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  • April Showers Bring... Dividend Growth, Joy And Fun! [View article]
    Great article Mike. It was a much needed smile today. You and Roberta are a few dividends nearer to Mikeville, Hawaii. Congrats.
    Apr 9 01:41 PM | 3 Likes Like |Link to Comment
  • Total Return Is Not All That Matters In The Accumulation Phase [View article]
    Eddie: Another thoughtful article challenging us to think.
    I fully agree that total return is not everyone's primary goal in the accumulation stage. This represents a very narrow viewpoint, especially for someone in an advisory role. We're all happy with a nice fat total return, and most of us would be thrilled with more years of juicy total return like last year, but it just simply isn't always the primary motivating factor. There are so many other factors to consider and anyone of them can be primary. For some people it's capital protection, for many DGI it's building an income stream - something that usually cannot be done effectively at the point of retirement. I also agree that investing is an intensely personal venture based upon your past experiences, future goals, future earning potential, individual needs, time horizon, and risk tolerances to name just a few of the factors.

    I like your list of 7 recommendations as well. Keep inspiring us!
    Mar 20 06:05 PM | 3 Likes Like |Link to Comment
  • Retirement: The Forgotten Pieces Of The Puzzle [View article]
    3 yrs ago at age 42, having lost 90% of our life savings we thought a secure retirement was impossible. But we started again. 18 months ago, thanks to the dividend and income section of SA, I realized if we kept saving, at a higher rate than we were, we could actually retire and live off the dividends at age 65. Now, but only in the last couple of weeks have we actually been thinking there is the possibility of sneaking off early. Maybe significantly early. We're dreaming, but not yet sure it would actually work and not sure if we want the dramatic lifestyle changes. Of course, we're young enough we don't have to have it all figured out yet. But it gives us hope that not only will our retirement be secure, we could retire early and spend the winters somewhere warm.
    Jan 21 03:24 PM | 3 Likes Like |Link to Comment
  • Building A Portfolio Part 3: Due Diligence [View article]
    I bought in deferred account, so no tax harm done. Yes, the stock did drop, but I don't really find that phenomenon consistent, often yes, but not predictive. In the end, I would have lost at least 5% in exchange which was one of the considerations, but who could have known that was coming? So it's a good thing I took action when I did. Too bad I didn't buy COST at the same time. Its share price is highly unlikely to drop faster than exchange, but who knows.
    Jan 9 09:15 AM | 3 Likes Like |Link to Comment
  • Building A Portfolio Part 3: Due Diligence [View article]
    I'm glad you found the article helpful. If you are a long-term investor, the due diligence is far more important than getting in a couple dollars down. That's why I don't care if GIS is falling today. It will make little difference whether I paid a few dollars more 20 years from now, but a huge difference if the company is not sound.

    Check out Eddie Herring's article on the topic as well from June. Can An Individual Investor Invest Reasonably Well. It inspired me, and made me brave enough to really do the work. As a trader, this stuff was not on my radar.
    Jan 8 05:23 PM | 3 Likes Like |Link to Comment
  • Building A Portfolio Part 2: Choosing A Stock [View article]
    I think the dollar going to go lower over the next year and that it is specifically being manipulated to do that to increase trade. I plan to mainly focus on purchasing US companies over the next few months, when I will be contributing about 25% of my portfolio. After that, or when the dollar drops much further, whichever comes first, I will focus on Canadian stocks for the contributions for the remainder of the year (hopefully another 25%). I hope that 20 yrs from now, any purchases made within 10% of even will be attractive entry points. It's just too bad I wasn't as aggressively interested in large, solid US companies over a year ago when I was busy trading Cdn small caps. But, such is life. I can't change what I didn't know or understand then, I can only move forward from now. As far as I know, my broker gouges me, 1.0659 today, at least in comparison to what I can get at the forex store.

    We've had a very sweet opportunity and it's too bad I didn't understand how sweet it was. When our dollar hit 3c above, I convinced my daughter to open a USD account at the bank for possible future travels and we headed to the forex store to transfer a nice large amount for her. In the end she hasn't traveled, despite being all over the world previously. Having it sit in cash there has been far better than a GIC! As a trader, I just didn't translate that information into usefulness for buying stocks though. Sigh. Can you imagine the 29% returns last year in GIS with the added 10% forex kick. Some of these boring stocks are SWEET!
    Jan 7 10:45 AM | 3 Likes Like |Link to Comment
  • Building A Portfolio Part 1: Not Just Buying Stocks [View article]
    As I mentioned at the end of the article I love the 'as iron sharpens iron' attitude of this forum.

