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Alex Trias  

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  • The Perfect Portfolio For Retirement Is An Illusion [View article]
    The key is that you take that $1,800 montly rent, and plow it into similar assets when prices are depressed. Try that a few times, and you will REJOICE next time when the price of your assets drops.
    Apr 17, 2015. 05:41 PM | 5 Likes Like |Link to Comment
  • How To Flee To Safety With Dividend Growth Stocks [View article]
    True enough - but that assumes you plan to sell when dividends get cut (which I sometimes do). Others might dig in more to study why the dividend was cut, whether that's good for the business long-term, and then decide to buy even MORE of the stock at a bargain price. That was a big topic on SeekingAlpha with ARCP, after that REIT cut it's dividend. Anyone intrepid enough to step into that morass has made a nice capital gain for themselves..
    Apr 15, 2015. 02:01 PM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    Good one! If they traded on the NYSE, I'd invest in the student and short the parents!

    I say that as a proud parent.
    Apr 14, 2015. 04:05 PM | Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    No, what it means is that even if the REIT is distributing 90% of it's accounting "earnings", it's still got a lot free cash flow it doesn't distribute and can use to invest in more properties and fund growth.
    Apr 14, 2015. 04:04 PM | Likes Like |Link to Comment
  • Why The Coming Months Are Crucial For Navios Maritime Partners L.P. [View article]
    As an investor, I like to take a far more fundamental view of owning a business than just looking at shipping rates or charter expirations. I look at ten or more years worth of the earnings histories of other drybulk shipping firms, and then I compare that to Navios' earnings history. Do that and you'll see a huge difference, and then the question is "what accounts for that difference?" My next step is to through all the shareholder presentations and earnings reports, read about how Angelika Frangou found the right opportunities over the years, re-thought the company's direction, executed her strategy, and obsessed over delivering shareholders a stable and growing dividend. Evaluated thus, it's clear NMM has amazingly talented managers.

    What makes a great business are great managers, and great businesses make great investments if you can buy a piece of the business at a reasonable price. What's a reasonable price? My approach is to calculate how many years of operating surplus will it take to completely pay for an investment, based on the average operating surplus growth rate over the lifetime for the company. If the investment will pay for itself within a period of time that is less than my minimum holding period, that's a good price. For NMM, operating surplus per share might pay for the stock at current prices in MAYBE 6 years, maybe more, maybe less. I just want a ballpark figure, and that's well below my ten-year minimum holding period, and below the S&P500's average pay back period for the last century. It all comes out looking like a great company at a price that's somewhere between reasonable and cheap.
    Apr 14, 2015. 01:41 PM | 1 Like Like |Link to Comment
  • How To Flee To Safety With Dividend Growth Stocks [View article]
    If you are a dividend investor, isn't the biggest threat to safety the threat of dividends getting cut? If you earn enough dividend income to cover your living expenses, you don't need to sell stocks, so how is the price of your portfolio even relevant? I guess it's relevant if you are constantly BUYING stocks, but in that case, you should be delighted if the price of your favorite companies is dropping - the harder the better.
    Apr 14, 2015. 12:15 PM | Likes Like |Link to Comment
  • Creative Self-Disruption [View article]
    Another good article. I'd only add one fifth guideline: adapt corporate culture and incentive systems to make every employee an entrepreneur. If an office messenger comes up with a new, risky, potentially better product or service, threatening to canibalize a senior partner's core business, the company should the sort of place to try the messenger's idea, and to link her or his title and pay structure to the performance of the new product or service. It's so easy for the best employees to go off on their own and start a new company, existing companies have to focus on unleashing their employee's potential now more than ever before.
    Apr 13, 2015. 02:37 PM | 2 Likes Like |Link to Comment
  • REITs: The 90% Rule Isn't That Big A Deal [View article]
    Doesn't all come down to the fact that REITs claim massive depreciation deductions on their real estate? It's a sweet deal - especially for tripple net lease REITs, which don't generally pay for any upkeep and maintenance on the real estate they own - they get to write off the depreciation on an asset that basically doesn't depreciate.

    A different analysis with MREITs, obviously.
    Apr 10, 2015. 04:17 PM | Likes Like |Link to Comment
  • A Single Mother's Income - Dividend Growth Investing [View article]
    After today's 10% run up, guessing GE is now a substantially larger portion of Diva's portfolio. Time to diversify! Agree with Booban, though - slow and steady is always the way to make any change.
    Apr 10, 2015. 04:13 PM | 1 Like Like |Link to Comment
  • A Single Mother's Income - Dividend Growth Investing [View article]
    Diva - while holding 73% of your eggs in one basket isn't very prudent, I hope that you did hold onto your GE stock through this morning. You're in for a nice 8% surprise at 9:30 when the market opens!
    Apr 10, 2015. 08:38 AM | 4 Likes Like |Link to Comment
  • It Takes Courage To Not Run With The Bull [View article]
    I agree with Eudaimonia as a general matter - but I wouldn't value my business based on criteria such as market sentiment, or general economic conditions, or the PE ratio of the S&P500.
    Apr 10, 2015. 08:36 AM | Likes Like |Link to Comment
  • It Takes Courage To Not Run With The Bull [View article]
    If you owned a bunch of profitable American private companies with great products, managers and business models, would you sell them right now based on any of the indicators cited in this article? Why should it make a difference if the companies in question are public?
    Apr 9, 2015. 09:17 PM | 3 Likes Like |Link to Comment
  • My Dividend Growth Journey Ep. 1 - Why You Should Never Chase Yield [View article]
    There are plenty of high quality dividend payers that will pay you more than 2% - I suggest you read Brad Thomas' work on REITs. He does a great job pointing out very high quality tripple net lease REITs, some of which pay regularly increasing dividends in the area of 5%, give or take. As you know, REITs pay no corporate level income tax - that is reserved for the shareholder. HOWEVER, if you hold REITs in a ROTH IRA, nobody ever pays one red cent of tax - not at the shareholder or corporate level. Putting high quality tripple net lease REITs into a ROTH is one of the best deals going.

