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  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    >>> "In any case I have achieved my goal of putting my point across that even a well crafted hand picked portfolio of individual equities even during the boom times does not beat the market in total return." <<<

    Another example of you not understanding equity investing.

    Most blue chip companies that are purchased by most dividend growth investors are not supposed to outperform in boom times. They are defensive in nature and their true value is in protecting the downside. I'm not surprised that you didn't know that since you don't invest in equities.

    And you insist on advising others about equity investing? ... Ha! Ha! ... Unreal.
    Mar 31, 2015. 04:04 PM | 6 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    varan, I don't mind comparisons as long as they match the objectives. I have repeatedly told you that income growth is my primary objective and that I expect the portfolio to show double digit income growth regardless of market conditions and the portfolio is doing just that. Yet, you want to compare total return and ignore the income part, the part that is expected to more than make up for any lost total return.

    The portfolio does have a secondary objective of total return because total return is going to show up eventually whether I want it to or not. The portfolio objective is an annualized return, over the long term, of 8.25%.

    I wish to measure total return over two business cycles where compounding has a chance to start making an effect. It takes about 15 years but I don't have easy access to 15 year numbers, but I do have easy access to 10 year numbers.

    The Project $3 Million Portfolio, to hit that 8.25% annualized return over the first 10 years needs to be $211,205.56. As of today, with 4 more years to go, the portfolio value is $141,44.56. It is more than 30% ahead of schedule. I consider that acceptable for a secondary target.

    The annualized return, based on total return, for the S&P 500 is under 8%.

    Several months ago your suggestions was a portfolio of:

    VFINX which has a 10 year return of 7.97%, FDVLX at 8.59%, and VUSTX at 7.71%.

    My portfolio has an objective above what your portfolio has been able to produce.

    Now you are changing horses and suggesting VTI which has a 10 year return of 8.65%, which isn't bad, but won't come close to providing the income/cash flows that my portfolio will produce, which is our primary objective. The yield on VTI is a miserable 1.8% and my portfolio has a 3.8% yield.

    I know it's easy for a critic to use hindsight analysis and show something that has done better. That doesn't help most people. Tell us what you would do going forward and let's track it. I do it, but you refuse and we both know why. You don't want the criticism that will come your way when you under-perform. ... Ha!

    You're a trip.
    Mar 31, 2015. 09:33 AM | 11 Likes Like |Link to Comment
  • From Growth To Dividend, Why Warren Buffett's Primary Reason For Investing In Coke Is Slowly Fading [View article]
    Like Warren, I own KO for it's cash flows into my account. Although I don't get $538 million like Warren, I do enjoy counting on that safe and reliable cash flow.

    I'm not interested in selling my shares for capital gains, and I have some nice gains. I will continue to hold KO for the cash flows it generates in our accounts.
    Mar 30, 2015. 07:10 PM | 3 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    >>> Varan appears, to me at least, incredibly patient, considering most of the people in these threads don't even want to consider alternative strategies, let alone have their mind or "goals" changed <<<

    Lemme see if I got this right. A guy who has no experience using the dividend growth strategy, and has no intention of using the dividend growth strategy, is going to tell me I'm closed minded to alternative ways of investing.

    Meanwhile, I, who have experience with ETF investing, as well as mutual fund investing, and who held a Series 6 license, is closed minded to other ideas even though his experiences have shown him that the best way to achieve his goals is the strategy he chose to be committed to.

    Okay, I guess I get it. I don't know what I'm doing or why.

    Thanks for the heads up!
    Mar 30, 2015. 06:03 PM | 14 Likes Like |Link to Comment
  • Why Kraft Is Not A Good Investment Candidate [View article]
    Well stated Steve and I concur with your assessment.

    I don't think Buffett would have gone through with this if he didn't expect better things for Kraft-Heinz. From my perspective, it isn't so much what they have done separately, but what they can do together, going forward.

    I firmly believe there is a much better future for these two companies working in tandem.

    It was interesting to see one advisor in a comment stream announce he took profits on every client who held KRFT and he reported the merger and profits to his clients who were obviously delighted at the capital gains. Most advisors, I would think, love to take advantage of those situations to lock in credibility and cement the advisor/client relationship. That's normal for those in the business. I understand that concept.

    I must admit, I notified the people who I manage money for to let them know the results of Buffett buying out KRFT. I'm not opposed to basking in that glory! ... Ha!

    My friend asked, what's next? I told him that since we now have the initiative, we need to build on that. I told him I expect to add to KRFT once the deal is complete, not take profits at this time. I told him the strong often get stronger.

