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Eddie Herring

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  • Retired Investors: Is It Time To Consider A New Investment Strategy? - Part 2 [View article]
    Bob

    As usual an excellent article that details a very structured and very sensible plan and methodology for investing. It is also one that has created a lively comment stream.

    I've never held LINE/LNCO/LINN and so don't have a dog in that race but I have to come down on Five+'s side in regard to her statement that panic selling is never a good idea. Selling, or buying either for that matter, needs to be done only after a diligent effort (hence the due diligence) at looking into the quality and value of the company and if it still meets ones objectives and rules for the initial investment. In other words one needs to think through the process and rationale for getting rid of an investment and make a reasonable and thoughtful decision. If we put a large amount of effort into determining why we we want to invest in a company, why would we not also put an effort into determining why we want to get rid of a company?

    As I said I don't know anything about the LNCO/LINN/LINE family and I am not saying one should buy, hold, or sell it. I am saying that that panic selling is what too many do that causes long term harm to their portfolios. We need only look as recently as 2008 to know that.

    You have provided a thoughtful and structured way that you handle your sell decisions and I commend you for following a disciplined approach. Many investors would be better off if they, as you so often say, have a plan for their portfolio and follow it. Well done, Bob.

    Eddie
    Jul 6 01:07 PM | 2 Likes Like |Link to Comment
  • Beating Back Fear For Income Investors [View article]
    Pick one, Obie. I'm easy.
    Jul 5 01:34 PM | 2 Likes Like |Link to Comment
  • Beating Back Fear For Income Investors [View article]
    Obie

    Well, it's got to be a David and that was the first singer I could think of with first name David. And "Golden Years" might be an appropriate theme. HA!
    Jul 4 10:55 PM | 1 Like Like |Link to Comment
  • Beating Back Fear For Income Investors [View article]
    I'm guessing David Bowie would handle the musical score...
    Jul 4 10:56 AM | 2 Likes Like |Link to Comment
  • Beating Back Fear For Income Investors [View article]
    "Just be sure to spice it up like Cramer. Alott of yelling and antics."

    Just say something negative about MPT. That'll bring in the audience, up the ratings, and might even get it moved to prime time. :-)

    Eddie
    Jul 3 11:43 AM | 3 Likes Like |Link to Comment
  • How To Put Your Retirement Strategy On Autopilot [View article]
    Dave

    While I agree we need to be cognizant of what is going on in the world, I don't base my investment decisions on what might happen with the stock market next week, or in the political arena next year, or who wins the presidential election. I base it on buying quality companies that generate consistent cash flows that pay me growing dividends.

    Eddie
    Jul 2 11:14 AM | 5 Likes Like |Link to Comment
  • How To Put Your Retirement Strategy On Autopilot [View article]
    "choosing how to invest based on something that has a slight chance of happening many years down the line is both self-defeating and angst-causing."

    Mike

    Totally agree.

    Eddie
    Jul 2 10:01 AM | 2 Likes Like |Link to Comment
  • How To Put Your Retirement Strategy On Autopilot [View article]
    AAJoe

    Keep hanging in there and pretty soon you won't be average, you'll be An Above Average Joe.

    Joe
    Jul 1 04:58 PM | 6 Likes Like |Link to Comment
  • Beating Back Fear For Income Investors [View article]
    Dave

    Excellent article. You are so right, fear sells, and as they say in the newspaper industry, blood leads and I suppose that may be when Buffett is out shopping around, when blood is leading.

    I want to echo your thought on writing things down. For years I tried to hammer in to my kids to "think on paper." By writing your thoughts down you can solidify them and back off and really look at them from a somewhat different perspective. I emphasized to them to use the old T method by putting the pros on one side and the cons on the other when making tough decisions. I think my English teacher son calls it compare and contrast or something like that.

    If we did that (think on paper) when worried about price volatility/fear in the market I tend to think it might help with making more rational decisions rather than shooting from the hip because we're worried we might lose a small profit or risk a large loss. And looking at the business rather than the price will only add to that rational decision making in my opinion.

