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David Fish  

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  • Let's Talk About The Nifty Fifty And Dividend Growth Investing [View article]
    'straw man arguments such as "your precious DGI doesn't work; just look at the Nifty Fifty!"'

    Mike,
    I think what some people are (surprisingly) missing is that you did a great job of disproving that commonly used straw man, on at least two counts:
    1. The Nifty Fifty results were a success story, not a failure...even with 2/3 of the companies counted as going to zero.
    2. Using the Nifty Fifty as a proxy argument against DGI is an extremely poor choice of "evidence," since:
    a. Not all...perhaps not even many of the Nifty Fifty were Dividend Growth stocks at the time. Forty years ago, JNJ had a streak of only 12 years of increases, Eastman Kodak was NEVER a DG stock, etc.
    b. If the faulty reference is built on the fact that the Nifty Fifty were all large-cap dividend payers (which is not even certain from the dividend perspective), then this part of the strawman relates to the claim by some critics that DG consists mainly of large-cap dividend payers (and raisers). But this common claim is simply wrong. The CCC list, for example, is almost evenly divided: 1/3 large-cap, 1/3 mid-cap, and 1/3 small-cap.

    Bottom line: If a Nifty Fifty existed today, DG investors would screen for records of consecutive dividend increases and then do due diligence to select only the best of the bunch. If they invested only 1/3 of their money in the selected group and literally threw 2/3 of their money down a hole, they would still be likely to "beat the index."
    Sep 26, 2014. 02:13 PM | 41 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    The Pair-of-Pants analogy has been beaten to death by anti-dividend critics. The problem is that the construct is wrong. It's not a case of cash going from the left pocket to the right pocket. The reality is that the dollar is going from the corporate pocket to MY pocket. I still own the same percentage of the company, but now there's a dollar in my pocket, soon to be joined by another...and another...and another...
    Mar 13, 2014. 06:13 PM | 34 Likes Like |Link to Comment
  • Diversifying The Perfect Retirement Portfolio - Here's How: Part 3 [View article]
    Excellent Part 3 and great examples throughout. One thing that I find perplexing is that some critics of investing in individual stocks and diversifying "too much" suggest that the investor "might as well" just buy an index fund...but isn't an index fund itself an example of "OVERdiversification?" (If 30 or 50 stocks is "too much," then how is owning 500 stocks not even worse???)
    May 5, 2014. 01:24 PM | 32 Likes Like |Link to Comment
  • How To Get Over 10% Annual Returns For 20 Years [View article]
    'You are assuming that over the next 20 years the history of these stocks will repeat itself. Have you ever heard the statement " past results is no guarantee of future performance"????'

    Chuck,
    You're absolutely correct...maybe they'll do better!
    Sep 16, 2013. 09:34 AM | 31 Likes Like |Link to Comment
  • Can Everyone Succeed With Dividend Paying Stocks? [View article]
    'a few stats might be in order:
    "since the financial crisis began gathering force in Q1 2008, the S&P 500 companies have distributed $3.8 trillion in stock buybacks and dividends out of just $4 trillion in cumulative net income. That’s right, 95 cents of every dollar they earned—including the huge gains from restructurings, downsizings and job terminations—was flushed right back into the Wall Street casino."'

    First...I'd be curious where that quote came from. (You don't cite the source.)
    Second...The conclusion doesn't match the data. The quote suggests that paying dividends and executing buybacks equates to "flushing" money back into the stock market. No evidence of that construct is given.
    a. When a dividend is paid, money is sent directly to shareholders. While some of that might be reinvested, other amounts are spent or simply banked. Assuming 100% reinvestment is simply unsupported.
    b. When a company buys back its stock, the sellers receive cash. Again, you seem to assume 100% of that is invested back into the stock market, without any supporting evidence.
    So...bottom line: When you make gigantic (unsupported) assumptions, you can then produce highly biased conclusions, which you further embellish with terms like "Wall Street casino."
    Jul 3, 2014. 04:05 PM | 30 Likes Like |Link to Comment
  • Can Everyone Succeed With Dividend Paying Stocks? [View article]
    Well, it's an interesting source (Stockman was Reagan's Budget Director, IIRC) but it's still a giant leap from the figures to the conclusion ("flushed right back into the Wall Street casino.")
    One problem is treating 500 companies as a single unit. The $4 trillion in net income is netted down by those companies that lost money, whereas the $3.8 trillion came out of companies that would therefore have had more than that much in profits. Using the net of $4 trillion in profits for the 500 renders the $3.8 trillion number meaningless. It's like saying that Exxon shouldn't have paid a dividend because Radio Shack lost money. How much did the paying companies actually make...$6 trillion? $8 trillion? $15 trillion? If that number were revealed (as it should have been), then the conclusion might actually be closer to "Heh! Those cheapskates should have paid out far more!"
    A second problem, as I mentioned, is leaping to the conclusion that 100% of the distributions were put back into the stock market...with no corroborating evidence. Certainly many people spent dividends on food and shelter, or just plain luxuries, as did those cashing out stock positions due to a buyback.
    A third problem comes at the end, using inflammatory language like "Wall Street casino." Every transaction has a willing buyer and seller, who exchange cash for something in return (stock or some other instrument). In a casino, you wager your money and may (often do) receive nothing in return. There's no doubt that some people (traders) do treat the markets like a casino, "betting" on one thing or another. But the writer is painting every investor as a hapless chump who is being ripped off every time they show up with money. That's not an intelligent argument; it's simply an attempt to rabble-rouse.

