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Dale Roberts  

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  • Nike On Top Of Its Game With Double-Digit Earnings Growth [View article]
    Yes, expensive some will write. But that 26 PE forward earnings appears to be the price of growth in today's market environment. If you like a company, buy it and add to it. Buy and hold and add. It is all that simple. If Nike goes on sale due to its own performance or due to a market reset, buy some more without evaluation.

    A wonderful dividend achiever hopefully heading into the aristocrat index in over a decade.

    Dale
    Jun 27, 2015. 08:06 AM | 1 Like Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    "Please tell me that you are not suggesting that investors should not do any homework, due diligence or research on any investments that they contemplate putting their hard earned money into".

    You mean like buying the no research required passive dividend aristocrat index(or its constituents)? Well absolutely. I would guess that no research required index has beat just about everybody here, on total return. And that may continue.

    That methodology trusts the dividend growth history. Dividend growth is a divining rod that finds earnings power and financial stability. No other research was required for that index.

    I will not rebalance, I will let the winners run as per the Ellis's and buyandhold (an SA investor with a wonderful message). Perhaps the most important message - Buy and Hold. Not buy and evaluate and guess and have sell rules and lots of second guessing.

    Anyway, back to adding a few paragraphs to my initial experience of buying 15 aristocrats and achievers (with no research, with no sweat, no worries).

    Dale
    Jun 26, 2015. 08:05 AM | 1 Like Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    Thanks, I appreciate the reply. I could refute just about every point (there's some contradictory stuff going on in there) but I won't. We both got to make our points.

    And the effective of the value evaluation with respect to Nike is quite clear.

    Your tool actually reinforces how accurate the professionals are at estimating the growth prospects of companies. They usually get it right; at least on the dozen or so that I looked into.

    But of course it is a stock market, and that overall valuation (what we pay for growth prospects) and money flow is important and can change in a hurry. As Mr. Ellis writes, the markets are efficient (professionals), and the markets are emotionally unstable (individual investors).

    Thanks for your reply.

    Dale
    Jun 26, 2015. 07:48 AM | Likes Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    I will finish with this. I perhaps will add some value to the debate with my own portfolio experience. My next article is entitled Buying Dividend Growth Stocks Without Looking. I recently skimmed from the top 20 or so of VIG, sold the ETF and bought 15 companies with the goal of eventually holding about 20 companies.

    I bought without any evaluation of company metrics. The only metric is dividend growth history (and yes the index applies dividend health screens). So my money is where my mouth is. I will share that process moving forward.

    VIG top holdings such as NIKE and CVS Health became individual holdings. Many would write that CVS is very expensive today, well that's the price of growth in today's market. CVS has a current PE of 25.8 and a forward PE of 18.1. That's the cost of buying a company that has quadrupled revenue over the last decade, has increased earnings by 40% over the last 5 years, and has earnings per share growth of 15.2% (at least according to guru focus) over the last 3 years. The market (professional group think) says that is the current cost of buying earnings potential.

    The stock market might get repriced, CVS along for the ride. If the stock markets correct (that is the greater question) I will be purchasing more of CVS and the Nike's of the world. I will not try and guess at optimal entry points.

    Dale
    Jun 25, 2015. 08:20 AM | Likes Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    All said, I think we should be able to debate this in respectful fashion. The author makes a claim that there are tools that can allow you better entry and exit points for company ownership. I respectfully disagree. I will certainly put that in an article or two so that readers can challenge and debate.

    And we've seen that Mr. Carnevale is always able to put forward his case and he does so in respectful fashion, even when countering challenges.

    Investors can then decide if they want to purchase tools that they feel will add value (to their goals) above and beyond the costs.

    Dale
    Jun 25, 2015. 07:49 AM | 2 Likes Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    It is perhaps always a good idea to go back to the basic understanding of a metric? ...

    "Broadly, a high price-earnings ratio means the market believes that
    that the company has strong future growth prospects. A low price-earnings ratio generally means the market has low earnings growth expectations for the firm or there is high risk or uncertainty of the firm actually achieving growth".

    Dale
    Jun 25, 2015. 07:42 AM | Likes Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    Hi Chowder, I am not singling anyone out. We are here to learn and share. The author is here to sell a tool and active management, I am on the other side for the most part. I will suggest that investors might consider not having to pay for stock reco books or evaluation tools and websites of any sort, not just the above example. Or be very selective about the advice and tools that you purchase. Make sure there is real value.

    But always to each, his or her own. Read. Decide. Invest.

    The very salient point made was that the tool did not provide any value with regards to entry points and exit points. When ever I look into tools such as this I see it reinforcing that the markets are largely efficient (but certainly not perfectly efficient). The information from a tool such as this is already priced into the stock by professionals with much more expertise and many many more weapons. It is priced in, that is a fact.

    When the PE ratio drops below a recent or historical 'normal' range, it means the market has weaker earnings growth expectations moving forward. Every time I have checked in, I see the market was largely right - the company had lower earnings (trend) and lower total return. That's my observation.

    But again, if you like a company buy it and hold it and add to it on a regular schedule. That appears to be what works for the very successful investors.

    As Mr. Charles Ellis writes in Winning the Loser's Game, those who try too hard run into trouble. It is a fool's game to try and beat the market, is the theme of that wonderful book. It's a good read, and it will help readers understand how the market is priced.