    Another good source for steady, relatively safe higher yield are MLPs and MLP funds. Since these collect contractually insured income, many do a great job of paying out dividends regular as clockwork. Picking MLPs is tricky stuff, so I tend to prefer MLP funds - you could check out AMLP, which is an MLP ETF. I think it has a pretty high yield at the moment, and the distributions look fairly predictable.

    Good luck!
    Apr 8, 2015. 06:19 PM | Likes Like |Link to Comment
  • My Dividend Growth Journey Ep. 1 - Why You Should Never Chase Yield [View article]
    I think you are trading in and out of positions too often, and you haven't diversified well (as you concede in your article). It's fine to own some high flying, high yield dividend stocks, but I'd diversify into some lower yielding, stodgy 3% and 2% yielders with a 20 year (or longer) track record of raising dividends. If you are going for BDCs, curiously high yielding REITs like ARCP (which I owned at one point), and Mreits, don't own one or two select names. Own 30 or 40, and assume many will slash their dividends. You'll never know in advance which ones will.

    Personally, I like to hold the overwhelming majority of my assets in companies with 20 or more years of consistent dividend growth. I'll pick a company like SWK, which makes tools (and has raised dividends for over 100 years), or MCK, which makes spices and seasonings, over a company like FSC which makes.... I don't know what exactly. SWK has raised its dividend for 100 years, whereas FSC? Not much track record there, which isn't surprising because FSC's business niche is.... well, I don't know exactly.

    I'll admit, I don't quite understand BDCs, whereas I use SWK's tools every day (won't use any other tools, for that matter), and enjoy Old Bay seasoning made by MKC on most of my chicken and fish dishes. I don't even care what Old Bay seasoning costs - I'll still buy it (and so will millions of other crab eating folks like myself). Sure, I'd like a 10% yield, but I'd rather have a 2% yield where I understand exactly where the money comes from and why the company's got some staying power, over a 10 yield that comes from... well, I don't quite understand where.

    You're right, it's a marathon. So buy a number of businesses you understand and are willing to stick with for life, pick companies with at least twenty, thirty, even fifty years of solid dividend history (or more, even), and keep reinvesting in these things for the next twenty to forty years until you can live off portfolio income and never so much as think about selling principal. And if you're going to play with high yielders that you don't fully understand (no shame - I own high yielders that I don't understand), own 100 firecrackers rather than one or two sticks of dynamite. I keep about 3% of my total portfolio in firecrackers, the rest is in companies that make stuff like jam, tampons, pharmaceuticals or trains.

    Now I'm just going to say that learning to invest is like learning to walk - you learn by bumping into things and falling down a lot, and then adapting. You need to be patient with yourself. My best advice is that I think you should read Ben Graham's book, the Intelligent Investor. If you like it, then go ahead and read all of Warren Buffett's shareholder letters. Read them four or five times, in fact. Keep your living expenses low, invest in durable yield rather than high yield, and keep it up for a couple of decades. It will take a long, long time, but you'll look back and will not believe how well you've done for yourself and your family.
    Apr 6, 2015. 08:52 PM | 23 Likes Like |Link to Comment
  • Why Dividend Growth Investing Might Not Be For You [View article]
    Regarded Solutions, I think all the examples of fun reasons why DGI might not be for everyone are backwards. For a family with enough wealth, living off dividend income should be a snap, with PLENTY of extra income left over to reinvest into more serial dividend raising companies. Better yet, the ultra wealthy have got plenty of capital that never needs to be sold - so the family can enjoy 50 year long, maybe even 100 year long, holding periods. Take a look at a 50 year chart for some of the companies that have been raising dividends for the last 50 years or more (think Stanley Black and Decker, Sherwin Williams, Dupont, McCormic, etc), and you get the picture. It is almost magical to see what can happen with multi-generational investment strategies focused on dividend growth, reinvesting dividends for compound returns, and permanent holding periods. It's when you have less wealth where DGI can get dicey. If you have less wealth and therefore cannot live off portfolio income alone, you're going to have to periodically sell assets, and the bewildering magic of DGI can suddenly start to look like a lame puppet show.

    Just sayin'.
    Apr 6, 2015. 06:26 PM | 6 Likes Like |Link to Comment