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International Business Machines Corp. boosted its quarterly dividend 10% and said its board authorized another $3 billion for the company's stock repurchase program, bringing the buyback program's total to $6.7 billion.
The tech bellwether, which has generally weathered the economic slowdown because of cost cuts and benefits from its product mix, raised its dividend to 55 cents a share. The move comes as many other companies across all industries are cutting their dividends, sometimes to nominal levels, as they look to preserve cash amid the recession.
The tech bellwether, which has generally weathered the economic slowdown because of cost cuts and benefits from its product mix, raised its dividend to 55 cents a share. The move comes as many other companies across all industries are cutting their dividends, sometimes to nominal levels, as they look to preserve cash amid the recession.
- Wall Street Journal
A little more sunshine peeking through the clouds... IBM increased its quarterly dividend by 10% to 55 cents a share, the 14th year in a row it has raised its dividend. It also announced a $3 billion share repurchase. The company has nearly $13 billion in cash. Its shares have held up much better than the market, down a mere 22% from the peak. (Did I just say a 22% drop was good? Wow... I'm really slipping.)
Big technology companies are sitting on loads of cash... Apple has over $23 billion in cash and short-term securities. Dell has $9 billion. Hewlett-Packard has $11.3 billion. Extreme Value World Dominator pick Microsoft has $20 billion. Another World Dominator pick, Intel, has $11.8 billion...
Cash can be used for dividends, share repurchases, or acquisitions. That's part of the attraction of great businesses with pristine balance sheets. There's far less risk of being painted into a corner by creditors, which is what you get with debt-heavy, commodity-oriented companies.
Big technology companies are sitting on loads of cash... Apple has over $23 billion in cash and short-term securities. Dell has $9 billion. Hewlett-Packard has $11.3 billion. Extreme Value World Dominator pick Microsoft has $20 billion. Another World Dominator pick, Intel, has $11.8 billion...
Cash can be used for dividends, share repurchases, or acquisitions. That's part of the attraction of great businesses with pristine balance sheets. There's far less risk of being painted into a corner by creditors, which is what you get with debt-heavy, commodity-oriented companies.
- Dan Ferris, S&A Digest
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The Cheapest Real Estate in the World
By Tom DysonWednesday, April 29, 2009
"All of a sudden, it became a monster..."
I was on the phone with my friend Andrew. Andrew is 25 years old. He's been trying to get a business off the ground. Recently, his phones started ringing... and they're still ringing nonstop...
"A guy from Vegas called. He bought 35 houses with cash. Then a guy from Toronto called. He bought eight houses and a 186-unit apartment community. We just had another guy in from Toronto looking to buy 50 rental properties."
Someone else was speaking on a phone a few yards away. More phones rang in the background.
"We're getting calls from all over the world," said Andrew. "Tons of Americans are calling in. It's both. We've launched a website too... and we're already getting a lot of hits. We now have 22 agents working for us, full time."
My friend's city has the cheapest real estate in the world. But in the last six months, prices capitulated. A price capitulation is what happens in the final throes of a bear market. It's the final death spasm that sends prices to ridiculously low levels for a moment before people regain their senses.
"They call up and they want to buy houses for $500," Andrew says.
Andrew showed me a house his firm bought for $750. They bought this house from a bank a couple months ago. It's almost in rental condition. This house sold for $110,000 in 2005.
Then he showed me a house they paid $20,000 for two months ago. It's a four-bedroom, three-bath, 1,900-square-foot house with a full basement. The bank mortgaged this house for $188,000 in 2006. It's in a fantastic neighborhood of well-maintained lawns, where people take pride in where they live.
Andrew is accumulating as much of this property as he can. Apartment buildings in wealthy neighborhoods are his favorite investments. His city is in a depression, and people don't want to own houses. So there's strong demand from people who want to rent. He says he can make returns of 15% to 20% a year in these properties...
Here's the thing: There's always a price that'll "clear" a market. When prices reach a certain level, buyers enter. This is one of the most important fundamental rules of speculation... and it never fails.
Andrew lives in Detroit. For years, there's been no life in Detroit's real estate market. This year, without explanation or fanfare, prices in Detroit property reached this level. Now sentiment has turned around. The phones in Andrew's office have started ringing.