    Investing is simple but it ain't easy, as Mr .B likes to say. :)

    Dale
    Jun 25, 2015. 07:37 AM | 4 Likes Like |Link to Comment
  • Can We Really Trust Nike's Stock Price? [View article]
    Since the author sold out due to the tools showing a too high valuation, NIKE has delivered 24.8% per year. Those returns are way, way above the returns of when the author bought when there was incredible value. The tool seemed to not work with this company evaluation.

    The only truly successful investors I've come across all appear to share the same trait - patience. They buy and hold and add at regular intervals. They do not over think, or "over-evaluate". Most buying and selling usually leads to a lesser purchase, as research shows.

    This is another lesson for Seeking Alpha readers. Investing is that simple. Buy and hold and add to companies that you like. For dividend growth investors, buy companies with a history of increasing dividends, and trust that dividend growth. It will do all the work necessary.

    Dale
    Jun 24, 2015. 07:26 AM | 4 Likes Like |Link to Comment
  • Choosing Which Stocks To Sell For A Big Purchase [View article]
    Thanks, I appreciate the replies. You may be less emotional than you used to be, but it appears that you are still very active and looking for an edge, looking for a win. That usually leads to trouble :)

    As I have written, the trick to dividend growth investing is instead of seeking alpha, let the alpha come to you.

    Experience and returns will be your teacher. I would suggest you track your returns against appropriate indices such as the Aristocrats, and Equal Weight RSP.

    Dale
    Jun 24, 2015. 06:40 AM | 1 Like Like |Link to Comment
  • Choosing Which Stocks To Sell For A Big Purchase [View article]
    Another rule I would suggest, ha, is don't sell. Don't have a sell rule, perhaps other than a dividend cut, and then perhaps consider holding?

    With all due respect you appear to be a very emotional investor who thinks very hard, too hard. Buy and hold. If you don't trust your purchase decision, then you don't trust yourself - you should not be buying individual stocks.

    There is very little research required for dividend growth investing. For me there is no research required. There's no research required for purchasing 20-30 aristocrats. There is no research required to purchase 20-30 of the Dividend Achievers (that will include some aristocrats of course) Trust the dividend growth history. That dividend growth history is much smarter than you and me and everyone reading this. :)

    For now, take yourself out of the stock selection process and buy a Canadian and an US dividend ETF or index?

    Dale
    Jun 23, 2015. 06:59 AM | Likes Like |Link to Comment
  • Choosing Which Stocks To Sell For A Big Purchase [View article]
    Why were you investing short term monies? A rule of thumb is to keep an emergency fund. Any monies you may need in the next five years should not be invested in a growth portfolio.

    Many keep 3-6 months or more in total spending needs in cash. We need to separate are short term and long term monies. Only our long term monies are invested for real growth. That way we don't end up with losses. We don't break rule no 1 and no 2.

    Dale
    Jun 23, 2015. 06:49 AM | 2 Likes Like |Link to Comment
  • The Evolution Of My Approach To Dividend Income [View article]
    Interesting from the first link ...

    It is possible to get “growth at a low price”(GALP) 12 . Individually, the market is sufficiently efficient that few, if any, stocks individually have the GALP profile.

    However, it seems that the stock market is sufficiently inefficient that it is possible to assemble a collective portfolio (like our decile 10) that indeed has the GALP profile.

    Dale
    Jun 22, 2015. 08:44 AM | 1 Like Like |Link to Comment
  • The Evolution Of My Approach To Dividend Income [View article]
    Thanks Craig, I will trust that the companies are suitably priced for the times. I will trust the billions of dollars of research and expertise of the professionals. The markets are professionally priced.

    And then I will trust the dividend growth history to hopefully find that long term earnings power. And I will continue to buy at different prices and valuations.

    Dale
    Jun 22, 2015. 08:31 AM | Likes Like |Link to Comment
  • Dividends Are Not That Reliable [View article]
    "The aggregated virtues of high yielding stocks have led them to outperform low- and no-yield stocks over time"...

    I think low yield and low payout ratio would be the second best performer in the group, from those dividend growth studies. See the Sure Dividend site for links and studies.

    Also the small cap indices have a very pronounced history of beating the crap out of the total market and S&P 500 indices, they will beat the high yield as well. Current yield on Vanguard Small Cap, 1.38%.

    One has to be very careful with high yield. Once again, studies suggest paying attention to that payout ratio.

    Dale
    Jun 21, 2015. 06:12 AM | 2 Likes Like |Link to Comment
  • The Evolution Of My Approach To Dividend Income [View article]
    EOG is in the next file for my list of Achievers to add (skim). I looked into that company when I was researching and writing on the energy space and the new oil price paradigm. All said, I will buy it because it is on the list, not because of the research.

    It is a company that has tripled its revenue from 2008. It is the original fracker, shale play (pioneer). Payout ratio 15. It might be very well positioned for the new low oil price paradigm.

    Some might invest for the income (enabled by revenues and income), I will invest for the actual revenue and earnings growth, the inputs. Dividend growth has a habit of finding that earnings power. Why eliminate companies simply because they choose to return less of their earnings by way of dividends? Why not trust the earnings column? Why not simply trust the dividend growth history?

    That is a question investors might ask, and it is up to each of them to decide.

    If investors pass by incredible earnings power, they will likely leave some total return on the table.

    Dale
    Jun 21, 2015. 05:53 AM | Likes Like |Link to Comment
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