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Eddie Herring
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Retired Project Manager - 36 years with a national utility. Married 36 years and have 3 wonderful kids. USAF Veteran. Investing primarily in solid dividend paying companies with focus to generate income, capital appreciation is of secondary concern but still important. Tend to be conservative in... More
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  • A Time Saving Shortcut For Stock Prices

    Due to a recent comment I made to an article I was asked about how I automatically get my Excel spreadsheet to update stock prices. The following hopefully will explain my process.

    I have been using a Yahoo quotes add-in to Excel for quite some time, long enough that I don't remember exactly where I got it. But it's available at this website by clicking here. At that website you'll see this screen:

    (click to enlarge)

    There is a zip file under Top Level Files on the lower part of the page. You'll need to download that zip file. On the same page just below the zip file there's a link "Install-the-addin.html. Clicking on that link carries you to the instructions for installing the add-in.

    After you get it installed you'll need to enter a specific formula for the Excel spreadsheet to use. I list all my symbols in one column so that I can look at each position individually. Since I'm lazy (or time efficient) I don't want to have to type the symbols in a formula in every row. I type it one time and then copy it to all the other rows. Here's an example spreadsheet.

    (click to enlarge)

    In my first column are the stock symbols. In Column F I have the current price. This is based on the last price from Yahoo. In the formula input area is the formula which is =RCHGetYahooQuotes($A2,"l1"). A2 is the column and row that it is to pull the stock symbol from, in this case for Coca Cola or KO. The $ sign in front of A2 tells the formula to always pull from Column A. You can copy and paste the formula (from the = sign to the close parenthesis symbol) as I have it here in your spreadsheet and then just change the reference to the appropriate column and row that you're using in your spreadsheet. The remainder of the formula remains the same.

    After you input the formula in the first cell, you can then simply copy and paste it in the other cells and it will automatically update the appropriate cell for the symbol in the additional rows.

    Other formulas in the example above include total purchase price which (using KO again) are common Excel formulas such as =Sum(B2*D2). =B2*D2 also works. It's simply saying multiply (the * is the symbol for multiply) Column B and Row 2 by Column D and Row 2, or in other words, multiply the number of shares times the original purchase price and give me the total.

    Under Current Yield just put in =H2/F2 and it will calculate the current dividend yield. If it gives the decimal number such as 0.029590104 simply right mouse click in the cell the formula is in (I2), go to format cells, and under the number tab select percentage to change it to 2.96%. I have to manually input the current dividend itself though.

    Another formula I use just for curiosity sake is how long I've held a position which is what I have in Column J. The formula I use there is =TODAY-C2 with C2 indicating the column/row that has the date I originally bought it. It then calculates the number of days from that date to the present day.

    Now, every time you open up the spreadsheet it will update the current price. Since it's downloading the information from the web, if you have a large spreadsheet with a lot of symbols, it may take a few seconds to update, depending on your connection speed. You'll need to make sure you have the spreadsheet set up to automatically update the formulas. To do this click on the Excel symbol in the top left handle corner, then go to Excel options, then select formulas, and under calculation options make sure automatic is selected.

    Once you have the price updating automatically, you are essentially only limited by your imagination in setting up your spreadsheet any way you want it. In the documentation link shown in the above web page there are other formulas that pull in things such as ROE, dividends, and so forth. However, I've found some of them don't match the data from other websites. For example, I've set up similar formulas to pull in the dividend and it would be different than shown on FinViz or Morningstar. So I only use the price, which I've found to always be correct.

    I hope this is helpful. If some of it is too basic forgive me, I just didn't want to assume everyone knew certain things.

    Tags: KO
    Feb 09 10:05 PM | Link | 11 Comments
  • My Investing (Business) Plan

    In a comment to Bob Wells' fine article here I was asked about a link to my investing plan and responded that I didn't have it online but would consider posting it to the Instablog. That's the purpose for this post. However, a few comments are in order.

    Those whom I've previously sent this plan via email may notice a few slight changes but the basic structure and content should still be the same. Over time I continue to update or modify it. Often it's just changing a word but I'm a strong believer in Mark Twain's adage that "The difference between the right word and the almost right word is the difference between lightning and the lightning bug." So I continue to press on to find the right word(s) for each part of the plan.

    I've also used portions of the plan as content for past articles and have included the links to those articles in the relevant portions. This is to help further explain my thoughts in regard to those particular passages. If you have any questions regarding any particular portion or content feel free to ask and I'll try to explain why I have something as it is.

    Lastly, please keep in mind while reading this that it is designed specifically for me, my personality, and my situation. My posting it is not a recommendation to use it, but rather is to just simply respond to a request.

    Investing Plan

    Purpose

    My purpose for investing is to create a future income stream for my wife and I that will potentially be useable starting in 2023 that will not require depleting of the capital.

    Philosophy

    I buy quality businesses and hold them to reap long term income benefits - I use the stock market as the means to do that. I am an investor not a trader. I believe this requires a different mindset than trading.

