S&P 500 Watch: March 'Winners' Are Actually the Biggest Losers [View article]
Thanks for an informative analysis. When the market was near its lows I had argued that sound stocks were by no means "cheap"; and that the low SP500 was more due to some of its constituents being demolished, rather than due to its good companies becoming "cheap". This was just an observation, now bolstered by your excellent analysis, which says that the demolished ones have stirred back to life in the ER, boosting the SP500.
I still maintain that at current levels stocks are not "cheap" except relative to the bubble era. Dividends are being slashed at astonsihing rates, and historically, companies which drastically cut dividends have restored them slowly, if at all. Thus, I expect SP500 dividends will not climb back to 2007 levels for many years, and this suggests to me that stocks will be worth less than they were in 2007 for many years as well.
Merck / SGP: Will the Pharma Megamergers Continue? [View article]
The market voted on the unwisdom of the deal for MRK shareholders, sending MRK down almost 8%. I suspect MRK will now cut their dividend, and the shares will be further pulverised in response. Managements and boards are failing to realise that the dividend is the most important reason to own a share in any company over the next few years, as the expectation of stock appreciation is no longer sufficient.
Very foolish of MRK's management to pay such a premium for SGP, and exceptionally irresponsible to pay such a large percentage in cash. In this environment, cash should be conserved to support the dividend. They have not learned from the DOW/ROH debacle, nor from the decimation of PFE's shares following their equally reckless buyout of WYE and dividend cut.
S&P 500 Watch: March 'Winners' Are Actually the Biggest Losers [View article]
I still maintain that at current levels stocks are not "cheap" except relative to the bubble era. Dividends are being slashed at astonsihing rates, and historically, companies which drastically cut dividends have restored them slowly, if at all. Thus, I expect SP500 dividends will not climb back to 2007 levels for many years, and this suggests to me that stocks will be worth less than they were in 2007 for many years as well.
Merck / SGP: Will the Pharma Megamergers Continue? [View article]
Very foolish of MRK's management to pay such a premium for SGP, and exceptionally irresponsible to pay such a large percentage in cash. In this environment, cash should be conserved to support the dividend. They have not learned from the DOW/ROH debacle, nor from the decimation of PFE's shares following their equally reckless buyout of WYE and dividend cut.
(disclosure: own shares in MRK, SGP, PFE and WYE)