Please “Stop It” With the Strict Stop Losses

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

Please “Stop It” With the Strict Stop Losses

“This wine is crap.”

My wife (girlfriend at the time) glared back. I couldn’t let it go.

“Seriously…we paid $50 for this? I’d rather drink a bottle of Niagara.”

My comment—and ode to the New York wine that tastes like Welch’s grape juice—didn’t help the glare.

I was 22 years old, making $50K per year. It wasn’t a bad starting salary back in the day, but I didn’t have many extra $50s to spend on a Napa Valley wine tasting.

Plus, this guy had been drinking cheap Canadian beer since he was 16! The thought that I could procure 100 Labatt Blues for the price of our tasting raised my temperature further.… Read more

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This Stock’s “Hidden Yield” Pays 17% a Year (With 450% Payout Growth)

Dividend stocks reward us with more than just cash flow. They actually benefit our retirement portfolios in four ways:

  • A high current yield—for meaningful cash flow today. In a moment we’ll spotlight a timely play with a neat 3.5% yield.
  • Dividend growth, which tends to pull a company’s share price higher (as we’ll see below with this stock, whose payout exploded 450% in the last decade).
  • Share buybacks, which cut the number of shares outstanding, boosting earnings per share and share prices in the process. And of course …
  • Price appreciation, as the stock moves up on strong results for the company, its industry or the economy as a whole.

… Read more

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A 7.7% “Dividend Lifeboat” for a Tough Market

It probably won’t surprise you to hear that I’m hearing from a lot of investors who are concerned about protecting their portfolios, and their income streams, from the worrying times we’re facing today.

As the strategist of the CEF Insider high-yield investing service, I hear those worries, and I take them to heart with every CEF pick I make. And while talking portfolio strategy may seem a little inconsequential given the tragic events unfolding in the Ukraine, it’s vital that we do everything we can to look out for our families’ needs, especially now.

What’s more, by protecting and growing our income streams, as my colleague Brett Owens recently said, we can use our dividend dollars to help address some of today’s dire needs, whether it’s by donating to a charity helping the people of Ukraine or in the USA, by supporting family businesses that have been hit by the pandemic and, now, soaring prices.… Read more

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3 Copper Plays for Wall Street’s Unsung Surging Metal

Russia’s reckless (and, sadly, increasingly ruthless) invasion of Ukraine has put a spotlight squarely on the commodity markets. Many of them have already taken off to the moon. Crude oil, of course, was the first to hit orbit.

But there’s one hard asset that’s still flying under the radar—at least for now. And this commodity just so happens to be a source of aggressive dividend growth.

Oil, as mentioned, is most of the media’s attention. Not only has “black gold” set the investing world on fire, with the highest crude-oil prices seen in more than 13 years—but Americans are forced to watch that filter down into all-time-high gas prices.… Read more

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While the S&P is down hard in 2022, this dividend darling is up 11%

It’s not a particularly great environment for investing lately, that’s for sure. The market is churning amid unrest in Ukraine. The rate of inflation is the highest since 1982. And the Fed has signaled an interest rate hike is all but certain.

But you may be surprised to learn there are plenty of dividend stocks that aren’t just surviving right now, but thriving. This elite group of “hidden gems” is enjoying rising share prices even as they offer up dividends twice as big as their peers.

These aren’t the usual suspects, of course. Because in 2022, the old rules of investing simply don’t apply.… Read more

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A “Contrarians Only” Strategy for 11% Dividends, 150% Payout Growth

Ignore the overtorqued headlines about inflation: even though prices are rising, they won’t take out the economy.

In fact, rising inflation is setting us up with a contrarian opportunity to grab double-digit dividends in a corner of the market everyone’s written off. That would be consumer-discretionary stocks, which you’d think would be the main victims of inflation, but that’s far from the case, for reasons we’ll get into shortly.

We’ll also delve into one smartly run consumer-focused closed-end fund (CEF) yielding an outsized 11% below. But first we have to talk strategy, because while there are opportunities for us, this twitchy market also includes some traps we need to watch for.… Read more

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Ethical Dividend Investing (Invasions, Oil and More)

“Mom, please make sure you secure your mask first before assisting the kiddos.”

We receive this reminder every flight from at least one flight attendant. Mom receives the reminder while your income strategist sits across the aisle (a mile away as far as his parenting partner is concerned) in an uneventful seat dubbed Daddy Island.

This, of course, runs counter to Mom’s (and even Dad’s) instinct. If your kid is in trouble, your first, second and third reaction is to help your child first. The airline’s point is that we can best help our children by first securing our own oxygen.… Read more

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2 “Recurring” Dividends That Shake Off a Crisis, Grow 88%+

When a market storm hits, we dividend investors can protect our wealth and grab steady payouts when we buy stocks backed by strong recurring revenue.

It’s one of the oldest business models there is! Here’s how it works: customers pay for the services these companies provide every month, year or whatever, which gives them predictable—and ideally growing—profits.

What’s more, these payments are “sticky”: once buyers start making them, they’re quickly “out of sight, out of mind,” automatically pulling from their bank accounts (or dropping onto their credit cards) on the regular.

(I’ll show you two such firms in a moment, one of which is converting its recurring revenue into a recurring payout that soared 88% in just two  years.… Read more

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This 8%-Yielding Fund Soared 260% (It’s Just Getting Started)

This market’s insistence on falling—even though earnings are soaring—has opened up a strong buying opportunity for us dividend investors.

And we’re going to tap it to grab a rare “double discount” on an 8%-yielding closed-end fund (CEF) that no one’s noticed. This income-and-growth machine has soared 260% since inception and has the potential to crush stocks this year, thanks to its undeserved markdown.

More on that below. First, let’s talk about this stock-market disconnect, because recent declines have yanked the S&P 500’s price-to-earnings ratio down to 23.8. That may not sound cheap, but it’s far below last year at this time, when valuations hit a nosebleed 43.7.… Read more

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4 Deeply Discounted Yields of 4%-21%: Treats or Traps?

Over longer time periods, dividend stock prices tend to follow their dividends—for better or for worse.

Sometimes, the stock price gets there first. This can be a race to the sky, in the case of a rising dividend. Or a race to the basement, when a payout is about to be cut.

For example, we had been concerned about Kraft Heinz’s (KHC) dividend for years. Income investors “sniffed out” the inevitable payout cut before the lower quarterly dish became official:

Kraft’s Stock Price Tipped Off Its Dividend Cut

Investors waste no time ditching a troubled dividend when a firm has hacked its payout in the past.… Read more

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