Comments on Saving to Inve$t: Economic Recovery Advisory Board (ERAB) - Brillian...

I think forming the ERAB was a brilliant move on O...

2009-03-04T09:15:00.000-05:00

I think forming the ERAB was a brilliant move on Obama's part. It shows that he is serious about solving the issues and not just politicizing them. too often our most important issues, Social security reform to name one, become politicized. So, a real long lasting solution never arises. hopefully, by forming this board Obama is opening the government to real solution to real problems.

HI- Im new to your blog. Which brokerage do you h...

2009-01-19T11:20:00.000-05:00

HI- Im new to your blog. Which brokerage do you have your Ausie brokerage account with? Do you live in the US? are you a US citizen? thnx

Neil, thanks for stopping by. I also think Obama's...

2008-11-28T11:50:00.000-05:00

Neil, thanks for stopping by. I also think Obama's two choices to lead the ERAB are good, but I want to see who else is nominated and how the ERAB will be run.

In regards to the dividend stocks from my last post, all stocks like the DJ and S&P indexes are back to 1997/8 levels. So no surprise there. I am looking 5 years out, and do realize the stocks I picked will not have as much capital growth as other stocks. I picked them more on the company basis, sustainable dividend yield and cheap entry point. Utilities are essentially monopoly assests and their cash flow is pretty steady, which allows them to offest their debt required to fund major capital projects. D, for example is still able to sell its debt quite cheaply, which suggests that the market is not concerned about their defaulting.

COP, JNJ are good stocks. I just don't think they offer as good an entry point right now.

BHP is a great stock and on my radar. I have an Australian brokerage account as well, so have had BHP stock in my portfolio for the last 5 years....

You make some great points and look forward to your future comments.

Oop. Forgot to mention that I think BHP is a very ...

2008-11-28T03:56:00.000-05:00

Oop. Forgot to mention that I think BHP is a very enticing grower with a solid history of divs, debt management, etc.

Andy,Just kind of randomly stumbled onto your blog...

2008-11-28T03:34:00.000-05:00

Andy,

Just kind of randomly stumbled onto your blog tonight, but I had some thoughts to share with you.

First, most economists that I read (http://gregmankiw.blogspot.com/2008/11/redefining-grownup-and-hack.html) are quite happy with Obama's picks. I think Volcker is a great pick for this era.

Second, I wanted to say that as a young person who is saving to invest (and has been learning about the market for the last year primarily through caps.fool.com), I'm not that enticed by any of your dividend-paying picks from your previous post. Looking at a 10-year chart of the five, D is the ONLY pick showing a capital gain, while the others would have lost me 30% or more over a decade! Ouch - the divys do not make up for this kind of capital depreciation, and the technicals would probably scare me out of most of them. Fundamentally, AEP and D are both way in debt, and at their current cash flows would take forever to pay it off. Now I don't know a ton about utilities (and I think they may be special cases), but still, huge debt does not bode well for the long-term, especially in this climate...

Dividend-paying stocks that I AM attracted to: COP, JNJ, and the indexes SPY/DIA for diversification.

Just my 2 cents.

-Neil

TML - That could be the case, but I am going to wa...

2008-11-27T15:14:00.000-05:00

TML - That could be the case, but I am going to wait to see who is appointed to the board. I think this is a positive move overall, because it at least acknowledges that the government does not have the economic expertise to manage the issue and why not seek advice from leading mind out there. It is partly political as well I'm sure, but his intentions seem good.

@ Jason, that could be one solution but the last consumer stimuls' have not worked to well. Besides savings the bank is much more important because if one of the major goes down then the whole financial system could collapse due to their interdependence and complete loss of confidence.

@ Al - I think a combination of both is required. The government is the only one with the means to spend vast amounts of money right now, but ultimately it will be consumer spending that gets the economy growing again. Right now the government is spending to try and get business and consumers confident about their future and hence to make them spend.

Curt - see my above comments. It won't be such a bad thing to have the ERAB refershed with new people over time (most will have busy private lives anyway), just as long as the existing members contribute and can be leverage to get the best ideas.

This is a political move so that Obama can say he ...

2008-11-27T11:10:00.000-05:00

This is a political move so that Obama can say he is just taking advice from this new board. He needs to find a competent economic advisor he trusts and go with it, not expand the noise.

I think this board will be a rotating door, as people will be coming and going.

Well. One thing: is it me or is "change" starting ...

2008-11-26T19:52:00.000-05:00

Well. One thing: is it me or is "change" starting to look like the 1980s-90s?
But I think more and more we have to take investment and innovation matters into our own hands. The government can spend money, not make it.

What is wrong with giving the American household a...

2008-11-26T18:53:00.000-05:00

What is wrong with giving the American household a check for $13,000? The $13,000 would do much better in the people’s hands. The $13,000 is less than the government is spending on the original bailout and the new proposed $800 billion. If an economic advisory board cannot put the people before their selfish reasons something is very wrong. If the people had the money they would spend it and then jobs would be added, manufacturing would grow, and last but not least the states would gain money in the form of sales taxes not to mention the added income taxes from the extra workers.

http://nomedals.blogspot.com

Just more bureaucracy. There are so many economic...

2008-11-26T17:09:00.000-05:00

Just more bureaucracy. There are so many economic advisors and hangers on in the Executive Branch now, you would spend a day just counting them all: OMB, CEA, Treasury, Commerce, on and on, plus the Fed. This is a political move so that Obama can say he is just taking advice from this new board. He needs to find a competent economic advisor he trusts and go with it, not expand the noise.