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  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    Rose, thanks for the kind words.

    The word that causes many people to freeze up like a deer in headlights when it comes to equities is "growth."

    They apply that word to cap appreciation and I apply it to income.

    They are quick to tell me how KO has under-performed the market over many times frames. They continue to try and inject their objectives on my results. I'm not interested in KO outperforming the market. If it does, fine, if it doesn't fine. It's how KO continues to pay and growth the cash flows they inject into our portfolio's that is important to me.

    I was reading the Essays of Warren Buffett earlier in the week and Buffett said that he and Charlie have no price in mind that would cause them to sell their shares in KO. The steady and reliable cash flows from KO is what they are after.

    We reinvest our KO dividends and over the last 5 years, our compounded annual growth rate is 11.26%. Now that's what I want from a dividend growth company.

    To help insure the companies I own produce for me what KO does, I focus on the quality of those companies. Most growth companies have lower ratings. I'll take the low and slow pace of a KO because that low and slow price performance is what is allowing us to purchase more shares to increase the cash flows from dividends.

    I do understand that over the last 5 years that the "total" annualized return for KO has only been 9.9% and the S&P has been 14.9%. I do realize that if I needed to generate cash I could have made up the difference between the index dividend and selling some shares and might still be ahead with the index. But, I don't wish to sell anything. I don't wish to have a strategy where selling is "mandatory." I want it as an option. This move works now. It doesn't work well in significant market corrections. Dividends keep coming regardless and that's where my peace of mind comes into play.
    Apr 24, 2015. 09:56 AM | 2 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    >>> If you were any kind of dividend investor you owned GE in the Jack Welch days and just sat on this glorious retirement stock. <<<

    I guess I don't qualify for "any kind of" because I never owned GE. Looks like we'll have to come up with another name to call me.
    Apr 24, 2015. 09:33 AM | 5 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    @Contraria ... If truth be known DD is way more concerned about capital preservation than he is dividend income. There is nothing wrong with that if that's his primary concern or objective.

    The number of companies rated A- or better, which was his criteria, selling below fair value are much harder to find. He only wanted to invest in companies rated A- or better and selling at a discount. His criteria is what dictated his actions out of dividend growth investing.

    My goals are different and it's why I utilize a different strategy. I am still able to find high quality companies selling at a discount to fair value, but they are few. When I can't find any I'll add to a core position. I don't plan on selling a core position so I don't care if I limit the amount of cap appreciation I give up by averaging up on my position. It's the income and the growth of that income that is paramount, based on my goals.

    I have no fear of market corrections. I can handle seeing our portfolio's dropping 30% in value and not worry about it. Due to the quality of the companies I own, and their niche in the economic world, any negative price action will be temporary in my opinion, and that's how I will let it play out.

    Where some get comfort from the number of companies they can own within an ETF, I get comfort from owning companies rated BBB+ or better and are the leading companies within their industry.

    I do think this is not the time to sell dividend growth companies and switch to an index fund. If the market is going to correct, most of the companies I own are not going to correct as much as the index will, in my opinion. But, if others feel comfortable with that kind of diversity, then I support their decision. It's not my place to tell them they are wrong, they might be right. ... Ha!

    I explain what I do and will continue to do and owning ETF's will not be part of that process.
    Apr 24, 2015. 09:24 AM | 5 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    >>> And how are earnings not affected by rising interest rates when heavy borrowers like telecoms (T) and utilities incur higher costs to service debt, hence depressing their bottom line? <<<

    And after the initial hit to share price, those costs will be passed on to the public and earnings will start rising again and so will share prices.

    Companies don't absorb those higher costs, they pass them along to the consumer. At least the necessity companies do, you can't do without their product or service.
    Apr 23, 2015. 06:48 PM | 1 Like Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    @Pot Roast ... >>> I take accumulated dividends and regularly buy new or extra chunks in the company I feel is the best purchase at that time. <<<

    This comment is not meant to be critical, it is simply something to open conversation. I'm not going to try and sell people on the idea of reinvesting dividends, that's up to them, it's their money. However, I reinvest all dividends on all holdings.

    I have positions that are up well above 100% and a lot of people are mind conditioned to take at least half of their position off the table and play with house money. I'm of the opposite view. I'm looking to add to the position. The strong often get stronger.

    Overvalued companies can stay overvalued for long periods of time. If they continue to meet earnings expectations, price is going to continue higher. The market doesn't care if you have a 100% return or not, it only cares about a company's performance. So do I.

    I will not chase price higher to buy an overvalued company, but I'll continue to reinvest the dividends and/or add to one once I have a large margin of safety with regard to my cost basis.

