Tag Archives: NASDAQ:GOOG

What Does Pokemon GO Have To Do With Investing?

Nintendo Co., Ltd appreciated more than 100% in July after the launch of Pokemon GO. A month later the shares have already declined 27% from the peak.

Pokemon GO logo

Speculating is not investing

It’s great if you got in on the action before Pokemon GO was launched, but after the launch and the stock already went up, it’s too late to jump in.

To add to that, no one knows how long people will continue playing Pokemon GO. Actually, Pokemon GO already lost some users as the hype dies down a bit.

If investors are buying Nintendo just because of Pokemon GO, it’s purely speculation and not investing, unless they believe in the future of Nintendo as a company.

Besides, it’s not like Nintendo owns the Pokemon game. Check out Quora for the relationship between Nintendo, Niantic, and the Pokemon company and find out who benefits from the game.

In fact, I was surprised by the answer that Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) get a share of the pie. I think both of these tech giants are better investments than Nintendo, especially Apple, which trades at about 12.9 times earnings and yields 2.1% at about US$108 per share.

Gotta catch ‘em all?

In the Pokemon world, one of Ash’s goal was to catch all the pokemon. Not for investing, though. You better not try to catch ‘em all. Read More

3 Important Dividend Investing Concepts: Real Life Examples

This is a guest contribution written by Ben Reynolds at Sure Dividend. Sure Dividend uses The 8 Rules of Dividend Investing to systematically find high-quality dividend growth stocks trading at fair or better prices.

Investing concepts can seem divorced from reality. Theories become more understandable through real world examples.

This article takes a look at 3 important dividend investing concepts and provides real world examples to help either explain the point or show evidence of why it matters.

Total Return

Total return measures exactly what the name implies. Total return includes the capital appreciation and dividends of an investment.

The concept of total return is critical to investing success. It is the one number that determines how quickly your money will grow. All other things being equal, the higher the total return, the better. Here’s  how you can double your money.

Calculating a reasonable expected total return will help to guide your investing decisions.

Returns in the market can come from only 3 places:

  1. Change in intrinsic-value-per-share (typically measured by earnings-per-share growth)
  2. Change in valuation multiple (typically measured by the price-to-earnings multiple (P/E))
  3. Dividends

My estimate of The Coca-Cola Co’s (NYSE:KO) total returns over the next 5 years is below.

First, we know the company’s dividend yield is 3.2%. The company is a Dividend King – it has paid increasing dividends for over 50 consecutive years. We can reasonably assume Coca-Cola will continue paying dividends.

3.2% a year is our expected return from dividends for Coca-Cola. Read More

Have New Money To Invest? Which Sectors To Buy? Which To Avoid?

Year-to-date, the Utilities ETF (NYSEARCA:XLU) has appreciated 21% and the big two telecoms, AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ), have also appreciated more than 20%. Those are amazing returns especially including the above-average dividend yields utilities and telecoms typically offer.

However, with the bid up prices, it has become riskier to invest new money in utilities and telecoms.

The top five utilities in the XLU are all overvalued, including NextEra Energy Inc (NYSE:NEE), Duke Energy Corp (NYSE:DUK), Southern Co (NYSE:SO), Dominion Resources, Inc. (NYSE:D), and American Electric Power Company Inc (NYSE:AEP).

Reversion to the mean can happen for any of these utilities that are overvalued, and it could mean negative returns in the short term.
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