    Prior to the merger announcement, KRFT was considered overvalued by 5% according to S&P Capital IQ. After the merger announcement, and the price rose $20 per share, the new company was considered fairly valued. I'm not selling a single share of a high quality company, run by excellent management, because it is fairly valued. I will look to add more on top of an already overweight position.

    Buffett will make sure that management is highly qualified, that I am sure of, and because of that, I will relegate my greed and fear emotions and simply stick to what I always try to do, add to, or buy high quality companies at fair value or selling at a discount to fair value.

    Once the deal is complete, I will look to add more KRFT!
    Mar 30, 2015. 02:19 PM | 2 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    Open comment to clear the decks. varan has a way of mis-characterizing what it is I'm trying to accomplish with the public portfolio I manage called Project $3 Million. The portfolio belongs to a 30 year old who is looking to receive what we refer to as a pension from the market. Draw the dividends in retirement, avoid selling the underlying assets.

    I want to make our objectives perfectly clear since others have a tendency to muddy the waters so to speak.

    Project $3 Million is all about building an income stream that is reliable, predictable and increasing. The whole purpose of this portfolio is to earn enough income from the underlying assets, to replace the income currently being earned while employed.

    The companies that are purchased for this portfolio, and those that remain in this portfolio, must all support the overall objective; they must contribute to that income stream we are trying to build.

    We are not concerned with what the market is doing or will do; an income must be earned in all market conditions. Therefore, our focus remains on identifying companies that have a high probability of continuing to pay that dividend regardless of market or economic conditions.

    Total return is important to us from the standpoint that we want our positions to show capital appreciation so that the invested cash is not at risk. I don't mind putting cap appreciation at risk, but not the invested cash.

    There are times when cap appreciation and dividend income will rise together. Then there are times when prices head south, but the income stream continues to rise north. At times like this one needs to know what has priority. The income stream or cap appreciation? There's no wrong choice, but it does make a difference how the portfolio is managed.

    Our choice is to stay invested and continue to grow the income stream. It's why ETF's are unacceptable to us. They aren't very good stewards of producing an income stream that is reliable, predictable and increasing in "ALL" market conditions. Project $3 Million is designed to do just that, and if it underperforms the market for a period of time, so be it. The reward is that the income stream will grow faster because we're getting more shares at depressed prices and the dividends aren't depressed, the price is. Dividends aren't based on price, they are based on shares.

    Show me a better and more reliable way of meeting this objective, and I'm all ears, but ETF's are a joke to me based on what I am trying to accomplish. Those with different goals then ETF's make a great investment tool. I don't dispute that and in fact would encourage it.

    Know your priorities and then own whatever it is that supports those priorities. It's as simple as that to me.
    Mar 30, 2015. 09:20 AM | 11 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    Ah, the good old dodge the question because you don't want others to see your results technique. I get it.
    Mar 29, 2015. 10:39 PM | 13 Likes Like |Link to Comment
  • A Day In The Life [View article]
    goose, you can get some Morningstar Credit Ratings via this link:

    You will need to register with Standard and Poor, but the information is free. Once you register, type in the company name at the top left and the ratings will come up.

    If your local library makes Value Line accessible online, you can their Safety Ratings free of charge.

    The best book is, The Single Best Investment by Lowell Miller. I also like The Ultimate Dividend Playbook by Josh Peters of Morningstar. Then there's, Dividends Still Don't Lie by Kelley Wright.

    These books are not to be read as novels page after page non-stop. I studied them one chapter at a time, made notes, tested myself and constantly review them.
    Mar 29, 2015. 07:25 PM | 10 Likes Like |Link to Comment
  • Mr. Valuation's Best Ideas For Retirement And Dividend Growth Portfolios: Emerson Electric [View article]
    >>> his total return has not matched that of VTI, even though he claims that he is in it for the total return too. <<<

    Total return is a secondary objective. ... SECONDARY.

    The primary objective is the dividend income growth. VTI can't match the current income flow and can't provide an income stream that grows double digits every year regardless of market conditions. Therefore, VTI is not an appropriate investment vehicle for the person I manage money for.

    I will sacrifice short to intermediate term total return to insure the income objectives are met.

    Additionally, the person who owns the Project $3 Million Portfolio does not want to invest in technology companies. When I look at the top 25 holdings of VTI, 10 of them are technology companies. ... TEN!

    He currently owns one technology company and that's IBM. He might one day own one more technology company ... might.

    That leaves 14 other companies that represent the top 25 holdings in VTI and of those we own 8 of them. The others are on our watch list and we will buy them at better valuations than we can get them today by investing in VTI.

