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Jeff Paul

 
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  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    You're welcome, WDL.
    Apr 6 04:29 PM | Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Each of my models operates a little differently. The HYLP model looks for high yield and low payout, which mathematically implies low PE. This model does not force out a stock with high PE, however, when it is above ~65%, I do check that recent operating cash flows covered the dividend. This is because of the focus on yield, and with a 6-month rebalance, those that stumble on this front will get removed next time around.

    I've debated whether to apply the stop-loss when rebalancing/creating a portfolio. It is more of a momentum check, but I figure if I use it to remove a stock from one model, than it seems hypocritical to not exclude the stock from another that is rebalancing. Yes, some would see it as an opportunity. But, in the short-term, selling it was the correct move. I would need another rule to determine when to allow it back in, other than div increase, which only occurs annually, hence the problem at this rebalance.

    On the flip side, in the near term (next 6 months), Intel would need to do something that moves its stock up, while the overall market could see some correction. It hasn't been doing that the last few months, so it does have something to prove in that respect. My guess is that it will be available for the portfolios at the next rebalance, hopefully near the same price range ($20-$23), which still offers a great yield.
    Apr 6 03:46 PM | Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, meditative. Since I'm going for total return, I owned ABT (pre-spin off) over AZN. Currently don't have either. I have NHI and SYK in healthcare.
    Apr 6 11:04 AM | Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    WEC is in the low-beta, High DGR portfolio. It was in the final screened universe for this portfolio, but since DG-IncGro focuses more on yield, NU was selected over it.
    Apr 6 11:02 AM | Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    The CCC list has a beta column (go to the FAR right in the spreadsheet). The portfolio beta is just an average of those values, since I use equal weighting based on dollars.
    Apr 6 10:58 AM | 2 Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, billinsd. No, nothing wrong with owning multiple companies in the same industry. For a model limited to 30 stocks though, I'd like to see at least some diversification in each sector, if possible. I own multiple telecoms, and have had multiple tobacco stocks in the past.
    Apr 6 12:16 AM | 3 Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, smlaker. That's a good idea. I didn't include it as the primary objective is yield and then the overall portfolio DGR. You can find them in the CCC; about half were above 10%, probably averaging 15%. The other half were below 10%, avg of around 7%. Combined avg = ~11%.
    Apr 6 12:15 AM | 1 Like Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, horowitzcpa. K and LO were excluded from the screened universe because their respectively histories are less than 9 years of DG. This model focuses on stocks with longer histories of DG. Personally, I do own LO.
    Apr 6 12:10 AM | 1 Like Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, David. And thanks for your work with the CCC lists!
    Apr 5 06:58 PM | 3 Likes Like |Link to Comment
  • An Income Growth Dividend Portfolio For 2013: 3.9% Yield And 0.70 Beta [View article]
    Thanks, maybenot. I have LMT and have been looking at SJR. BCE is another Canadian telecom too that I've been watching.
    Apr 5 04:17 PM | 1 Like Like |Link to Comment
  • Dividend Growth Models Update: Low Beta, High DGR Portfolio Off To A Great Start! [View article]
    The betas listed in the graphics are for the time frame being measured, which is about 19 months for the Inception graph. That is a shorter timeperiod than what Yahoo Finance reports (60-month beta). I also calculate the volatility of weekly returns, which is a component of the beta calculation, but independent of comparison to the SPY. I consider 0.65 to be low, relative to 1.0 for the SPY. That isn't a scientific definition, nor do I use it as a baseline for any decisions. Some investors probably consider anything under 0.80 low, and some may have a stricter cutoff (0.50?). The bottom line is that these portfolios have lower beta than the market index and are thus far achieving higher total return.
    Apr 2 11:54 PM | Likes Like |Link to Comment
  • Dividend Growth Models Update: Low Beta, High DGR Portfolio Off To A Great Start! [View article]
    Thanks Jstr. I only have about 2 years of data, and no major pullbacks, so it's hard to answer your last question. The lower max drawdowns are encouraging, and I did do a spot check recently of about 10 holdings to see how they fared in 2008-2009. The REITs fell about as much as the S&P (percentage wise), but bounced back much quicker. The other sample stocks (cons staples, MCD, PG, utilities, JNJ, etc), fell on average maybe 50-60% of the S&P's fall, so I'm hopeful the portfolios will hold up well when the next decline hits. The only concern would be if people start rotating out of dividend stocks, which could lead to a greater decline, but I think rates would have to go up quite a bit before div stocks are unattractive in that respect. Of course, growth stocks won't look so attractive in that environment either, so div stocks may still perform better on a relative basis to the S&P.
    Apr 1 09:38 PM | 1 Like Like |Link to Comment
  • Dividend Growth Models Update: Low Beta, High DGR Portfolio Off To A Great Start! [View article]
    Yes, I was referring to MPT, and since there are multiple anomalies (low-beta, small cap/value, etc), at some point I would think the theory will need a revision. In general, the idea of more reward for more risk makes sense to me; that's just market economics. If you can get higher reward for less risk, everyone would do that, so the riskier company needs to offer a higher rate of return. Maybe that works better for bonds, since stocks are more subject to market pricing (no guarantees). But, higher risk also means higher chance of bankruptcy or other issues, so in aggregate, I can see where this category could have below-average returns. The issues of manager incentives and investor behavior are other layers that MPT doesn't factor in, not to mention different definitions of "risk".
    Apr 1 09:31 PM | 2 Likes Like |Link to Comment
  • Dividend Growth Models Update: Low Beta, High DGR Portfolio Off To A Great Start! [View article]
    No offense taken, Richjoy. I think we need to look at opposing research and experiences that don't match the "accepted theory" (meaning MPT in this case). The viewpoint of low-beta outperformance as an "anomaly" comes from an MPT-centric position. Like David, it is not one that I necessarily subscribe to, though I think parts of it make sense…at least until a new theory emerges, as you mention.

    Given that we've discussed data (and experience) showing the value of low-beta stocks, it does beg the question why all of this institutional "smart money" isn't all over low-beta holdings, to the point that the excess value is removed. Note, I'm not saying they don't invest in these stocks, but I do wonder why the %s that you quoted aren't higher. Also, it occurred to me that the %s don't reflect total market cap. i.e. 86% of Google's $250B market cap is institutional, which is far more than probably all of the stocks you listed. It's a complex system, so I don't claim to pinpoint a particular cause. I do believe that if institutions truly believed as we do, there would be less excess returns from low-beta stocks (due to higher demand/interest/attent... Experience and recent data says that is not the case, which is fine by me, as like you, I choose my own path.
    Apr 1 09:26 PM | Likes Like |Link to Comment
  • A Low Beta, High Dividend Growth Rate Portfolio With 3.4% Yield And 20% DGR [View article]
    To the best of my knowledge, the CCC list, which is my source for the data, only calculates annual div growth, hence the annual rebalancing. I would agree, that doing it at 6-months could have advantages. I don't have a good way to compute all of the rates though. If you know of another way to get it or create it, please let me know!
    Apr 1 09:14 PM | Likes Like |Link to Comment
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