The recent winning streak (averages had been up 7 out of the last 8 sessions) came to an end today as the month of September kicked off.
A solid earnings report and dividend increase have shares of Toronto-Dominion Bank (TD) trading higher in the early going. Bank of New York Mellon (BK) shares ended flat following news of their CEO Robert Kelly stepping down. According to a CNBC source, BNY Mellon’s board of directors believed the former CEO’s management technique was hurting company morale, and felt it best for him to resign from his post. This news comes despite Mr. Kelly being named one of the best CEOs of 2009, according to Institutional Investor Magazine. Elsewhere in the financial space, shares of Goldman Sachs (GS) lost $4 following cautious comments from a Wall Street analyst on the stock.
Retailers were in focus today, as monthly retail sales figures have hit the wires (which they normally do on the first Thursday of the month). Most retailers we follow finished in the red, including shares of Kohl’s (KSS), Best Buy (BBY), TJX Companies (TJX), and Limited Brands (LTD). All eyes will be on tomorrow morning’s monthly jobs number, which tends to bring out the volatility players.
It’s amazing to see the media continue to gush about Warren Buffett’s recent investment in Bank of America (BAC). We’ve many dissenting takes from analysts regarding the move, ranging from “this should put a floor under banking sector shares,” to “this is a bad sign for BAC, which clearly needed an emergency injection of capital.” However, most of the coverage of this development missed the dilutive structure of the investment. Mr. Buffett did not buy common shares of BAC — the company created special preferred shares for him that yield 6%! Yet this fact was nearly invisible in much of the coverage. Many retail investors catch 5-10 minutes of business headlines if they are lucky, so when you hear Warren Buffett invests $5 Billion in Bank of America, the assumption is that he bought common shares. That’s simply no so.
To this point, please realize who your source for information is, and how reliable they are at providing the key facts surrounding important issues. As I have been rolling up my sleeves to consider new revenue drivers for our Dividend.com business, I have been speaking to many professionals in the money management space. The takeaway I’ve had from these talks is how important marketing is to an asset/fund manager’s bottom line. It makes a lot of sense, and says a lot about the regular cast of characters you see appearing on various business media vessels (television, web, radio, etc.). At the end of the day, these guys are all about lead generation and growing their firm’s assets under management. They want to get you interested in their fund and commit your money to it. These gurus are often, in essence, figureheads for their companies, rather than an analyst at the fund who’s calling the shots as to where to place investors’ money.
There are certainly some exceptions to this presumption, but I can tell you as someone that has been living and breathing the markets for 16 years now, there is no way you can parade all around the business universe day and night, and still keep your finger truly on the pulse of the markets. I consider myself a super-methodical specimen when it comes to market research preparation, but when my Be a Dividend Millionaire book debuted, I had to prepare for the numerous interviews that came along with it. Fortunately in my case, I had limited travel, and was able to conduct many of the calls from my office or home.
Today, there are so many avenues of Social Media being pushed down every firm’s throat, investment “gurus” are now adding even more distractions to what is an already jam-packed day of media blitzes. Twitter is one of those vehicles I see many pundits utilizing throughout the day. It’s not just one or two “tweets” a day either, some gurus are posting hundreds of market tidbits per day! As I said before, the game of lead generation is where it’s at for investment firms these days. Think about that as you listen to endless stock predictions day and night from the analysts that are “on top of the markets.” If we at Dividend.com decide to make our own foray into the money management business one day, we’ll certainly face the same same questions on how to grow your client base. My answer will be easy: perform well, and investors will come.
Quick note: Be sure to check out the year-to-date watchlist posts up on the site today. You can see how well many of the dividend stocks we are tracking are doing through the first eight months of 2011. As always, you can find these and other members-only articles on Dividend.com Premium.
Also, be sure to check out our weekly “Top 50 Watchlist Names” post that is out today, only for Dividend.com Premium members.
Thanks for reading, and I’ll see you tomorrow! P.S. Please pass this e-mail on to someone you think can use some financial motivation as well as being kept in the financial news loop that could affect them.