    I'm not trying to be a Wall Street "shill"...just pointing out that that particular quote is highly misleading (and incomplete), so the conclusion is highly questionable.
    Jul 3, 2014. 06:41 PM | 28 Likes Like |Link to Comment
  • 9 Stocks to Hold Forever [View article]
    If I'm going to hold any stocks forever, they're going to be Dividend Champions...
    dripinvesting.org/Tool...
    Aug 25, 2010. 03:13 AM | 28 Likes Like |Link to Comment
  • I Love My 'Magic Pants' And My Partners Wear Them Proudly [View article]
    DVK,
    Excellent comment. To (try to) put it more simply...
    Chuck offers useful information and a "tool to think with."
    Larry insists on telling people what to think.
    Mar 19, 2014. 11:46 PM | 27 Likes Like |Link to Comment
  • Surviving A Worst-Case Scenario To Become A Dividend Growth Investor [View article]
    "if you would have sold at the absolute bottom and bought the sp 500 you would have made 130+%"

    If a person gave in to fear and sold at the absolute bottom, do you really think they would have had the courage to buy the S&P 500...or anything else???
    Sep 19, 2014. 12:03 AM | 26 Likes Like |Link to Comment
  • Dividend Champions For May 2014 [View article]
    SDS,
    I appreciate the suggestion, but I think it might actually take more time to that (extra) work. As it is now, I check all increases to see if they have reached four years (among companies that I don't already have included) and add them to the Near Challengers when they qualify. After that, I'm watching for any CCC+Near Challenger changes each day.
    How long it takes is a two-part answer:
    1. Throughout the month, I'm looking for the increases as mentioned above.
    2. After the market closes on the final trading day of the month, it takes several hours to download and align all the numbers to be dropped into the spreadsheet tabs and do various formatting tasks. I usually start about 6 PM and finish between 10 PM and 2 AM...depending on how many breaks I need or how focused I can be...;)
    May 2, 2014. 12:16 AM | 26 Likes Like |Link to Comment
  • Debunking Dividend Agnostic Assumptions: Here's What Really Makes Income Investors Tick [View article]
    In the latest compilation of the Dividend Champions, Contenders, and Challengers, dated August 31...
    seekingalpha.com/artic...
    ...the average of the most recent dividend increases for the 452 companies was 8.91%, which handily beats the rate of inflation. And, over the past five years, those companies have increased dividends at a compound annual rate of 12.8% and have an average current yield of 3.22%.
    Sep 2, 2011. 07:03 AM | 26 Likes Like |Link to Comment
  • 'Buying Dividend Stocks For Income' Arguments Don't Make Sense [View article]
    Your condescending attitude only compounds the ineffectiveness of your arguments.
    Aug 31, 2011. 08:00 PM | 26 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Chuck,
    Excellent analysis of YOC and its usefulness, along with a very illuminating portfolio example. Concerning some of the early comments that objected to the term "narcissistic purists," my immediate reaction was to be reminded of the Carly Simon song lyrics "You're so vain...you probably think this song is about you." What they seem to be missing is the "narcissistic" stance (independent of specific personalities) that the article addressed. In other words, when a critic tells someone that the only yield that matters is the "current" yield, they are expressing a personal viewpoint more closely aligned with a prospective buyer of a stock. But that criticism is completely irrelevant to the person who already owns the stock (and has no plan to buy more). If the latter is receiving 10% of what he or she paid for the stock, then why is it relevant that the "current" yield is 2%? The critic is expressing a personal relationship with the stock that he or she is attempting to impose universally. That's pretty "narcissistic," because, in essence, it dictates "my way is the only true way and if you think otherwise, you are wrong."
    Sep 4, 2014. 09:54 AM | 25 Likes Like |Link to Comment
  • 'Buying Dividend Stocks For Income' Arguments Don't Make Sense [View article]
    "1. Income is generally taxed at much higher rates than capital gains. So it makes sense to sell stocks to generate income as opposed to pay ordinary income taxes"
    Dividends and capital gains are both taxed at 15% (to most investors), so that argument is irrelevant to dividends. It may be a good argument against investing in bonds, which are taxed at ordinary rates, in which case I would agree with you. We don't need no stinkin' bonds! Besides, social security is a giant bond fund...from which we'll all receive "income."

    "2. The best investments are not necessarily the ones that generate the most income."
    Nor are they necessarily the worst. Your statement says exactly nothing.
    Aug 31, 2011. 07:15 PM | 25 Likes Like |Link to Comment
  • Retired Investors: Learn The Success Secret Of All Great Value Investors: Part 2 [View article]
    "Good businesses tend to persist being good businesses over long periods of time."

    This is a key focus for long-term investors, as opposed to traders who are focused on the short-term "noise" of the market.

    Great follow-up to Part 1 and I especially liked the home-price metaphor for thinking about companies vs. stock prices.
    Sep 23, 2014. 11:00 AM | 24 Likes Like |Link to Comment
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