    Anyway, very good article. Thanks,

    Eddie
    Jul 1 04:51 PM | 5 Likes Like |Link to Comment
  • Retired Investors: Is It Time To Consider A New Investment Strategy? [View article]
    T, Bob, DVK, Contr., et al

    Just my 2 cents but I view beta as how sharp the roller coaster ride will be, the lower the beta the broader (not as sharp) the peaks and valleys of price movement over the long term. For example, compare the beta of KO to NC, both dividend champions, and the price action or price range on a price chart. You can see the steeper climbs and sharper drops. For me a lower beta helps with not "sucking in your breath" on those sharp drops you get from high beta stocks. And as DVK pointed out, studies have shown better returns from lower beta companies.

    I don't equate beta with risk though, and for the most part I don't equate price movement with risk although I'm guessing the majority of people do.

    I equate risk as buying the wrong company, for instance one that doesn't have an economic moat, isn't generating sufficient earnings or cash flow to fund it's growth and still pay dividends, has a low interest coverage ratio on debt and a poor credit rating, has poor management, excessive pension obligations, in short poor fundamentals or characteristics that could cause loss of income from the investment.

    Lastly I equate risk with myself, with me getting impatient and buying at the wrong price, without a margin of safety, not doing my due diligence both before and after buying a stock, or not understanding the company in which I'm investing. I view risk as both managing the investment and managing my own self.

    Peter Lynch said everyone had the brainpower to make money in stocks but not everyone had the stomach. I would say beta (and price action) has to do with the stomach, whereas risk has to do with the brain.

    Let me also echo the compliments and the debt we all owe to David Fish and his CCC spreadsheet. I recently told someone I don't screen for a list of stocks any more. I simply go to David's list and work from there. David has earned a reserved spot in investment heaven... (but don't be in a hurry to get there) :-)

    Bob - kudos on another fine article and discussion. Thanks,

    Eddie
    Jun 30 05:01 PM | 11 Likes Like |Link to Comment
  • Can An Individual Investor Invest Reasonably Well? [View article]
    "when everyone tells us we're foolish"...recently asked how I feel now that the market is down...as in "See, I knew you'd fail"..."

    There are so many naysayers out there and what is typical is that they measure the success or failure solely on whether the market is going up or down. Taking advantage of opportunities to get good, and sometimes great, deals on quality companies is something that too many people don't understand. Rather than looking at the value of the company they look at the price on a chart. I like the answer you gave.

    You'll find the more experienced you get the less time it will take and the more relaxed you'll be and you will then be enjoying the fruits of your earlier labors. Thanks,

    Eddie
    Jun 28 04:40 PM | 3 Likes Like |Link to Comment
  • Can An Individual Investor Invest Reasonably Well? [View article]
    Hi Aldurst

    For the numbers in the article above I calculated the details using information available at Morningstar.com under the key ratios tab and the financial tab and then balance sheet, cash flow, and income statements tabs. I then use the data there to calculate the compound average growth rates (CAGR) for the different metrics. If you want to PM your email address to me I'll send you the spreadsheet I use. Several people have asked for it and I don't mind sharing it, you can then modify it however you wish. It will tell you where a lot of the information is and has the CAGR calculator built in.

    Ordinarily I would use Fast Graphs for quite a bit of it but didn't in this instance as explained in the article and comments above. Thanks for your comment and the privilege of being the recipient of your first comment. Glad you enjoyed the article.

    Eddie
    Jun 28 03:09 PM | Likes Like |Link to Comment
  • Can An Individual Investor Invest Reasonably Well? [View article]
    Wenzac

    Thanks. I had gone to that screen when the question was first asked and my name was grayed out so that it couldn't be changed. I'm guessing since mine had been changed once that may have been the difference. Thanks for the tip though. Maybe that will work for 5733621.

    Eddie
    Jun 28 10:50 AM | Likes Like |Link to Comment
  • Can An Individual Investor Invest Reasonably Well? [View article]
    EK1949

    Thanks. Lots of ways to peel the onion which is one of the things I especially like about dividend growth investing. And one of the important things is that, as you so aptly stated, it needs to fit our aptitude and character.

    Eddie
    Jun 28 10:46 AM | Likes Like |Link to Comment
  • Can An Individual Investor Invest Reasonably Well? [View article]
    byslkwd

    Good link. Thanks.

    Eddie
    Jun 28 10:44 AM | Likes Like |Link to Comment
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