John Frye

CFA
Personal Finance, Retirement, Investing
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“With over 38 years of experience in the investment field, John Frye is Chief Investment Officer and a founder of Crane Asset Management LLC who oversees all aspects of Crane's investment and portfolio management process.”
Firm:

Crane Asset Management LLC

Job Title:

Chief Investment Officer

Biography:

Crane Asset Management LLC is a full-service investment counseling firm providing investment management services to private individuals, retirement plans, endowments, and charitable foundations. All accounts are managed on a discretionary basis. John Frye founded the firm in 2003, with a partner who remains Chief Operating Officer. They work with all of their clients to formulate a long-term investment strategy that will meet their investment objectives while addressing their risk profiles. Understanding their clients in this way enables them to develop unique plans based upon each of their clients’ needs to help them achieve their financial goals.

Before co-founding Crane Asset Management LLC, John served as Executive Vice President and Portfolio Manager at Renberg & Associates in Beverly Hills. He began his career with E. F. Hutton & Company in New York and subsequently worked with Alex. Brown & Sons in Baltimore. He received his Bachelor of Arts in Politics from Princeton University in 1977 and his M.B.A. from Columbia University Graduate School of Business. John holds the Chartered Financial Analyst® designation and is a member of the CFA Society of Los Angeles.

Education:

BA, Politics, Princeton University
MBA, Finance, Columbia Graduate School of Business

Assets Under Management:

$81 million

Fee Structure:

Asset-Based

CRD Number:

849182

Disclaimer:

Crane Asset Management is registered with the State of California. A copy of Crane's Form ADV filing (Parts 2A and 2B) can be accessed here. In addition, Crane's Form ADV (Part 1) can be downloaded from the SEC's website. (Type in Crane's name in the field provided and follow the instructions on the site to download the information required.)

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    Stocks
What is the relationship between stock price and dividends?
100% of people found this answer helpful

A good answer to your question would require a 5,000-word essay.  I will be as brief as possible in the hope that you and others will actually read this.

Your first question points out the difference between a company's actual (and unknowable) true value, and its market capitalization.  A company's stock price supposedly reflects its true value, but usually doesn't.  It's really only the temporary equilibrium between supply of and demand for shares.  So a company can increase in value (that is, increase its revenues, earnings, and cash flow) but there might be a long time before its stock price reflected that increase.  Stocks only go up when there are buyers.  It's my job (and that of your other responders) to find stocks whose price does not accurately reflect the true underlying value of a business.  This, as always, is a challenge; a good investor is one who is right about 60% of the time.

You also ask about dividends.  They are set by a company's board and the payout varies widely from company to company.  All other things equal, a company that pays less in dividends will see its stock price run higher and vice versa.  If you own shares in a company you also have a part-ownership interest in the cash on its balance sheet; so a dividend is really the company giving you some of your own cash.  (And forcing you to pay tax on it.)  As an investor your total return is divided between price appreciation and dividends and in a perfect world it would not matter how much of its earnings a company paid to its shareholders.  But our world is not perfect.  First of all, dividends are taxable so you might prefer to have price appreciation (which is only taxable when you sell); second, investors usually view a company with a high dividend as unable to reinvest its free cash into its business at an acceptable rate of return -- that is, its business is mature and slow-growing.

Third, penny stocks.  This term is broadly applied to a universe of small publicly traded companies.  Some "penny stocks" turn into large companies over time and your returns will be spectacular; most will not, and many will go bankrupt.  A too-large fraction of penny stocks are manipulated by insiders to suck in unwitting investors who bid up the price as those insiders sell.  That's called a "pump and dump" and it's fraudulent.  For those reasons I would counsel everyone to avoid speculating -- gambling -- by buying shares of companies they don't know.  In all cases, only buy stock in a company you have researched and are confident in its soundness and bright future.

Questions?  Click below.

September 2017
    Stocks
If a stock price is just based on market demand, is that good for long-term and early investors who will continue to enjoy a high EPS?
100% of people found this answer helpful
September 2017
    Stocks, Insurance
Can options only be used as insurance for a stock or can they also be used to make profit?
100% of people found this answer helpful
September 2017
    Investing, Stocks
How can I determine if a company is a good company to invest with after doing fundamental analysis?
100% of people found this answer helpful
October 2017
    Investing
What happens when a company you own shares with sells their assets for a big amount?
100% of people found this answer helpful
October 2017