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  • Why Would I Not Sell Dividend Stocks Even After A 1000% Gain? [View article]
    BY4,

    SA accounts for 5% of my traffic. I receive a lot of comments and emails. A lot of comments on SA did sound unhappy.

    I never try to be insulting on purpose.

    One of my weaknesses is that any time i write something, I assume people know what is going on inside my head. Instead, I should be spelling things out, because I should never assume people know what is going on in my head.

    I actually like when people challenge my thinking, because it makes me a better investor. I don't like it at the time when my ideas are challenged, but it is what makes me better. Now, not all ideas that are challenging me are worth learning from, but on aggregate they are ;-)

    While I can tell you which stocks I think are cheap today, I struggle with selling stocks that are overvalued. It is a gray area as I am wiling to pay up to 20 times earnings for a stock. So when a stock trades at 24 times earnings, is it a sell? If I sell, what happens if I buy a stock that only looked cheap on the surface but dissapoints me down the road ( and therefore I would have been better off holding the original stock)?

    I try to assign probabilities to different scenarios, but they are all totally unscientific. That's what makes investing more of an art than science - expectations and the fact that beauty that lies in the eyes of the beholder.

    BF-B might look like a decent hold for me until it hits $75 - $80/share given current fundamentals through 2014 keep up as expected. Someone else might decide to sell BF-B, and buy something cheaper, like WFC. But what if BF-B earns $6/share in 10 years, trades at $120 and pays me $20 - $25 during that holding timeframe; while WFC fails to grow EPS and trades at $40 in 10 years, and distributes $15 in dividends during that period?

    Is the P/E of 10 for WFC an illusion of margin of safety? Or is the P/E of 26 for BF-B unsustainably high because BF-B EPS are going down from here?

    These kinds of decisions make me sleep like a baby - I wake up every hour and I cry over these decisions. (It's a joke, I sleep well at night actually)
    May 16 07:05 PM | 1 Like Like |Link to Comment
  • Optimizing Triple Net Lease REIT Investment: Time To Sell Realty Income [View article]
    I find it interesting that the author fails to mention that Realty Income raised dividends by 19.20% over the past year. The author does mention

    "Back in September, LXP raised its dividend by 20% in one fell swoop. Such a raise is bigger than all of O's dividend raises in the last 5 years COMBINED."

    For your reference: http://bit.ly/16AIzLH

    I do agree Realty is overvalued today, but could be fairly valued below $42.

    In addition, replacing Realty Income with GOOD might be pretty BAD, as you are running the risk of getting into an asset with lower quality.

    Furthermore, real estate is all about location, location, location. The competitive advantage for Realty Income is that a profitable retailer at a certain location would likely renew the lease, or otherwise they would have to go to another place, and might lose customers in the process. A high traffic location is worth paying a decent rent for over time. Plus, given the long-term nature of Realty Income’s leases, even if rents are decreased down the road, that would happen in 10+ years on aggregate. How will the situation look like in over a decade?

    May 15 08:16 PM | Likes Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    After reading some comments I find it very interesting that so many had an issue with the word "forever", but had few comments on the actual article or any objections that PG will be able to grow as it has been for the past 56 years.

    PG will likely earn $8/share by 2023.. The price could probably reach $120 - $160 in 10 years, and investors would likely receive close to $35 in dividends over that period. If you disagree with me, please short P&G - I would gladly earn 3% per year by lending you my PG shares ( in addition to any dividends and capital gains I would earn over that period).

    The main reason why I don't comment here is because you always get a hoard of people focusing on insignificant details that don't matter, and end up missing the forest for the trees.
    May 15 08:42 AM | 3 Likes Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    Thank you for your comment. I like Buffett, and like to learn as much as possible about him and strategy. I like learning about stock market investing in general.

    I would not blindly buy because he has done the analysis and purchased a security himself. If I feel comfortable with a stock after I review it, only then I would buy it.

    I didn't know that he sold MCD because he bought DQ. I do recall his 1998 letter to shareholders mentioning that BRK shareholders would have been better off if he had not shown to work, as he sold MCD too early.

    For DIS, I was referring to his selling of the stock in the 1960s ( 1965 I think). Adjusted for dividend reinvestment, it would have been up 600 times over the past 48 - 50 years. Of course, BRK is up 10,000 times since then...

