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Eli Inkrot  

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  • Exploring The Dividend Sell-Off Approach [View article]
    Thanks Dividend Math Guy, I appreciate it. As your moniker indicates, the important part is completing the underlying math. All the best.
    May 20, 2015. 03:45 PM | 1 Like Like |Link to Comment
  • Exploring The Dividend Sell-Off Approach [View article]
    Thanks George, I appreciate it. I agree, even consuming too much water in too little time will kill you. All things in moderation. All the best.
    May 20, 2015. 03:39 PM | 1 Like Like |Link to Comment
  • Exploring The Dividend Sell-Off Approach [View article]
    Hi Dividend House, thanks for your comment and kind words. What you mention is effectively on par. It's not as though I'm personally advocating this method. However, it is nonetheless important to realize that this option exists. As you state, it grants an additional layer of comfort in knowing that you have an alternative to deal with needing a bit of extra income. Shoot for never selling a share, but understand that there exists a bit of flexibility in that assumption.
    May 20, 2015. 03:38 PM | 1 Like Like |Link to Comment
  • Exploring The Dividend Sell-Off Approach [View article]
    Hi Andre, thanks for your comment. The short answer is: yes, you should personally take taxes into consideration. The longer answer is: 1) every reader's tax situation is different such that what would apply to one would be less than helpful to another. And 2) in many circumstances, under current law, you wouldn't be paying taxes via a tax-free account or being in a lower tax bracket. It's quite possible for a couple to make $90k a year and not pay a dime of federal taxes on dividends or the sale of long-term capital assets. Given that the above example worked with numbers around $20k, it's not particularly difficult to imagine a "no tax" situation.
    May 20, 2015. 03:34 PM | 2 Likes Like |Link to Comment
  • Exploring The Dividend Sell-Off Approach [View article]
    Hi TF17, thanks for your comment. I agree. The above was merely an example of successfully reaching one's goals in a slightly different manner. Your proposed liquid position could indeed be a better option. Then again, if one is looking to sell shares it follows that starting from liquidity might not be an easy option to accomplish. Moreover, while that high / low pattern holds in this example, it could certainly be the case where lower income is found in periods of higher instead of lower prices. The point was simply to underscore the idea that there are many ways to get to your overall objective; you need not be restricted by an arbitrary thought if you can work out multiple avenues to success.
    May 20, 2015. 01:13 PM | 1 Like Like |Link to Comment
  • Exploring The Dividend Sell-Off Approach [View article]
    Thanks AJJ, I appreciate it. All the best.
    May 20, 2015. 01:07 PM | 2 Likes Like |Link to Comment
  • Johnson & Johnson And A 'Forever' Lower Share Price [View article]
    Hi mjtroll1, thanks for your comment. You need not be astounded, it's simply logic. Warren Buffett expresses the sentiment better than I:

    "The logic is simple: If you are going to be a net buyer of stocks in the future, either directly with your own money or indirectly (through your ownership of a company that is repurchasing shares), you are hurt when stocks rise. You benefit when stocks swoon. Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance. These shareholders resemble a commuter who rejoices after the price of gas increases, simply because his tank contains a day's supply."
    May 20, 2015. 11:23 AM | 5 Likes Like |Link to Comment
  • The Southwest Approach To Investing [View article]
    Hi Dane,

    Thanks for your message and kind words. It should be noted that I obviously prefer to partner with companies at lower prices, but alas I have no special ability in telling you what share prices will do in the coming days, weeks or months. However, given the profitable nature of said companies, it turns out that a higher price is more likely than a lower one, especially as time goes on.

    The idea of the Southwest reference was that you have the ability to buy at a reasonable price today and benefit from a lower price. If you wait, you're subject to the risk of never again being able to get today's price. Likewise with investing, if your partnership of choice is offering a "reasonable" value proposition, you have the option to buy today or wait. If you buy today and the price goes up, that's fine. If you buy today and the price goes down, that's not bad news - you'll likely be purchasing more via "fresh" capital, reinvestment or repurchases. Alternatively, if you wait for a lower price that never comes, you could still be waiting. Searching for the perfect can be the enemy of very good.

    Personally I am much more comfortable owning a piece of a profitable partnership instead of hoping for a price that might never come. As indicated above, if I buy at a reasonable price today and the price goes down I can deal with that (it's actually good news.) On the other hand, if I don't buy today and the price goes up, I don't have much recourse. It's not about "buying now" or at "any price" or anything of the sort. Instead it's about considering your options and working toward your underlying goals. I hope that helps. All the best.
    May 13, 2015. 02:40 PM | 1 Like Like |Link to Comment
  • Is Chevron's 'Frozen' Dividend An Opportunity? [View article]
    Hi Cash Flow, thanks for your comment. Although it should be noted that XOM has an even more robust history than CVX of paying the same dividend for five consecutive quarters or more:

    http://seekingalpha.co...

