It has been an interesting year in 2012. The stock market has performed great at times only to come back and retake those gains, but throughout all of 2012 dividends have been paid on MCD and ANAT. These two stocks have recently taken a dip only to bounce back. The life of a buy and hold investor is so boring in the long run but amusing in the short run.
McDonalds has recently taken a dip because of slowed growth and currency disadvantages, not to mention a new CEO taking over. Yet the company recently increased it's dividend by 10% to nice .77 per quarter and has continued it's repurchase on its shares. So do we now sell this investment because of the recent drop in stock price? First I have to say a resounding, NO. This is a great company that is now selling really cheap compared to earnings. At 16 X earnings this a great opportunity to collect a fatter dividend, explore buying more if it continues to drop and just wait to see what this new CEO brings to the table. The current events bring back memories of "The Intelligent Investor", right now people are voting the stock down but in the long term the weight of this amazing company will outlast the votes. It's all about the earnings, dividends, and numbers. Emotion plays a part in the short run and this company has not sold this cheap compared to earning since August of 2011 when the Dow Jones was under 11,000. It doesn't make any sense to sell this stock. Thinking of this investment as your own business would you sell your business for less right when they give you a raise, have less shares outstanding, and are the leaders in fast food service? Nope. Would you buy more? That is the question for the heart or the mind..
American National had a dramatic drop and now has regained most of the loss. This investment has basically stayed flat for most of 2012 but when you consider the high dividend yield it has performed much better than if it were cash in hand or sitting under a mattress. When the stock dropped I put in a buy for $63 a share, which never struck. The idea of buying more of this company and reaping the dividend reward for years to come had me excited. Again this is a company that has been around over 100 years but has a new COO. I'm starting to see a major trend here. New leaders equals mostly a down stock especially if the last guy did a great job. What is it going to take to make American National move beyond it's range of 65-75 for the upcoming years? I believe this is a simple answer, higher interest rates! Will we ever get higher rates or will we stay with low rates similar to Japan? I believe we should see higher rates but then again who knows, I'm not in the predicting business, I'm in the collecting business.
McDonalds has recently taken a dip because of slowed growth and currency disadvantages, not to mention a new CEO taking over. Yet the company recently increased it's dividend by 10% to nice .77 per quarter and has continued it's repurchase on its shares. So do we now sell this investment because of the recent drop in stock price? First I have to say a resounding, NO. This is a great company that is now selling really cheap compared to earnings. At 16 X earnings this a great opportunity to collect a fatter dividend, explore buying more if it continues to drop and just wait to see what this new CEO brings to the table. The current events bring back memories of "The Intelligent Investor", right now people are voting the stock down but in the long term the weight of this amazing company will outlast the votes. It's all about the earnings, dividends, and numbers. Emotion plays a part in the short run and this company has not sold this cheap compared to earning since August of 2011 when the Dow Jones was under 11,000. It doesn't make any sense to sell this stock. Thinking of this investment as your own business would you sell your business for less right when they give you a raise, have less shares outstanding, and are the leaders in fast food service? Nope. Would you buy more? That is the question for the heart or the mind..
Panera Bread oatmeal - McDonald Competitor
American National had a dramatic drop and now has regained most of the loss. This investment has basically stayed flat for most of 2012 but when you consider the high dividend yield it has performed much better than if it were cash in hand or sitting under a mattress. When the stock dropped I put in a buy for $63 a share, which never struck. The idea of buying more of this company and reaping the dividend reward for years to come had me excited. Again this is a company that has been around over 100 years but has a new COO. I'm starting to see a major trend here. New leaders equals mostly a down stock especially if the last guy did a great job. What is it going to take to make American National move beyond it's range of 65-75 for the upcoming years? I believe this is a simple answer, higher interest rates! Will we ever get higher rates or will we stay with low rates similar to Japan? I believe we should see higher rates but then again who knows, I'm not in the predicting business, I'm in the collecting business.
