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  • Looking For Opportunities In MLPs: An Interview With Malcom Day [View article]
    I know some other commenters said they follow some MLP forums. What are some of the good forums out there to follow this space?
    Sep 19 08:46 AM | Likes Like |Link to Comment
  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    Good, thought-provoking article. I am with DGM on this one. I can't figure out overvaluation. And with the market right now getting (IMO) toppy, where would you put the profits? Yes, you can go from a company that is yielding 2.1% (WMT) into a yielding company of 3.2% (WEC) but I wouldn't put it there because WEC seems way overvalued (and utilities in general). I guess I am trying to say you may pay too high a premium for an increase in the income stream (hence, valuations of the specific companies matter) just because your new yield is higher.

    I think sometimes, simple is better and I will default back to the Chowder Rules (not as good as the Jordan Rules, but really close). If my current portfolio provides an income stream X% higher than the same month or quarter as compared to last year AND nothing fundamentally has changed with the companies I own, I do nothing.

    My .02 reinvested.

    Sep 15 08:05 AM | 3 Likes Like |Link to Comment
  • Trading Around A Core: The Big Picture [View article]
    Number of Analysts?
    Sep 11 08:20 AM | Likes Like |Link to Comment
  • How To Increase The Yield On Intel By Systematically Reducing Invested Capital [View article]

    Really enjoy your series and you are the author that got me dabbling into options (selling puts). So thanks for the education.

    As you gave guidelines with yor very first series of what puts you sell (1% yield per month, 8% discount from current price, etc), what is the ratio of upside:downside you are looking with these strangles? I'll use the example of INTC April 2013 calls, so 8 months away, using the closing price of 24.27 and 400 shares.

    I calculated the upside, if using Apr 2013 30 calls to be 30% after all expenses and the 400 shares called away.

    If it expired between 20 and 30, the yield was about 7% and you keep the 400 shares

    If INTC fell to less than 20, the puts would be exercised at a -10.75% "loss" and I now have 800 shares.

    So, in this case, upside:expiration is about 4:1 (30:7)
    Upside to downside was about 3:1 (+30%:-11%)

    What is the ratio you guys look for?

    Aug 31 01:59 PM | Likes Like |Link to Comment
  • Dividend Growth Stocks Can Provide Retirees Great Total Returns [View article]

    Another great article. I do want to highlight one sentence:

    Risk, or maybe better said, the individual's tolerance for risk, is another crucial piece of the puzzle.

    How are you defining risk in this case? I view it, much like Chowder, as the chance of my income stream going down or being less than inflation and not on a total return basis. Just curious on your take.

    Aug 30 08:15 AM | 3 Likes Like |Link to Comment
  • Is There A Problem With Dividend Growth Investing? [View article]

    Was you grandfather Benjamin Button, by chance?
    Aug 29 09:41 AM | 1 Like Like |Link to Comment
  • A New Take On The 4% Rule [View article]
    As you said, you do what lets you sleep well at night. I do what I do. It's not right or wrong; it's how we each decide to play and this is a big enough world where we can all play by different rules and it can work for everyone. My final response is this:

    Using a company like MMM, I have more confidence that they will raise their dividend for the 55th year in a row than knowing if the stock price will go up or down over the next 12 months. I'll take what I (reasonably) know because I can plan for the future that way. The only reasonable assumption I DON"T KNOW is how much they will raise the dividend for next year.

    Aug 28 04:17 PM | 7 Likes Like |Link to Comment
  • A New Take On The 4% Rule [View article]

    The comments you make are pointing back to a total return basis, especially when you mention volatility of the portfolio. If you want to play to the whims of Mr. Market and what it says the price of CSCO is at 2:48 PM, be my guest. I will try and sum this up in 3 points which I have said on other articles, most knowingly on another article of DVK's, so I am paraphrasing:

    1) Dividends give me a return of my money, not necessarily a return on my money. Think real estate and rent.