    Petrarch makes some good points. I guarantee I will consider carefully each and every point every commentor makes. That is how my best learning has occurred here. We often learn more from those with different points of view than those we agree with. (please be patient Petrarch, it may take a few days). It is a great privilege to have people spend their valuable time to comment on one of my articles. I think P is very concerned with the safety of my portfolio and he has taken the time to express what he believes to be the best course of action. I am keenly aware that I have not experienced a dramatic drop in price with myself at the helm, but encouraged that it wasn't us who requested or dumped our holdings into a cash account during the last crash. Having basically lost everything has indeed been a lesson.

    "BTW - you do not have to be subjective about risk. You can look up beta values for stocks - that will give you a sense of risk."

    Wow. I can't believe that didn't occur to me! I will get right on that when I return home, though I'm very happy with the table as it is as it reflects a 'wrestling' with the subject. What I was thinking with Miller's risk table was, "How confident am I in these companies and how comfortable would I be with a 50% or more drop from here?" (a la Warren Buffet) In a way it's a personal 'trigger happy' measurement! I think both approaches to the table are valueable and I will definitely implement the beta one. In future years I will make both, the personal one first, so that the beta numbers don't affect my decisions until after.

    This forum is concerned with stocks. It is not meant to be everything about investing. Some of the articles I write lean towards 'personal finance' and are not published. However, portfolio construction and asset location and asset allocation are critical especially for a newer investor. It's not surprising you haven't found much here, and one of the reasons I picked up the library book (plus the one I wanted wasn't in).

    1. Do not hold stocks. I think you mean holding individual stocks, as the asset allocation you suggest is mostly stocks. I am not willing to pay other people to make decisions for me, that's one of the benefits of being a retail investor and the professionals don't outperform anyway. So managed funds are generally of no interest for me. We will have to disagree on this and William Bernstein would as well. He mentions holding stocks, and even mentions recommending to certain investors holding 100% stocks, though as the market had changed he was (in 2001) leaning towards a larger percentage of bonds. He also recommends that "maximum stock allocation should be 10 times the number of years until you will have to spend the money". In my case, that would be over 100%!

    2 Random Walk, I have not read Malkiel's popular book, "Random Walk Down Wall Street" yet. I look forward to that. But I also follow Chuck Carnevale's position of price following earnings and do not agree with the efficient market theory.

    3. Asset Classes. Bernstein discusses the number of types of asset classes to hold and I would target more than average for myself as well as I enjoy the complexity as he does. I thought his confession of holding 30 and immediately saying more than 6 being not really necessary was quite funny.

    4. Risk. A 20% correction would not disturb me. I'd be rather thrilled as I expect to contribute 25% of the portfolio in the next few months. Of course, I'd prefer if only half of my stocks dropped 25%! I've been thrilled to buy BCE this summer and RIOCF more recently (among others).

    As for the dividend craze. Mr. Bernstein talks at length about the calculation of expected returns based on dividends and how the dividend is predictive over the very long term of the return of the company. I would quote the book but it is well out of reach to refer to and I skimmed that as I already understand the value of dividends and how important they are. They make up a significant percent of the total return of the market. Creating a growing dividend stream with a focus on making it peak 20 years from now is my main focus.

    I expect to move to 20-80 within a few years and keep watch over the asset allocation of the 80. I look forward to further discussion, Petrarch.
    Dec 28 12:14 PM | 3 Likes Like |Link to Comment
  • What A Difference A Year Makes [View article]
    Very true, Dave, but I would guess that your total portfolio value is not at all the same number as the amount of nuts you put up for the winter. There is more that just the saving principle at play here. I'm glad I've discovered that early enough.
    Dec 26 11:17 AM | 3 Likes Like |Link to Comment
  • What A Difference A Year Makes [View article]
    Thank you Dave,
    I can't wait for the announcement of your 2014 book out. I look forward to it immensely. Yes, it is a totally different portfolio from the beginning of the year, and a totally different perspective for me. I have a friend who's just been introduced to investing by a trader co-worker. I hope I can save him a year of my journey.
    I appreciate your input here on the forum and never fail to learn something from your articles.
    Thank you,
    Dec 25 11:18 PM | 3 Likes Like |Link to Comment
  • What A Difference A Year Makes [View article]
    Smarty, you are exactly right. The biggest gift is that the pressure of needing to perform well with every single decision is entirely gone. A good part of that is just having a well-diversified, non-trading portfolio. Sure, I may take on a trade every once in a while (only GG and WETF this year) but that's not at all the same thing.

