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  • The Dividend Growth Investing Mindset [View article]
    The reason Warren is usually way early is because it takes time for him to build a position. I think it is common sense.

    I'm a technical analyst who did nothing but trade off TA for years. I can read candlestick patterns and other technical indicators and they are worthless to an investor trying to build a portfolio over time. I hardly ever check a chart anymore.

    TA is okay if one is going to go all in with a full position or an over-weighted position. Timing the market is useless if you are going to ease in. If you are going to time the market, then you should know when to go in with size.

    I don't necessarily want IBM to take off from here. The portfolio I manage where the purchase was made doesn't have a full position yet. I would be perfectly happy if it traded sideways for the next 3 years or so.

    A lot of people are second guessing Buffett here, but I'm not. I didn't know he was buying until just recently, but I was buying ahead of his announcement. I think he's right long-term, and if he is, I am. And if I'm right, I'll will have to hear people tell me that I was lucky to get in at the bottom, just as they are telling me the same thing now about going all in in 2008.

    I wasn't lucky, and it wasn't/isn't obvious. I made a decision that seemed logical to me. You buy high quality companies in adverse times and slowly build your position.
    Mar 4, 2015. 06:53 PM | 1 Like Like |Link to Comment
  • The Dividend Growth Investing Mindset [View article]
    Scott, I hate technology. I don't have any idea how to do things.

    I received a message telling me I needed to save as a picture and zoom. I don't know what any of that means or how to do it. I was told I had to crop something. The only thing I know about cropping is I think that's what farmers do to tobacco.

    Someone told me to clear my cache. Say what? I still haven't got a clue what that means.

    I thought the browser was that little arrow thing that I move around with the mouse. I know what a mouse is.

    Just talking about technology is making my skin itch.

    I don't know how to excell or create and maintain spread sheets. I don't know how to text or use a smart phone. I don't know how to put a phone number into my phone. I hand it to people and tell them to put their number in. I met a pretty young lady down at Buffalo Wild Wings that wanted to hang with my crew and me on weekends for NFL games. She wanted to give me her number to stay in touch. I handed her the phone and told her to put it in. My cousin said I was a piece of work. I told him when she put it in, she was committed to giving me her number. ... Ha!

    I'm a relic man! A dinosaur.

    I don't like MSFT or CSCO because they are technology. I won't even do minimal research on them. When they come up in comments or articles, I usually skip over them. .... Brrrrrrrrr, no technology for me please.
    Mar 4, 2015. 01:17 PM | 4 Likes Like |Link to Comment
  • The Dividend Growth Investing Mindset [View article]
    Mikee, I understand. I don't like MSFT or CSCO and I don't care how good the numbers look, I'm not interested. Same with banks.

    IBM is the only technology company I feel comfortable buying.

    KO is probably one of those companies most people avoid because it lacks growth potential, yet I'm looking to add to an already overweight position.
    Mar 4, 2015. 08:02 AM | 2 Likes Like |Link to Comment
  • Altria Is The Best Dividend Growth Stock For Income Investors: UPDATED [View article]
    Matthew, your logic doesn't apply to a lot of people. They don't share your accurate view about stock splits. I have people tell me all the time they are waiting for a split and when I try to convey what you just did, it goes right over their heads.

    Splits matter to a lot of people, right or wrong.
    Mar 3, 2015. 07:46 PM | 1 Like Like |Link to Comment
  • You Can Absolutely, Positively, Retire Early... Maybe [View article]
    If you are at least 59 1/2, most employee retirement plans allow an early withdrawal to move the funds into a self directed Ira.

    I did just that with our 401K's. That way I was able to get the money working several years ahead of the distribution period.
    Mar 3, 2015. 07:42 PM | Likes Like |Link to Comment
  • The Dividend Growth Investing Mindset [View article]
    Speaking of mindset, and IBM specifically, a lot of people are avoiding IBM because of lower revenues. People are avoiding IBM because they don't expect price to rise anytime soon, or they simply think IBM is a company that will turn into the next Kodak.

    Unless I have a full position, or better, an overweight position, I don't want price to take off on me. Why would that be an advantage? I certainly couldn't add to it if it became overvalued. It certainly wouldn't have a great impact on my portfolio bottom line due to lack of size.

    There are companies like CL and ADP for example that I wanted to buy more of and can't due to price taking off.

    In a recent CNBC interview following the release of his annual letter, Buffett had this to say, specifically about IBM whom he doubled up on his position.

    >>> "People have this misconception that - when we buy a stock - we want it to go up. That's the last thing we want it to do ... There's been no surprises at IBM since we started buying it a few years ago ... We expected revenue to come down." <<<

    The position wasn't large enough to impact his bottom line because he lacked size and the under-performance has allowed him to build up his position.

    It's the same concept that applies to my portfolio. There are companies out there I want to see keep their share price down for now while I have time to build them into meaningful sized positions.

    I think IBM will survive. Buffett says he believes in the current CEO and if she doesn't work out, Buffett is finally getting to a point where the size of his position allows him to have some influence over the Board if changes have to be made.

    Project $3 Million currently has a 1/2 sized position in IBM and I will be looking to add to it if price will stay down.
    Mar 3, 2015. 07:09 PM | 2 Likes Like |Link to Comment
  • You Can Absolutely, Positively, Retire Early... Maybe [View article]
    Gee, sometimes the trader in me wants to come out. It took hard work to keep those urges under control.

    I can stick with a strategy, no problem. However, there are times when the urge to do something arises and any excuse will justify scratching that itch.

