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Dale Roberts

 
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  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Hi positive see my articles on retirees, they demonstrate that there is no additional risk in harvesting shares for income. There is sequence of returns risk, and that can be easily managed. In the end it comes down to the earnings power of the companies you hold. Sequence of returns risk can certainly be managed with some higher yield, bonds (for inverse relationship to equities) and cash.

    As Chuck Carnevale recently wrote, strong earnings potential with lower yield can be less risky than some higher yielders with little or no growth.

    Earnings power = greatest protection from inflation over the longer term.

    Dale
    Nov 23, 2014. 11:29 AM | Likes Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Hi Steve, DGI can be indexing, Dividend Aristocrats NOBL, SDY, VIG, etc.

    It's not one of the other. It's passive vs active even within the realm of dividend growth. Many will use a blend as you can tell by the message boards.

    The Aristocrats are simply SP500 member with 25 year plus div growth history, perhaps one of the most pure indexes you could create.

    Dale
    Nov 23, 2014. 11:24 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Yes, it's about making money, and the most money, well for those who want the most money :)

    And that's why comparing to an index or ETF or professional manager is important, once again for those who want the most money :) ha.

    And again there are some great Dividend Growth indexes such as the simple Dividend Aristocrats that has a history of a considerable market beat. That is recognizing the potential of dividend growth (the appreciation of) and that the best use of dividend growth might be through a market index or ETF.

    It's just math, and not an emotional argument. Benchmarking is a part of most any industry, or profession.

    Dale
    Nov 23, 2014. 08:54 AM | 3 Likes Like |Link to Comment
  • 75 Fairly Valued High Current Income Dividend Stocks For Your Retirement Portfolios: Part 2 [View article]
    Thanks again Chuck. A reader posted an interesting comment on one or your previous articles. Your charts list normal 5-year PE, I am assuming that's over the last 5 years?

    If so, how does that 5-year normal PE compare to normal PEs from the 1950s, 60s, 70s, and 80's? PE levels went to silly levels in the late 90's and never really did reset to a historical average range. Are we assuming that it's different now? That there is a new normal for purchasing at higher PE levels?

    For historical perspective do have you the historical 5 year avg PEs for some of the companies that have been around for many, many decades? And that is through those decades.

    Thanks, Dale
    Nov 23, 2014. 08:17 AM | Likes Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Hi Ted I am on the opposite side of the coin on trying to redefine risk, it is the emotional reaction to price. I even think that investors who take the approach that they will ignore price because they are only going to watch, or care about the income are setting themselves up for even greater failure. They might be indentifying themselves as having very low risk tolerance level. An all equity portfolio would likely be dangerous.

    I am with Warren Buffet on this one, if you can't handle a 50% price drop in one of your companies, don't invest. Or of course that swings to manage your total portfolio value and price declines with bonds. 40% bonds might turn a 50% market correction of 20% or less. Market return history suggests that would be a good move for many (most?) investors.

    Dale
    Nov 23, 2014. 08:03 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    And also, when we mention moving through a correction, then the holdings will take a backseat in importance to investor behaviour. Investors largely turn those 10% average annual market returns into 2-3% or less due to fear and the emotional reaction to price drops and holding a portfolio that does not match the investor's risk tolerance level.

    That's why I write a lot about risk management and bonds and balanced portfolios. One can add 25% bonds and create a (re-balanced) balanced growth portfolio that will beat the broader market through most periods. That's an easy decision for most.

    Net, net, in the end the risk management is likely more important than the holdings and approach. But once risk is addressed, then the style decisions become important.

    Dale
    Nov 23, 2014. 07:45 AM | 4 Likes Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Appreciate the numbers but to be fair, and honest, ha, I'll have to admit that VDIGX did not beat the market in that period either. In fact the top 30 picks would (ironically) be identical to VDIGX based on averaging the returns.
    There are period when the broad market indexes are very hard to beat.
    The real test and benefit of DGI is moving through corrections.
    From beginning of 2009 to present SPY beats VDIGX.
    From beginning of 2008 to present VDIGX beats SPY.
    VDIGX then goes back and beats SPY from every Jan 1 start date back to and including January 1, 1998 to present.
    Move back furhter and we're into a period where SPY has a beat.
    Dale
    Nov 23, 2014. 07:39 AM | 3 Likes Like |Link to Comment
  • Dividend Growth Investing, Total Return, And Indexing Revisited [View article]
    Hi West Coast Investor thanks for the link to my article. My follow up that will compare the investment approach of 'Seeking Alpha' vs the professional Vanguard Manager is finished and will be posted tomorrow or Tuesday. There is a distinct separation, in style and approach when we look at the current holdings, and those tea leaves.

    Again the main distinction is generally investing for income "total income" or Total Return. There is great logic in creating a portfolio that grows to a larger number. I think most of us would say we want more money to spend and invest in retirement. That's why I do these types of articles. And I write them for those who do not comment, largely, the silent majority.

    You will get some "feedback" ha. Stick to the high road. And remember those who have selected a path, will not change their mind based on articles or research or evidence. Life is the only lesson that most will respond to. And you can put me in that group. I had to have an expensive hobby before I did some real research into what works, and what does not in the world of investing.

    Dale
    Nov 23, 2014. 07:30 AM | 5 Likes Like |Link to Comment
  • The Real Nifty 50 For Dividend Growth Investors [View article]
    And here's a new article posted that links to this one. The article back tests the top 30 consensus holdings, vs market indexes for what it's worth ...

    http://seekingalpha.co...