    Having the end goal, shorter term goals, plans and strategies already decided and now in play have made all the difference.

    I also know that if I had continued as a trader, I would have quit by now. So much would have been lost, and not just financial freedom in retirement. This has given and will give me a purpose, job, and hobby for years to come. My extended family has substantially benefited as well and I am confident my children will be financially secure as well. It's the gift that keeps on giving.

    Yup, plain old folks, like this mid-western farm girl, if you're willing to put in the time and effort, can do this.
    Dec 25 07:02 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investing: Misguided And Doing It All Wrong [View article]
    I had to read your article to see if "Misguided and doing it all wrong" was me! (whew!)
    Actually, I wouldn't miss any of your articles, Dave.

    There is certainly variety in the DGI world and I would identify myself a D-G investor even though only 80% of my equities are the 'usual suspects'. Age, stage and goals certainly plays a big part of that.

    One of the big benefits of this corner of the forum is the focus on setting goals, making plans, and defining strategies - which makes all the difference especially in the Sleep Well At Night arena. When the plan is working, you can tolerate some volatility without concern. This makes it much easier to not panic and withstand corrections, and on the opposite side of the spectrum, allow me to take an occasional calculated risk without the concern of jeopardizing the main goal of the portfolio.

    I used to worry so much about my portfolio and retirement, believing it was not likely possible to even be 'ok' when we retire. Our situation has not changed, except that I'm even more disciplined to save, other than I've given up trading and embraced DGI. Now I am not reliant on the next trade doing well and there is no concern at all. The vitamin "D" has made all the difference.
    Dec 19 03:04 PM | 3 Likes Like |Link to Comment
  • Western Union: Steep Discount, Sector Domination, Strong Volume Growth [View article]
    Excellent article. If they are all this readable, informative and passionate, I will enjoy every one. You've earned another follower and I look forward to your analysis of another company. I have been long WU since early March, and have been surprised how quickly WU has recovered. I try to look for dividend growth for the future, and not only want stable longer-term DGI companies, but with 20 years before needing the income, those that could develop into the next generation's dividend champions. (ie Visa). I bought this because it had a nice, growing dividend (a much higher percent at $14!), was the market leader, and trades below earnings. I thought it had the possibilities of being a long term stable company, and that if after more research, I decided it wasn't, I could at least catch a 20% swing anyway!

    I have not been disappointed, but I have wondered many times whether I should take the 30% and run, but I haven't found something that I think is a much better opportunity that I'd replace it with. I don't think I'll sell, and don't wish I did before the earnings report. Your article confirms what I understood.
    Nov 6 05:31 PM | 3 Likes Like |Link to Comment
  • Why Do Dividend Growth Investors Like Price Pullbacks So Much? [View article]
    Really? Tim McAleenan wrote an excellent article with mathematical examples about how your returns will be much better over time if the market has a few significant corrections over your investing time period. It was a very important lesson for me.
    Oct 18 05:18 PM | 3 Likes Like |Link to Comment
  • Do Not Despise The Days Of Small Beginnings [View article]
    Welcome to SA Karpy, I started out as a trader and after a year came to see the wisdom of Dividend-Growth Investing. It's been a little over a year of learning and transitioning, but hanging out here and reading has been the most beneficial thing I've done. There's great writers here who are willing to help and have lots of experience and wisdom
    Oct 7 09:36 PM | 3 Likes Like |Link to Comment
  • Tortoises Win The Retirement Race [View article]
    WAY TO GO! You are absolutely correct that saving can be done by anyone. The sad thing is that people don't realize or understand the value often until they are much older and even empty nest.

    An issue I didn't read in the article that is hampering retirement savings, is that older children are moving home and sponging off parents until much later in life. They think they can live 'free' off their parents, but it's costing their parents their retirement.

    We are fortunate to have been empty nest at 42. Despite having saved well and having lived modestly our whole lives, we had to start again. But now we have time and resources and many lessons well learned. We'll be fine. Not everyone who wakes up 60 and broke did it to themselves, but the vast majority certainly have. I know people older than myself who pulled out their retirement savings to take their still-young children on a cruise. sigh. The thing that disheartens me most is watching people live a lifestyle I couldn't afford, knowing their resources are substantially less than mine. But they simply don't understand and no one's taught them.
    Sep 24 09:48 AM | 3 Likes Like |Link to Comment