    2) My primary goal is to look for stocks that have a history of distributing a portion of their net profits (yes, I think companies can run out of ideas that cannot increase their ROE) to start my own, personal (hopefully) inflation-beating annuity and I am starting that clock early so compounding has more time to take place. And yes, I am using history as a guide (thank you, Mr. Fish) to filter out those companies which still have low payout ratios with inflation-beating DGRs bought at a fair or what I determine as an undervalued price.

    3) To have #2 as my primary focus, I HAVE TO let the volatility of the market occur and let the market go where it may bringing the total value of my portfolio up, down or sideways on any given day.

    It's not right or wrong, Alan. The authors and responders in this section have just found the market to be too gut-wrenching otherwise and this lets most people here sleep well at night.

    My .02 reinvested

    Aug 28 03:29 PM | 7 Likes Like |Link to Comment
  • When Should I Be Selling? [View article]

    I read your comment twice and you need to fill in some blanks:

    "now yielding over 20% on cost and have built up substantial capital gains,"

    Wonderful for you. Hope I get there in 10 years or so!!

    "and the dividend income is still satisfactory in retirement."

    Still don't see a problem and with dividend increase, you should be ahead of inflation.

    "When do we sell and where to re-invest?"

    Now I am confused. Why sell anything when your dividends are giving you enough to retire on? You don't have to touch the principal and sell anything (unless this is an IRA, which wasn't made clear)

    "Personally, I'm following the 4% yearly selling strategy"

    Massive confusion. Can you live on the dividends (and Social Security) or do you need to sell? If you do need to sell, why does it have to be 4%? Why can't it be the 1.5% you need for the next 6-12 months expenses? If you don't need to sell, reinvest the dividends and call it a day. You already won and are the envy of the young'ns around here. Why are you trying to make this harder than the game plan you have followed for the last 20 years?

    Aug 21 04:12 PM | 5 Likes Like |Link to Comment
  • Options Trading For The Dividend Growth Investor [View article]
    I'll answer Byloe. You are correct. Skyler gave an overview but you do need to understand all the costs to see if this is worth doing or not. An excellent primer would be to follow the author K202 when he first started writing articles. Also, I will use TDAmeritrade fees, since that is the brokerage I use.

    Commission $9.99+ $.75 per contract (1 contract = 100 shares). So if you do 1 contract, you agree to buy 100 shares, or in Skyler's case ($7,250).

    If it expires worthless, the price of KO is $72.51 or higher, there is no other fees and with 1-2 month options, the premiums (the $65 per contract) are taxed at your regular income rate.

    If the price is $72.49 or lower, there is the transaction fee of $19.99 (vs my $9.99 purchase or limit order). Your cost basis, using Skyler's example, is $72.50-$.65 = $71.85 for when you decide to sell KO in the future, if ever.

    I personally find options only become economically viable once you begin to write at a minimum 3-4 options, which means you have a pretty substantial portfolio to begin with. (Using KO, that means you have $23,000 lying around). It's discipline, you get paid to wait, and if you can nab some options on some down days, the volatility went up and the premiums go up, but you ONLY do this WITH STOCKS YOU WOULD WANT TO OWN.

    That's the forgot Skyler forgot to hammer home. Don't do it with any stock that has a good premium but you do not want in your portfolio. Also, be careful with your brokerage. I thought I was writing cash-secured puts but I never saw my money market fund move. When I called, they said I had the ability to use margin, something I didn't even want, but made more sense because they were using the rest of my portfolio as collateral.

    Jul 25 08:58 AM | 8 Likes Like |Link to Comment
  • Lexington Realty Trust: Score Nothing But Net With A Sharp Shooting Triple-Net REIT [View article]

    As others said, great article and easy to read. Can you help me explain why this space exists? I never understood from the tenant's side why they would do this. Using Bank of America, since they have 8 LXP sites, what is the advantage to BOA for signing a 20 year lease, having to pay for everything involved with the building for 20 years, and have nothing at the end as collateral? If there was a bug problem or a leaky roof, they are not calling LXP, but calling someone themselves (and paying for it besides). So back to my question: Why does LXP (or O or NNN) exist?