    Investment Principles

    Article here

    Surround myself with quality companies;

    Understand the relationships;

    Know when to say No (applies to both buying and selling);

    Be prepared when opportunity knocks (and watch for those opportunities);

    Seek dependability;

    Continually improve knowledge level;

    Do the right thing;

    Keys To Success

    • The portfolio is a business. Treat it like one.
    • Understand each company and the role it plays in the overall portfolio. If I don't understand it don't invest in it. Period! No matter what the yield, no matter how popular, no matter who recommends it. Don't do it.
    • Give preference to investing in low beta high quality companies;
    • Always practice patience.
    • Devote a minimum of 8 hours/week to continual learning of investing, whether reading, studying, having discussions, writing articles, researching, or analyzing investments.
    • Identify and manage risk on a continuing basis.
    • Utilize compounding of investments by either reinvesting directly in dividend paying companies or using cash dividends to buy additional dividend paying companies.
    • Manage the psychological aspect (Fear/Greed) of investing by managing my emotions (see list of questions to avoid panic*).
    • Think long term, not next day, next week, next month or next year. Note: Time frame for investments may be adjusted if/when distributions begin from the portfolio.
    • Evaluate and consider others' ideas, suggestions or recommendations but always accept responsibility for my own investments. Ultimately choose what is in the best interest of and supports my investment goals.

    Goals/Objectives/

    My goal is to increase my portfolio size to a level that provides income that is at least half that of my annual pension. This will be accomplished by investing primarily in dividend growth stocks, adding funds each year to the portfolio, and practicing passive management but active monitoring of the portfolio.

    Strategy

    At least 80% of the portfolio will be in companies/stocks that pay dividends. The portfolio will be segmented as at least 60% core/foundational, ~20% may be non-core for short-term (<5 years) positions for high yield or growth of capital while collecting dividends, and no more than 20% of the portfolio may be used for speculative investments, i.e. stocks for growth of capital only or techniques such as options.

    The dividend paying companies should have a history of paying and increasing dividends or exhibit the ability to do so. These may include C corporations, BDC's, REIT's, and MLP's. I may also invest in closed end funds, as well as companies that don't pay dividends, such as growth stocks, but my core or foundational investments will be solid blue chip type companies.

    Rules for Managing the Portfolio

    • I will structure the individual positions so that no single position will exceed 15% of the portfolio - for any at 15% I will not add to that position but will add to others or add new positions so as to decrease its portion of the portfolio. Any company exceeding 10% of the portfolio should be rare! The average position size of the portfolio shall not exceed 5%.
    • I will not buy any company without first doing my due diligence to insure their ability to pay the dividend and the stability of the company.
    • I will not buy a company that is losing money or that has no discernible product. I don't do IPO's.
    • To protect against inflation I will look for companies averaging a dividend growth rate of 6% or better.
    • I will not buy any company with a dividend yield of less than 2% unless yield plus DGR is =>12%. My preferred is 3% or higher. This excludes speculation in the 20% portion of the portfolio.
    • I will always evaluate the dividend payout ratio based on cash flow.
    • I will evaluate portfolio performance by measuring the dividend income increase or stream on a quarterly and annual basis,
    • I will not buy a company that is over-valued according to my calculation of intrinsic value.
    • I will practice good risk management of my portfolio by understanding the company/investment, allocating my portfolio on a position size basis, obtaining a margin of safety, seeking recession resistant companies, and maintaining sector/industry diversification.
    • I will be patient and control my emotions regarding my investments. I will review my list of questions* when I feel the urge to sell if a company price is dropping significantly.
    • I will always ask how does this investment align with my purpose and move me closer to my goals.

    The Process

    Obtain candidates for evaluation from various sources. Sources include the CCC list authored by David Fish, various screens, and/or mailing lists.

    For dividend investments in C Corps perform a dividend safety check. Evaluate the dividend payout ratio based on both cash flow and earnings. If the payout on cash flow is above 75%, stop. Check credit rating, if BB+ or lower, stop.

    Make sure I understand the company business, how it makes money and the business risks it faces; Check the company website, annual reports and 10-K; Verify is well run company by metrics, management history, and reading CEO/COB letters;

    Evaluate fundamental metrics. Sources for metrics include Fast Graphs, Morningstar, Yahoo Finance, FinViz, and company reports such as 10-K. and annual reports.

    Evaluate for economic moat.

    Check for recession resistance;

    Perform valuation to determine intrinsic value and compare valuation to Fast Graphs, Morningstar and others;

    Make sure valuation template is complete;

    Compare valuation to current pricing for buy/wait signals.

    Compare my evaluation to analyst reports, such as S&P Capital, on brokers website;

    Write investment summary and identify if the investment is short term or long term; Note - summary (why this company) must be explainable in plain language in two minutes or less.

    Reasons To Sell a Position

    1 - I was wrong about the company;

    2 - The company, criteria, or reason for investing has changed;

    3 - I have identified a significantly better investment that will improve the portfolio;

    4 - I need to rebalance the position due to growth;

    5 - The objectives of the investment have been met or exceeded (note - usually short term buys);

    6 - If a company becomes too over-valued that it would be better to take profits and buy back in this may be considered but should be rare, with the exception of bubble events;

    *My List of Questions To Avoid Panic

    Article here

    What is really happening here?

    Has anything changed other than the price?

    Is this a news driven event?

    Did I enter at an over-valued price, i.e. was I wrong or did I miss my entry?

    If I didn't own this stock, would I consider buying it here?

    What is my timeframe for this investment?

    Is the entire market moving down, the sector/industry, or just the company itself?

    What are the alternatives?

    May 15 8:50 PM | Link | 29 Comments
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