    How many times do we read comments from people who had a nice percentage profit say they regret not owning more? You won't hear it from me! I'll average up on a position in a heartbeat. The strong often get stronger babee!
    Apr 23, 2015. 06:45 PM | 3 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    Maybe I don't get it. If the market is overvalued, the ETF's are overvalued. When people pour more money into ETF's, they have to go to market to buy more of these overvalued companies and that runs valuations even higher, yet people don't think twice of buying overvalued ETF's. Talk to them about an overvalued equity and it's like the boogeyman just invaded their home.
    Apr 23, 2015. 06:09 PM | 4 Likes Like |Link to Comment
  • Project $3 Million - Portfolio Management, New Purchase [View article]
    MMP just came out with another quarterly increase of 3.2% which gives them nearly 17% year over year and that's how I measure MLP increases, year over year.

    MMP is up nearly 200% for us and is a rather large position, so a 17% increase on a position of size has a very nice impact on the total dividends received.
    Apr 23, 2015. 06:01 PM | 1 Like Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Pot Roast, yes. That's the purpose of dripping. Buy less shares at higher prices, buys more with lower prices.

    Keep in mind also that the strong often get stronger. Some companies always seem to sell at a premium but that doesn't prevent prices from going higher. Sometimes rating firms are forced to raise valuations because the underlying companies continue to meet earnings expectations.

    I thought I was a genius selling VFC when the yield dropped below 2%, the company was overvalued, and I locked in an 80% profit. Pure genius!

    Then VFC continued to be overvalued, continued to meet earnings expectations, continued to offer an insignificant yield but price rose another 100% on top of the 80% I locked in. Pure dummy!

    Things are much easier in hindsight. Therefore I have simply decided to hold on to high quality companies as long as they remain high quality.
    Apr 23, 2015. 09:34 AM | 12 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Thanks DD. I hadn't read your blog prior to my comment. I didn't know it was there. I decided to look back on your comments and found it. I just finished reading it and all of the comments that followed and you explained yourself very well. I understand now where you are coming from and I salute you sir and wish you well in your next phase.

    Be sure to stop in from time to time and say hey! ... Ha!
    Apr 23, 2015. 08:14 AM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    DD, I'm surprised to read your comment pertaining to company risk. I thought all of your holdings were rated A- and above.

    I can't recall an A rated company going bankrupt, there is usually a regression series prior to that where its ratings continue to drop and you have plenty of time to think and react during that process.

    I thought that was why you were so strict about your quality ratings.
    Apr 23, 2015. 07:20 AM | Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    @Anthony ... You say you can't see buying low/no growth stocks trading at premium multiples. I'm a dividend growth investor and I can't see it either.

    Most of the dividend growth investors I know here on SA wait until they can purchase ownership in a dividend growth company until they can purchase it at a discount to fair value. I know I do.
    Apr 23, 2015. 07:06 AM | 7 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    Most of these companies that people talk about being overvalued are in these other ETF's that people talk about owning. Yet people don't think twice about ETF valuations when they buy.

    If all these equities are valued too richly to buy, what makes the ETF an attractive value or option?
    Apr 23, 2015. 06:22 AM | 7 Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio: 1st Quarter 2015 Update [View article]
    heglimp, this is where being patient is truly a virtue.

    Some people want to try and get "hero price" and try to guess at a low price, the trader part in me, that still remains, suggest waiting for revenues to start rising and then go in more with size as opposed to small positions.

    The more uncertainty there is, the smaller the positions should be when buying. When you see revenues and oil prices rising, you have more certainty. The more certainty you have, the larger the buy positions should be unless your hands are tied like mine are with Project $3 Million. That person can only invest $500 per month so I have limitations.
    Apr 22, 2015. 09:11 PM | 1 Like Like |Link to Comment
  • Project $3 Million - Portfolio Management, New Purchase [View article]
    troll, I know this is difficult for some people to believe, but having KO under-perform the market is of no concern to me. All I care about is that the money I invested in KO is safe, and it is, I have a profit of nearly 70% based on my cost basis.

    I am firmly in the Warren Buffett camp when it comes to KO. It is not for sale at any price, so it doesn't matter to me what price does outside of just showing a profit on my invested cash. It's the safety of the dividend and the cash flows the dividend represent as they enter the portfolio that has priority for me.

    Companies like MA and ROST, just to provide an example, are companies I count on and expect to show cap appreciation, not KO, PG, T and some of my other core positions.

    Quite a few people who claim to be total return investors don't understand the importance of the cash flows from dividends that some of us prefer over huge cap gains. My CAGR with regard to my KO dividend income is over 10% annualized for the last 5 years. I would be perfectly happy if the next 5 did the same thing.

    In fact, I think I wrote in this comment stream, or somewhere within the past week that I added more KO to an "old folk" portfolio. Talk about timing there ... Ha!

    It wasn't by design, it's just my week. It's why Real Madrid and Juventus won today. Ole Chowder is on a roll! ... Heh, heh.
    Apr 22, 2015. 08:53 PM | 5 Likes Like |Link to Comment
  • Project $3 Million - Portfolio Management, New Purchase [View article]
    Thanks, but I wasn't trying to time the call, it just worked that way.

    I did mention in the article that I thought I would lose the discount to fair value if I waited on MA and chose to chase yield elsewhere. So I'm not surprised that MA is moving up quickly.
    Apr 22, 2015. 08:40 PM | 1 Like Like |Link to Comment