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Nicholas Ward  

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  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    David, I didn't know that Hormel owned Muscle Milk. You learn something new every day :)
    Mar 3, 2015. 04:22 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    Dave, my qualms in terms of the food industry, or with any industry for the matter, aren't with profits. I agree, these profits are what drive society forward and allow for the inventions and innovations that make the world a better place. I also agree with your closing statement: "Those profits allow the funding of charitable endeavors here in the States and all over the world. How you use the gain of your investments is what really separates the men from the boys."

    Its not the profits that bother me, or I think most people who seem to bash them, its the ethics and business practices that are behind them that matter. Sure, the "profits" may become the scapegoat, but like you said, these aren't the issues - they cannot think or act, it is the men and women behind the scenes making the associated business decisions that sometimes give certain industries or individual companies a bad name. There are good profits, bad profits, clean and dirty, honest or dishonest profits. There are many kinds of profits. Some will be helpful to some while hurtful to others. The world is a complex place. I don't think we should dishonor profits, far from it; but instead, we should determine their origins and their merits before we glorify them.

    My issue with the food industry is centered around irresponsible farming practices that are destructive to the environment, an unwillingness to accept new data as real and to change accordingly, and animal welfare issues that I strongly believe in. I eat meat, I hunt, I process my own game...but, I do it ethically. I've seen too many industrialized farming operations that treat that disrespect the animals and have no regard for their quality of life. It is upsetting, life should never be trivialized.
    Mar 3, 2015. 04:21 PM | 2 Likes Like |Link to Comment
  • The Dividend House DGI Portfolio: The Good, The Bad, And The Ugly [View article]
    Maybe I'm being naive here, or highly arrogant (I hope not), but my income growth target is higher than 6%. In the very long-term that is probably about right but in the short term I expect to do better. In 2014 the average dividend increase of my holdings (including several that were 0% due to their lack of dividend) was over 10%. Excluding those companies that don't pay a dividend it was 11.24%. I prioritize dividend growth over dividend yield in many respects. This 10% annual increase is where I'd like to be. The average yield of my portfolio's 51 holdings was 2.28% - I know many DGI investors shoot for a higher target than that. There many come a time when I need to own more T's and less QCOM's, but until then, I like the idea of dividend growth as a focus.

    It'll be interesting to see how everyone'e portfolios play out. Over the last 5 years or so, so many DGIers have began publishing their results here on SA. I enjoy following them all and watching as strategies harden or transform. Such a great learning opportunity.
    Mar 3, 2015. 03:24 PM | Likes Like |Link to Comment
  • The Dividend House DGI Portfolio: The Good, The Bad, And The Ugly [View article]
    I would agree with you that it is highly speculative. I carve out a small percentage of my portfolio that is dedicated towards more speculative/growth oriented holdings. This may or may not be something that everyone is interested in doing. I think all of these companies are great potential ideas for your daughter's portfolio. Like I said, they seem expensive right now, V especially, but with a very long-term horizon I don't really think anyone would regret owning shares of these companies. Best of luck to you.
    Mar 3, 2015. 03:15 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    touche'.

    I guess it just comes down to how badly we want to make money (it isn't everything). And, how we want to go about doing that. Where are our moral lines are drawn in that regard.

    These statements are in no way a reflection of you and your ethics, just generalizations that I think all investors must consider. Everyone will come to their own conclusions in these regards. I'm just thankful that the market is such a big place that allows everyone to be successful where ever they stand morally or philosophically.
    Mar 3, 2015. 03:11 PM | Likes Like |Link to Comment
  • The Dividend House DGI Portfolio: The Good, The Bad, And The Ugly [View article]
    Bob, I find it interesting that you say, "A loss is already a loss. Period. If I won't buy it today, why do I still own it?"

    This is a question that I struggle with as well. I recently touched on this in an article about selling WMT but decided that this mindset was best used on a case by case basis, rather than as a general rule. It seems that you've made it a general rule. I've gone back and forth on this sort of thinking. Sometimes it makes perfect sense, sometimes it seems illogical. Do you care to comment on your reasoning in more depth?

