All day today a song kept running through my mind as I watched the markets. It started this morning when I heard the talking heads on CNBC going crazy over the fact JPMorgan Chase would now pay $10 instead of $2 for Bear Stearns. The artist is LL Cool J and the song is Mama Said Knock You Out. Aren’t we all such a bunch of suckers? Let’s face facts. We are small time investors without the inside knowledge only granted to that wealthy connected Wall Street crowd. Towards the end of last week you had people arguing as to why the price of Bear Stearns had reached $6 when they were being purchased for $2. The consensus was that major stockholders were buying up shares to make sure the deal went through. What was the real story?
As it turns out, the real story was insiders knew this deal was going to be renegotiated. How much they knew and when they knew it will probably never be known. I would like to believe that dividend growth companies are immune to these types of problems. Bear Stearns did have a consistent dividend, but some years it did not grow so it would not pass my litmus test. Therefore, I will still continue to believe in dividend growth companies.
On to better things. The Thoroughbred Folio made a huge turnaround last week. Maybe it was Spring that raised investors spirits or maybe just the anticipation of the Easter Bunny. Whatever the case, we made significant gains to dip below the $100 loss point.
The dividend train keeps right on rolling. We received three more dividends over the past week. VF Corp (VFC), Integrys Energy (TEG), and Avery Dennison (AVY) piled on another $2.22. Integrys Energy accounted for $0.99 of that gain by itself.
The three front runners just keep on keeping on. Nucor Corp, VF Corp, and Synovus are looking good with significant double digit growth to date. The rear of the pack welcomes back an old friend, Total System Services. Gannett was able to pull itself out of the funk while Legget & Platt is becoming a permanent fixture in the bottom three. Consolidated Edison came from nowhere to fall all the way to the bottom sporting a 5.8% dividend yield.
Thoroughbred Performance (Week 14 of 52): $-87.08 (-2.90%)
Dividends To Date: $16.42
Top 3 Stocks
- Nucor Corp $16.09 (21.45%)
- Synovus $6.90 (20.39%)
- VF Corp $10.57 (14.09%)
Bottom 3 Stocks
- Consolidated Edison
$-11.81 (-15.75%) - Legget & Platt $-10.95 (-14.60%)
- Total System Services $-5.68 (-13.80%)
Stocks used in this post:
- (AVY: 36.28, -4.22%, Yield: 4.33%)
- (ED: 40.45, -1.49%, Yield: 5.69%)
- (FDO: 24.85, -1.23%, Yield: 1.95%)
- (LEG: 18.25, -0.76%, Yield: 5.44%)
- (SNV: 9.79, +9.88%, Yield: 159.52%)
- (TEG: 45.46, +0.24%, Yield: 5.89%)
- (TSS: 14.67, +0.41%, Yield: 22.66%)
- (VFC: 58.83, -5.89%, Yield: 3.71%)
March 30th, 2008 at 1:51 pm
I guess we will never really know who knew what and when they knew it with the Bear Stearns situation… Since Chairman James Cayne sold $61.3 million of Bear shares on Tuesday, according to a filing on Thursday.
March 30th, 2008 at 2:09 pm
I suppose we will have to assume people felt the original deal was so bad that it was inevitable that the sell out price would rise. I just think it is all pretty shady. I don’t think Cayne did anything wrong. He took a pretty big beating in the whole deal.