If the market for Detroit housing has found a bottom, maybe the property market in your hometown is close to making a bottom, too...
Good investing,
Tom
P.S. Andrew Kuhn is a DailyWealth reader. I met him two years ago after he contacted us and offered to show us around Detroit. DailyWealth readers can contact Andrew at andrewdkuhn@gmail.com or check out his websitewww.helpbuilddetroit.com.
I was on the phone with my friend Andrew. Andrew is 25 years old. He's been trying to get a business off the ground. Recently, his phones started ringing... and they're still ringing nonstop...
"A guy from Vegas called. He bought 35 houses with cash. Then a guy from Toronto called. He bought eight houses and a 186-unit apartment community. We just had another guy in from Toronto looking to buy 50 rental properties."
Someone else was speaking on a phone a few yards away. More phones rang in the background.
"We're getting calls from all over the world," said Andrew. "Tons of Americans are calling in. It's both. We've launched a website too... and we're already getting a lot of hits. We now have 22 agents working for us, full time."
My friend's city has the cheapest real estate in the world. But in the last six months, prices capitulated. A price capitulation is what happens in the final throes of a bear market. It's the final death spasm that sends prices to ridiculously low levels for a moment before people regain their senses.
"They call up and they want to buy houses for $500," Andrew says.
Andrew showed me a house his firm bought for $750. They bought this house from a bank a couple months ago. It's almost in rental condition. This house sold for $110,000 in 2005.
Then he showed me a house they paid $20,000 for two months ago. It's a four-bedroom, three-bath, 1,900-square-foot house with a full basement. The bank mortgaged this house for $188,000 in 2006. It's in a fantastic neighborhood of well-maintained lawns, where people take pride in where they live.
Andrew is accumulating as much of this property as he can. Apartment buildings in wealthy neighborhoods are his favorite investments. His city is in a depression, and people don't want to own houses. So there's strong demand from people who want to rent. He says he can make returns of 15% to 20% a year in these properties...
Here's the thing: There's always a price that'll "clear" a market. When prices reach a certain level, buyers enter. This is one of the most important fundamental rules of speculation... and it never fails.
Andrew lives in Detroit. For years, there's been no life in Detroit's real estate market. This year, without explanation or fanfare, prices in Detroit property reached this level. Now sentiment has turned around. The phones in Andrew's office have started ringing.
If the market for Detroit housing has found a bottom, maybe the property market in your hometown is close to making a bottom, too...
Good investing,
Tom
P.S. Andrew Kuhn is a DailyWealth reader. I met him two years ago after he contacted us and offered to show us around Detroit. DailyWealth readers can contact Andrew at andrewdkuhn@gmail.com or check out his websitewww.helpbuilddetroit.com.
MORE ON THE CRAZIEST TRADE IN THE MARKET
Yesterday, we looked at the "ridiculous" rally in restaurant stocks.
Despite the recession, companies like Panera Bread, Chipotle, and Cheesecake Factory are all near 52-week highs. The market is suggesting the Fed's wild efforts to inject money and credit into the market are taking effect... which means bigger profits ahead for this beaten-down sector.
But what about the coffee stock everyone loved to hate last year... the king of the $5 cup of coffee? What about Starbucks?
As today's chart shows, even overpriced coffee – as measured by Starbucks (SBUX) stock – is enjoying a rally right now. Investors fled the stock last year on recession concerns... and SBUX fell a huge 60% from its peak. But now that the market believes things are getting "less bad," the stock is soaring. Shares are at a six-month high. As unlikely as it sounds, the "consumer spending" rally is on!
Despite the recession, companies like Panera Bread, Chipotle, and Cheesecake Factory are all near 52-week highs. The market is suggesting the Fed's wild efforts to inject money and credit into the market are taking effect... which means bigger profits ahead for this beaten-down sector.
But what about the coffee stock everyone loved to hate last year... the king of the $5 cup of coffee? What about Starbucks?
As today's chart shows, even overpriced coffee – as measured by Starbucks (SBUX) stock – is enjoying a rally right now. Investors fled the stock last year on recession concerns... and SBUX fell a huge 60% from its peak. But now that the market believes things are getting "less bad," the stock is soaring. Shares are at a six-month high. As unlikely as it sounds, the "consumer spending" rally is on!