    Perhaps most to the point, twice in the last 25 years has the company paid the same dividend for 10 straight quarters. Beyond this there are a bevy of examples of "irregular" or "non-conventional" increases in the company's past. By relying solely on recent history, it could simply be the case that one's frame of reference is too short. All the best.
    May 6, 2015. 03:29 PM | 9 Likes Like |Link to Comment
  • Why Procter & Gamble Could Be A 'Better' Choice Than Colgate-Palmolive [View article]
    Hi jimmy, thanks for your comment. Your logic is reasonable, but the answer, like most things, is: it depends. Assuming constant dividend yields, the faster growth would lead to greater appreciation and thus a potentially higher compound return. However, much like being cautious with dividend growth rates, it can be prudent to do the same thing here. Presently Procter & Gamble has a higher dividend yield than Colgate, but this might not always be the case. If the yields were to reverse, the appreciation wouldn't be as clear cut - PG's price would grow faster than its dividend while CL's price would increase at a slower rate. Once more the idea of relative timeframes becomes paramount.

    Perhaps just as important is the idea that this was merely an example; a "stacked" one at that. If the company's were to grow their payouts at similar rates moving forward, as has been the case in the past decade, the dynamics change. The total return characteristics of each could be similar, albeit getting there in a slightly different manner. The point was not to indicate a "better" security, rather to underscore the idea that you can't just look at a single year and suppose one will be better than the other. There are a bevy of additional factors to consider. I hope that helps, all the best.
    May 5, 2015. 05:11 PM | 1 Like Like |Link to Comment
  • Why Procter & Gamble Could Be A 'Better' Choice Than Colgate-Palmolive [View article]
    Thanks CapeCap, I appreciate both your comment and kind words. I agree: both companies have proven to be excellent businesses. Keeping in mind the underlying math can better direct how you think about the process. All the best.
    May 5, 2015. 03:39 PM | 1 Like Like |Link to Comment
  • Franklin Resources: Gain From Its Capital Allocation Strategy [View article]
    Hi scorpsteals, thanks for your comment. While I do try to bring about various investing thoughts, it should be underscored that this is certainly not a recommendation. It is always prudent to complete one's own diligence, based on personal circumstances, and I would not provide a blanket recommendation. Everyone is different.
    Apr 23, 2015. 05:44 PM | 1 Like Like |Link to Comment
  • Franklin Resources: Gain From Its Capital Allocation Strategy [View article]
    Hi Robert, thanks for your comment. Note that “special” dividends are such denoted to indicate a lack of future obligation, not unpredictability (much like repurchases). Some firms regularly pay a “special” dividend. I agree that the timing and amount would be difficult to predict, but it does not follow you couldn’t expect them to occur some time in the future. In any event, in the sake of prudence, I indicated no such dividends in the above assumptions.

    Additionally, it should be made clear that I have no great affinity for buybacks. Instead, I simply look at the investment circumstances and present them appropriately. Like most things, the value depends on price paid. All the best.
    Apr 23, 2015. 05:40 PM | 2 Likes Like |Link to Comment
  • The Skewed Nature Of Dividend Growth Rates [View article]
    Thanks Dave, I truly appreciate it. I wanted to demonstrate the idea's practicality via both real-stock and hypothetical examples. Often people get caught up in one or the other, so hopefully I offered enough for both crowds. The general construct is to simply to pay attention to your underlying goals and how each security in your portfolio works toward those objectives. Doing the underlying math often illuminates certain investing nuances - like not blindly accepting an average growth rate. Once again, I appreciate it. All the best.
    Apr 21, 2015. 03:35 PM | 5 Likes Like |Link to Comment
  • What Would Moderate Growth Mean For Aflac? [View article]
    Hi Planning for Retirement, thanks for your comment and kind words. I agree: the benefit of reinvesting can add a nice boost over the years. In fact, just to illustrate the point, I have provided a follow up on the magnitude of what that benefit, with respect to Aflac, might look like:

    http://seekingalpha.co...

    If I can open up an avenue of investing thought for others, I've done my job. Once again I appreciate it. All the best.
    Apr 17, 2015. 04:15 PM | Likes Like |Link to Comment
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