General Electric Looks As If It's Becoming The Shareholder-Friendly Company It Once Was [View article]
Chuck, Thanks for this thorough look at GE. It does appear that the past few years have seen a vast improvement in the fundamentals and there are various trends that should favor the company. Of course, it would be nice from an investor's standpoint if the stock were undervalued, rather than fairly valued, in order to start or increase a position in GE.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
Nice first article and very pertinent title questions. As you suggest, it's just that companies without streaks may be "less visible" since they're not being tracked. On problem I have seen with using a simple DGR (or Dividend CAGR) screen is that significant variation can be overlooked. I have seen this in articles with titles such as "5 Stocks with over a 10% DGR for five years." On reading some of them, I was surprised to see that some of the companies mentioned had a grand total of one or two increases during the five-year period. This makes sense (but is hardly illuminating) since the calculation simply involves comparing the dividend rate now with that of five years earlier, and can easily be distorted by small numbers. For example, a company could pay 1¢ per share for many years, so bumping it up to 2¢ last quarter means a 100% increase, and a very high DGR. Not quite the same as a company that paid, say 10¢, 12.5¢, 15¢, 17.5¢, and then 20¢ over the last five years...which would result in the same DGR!
The Top 35 Dividend Champions With Regard To Long-Term Stock Price Appreciation [View article]
Concerning the negative return of TDS and NC, I think you might find that the price history is distorted because of spin-offs or other corporate reorganizations. For example, last year, NC spun off Hyster-Yale Materials (HY), with the majority of the previous cost basis going to the spin-off. So, without adjusting all of the previous price and dividend history, it might well appear that NC suffered a decline of more than 50%...which it really didn't. Given the size and spin-off tendencies of the Champions, it's quite possible that historical prices (and dividend rates) might be similarly understated...meaning that their returns might actually be better than indicated. (I have tried to ensure that all dividend history has been properly adjusted.)
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
DC, I hear what you're saying. Fortunately, in my neighborhood (near the center of town), I've only encountered raccoons a few times, and none were rabid. In fact, they were definitely "shy," as were the possums, groundhogs, etc. The squirrels and chipmunks are the same way, and I'm well aware of their speed...plus, I wouldn't think of trying to take away their nuts...;)
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
Well, I just tend to stay away from places that have either. That way, I don't have to pack anything. Generally, I can handle the ferocious chipmunks and squirrels that frequent the neighborhood. (I have garden tools!)
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
Peter Lynch used to say that one 10-bagger in a 10-stock portfolio could more than make up for mediocre results from all the other holdings. So the question is: When you sell a stock just because it has doubled, was that the 10-bagger (that you sold as a 2-bagger)?
The other aspect is time. If you are investing for the next 20 years, which may be enough time for a 10-bagger to appear, then why are you selling a stock that doubled after only a year or two?
The Business Model Of The Dividend Growth Investor [View article]
"There is one big difference, which is that in poker, the odds are (or can be) known"
There is another big difference, your time horizon. In poker, your decision is specific to the hand being played. In investment, there's usually no "time clock" that says you have to make the decision today, this week, or even this month. The decision is not all-or-nothing, as it is with a poker hand. In fact, an investment decision may well be a matter of degree. The stock in question may go up a little or a lot, or it may go down a little or a lot...or it may do very little. If there's a dividend involved, you're also being paid to delay any decision on selling. So there's a lot of "black-or-white" in poker; not so much in investing.
Dividend Contenders: 13 Increases Expected By The End Of July [View article]
I think that you are interpreting it wrong. This is the fifth dividend since the spin-off, all at 66¢. The dividends prior to the spin-off have been adjusted: a pro rata share of each was assigned to COP (at 50.8794¢) and PSX (at 15.1206¢...which PSX has raised three times). On an adjusted basis, the 1st-quarter 2012 dividend was 50.8794¢, so the company (as it exists now) would pay more in 2013, even if it keeps paying the 66¢ rate.
The Business Model Of The Dividend Growth Investor [View article]
"David Fish specifically said while he may not have explicitly referenced earnings in his last posting, he implied that they were important."
Dividends are the payment of a portion of earnings to shareholders, and I have stated repeatedly that rising dividends require rising earnings. In addition, if you go back and look through my "Smackdown" articles, you'll see that the screening steps usually (or often) include the Estimated 5-year Earnings Per Share growth, which I frequently explain as being the source of future dividend growth. Am I supposed to mention earnings in every comment I make?!
Why Passive Index Investing Is Merely An Illusion [View article]
1. Most funds don't beat the indexes. A significant impediment is the fees that they impose, which means that they would actually have to beat the indexes in order to merely match them. 2. Most individuals do even worse than the funds, for two reasons: a. They mainly invest in those funds (that can't beat the indexes). b. They "time" their purchases and sales badly...mainly because individuals fall prey to emotion. They buy when the market is up and sell when the market is down.
Therefore...the most logical way an individual can do better is to avoid using funds that will cost them fees and invest directly in stocks, while getting a handle on their emotions. The first part is relatively easy. The second part takes discipline.
