Did anyone see this morning’s CPI (consumer price index) data? It beat analyst expectations (in a good way) and showed inflation pressures are relatively non-existent. The “slight” bump up in food prices was offset by a drop in energy prices. Now let’s see a show of hands: how many people paid less in their energy bills or at the pump? That’s funny, no hands are up. Oil and gas prices are spiking and the energy price data shows a decrease! Yet another reason why I keep saying the environment for investors remains quite limited as far as income opportunities go.
Getting back to the markets, earnings results helped move shares of Abercrombie & Fitch (ANF) and Target (TGT) higher following their numbers. On the flipside, Deere & Company (DE) and Staples (SPLS) got hit hard on numbers that disappointed investors. Wall Street analyst downgrades pushed stocks like Barnes & Noble (BKS) and Entergy (ETR) lower.
Late Monday, Google (GOOG) announced it would be acquiring Frommer’s, one of the best-selling travel guidebooks in the world. Even though the terms were undisclosed, several sites believe the purchase price was in the $23 million neighborhood. This deal follows Google’s strategy to buy Zagat, a restaurant review giant that has been around for many years. Now this piece isn’t so much about Google making smart acquisitions as much as it is about what real revenue-generating businesses can sometimes go for. Now again, we don’t know what Frommer’s financials looked like, but on the surface, the price looks very cheap.
Recent overvalued tech IPO’s like Yelp (YELP), Groupon (GRPN), Zynga (ZNGA), as well as Facebook (FB) should now be worried about the possibility Google is coming after their business — and making smart acquisitions in the process.
Investors need to take note how dangerous hype can be for companies, both public and especially private soon-to-be IPOs, which are pumped all over the various mainstream media channels. By the time the retail investor can get their hands on company shares, the best part of the investment angle has been picked clean many times over in most cases. It’s clear that VC’s and private investors tend to be the best-positioned in many of the deals we see on Wall Street. By the day of the IPO, these insiders are ready to cash out a good portion of their investment and move on to the next opportunity. (For obvious reasons, you won’t see this kind of critical commentary on mainstream business media outlets).
Turning to real estate for a minute, a good friend of mine who dabbled in commercial real estate would often tell me the best properties were often the ones that never saw a public listing. This fact often struck me as odd. Why wouldn’t property owners list their buildings publicly and try to get the best possible price for them? Well, many times, property owners don’t want their tenants to panic about a potential sale affecting their leases. So to keep things quiet, the listings never see the light of day. Many of the shrewdest real estate moguls buy properties almost exclusively this way (in private, secretive deals).
At the end of the day, there are deals to be had out there, but you need to be in the right place at the right time. And more importantly, you must have the liquidity to make things happen. Otherwise, most mom-and-pop investors need to work really hard to make sure they aren’t purchasing properties that plenty of smart money has already passed over.
The same concept applies to the equity markets. Always be sure your hard-earned money is being invested wisely. Look to buy quality not quantity, strength not weakness, and never base your decisions on misguided hype. As always, we’ll be right here at Dividend.com helping steer you toward the best possible ideas, and perhaps more importantly, warning you about the ample dangers that exist in the markets these days.An Important Note Regarding the Best Dividend Stocks List
We want to make sure everyone understands that the stocks on our Best Dividend Stocks List are the names we currently like for new investor capital, regardless of what date the stock was first recommended on. If and when a stock is removed from the list, we will clearly state whether the stock should be sold (which is rare but occasionally will happen), or simply held in one’s account until we see a better entry point or catalyst.
And here’s one last thing to remember about what we do here at Dividend.com: it’s not just the names that we recommend that can help you build wealth, but also the things we try to steer you away from that are just as important. Forget about speculative or penny stocks, chasing unprofitable IPOs, and listening to the manic talking heads in the business media!Our Beat The Markets with Dividend Stocks eBook Has Arrived!
We just debuted our brand new 275-page eBook, exclusively on Dividend.com! In this digital-only book, we look ahead to 2012 and the main factors that could affect dividend investors. A $39.95 value, the eBook is a free download for paid Dividend.com Premium subscribers.
Beat The Markets with Dividend Stocks contains a full economic forecast for 2012, including in-depth analysis on 65 of the biggest dividend stocks out there. It’s a great way to get prepared for your investing next year! So head over to the Dividend.com Premium homepage now to download your copy.A Dividend Capture Strategy for Active Investors
We now offer complete U.S. dividend data for all Dividend.com Premium members, so anyone that focuses on “Dividend Capture” trading strategies should have plenty of good stuff to research each day. Just check our enhanced Ex-Dividend Calendar, which is the best in the business, to search for upcoming payouts.
Speaking of dividend capture, Dividend.com Premium members can also access a 9-page report we published on the essential elements to any successful dividend capture strategy. Be sure to check it out here on the Premium homepage.
Thanks for reading everybody. I’ll see you tomorrow!