    Jul 23 02:32 PM | Likes Like |Link to Comment
  • Are Dividend Growth Stocks In A Bubble? [View article]
    Yellow Lab:

    You beat me to the punch by one cup of coffee!

    As I was reading the comments, I am trying to think historically on what has happened.

    For 2003: Bush brings in the artifically low dividend tax of 15%, but no one cares because that was the start of the housing bubble where one could really use leverage and no money down and need only a pulse to get a $500,000 mortgage.

    For 5 years real estate is all anyone cares about, until the housing bubble explodes, bringing in the government to manipulate interest rates (LIBOR which affects mortgages and hence savings) to absurdly low levels, and now giving the novice/average investor no ability for a "fair" interest rate for stashing their money in a CD or savings account.

    Which pushes us to where we are today. People clamoring for income and raising prices on DG stocks to fair to fully valued (on average). Back to your question Yellow Lab, I want to get back to some sort of normalcy. I would prefer they raise the tax 66-100% from here (meaning a 25-30% tax on dividends). I think that would get rid of all the bubble pundits, get rid of people on the fringe of the search for yields and drive prices lower, giving us here a better chance to increase our income stream. I've got a lot of cash just waiting, waiting, waiting, and the opportunity cost drives me nuts right now knowing there are no screaming buys (I was 2 days away from being put WAG; and MDT looks cheap but the yield is too low) to put money into. And if the CNBCs and the newspapers of the world put it exactly as that: Obama raises the dividend tax 100%!!!, that's exactly what we need because people read headlines and refuse to read to the 3rd paragraph, which makes my comments moot, too.

    My .02 reinvested.

    Jul 21 10:15 AM | 2 Likes Like |Link to Comment
  • Why Dividend Growth Is More Important Than Yield (Don't Be A Yield Vigilante) [View article]
    The author Doug Carey does an excellent job comparing high yield with little to no growth versus the lower yield/high DGR stock. He repeated the article 3 or 4 times now with various stocks, but is an excellent tutorial on why you need to at least start with a 1.25-1.50x yield greater than the S&P 500 because as good as a company like FAST or CHRW may be and the DGR has been outstanding on those two examples, it's takes way too long to get a yield of substance. Skyler, if you use the example of T vs WMT, you would get a very different view of which stock you would choose.
    Jul 19 10:22 PM | 3 Likes Like |Link to Comment
  • Why You Should Save For Your Kids' Retirement: The Power Of Time [View article]
    Gee whiz, Skyler - you really meant it that I should write articles instead of giving you all the ideas.

    The answer sat, is yes, you can "employ" your children. My kids are soon to be 4 and 7. I have a flyer that promotes my business and has both of them in the flyer. They were paid as "models." Both were paid $395. No tax problems because under $400 for children and you don't even need to file any tax returns.

    Only one dividend paying stock is in their Roth right now: INTC. Next year $395 more. We'll see what DRIPping these stocks does in 45-50 years.

    Jul 17 02:44 PM | 3 Likes Like |Link to Comment
  • Building A Portfolio, One Wish-List Stock At A Time [View article]
    I'll try and answer this for the author and I will call it the Chowder Law because he is the one that beat this into everyone else on this segment of SA:

    The purpose of the DGI philosophy is to protect the income stream. The more companies one has, the less risk you are placing on any one sinking your man-made, inflation beating annuity. To accommodate for this being your primary goal, you must let the volatility of the market change your portfolio value/net worth every day. You can't have both and I am guessing the author is not focusing on total return in the truest of defintions.

    My .02 reinvested.

    Jul 16 06:41 PM | 11 Likes Like |Link to Comment