    The indexes come out ahead in the last 5 year bull run. But of course the measure would be a look moving forward, and moving forward through a market correction or two. In some periods the markets are hard to beat.

    Dale
    Nov 23, 2014. 07:15 AM | Likes Like |Link to Comment
  • The Real Nifty 50 For Dividend Growth Investors [View article]
    Some may want that 80% market beat potential over 15 years. Count me in on that. And some may feel they are not able to beat the market, at all, or to the degree that the Mr. Kilbride's can. Or again, perhaps they buy the dividend aristocrats index in the hope that they continue that near 3% per year market beat.

    That's said over the last 15 years the Vanguard market outperform is higher than the outperform rate of the dividend aristocrats.

    Again the next article will show the difference between the Vanguard approach and that of the panelists consensus. It is considerable. The holdings are the tea leaves and they speak volumes.

    Once again, only a consideration for those who want to create the greatest wealth, and have the largest sum to invest and spend in retirement.

    Dale
    Nov 22, 2014. 04:18 PM | Likes Like |Link to Comment
  • Equity Selections For Your Retirement Portfolios: 39 Dividend Growth Stocks For Total Return: Part 1 [View article]
    Great post Chuck. Yes lower to modest yielding stocks that are better designed for total return can at times deliver the most by way of inflation protection. And that sequence of returns risk can be managed with cash and bonds, or even a higher income component (bond replacement as I think you've penned or suggested in the past). I prefer bonds for that inverse relationship in major corrections.

    But as you've written on in the past a growth component may be very beneficial for retirees who require an aggressive spending strategy. It will come down to earnings power.

    All said the dividend aristocrats have done the trick for total return in the past.

    Dale
    Nov 22, 2014. 01:06 PM | Likes Like |Link to Comment
  • Dividend Stocks Are Not In A Bubble, But Many Of Them Are Pricey [View article]
    Hi, have a read, the Shiller Index is not about market calls, it's about long term probabilities of returns. It's not about buy and sell signals. It (and my article) would have nothing to do with or have any relevance to Ms. Garzarelli's market calls. :)

    The Shiller Index is certainly largely misunderstood, and or misrepresented.

    The Shiller Index is based on the work and ideas of Mr. Benjamin Graham. He also suggested sliding in an area of 25% to 75% equities (for most investors) based on what appeared to offer the most long term value. I have no idea what Mr. Graham would suggest today. He would not find much if he applied his 1930's, 40's , 50's. 60's, PE lens and metrics? He would likely not find bonds an attractive proposition, either. Ha.

    His greatest disciple currently sits on his greatest cash pile, generates lots of income from pref deals, and is consolidating in some core positions.
    Investors can read whatever they like into that. Warren does the math on risk return as it applies to cash vs equities. I have an article on that.

    I agree on staying the course. I am investing on a regular schedule. All of my portfolio income goes into equities on a dollar cost averaging schedule, some funds into BRK.B. But I certainly have cash available like Mr. B. and the ability to swing from bonds to equities (reallocation) as per Mr. Graham if equities move back into any kind of historic range of obvious long term value. I do listen to the masters.

    Stay the course. Be ready for a meaningful opportunity with real monies via cash and rebalancing.

    And always to his or her own.

    Dale


    Nov 22, 2014. 09:27 AM | 2 Likes Like |Link to Comment
  • Why Berkshire Hathaway Shouldn't Pay A Dividend: A Long Look Back At Berkshire [View article]
    Great piece, thank you. I purchased BRK.B when Mr. B. helped take out my one of 3 single stock holdings - Tim Hortons. Sold all as it was a silly purchase and valuation. But BRK has some wonderful income from that deal.

    And luckily BRK has recently put a nice outperform on the market. He knows how to navigate troubled waters, and BRK is the instant ability to hold a large cash position with an investor who also has the ability to also add leverage through his other holdings.

    Ironically, it's like purchasing higher risk leverage, but in a lower risk environment?

    Dale
    Nov 22, 2014. 07:06 AM | Likes Like |Link to Comment
  • The Real Nifty 50 For Dividend Growth Investors [View article]
    Here's the link to Ben's 8 rules for dividend growth investing.

    http://bit.ly/PYgBTX

    Of course Ben is an "Aristocrater" or perhaps "Dividend Championer".

    Many relevant studies are linked or referenced on that wonderful page.

    Dale
    Nov 22, 2014. 06:57 AM | Likes Like |Link to Comment
  • The Real Nifty 50 For Dividend Growth Investors [View article]
    Some very interesting stuff to follow on the comparison of the approach of 'Seeking Alpha' dividend growth investing and the approach of Mr. Kilbride. The differences are striking and much more pronounced than I would have guessed.

    Mr. Kilbride does certainly seem to follow the traditional parameters of using dividend growth to generate total return, to capture that (hopefully) wonderful gift of a market beat by way of dividend growth.

    A reference point would be my article "How to get the most out of dividend growth".

    http://seekingalpha.co...

    And readers might want to check out the Sure Dividend Site, suredividend.com

    On that site Ben references many studies that show how dividend growth investing is best used to capture that gift of total return. He offers a pragmatic, research-based approach and guidelines.

    Article to follow, the research is in, now down to putting some sentences together.

    Dale
    Nov 22, 2014. 06:48 AM | Likes Like |Link to Comment
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