Biderman on ETFs, dividends and float shrinks.
So far this year investors have poured billions into high dividend strategy ETFs. Yet almost all the big dividend ETFs have underperformed the market, even after including reinvested dividends. On the other hand only millions have gone into ETFs whose strategy is based upon float shrink. Companies that have been shrinking the trading float of shares the most using free cash flow have not only significantly outperformed the high dividend ETFs, but the overall market as well.
Those of you who took finance 101 might have learned that there are two ways to distribute profits to shareholders. But before a company can distribute anything, the company first has to generate a cash profit, after taxes and after all capital expenditures. What is left is free cash flow that can either be added to the balance sheet or distributed to shareholders via dividends or float shrink.
Full video below.
Whether you believe it or not, people use technical analysis. The latest “indicator” is measuring sentiment by tracking Twitter feeds on individual stocks. Via Downside Hedge.
With the advent of social media sites such as Twitter, investors now have the ability to get real time sentiment information on individual stocks and stock market indexes. The Twitter stream can be read by a computer program that scores each tweet and aggregates the scores into a daily value for each individual stock. The resulting values can be used as a technical analysis indicator in stock charts similar to a Relative Strength Index (RSI) or a Moving Average Convergence/Divergence (MACD).
Downside Hedge currently computes a Twitter Sentiment Indicator for a variety of stocks, ETFs, and indexes on a daily basis. In the chart below we compare our daily sentiment indicator of the S&P 500 Index to the AAII weekly sentiment survey. Full reading here.
Soon-to-be-Republican presidential nominee Mitt Romney is about as well-liked as he has been during the presidential campaign, with 48% of Americans holding a favorable view of him and 46% an unfavorable view. His image was only slightly more positive in May — about the time he clinched the Republican nomination. As recently as mid-July, significantly more Americans viewed him unfavorably than favorably.