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Dividend Dilettante

 
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  • Microsoft Or Disney - Which To Buy [View article]
    I just wanted to provide another angle to consider. Taking everything into consideration, I think MSFT is the clear winner as far as dividends are concerned, but it's worth nothing, I think, that during the time frame I considered, MSFT had 3 dividend payments below the conservative estimate, while all of DIS's increases were well above it. That being said, DIS did of course freeze their dividend while MSFT kept on increasing it.
    Dec 2, 2013. 12:21 PM | Likes Like |Link to Comment
  • Microsoft Or Disney - Which To Buy [View article]
    Thanks for the article.

    When you looked at dividend growth, you looked at 'absolute' growth, i.e. simply how much the dividend grew each year. An alternative way of understanding dividend growth is by looking at the growth relative to how much leftover cash the company had available to spend on dividends in any given year.

    I've made a blog post on SA with two graphs comparing DIS's and MSFT's dividends in this way from 2004-2012. They are here:

    http://bit.ly/IoGFnz

    Information about the "dividend drill model" I used is here:
    http://bit.ly/1chhxKt
    Dec 2, 2013. 10:20 AM | 1 Like Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops - Part II [View article]
    AgAuMoney, thanks for commenting.

    I think that's a great idea. I've cleaned up the code, added comments and uploaded it to:

    http://bit.ly/1bC1ubx

    As a software engineer, you'll probably find my code messy and inefficient - I wrote it mostly for my own use, and I am, by no stretch of the imagination, an expert programmer. Let me know if you have any questions about anything.

    Also, there were two minor typos in the article that I should point out:

    1) MO was not included in the analysis.

    2) The start date for the back tests was actually September 19, 2000, not July 17, 2000.
    Sep 23, 2013. 05:12 PM | 2 Likes Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops - Part II [View article]
    Richard Berger,

    Thanks for your accolades.

    I agree that analyzing how long the collected dividends sit around uninvested in the manual reinvestment case is important. As suggested above, this could explain why the DRIP is usually the out-performer.
    Sep 19, 2013. 05:33 PM | Likes Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops - Part II [View article]
    David Fish,

    Thanks for commenting (the dividend Champion/Contender/Cha... spreadsheet has been a starting point for a lot of my research and is a fantastic resource). My intuition is also that while the cash is not invested between buy signals the manual reinvestment strategy looses ground on the DRIP. If this were the case, however, one would expect that as the portfolio size increases the manual reinvestment strategy performance would improve since presumably there would be buy signals more often, i.e. the cash would be sitting around uninvested for a shorter amount of time. The first bar chart demonstrates, however, that the manual reinvestment strategy actually performs progressively more poorly as the portfolio size increases. I'll dig a little bit deeper and see how long the time is between buy signals in the manual reinvestment strategy.
    Readjusting the buy criteria to what you suggest in parentheses would be an interesting experiment.
    Sep 19, 2013. 05:25 PM | 1 Like Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    "Who on earth plans a retirement assuming a 12% total return for 38 years ?????? "

    Where total return = DGR + initial yield, and total return = 11%, the answer is, obviously: I do.

    I think we mean different things by "total return"
    Aug 27, 2013. 11:49 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    Thanks for the links, SDS
    Aug 27, 2013. 11:45 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    Great point Gary!

    I should have taken this into consideration

    Thanks for commenting!
    Aug 27, 2013. 11:44 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    Thanks stink, I appreciate it!
    Aug 27, 2013. 11:42 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    Thanks for the fact checking!
    Aug 27, 2013. 11:42 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    SDS,

    Thanks for your comment.

    It does look like a log-normal distribution - is there a reason you're mentioning this?

    The figure you're talking about is attempting to communicate the following: If I'm considering purchasing a stock yielding, say, 2.5%, I'm going to require a total return (where total return = DGR + current yield) of about 13.75%. This is calculated by substituting 2.5% for x in the equation. This means an implied DGR of ~11.25%.

    Does that make sense?
    Aug 27, 2013. 11:40 AM | Likes Like |Link to Comment
  • My Dividend Growth-Based Retirement Plan [View article]
    Thanks for commenting.

    "First, finding "dividend growth stocks" that have a 5% yield is going to present a slight problem."

    That's not what I'm saying. What I'm saying is: A 2.5% yield is fine, but I'm going to need a total return of about 13.75% for that initial yield to reach my goal, meaning an implied dividend growth rate of ~11.25% - for example.

    "Second, building a basket of stocks with a yield of 1-8% means that you will have to have the basket more heavily represented by the 5% and above yielding stocks."

    Sorry, I don't think that's correct - the important thing for me is DGR + initial yield. So I can have an average yield of, say, a mere 2.5%, but as long as the DGRs are high enough the result should be (based on the simulations I describe) about the same as if I were holding stocks yielding more but growing less. That's what my 3rd figure is attempting to communicate.

    "Fourth, your assumption about you need 4.5 million dollars of stock to throw off your income target is incorrect. As Robert points out, if you had 4.5 million dollars today and invested it at 3.5% then you'd achieve your income target."

    I don't understand your point here. I don't think that's what Robert was pointing out, unless I misunderstood his comment. I should mention that $ 4.5M is simply an estimate I use, based on a projected average future yield and costs of living.

    Perhaps I didn't explain it in the right way in my article, but my plan is to slowly save money over 37 years, investing in DG companies along the way using dividend reinvestment, then collect the dividends as income during retirement.
    Aug 27, 2013. 11:33 AM | Likes Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops [View article]
    leanne, thanks for commenting. I would, however, suggest that you consider my article as a model with important limitations and assumptions to be considered while interpreting the results. Also, it's good to do your own home work and not consider my results as 'the right way of thinking' about the topic -- but thanks! :)
    Apr 17, 2013. 01:35 PM | 3 Likes Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops [View article]
    Chief, good point. However, different investors have different commission costs/brokerage policies, so it depends on one's individual situation. For most, probably, (like me), commission costs are something to keep in mind when investing dividends without a DRIP.
    Apr 17, 2013. 01:25 PM | 1 Like Like |Link to Comment
  • Reinvesting Dividends Vs. Saving Them And Buying On Stock Price Drops [View article]
    tomlos, I'm glad liked it! I enjoyed doing the research
    Apr 17, 2013. 01:22 PM | Likes Like |Link to Comment
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