    I would hold PG "forever", although if a car runs me over tomorrow, it would have been for a shorter period of time ;-) If they cut dividends in 5 years, I would be out too ;-)

    I found the following very interesting from the 2012 PG annual report - shows shareholder friendly management:

    "Operating cash flow provides the primary source of funds to
    finance operating needs and capital expenditures. Excess
    operating cash is used first to fund shareholder dividends."
    May 14 07:04 PM | 1 Like Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    Haha, I did set myself up by picking Warren Buffett as one of the largest shareholders for PG ( through BRK). Buffett is awesome, and he is my hero - I like to read everything about him and from him ( investment wise).

    However, he does have the ability to do deals that you and I cannot do - buying railroads in 2010, Heinz in 2013, preferred shares of GE, BAC, GS that have high yield and warrants to buy shares at rock bottom prices.

    Also, Buffett is not always right. He sold DIS at less than 50 cents/share in 1960s, and MCD at less than $40/share in 1998. It is much better to purchase something you understand, than blindly follow something that someone bought/sold. Always do your homework before buying stocks.

    I already addressed the forever thing in the first comment.

    For anyone that has read my other articles, they would not have commented on the forever thing. I am always amazed at how quickly people make up their minds, without doing the necessary digging - you cannot address everything there is to dividend investing in one high level analysis of a company.

    I just hope (for them) that they do better digging before putting their money to work, and not jump to conclusions. I also hope people are buying things not because Buffett, or Tim or someone else likes it. But based on my interactions with investors, many do not do their own research before buying anything. Which is why I am still going to end with:

    "So what"
    May 14 07:39 AM | 2 Likes Like |Link to Comment
  • The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
    I am not comfortable owning INTC. But I do agree that one needs to have a diversified portfolio, and not be overly reliant on a single stock. I also try to have no more than 4- 5% of portfolio value in one stock. Helps me sleep well at night
    May 13 08:10 PM | Likes Like |Link to Comment
  • The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
    F&G,

    I guess markets are not very efficient after all - a hedge fund manager goes short a company, then talks negatively about that same company at a conference, without making much sense. Weak hands panic, and the stock price falls, thus helping the short cover their position at a profit.

    Rinse and repeat, and earn your 2 & 20. I am glad investors have been able to capitalize on this opportunity, after doing their analysis and identifying the weakness in the logic of the shorts.
    May 13 08:09 PM | 5 Likes Like |Link to Comment
  • The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
    I do agree that companies are better off using services of companies like DLR. If that happens, it is better for DLR

    Hope we see this trend expand over time. However, you always have risks with a lot of items. If you find mitigating factors, then risk is reduced
    May 13 08:07 PM | Likes Like |Link to Comment
  • The Case For Owning Digital Realty Trust: When Hedge Funds Don't Know What They Are Talking About [View article]
    The so called "straw man" argument is listed as a risk on the 10-k:

    "Our tenants may choose to develop new data centers or expand their own existing data centers, which could result in the loss of one or more key tenants or reduce demand for our newly developed data centers, which could have a material adverse effect on our revenues and results of operations."

    As mentioned in the article, there are mitigating factors behind this risk.
    May 13 07:57 PM | Likes Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    Great comment Water Buffalo. The diverse portfolio of global brands that consumers are buying for their quality will pay dividends for a long time.

    Ex I have been using Gillette products for a long time.
    May 13 07:50 PM | 1 Like Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    So what?
    May 13 07:47 PM | 4 Likes Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    BH 2012,

    My last addition was in April:

    http://bit.ly/10mwLrR

    Obviously PG was a better buy a few months ago. But at that time the problem was that the stock price had not moved for 3 years. There is never a "perfect" time to buy a stock.
    May 13 07:47 PM | 2 Likes Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    I am glad someone has been long P&G "forever" ;-)
    May 13 07:45 PM | 1 Like Like |Link to Comment
  • Procter & Gamble - A Dividend Stock To Hold Forever [View article]
    PG is a great company to hold forever, until something changes. I would take PG at 18 times earnings any day than the crazy P/E ratio INTC had in 2000.
    May 13 07:45 PM | 5 Likes Like |Link to Comment
  • What To Do When Your Stock Cuts Its Dividend [View article]
    Hi TIm,

    I wanted to double check where did you obtain the historical dividend data behind RDS/B? I would like to see it, as I like going through looking for old information

    I was able to obtain historical information going back to 1993 a few years ago, and it showed a consistent increase in distributions.

    http://bit.ly/18lXLv0

    It looked as if the dividends on the British units were based off the dividends in Gulden and then Euro:
    May 4 09:06 PM | Likes Like |Link to Comment
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589 Comments
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