    So again, VTI is not an appropriate investment vehicle for us.

    If total return were my primary objective, I would not be investing in the old blue chip companies. I would be investing in the companies that make up the Investors Business Daily Top 100. Companies where earnings expectations are expected to exceed 15% annual growth.

    If total return were my primary objective, I wouldn't be accepting companies with 6% expected earnings rates which I am doing now.

    If you wish to make total return your top priority, I see nothing wrong with that, but you haven't done a very good job of it. You should have tied up everything in Starbucks, Apple and Gilead six years ago and you would be so far ahead of the market today you could probably take a 5 year vacation and forget about it.

    In order to achieve the target we established for 40 years down the road, all we need is an annualized return of 8.25%. Over the last 20 years, the S&P 500 has only returned 7.5% according to S&P Capital IQ. My focus will remain on the income growth and as long as that is being achieved, the 8% total return number will take care of itself.

    Nobody who has looked at Project $3 Million has doubted it can achieve an 8.25% return. Some have said the objective is too low. It doesn't matter. That's all the client needs. If the client needed more, I would do it differently, but it's not my place to tell someone I manage money for that their objectives stink.

    It would be nice if you would put something relative out there on what your recommendation would be going forward based on their objectives, but I know you'd never put yourself on the line like that, so here we are, you telling someone else what their objectives should be.
    Mar 29, 2015. 07:09 PM | 14 Likes Like |Link to Comment
  • A Day In The Life [View article]
    >>> I still cannot understand how the value of the stocks doesn't matter but if this works for you, that's fine. <<<

    @tstreet, I explain the The Dividend Growth Investing Mindset here:
    Mar 29, 2015. 01:43 PM | 4 Likes Like |Link to Comment
  • A Day In The Life [View article]
    tikigod, my next scheduled purchase is two weeks away. I don't have a clue what works today. I will start my search for the next purchase late next week. Until then, I can't comment because I haven't looked.
    Mar 29, 2015. 01:39 PM | 1 Like Like |Link to Comment
  • A Day In The Life [View article]
    Thanks KKing.

    goose, keep in mind I utilize the Chowder Rule number "after" all other financial criteria is met. It wasn't meant to be used as a screening tool. The Chowder Rule number doesn't meet what I want it to meet if the company doesn't have high quality, investment grade credit strength.
    Mar 29, 2015. 01:34 PM | 3 Likes Like |Link to Comment
  • Why Kraft Is Not A Good Investment Candidate [View article]
    It's funny how people view things. I am very close to a 100% gain in KRFT and rather than sell off parts of this company, I'm looking to add more once the merger is complete.

    Why are people so quick to sell off parts of a company that has outperformed other companies and our own expectations once the position doubles?

    The strong often get stronger.

    How many times have we heard people who have a very successful position say the only regret they have is that they don't own more of it? I want to own more of what's working, not less.

    I envision KRFT eventually having a 200% capital gain and my heirs will probably see 300% and 400% gains. I want more of that, not less, and the company with the best odds of obtaining 200% gains are the ones already exceeding 100% gains.

    A funny thing happens when you are up 200% or more on a position. A market correction of 30% is nothing more annoying than a fruit fly. Investable money is not at risk. I'm able to stay calm in a world of panic, and those who are in a world of panic are those who didn't have large enough gains in place to keep their positions from going into the red during a serious market correction. Their initial investment money is at risk.

    KRFT is now going to be a stronger company than it was before. That is a time to add to the position, not sell off parts of it.

    Just my humble opinion.

    You did qualify your statement with suppose for various reasons, and since I don't know what your various reasons are, I can't address them.

    Since I don't know your situation, in retirement, young and starting out, risk tolerance, what your other holdings are etc., I don't know what to recommend. I would need more specifics on your goals, what it is you are trying to achieve in addition to just seeking a 3% minimum yield.
    Mar 29, 2015. 01:27 PM | 3 Likes Like |Link to Comment
  • A Day In The Life [View article]
    For me it was Rolaids! I ate them by the package. The emotional strain of trading catches up with you if you aren't fit. One had better be rested and nourished for energy because by the end of the day, you are mentally and physically drained. At least I was.
    Mar 29, 2015. 08:15 AM | 15 Likes Like |Link to Comment
  • Why Kraft Is Not A Good Investment Candidate [View article]
    No dividend in BRK and that prevents a lot of people from purchasing it, including yours truly.
    Mar 28, 2015. 07:21 PM | 2 Likes Like |Link to Comment