AT&T's Delisting Dear Mr. Berko: My wife and I are 56, and together, our two individual retirement accounts, which own the same stocks, are worth $146,000. Why was AT&T taken out of the Dow Jones industrial average? Our broker of nine years retired last month, and …Read more. Now Hear This Dear Mr. Berko: Do know the name of a large drug company that is supposed to have a cure for deafness? I have profound hearing loss, and I'm interested in the company. And I have about $30,000 to invest if you think the stock would be a good long-…Read more. Health Insurance and the Government Dear Mr. Berko: In one of your columns, you recommended several health insurance stocks as good investments. You stated that health stocks would make record profits because of greatly expanded government health care and that growing revenues, …Read more. Net Neutrality and Stocks Dear Mr. Berko: I'm a shareholder of Charter Communications, CenturyLink and Comcast. I have big profits in Charter Communications and Comcast and a small loss in CenturyLink. I don't understand this new "net neutrality" regulation thing. It seems …Read more.more articles
Dear Mr. Berko: My broker wants me to buy 300 shares of Pitney Bowes at $17.50. Does this make sense, considering that post office mail volume is falling? What is your opinion on Pitney Bowes? My broker is bullish on the market but I'm getting scared. I'm 46, worked like the devil as an honest auto mechanic for 16 years, own a real good business, have $205,000 in a Roth plus $60,000 in our joint stock account, and I don't trust the market. I don't trust the good things I hear about employment, inflation, home prices, higher incomes, a growing economy next year and so on. Almost all my costs are going up (utilities, taxes, new and used parts, belts, tools, insurance, fuel, storage rent), so I have to charge customers more. Lots of customers work "off-line" so they don't have to pay taxes and make less than last year or the year before. They tell me (I listen good) they owe more money now than they ever did. My business keeps getting better, but I don't hear many good things from my customers. How can the newspapers, the TV announcers, the radio people, the government people and financial experts keep telling us rosy things about the economy when my customers tell me how much trouble they are having? I don't trust these financial commentators anymore. They should live, work and talk to the people I know. Here are our portfolios to look at. Please let me know on 300 shares of Pitney Bowes and if I should sell anything to protect our stocks if the market goes like it did in 2008. — TS in Akron, Ohio
Dear TS: Pitney Bowes (PBI-$17.50) is one of those stocks that, through thin and thick, has increased its dividend annually for better than 25 years and had three 2 for 1 stock splits in that time frame. This world's largest postage meter make is being hammered by the decline in metered postage and the overwhelming increase in Internet correspondence. However, PBI's strong software revenues are up by 16 percent, and its two impressive software programs could help sustain revenues and profits over the next two years.
PBI's VOLLEY is a well-received digital billing system that is selling well to large business enterprises and its impressive CONNECT+ creates wonders with metered capabilities via a touchscreen process that facilitates color printing of envelopes.
I understand your distrust of the financial media, too many of whom have room temperature IQs. The DOW has more than doubled since its low point in March of 2009. Meanwhile, corporate profits are booming, trading volume on the NYSE has declined to its lowest level in 13 years and for a fifth straight year, investors have pulled more money out of U.S. common stock funds than they put in. Many investors are terrified that the market has been pushed artificially higher by Wall Street and the FED under the direction of the Administration. The DOW will remain overvalued as long as easy money, cheap money Herculean deficits continue feeding corporate profits. In the process, corporations have cut their labor costs and consumers increased consumption by taking on record debt. And of course, it's an election year, so it's axiomatic that the party in power WILL DO ANYTHING within its power to keep the voter happy (including messing with the economy) to secure his vote so it can remain in power. Most Americans vote based on their pockets, not principals.
You have a portfolio of excellent issues. The revenues, income and dividends of most of them are nearly impervious to inflation, recession and the economic cycle. When the DOW falls, your portfolio should not fall as much as the Dow. And because you are reinvesting the dividends, you will purchase more shares if prices decline. So don't sell a thing, stay the course and keep that broker. I really like his style.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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