    How many times have you seen the comment, well I have free trades so it didn't cost me anything. The free trade made it easier.
    Mar 3, 2015. 03:28 PM | Likes Like |Link to Comment
  • Altria Is The Best Dividend Growth Stock For Income Investors: UPDATED [View article]
    Qniform, you may be right and I'm not disputing your analysis. I like your numbers!

    I'm simply showing how M* is valuing MO and S&P Capital IQ would have to agree since they value MO higher than M*.

    I would prefer PM here to MO, so again, I'm just sharing information.

    This from M*:

    Valuation 02/16/2015

    We are raising our fair value estimate to $51 per share from $44, primarily to account for increased profitability expectations, as well as slight adjustments to our cost of capital assumptions. Our fair value estimate implies a 2015 price/earnings ratio of 18.6 times, a 2015 enterprise value/EBITDA multiple of 13.9 times, and a 4.1% dividend yield. For 2015, we expect Altria to generate roughly $18.4 billion in net revenue and earn an adjusted $2.80 per share, at the high end of management's guidance of $2.75-$2.80.
    Mar 3, 2015. 03:12 PM | 1 Like Like |Link to Comment
  • Altria Is The Best Dividend Growth Stock For Income Investors: UPDATED [View article]
    I reinvest the dividends back into MO and as a result my 5 year CAGR is 14.18%. Now that's dividend growth! Without dividend reinvestment, the 5 year CAGR would be only 8.67%, not bad, but nowhere near the 14.18% I'm getting now.
    Mar 3, 2015. 03:02 PM | 1 Like Like |Link to Comment
  • Altria Is The Best Dividend Growth Stock For Income Investors: UPDATED [View article]
    Dividends#1 did contact me and I confirmed what justanengineer spoke to.
    Mar 3, 2015. 02:49 PM | 1 Like Like |Link to Comment
  • Altria Is The Best Dividend Growth Stock For Income Investors: UPDATED [View article]
    MO has been performing so well that Morningstar was forced to raise their fair value number by $7, going from $44 to $51 just a couple of weeks ago. That's a significant increase. S&P Capital IQ was forced to raise fair value to $52.

    This still makes MO overvalued based on their numbers, but now it's only slightly overvalued.
    Mar 3, 2015. 02:44 PM | 2 Likes Like |Link to Comment
  • You Can Absolutely, Positively, Retire Early... Maybe [View article]
    The public portfolio I manage had 6 buys and no sells in 2014, same for 2013. The sales fee was 0.05% of the portfolio value.

    I will have 6 buys in 2015 and hopefully no sells, so that percentage will come down.

    MF's and ETF's can't compare when it comes to fees.

    I assume those with free trades are apt to trade more and I never ask for free trades. When I refer someone to Fidelity or TD Ameritrade, I don't want the free trades in my accounts. I don't want the temptation of moving things around.
    Mar 3, 2015. 02:08 PM | 1 Like Like |Link to Comment
  • You Can Absolutely, Positively, Retire Early... Maybe [View article]
    >>> If you began saving for retirement just six years prior, you weren't about to succeed regardless. <<<

    I didn't read it that way. I do agree with Income Yield.

    A lot of people start turning to income investing as they near retirement. We see comments all the time from people who say they are staying with mutual funds, ETF's, or growth companies, and will switch to dividend paying companies as they near retirement.

    Income Yield's comment is spot on for those who have that mindset. At a time they are ready to change, they may be losing half of their portfolio value as too many people experienced in 2008-2009.

    How about now? Those looking to change to income paying companies now are going to be buying overvalued companies if they are looking for blue chip companies, and it's blue chip companies that provide the safest dividends for those in retirement.

    These two scenario's are why I decided to start income building years before retirement for those who I manage portfolios for.
    Mar 3, 2015. 02:01 PM | 2 Likes Like |Link to Comment
  • Dividend-Stingy Wal-Mart Was Already On Probation, So What Now? [View article]
    I don't own TGT personally, but I did add it to an "old folk" portfolio I manage for a friend. His cost basis is $59.76, so he's happy with the result.
    Mar 3, 2015. 01:54 PM | 1 Like Like |Link to Comment
  • Dividend-Stingy Wal-Mart Was Already On Probation, So What Now? [View article]
    Scott, this is why I break positions down to Core, Supporting and Speculative.

    If a company is a Core position, I'm not selling even if the dividend is frozen. I look for dividend growth, but if I don't get it with a Core position, I'll hold through the down business cycle as long as the company maintains its high quality rating.

    I don't know if WMT would be a Core or a Supporting role position in my portfolio. I don't own them and haven't. I do know that GIS is a Core position for me.

    I'm not going to sell GIS if they freeze the dividend. They have frozen it before but have never lowered it in over 100 years. So, the dividend is safe and that is where my most concern is, the safety of the dividend.

    In 2000, GIS lowered the dividend growth to 2% and then froze the dividend for 2001, 2002, 2003 and 2004 before they started raising it again, but GIS still outperformed the market from 2000 to 2014. In fact they doubled the S&P return for that time-frame.

    I can live with that.

    When I make these decisions to sell or not, I look at how the portfolio as a whole is performing. I can't expect all companies to be operating on all cylinders at all times. If I'm on schedule, or ahead of schedule with my portfolio objectives, I will ride out the down cycles as long as the company is still financially sound.

    If I'm falling behind on my objectives, then I have to start purging the weak. It's that simple to me, that's the mindset I have established for my investing.

    I'm working on being more of a business analyst than a market or economy analyst.
    Mar 2, 2015. 02:15 PM | 6 Likes Like |Link to Comment