Dividend Contenders: 13 Increases Expected By The End Of July [View article]
No...it still has time to extend the streak, although its increase makes it "overdue." Because of the spin-off, last year's per-spin rate was adjusted lower, making it a year of split rates. So in order for its dividend to be "frozen," it would have to have back-to-back years at the same rate...which wouldn't happen until 2014=2013.
The Dow Hits All-Time Highs, But The Truth Is It Remains Cheaply Valued [View article]
Chuck, Thanks for another great article spelling out what the reality is in terms of valuation. On the one hand, it's unfortunate that many people are still locked into a fearful psychology because of the previous market collapses. On the other hand, that's what gives the rest of us the opportunity to buy top-quality companies at reasonable (or even bargain) levels.
General Electric Looks As If It's Becoming The Shareholder-Friendly Company It Once Was [View article]
Thanks for this thorough look at GE. It does appear that the past few years have seen a vast improvement in the fundamentals and there are various trends that should favor the company. Of course, it would be nice from an investor's standpoint if the stock were undervalued, rather than fairly valued, in order to start or increase a position in GE.
Are Streaks And Current Yields The Best Metrics For Dividend Growth Investors? [View article]
On problem I have seen with using a simple DGR (or Dividend CAGR) screen is that significant variation can be overlooked. I have seen this in articles with titles such as "5 Stocks with over a 10% DGR for five years." On reading some of them, I was surprised to see that some of the companies mentioned had a grand total of one or two increases during the five-year period. This makes sense (but is hardly illuminating) since the calculation simply involves comparing the dividend rate now with that of five years earlier, and can easily be distorted by small numbers. For example, a company could pay 1¢ per share for many years, so bumping it up to 2¢ last quarter means a 100% increase, and a very high DGR. Not quite the same as a company that paid, say 10¢, 12.5¢, 15¢, 17.5¢, and then 20¢ over the last five years...which would result in the same DGR!
The Top 35 Dividend Champions With Regard To Long-Term Stock Price Appreciation [View article]
Given the size and spin-off tendencies of the Champions, it's quite possible that historical prices (and dividend rates) might be similarly understated...meaning that their returns might actually be better than indicated. (I have tried to ensure that all dividend history has been properly adjusted.)
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
I hear what you're saying. Fortunately, in my neighborhood (near the center of town), I've only encountered raccoons a few times, and none were rabid. In fact, they were definitely "shy," as were the possums, groundhogs, etc. The squirrels and chipmunks are the same way, and I'm well aware of their speed...plus, I wouldn't think of trying to take away their nuts...;)
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
If they're in retreat, wouldn't that make them bears? Bears have horns? Wait..bears travel in herds? Hmmm...do bulls catch salmon now?
The Most Misleading Words In Investing: You Can't Go Broke Taking A Profit [View article]
The other aspect is time. If you are investing for the next 20 years, which may be enough time for a 10-bagger to appear, then why are you selling a stock that doubled after only a year or two?
The Business Model Of The Dividend Growth Investor [View article]
There is another big difference, your time horizon. In poker, your decision is specific to the hand being played. In investment, there's usually no "time clock" that says you have to make the decision today, this week, or even this month. The decision is not all-or-nothing, as it is with a poker hand. In fact, an investment decision may well be a matter of degree. The stock in question may go up a little or a lot, or it may go down a little or a lot...or it may do very little. If there's a dividend involved, you're also being paid to delay any decision on selling. So there's a lot of "black-or-white" in poker; not so much in investing.
Dividend Contenders: 13 Increases Expected By The End Of July [View article]
On an adjusted basis, the 1st-quarter 2012 dividend was 50.8794¢, so the company (as it exists now) would pay more in 2013, even if it keeps paying the 66¢ rate.
The Business Model Of The Dividend Growth Investor [View article]
Dividends are the payment of a portion of earnings to shareholders, and I have stated repeatedly that rising dividends require rising earnings. In addition, if you go back and look through my "Smackdown" articles, you'll see that the screening steps usually (or often) include the Estimated 5-year Earnings Per Share growth, which I frequently explain as being the source of future dividend growth.
Am I supposed to mention earnings in every comment I make?!
Why Passive Index Investing Is Merely An Illusion [View article]
2. Most individuals do even worse than the funds, for two reasons:
a. They mainly invest in those funds (that can't beat the indexes).
b. They "time" their purchases and sales badly...mainly because individuals fall prey to emotion. They buy when the market is up and sell when the market is down.
Therefore...the most logical way an individual can do better is to avoid using funds that will cost them fees and invest directly in stocks, while getting a handle on their emotions. The first part is relatively easy. The second part takes discipline.
The Business Model Of The Dividend Growth Investor [View article]
Dividend Contenders: 13 Increases Expected By The End Of July [View article]
Dividend Contenders: 13 Increases Expected By The End Of July [View article]
Also, ACE just increased its dividend by 4.1%, to 51¢ quarterly, marking its 21st year of increases.
The Dow Hits All-Time Highs, But The Truth Is It Remains Cheaply Valued [View article]
Thanks for another great article spelling out what the reality is in terms of valuation. On the one hand, it's unfortunate that many people are still locked into a fearful psychology because of the previous market collapses. On the other hand, that's what gives the rest of us the opportunity to buy top-quality companies at reasonable (or even bargain) levels.