    My main concerns with this sort of thinking are relative valuations (I wouldn't want to buy many of the companies that I currently hold at their current prices because they are expensive). They weren't expensive when I bought them though and they are still performing like the wonderful, high quality companies that they are. They have done nothing wrong, the market has just made an error (IMO). Now, I'm talking about winners here, with losers its a bit different. I guess it depends on the reasons that they're losers - usually a stock doesn't sell off for no reason at all. I also have a hard time selling big losers - sure I don't enjoy holding them, but I also hate the idea of locking in losses when there is still hope for them to recover. This may be a psychological issue that I need to come to terms with; however, I think this sort of reasoning is a bit part of traditional "buy and hold" investing.
    Mar 3, 2015. 03:06 PM | 1 Like Like |Link to Comment
  • The Dividend House DGI Portfolio: The Good, The Bad, And The Ugly [View article]
    Thanks all for the responses. I should have spoken (written) more clearly. I don't expect any of the companies I mentioned, or any company for the matter, to ever increase its dividend at a 20% rate perpetually. That said, I think there is precedent for low yielders to do so for decent periods of time, or to at least average a number near 20 (I just chose that number arbitrarily to represent high dividend growth, in hind sight, 15% would have been more accurate). Take a look at V and MA's dividend history. These company have put up tremendous raises and I believe they will continue to do so as their dividend matures and their payout ratios (which is still very low due to great earnings growth) increase to target long-term levels. DIS is not known for long-term dividend growth streaks because management has a habit of being conservative and freezing the dividend when financials are questionable. That said, when they do raise their dividend, which has been more often than not as of late (and I expect this trend to continue for the next year or two at least because of my bullish stance on the company's entertainment pipeline), the raises have been strong double digit increases.

    In closing, you all are right - no one should expect such high double digit increases. I agree that "counting on 20% growth is a recipe for disaster." Counting on anything isn't a great idea in the market's, they can be unpredictable. That said, barring any major large scale economic disasters, I believe that investors who own companies like V or DIS will continue to see strong dividend growth and I wouldn't be surprised at all to continue to see 20%+ increases, as these yields are not mature. My point being, its nice to sprinkle in companies like this with your normal 4-8% growers. They can make a noticeable difference in both your income growth and capital appreciation over the long-term.
    Mar 3, 2015. 03:00 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    I agree - I own shares of many companies whose products or services I don't use. I'm scared to fly in an air plane (my wife hates it when I admit that publicly but I don't think its anything to be ashamed of) but Boeing is one of my favorite positions. I like to invest in trends that I believe in long-term. The Urbanization of the world's population is a very bullish trend for air travel. With a multi-decade horizon (God willing) I have to consider such things when determining whether an investment is a "good" one or not.

    As a farmer, responsible food production is something that I am passionate about. I think the irresponsible industrialization of our food industry has and will continue to be detrimental to this country and the rest of the world. I don't own MCD because I don't eat there. I don't eat there because I don't think human beings should consume the food that they produce. If I believe the latter, why would I own the stock? Same goes for HRL and others who produce highly processed edibles that I believe to be unhealthy. That said, I'm always willing to balance my beliefs, the fact that I am not a clairvoyant, and the possibility that these companies will change their ways with current share price and the value that it presents. If MCD trades down low enough I'll bite the bullet and buy shares if I believe the dividend is sustainable. No decision is clear cut and easy.

    Thanks for your comment. I don't mean to start a debate on ethics either (I am in the same situation as you are in terms of MO - its something that I consider from time to time but for me I think the difference is in the fact that by the, now public is well aware of the dangers of smoking...I don't know if the same can be said in terms of the food we consume). Like I said, I agree with you that we should focus on the quality of our investments, not whether or not we personally use the products/services that a company offers. If only it was as simple as Peter Lynch puts it (or maybe it is...), "buy what you know."
    Mar 3, 2015. 02:47 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    I don't often think of Hormel as a potential investment - I don't eat much of the above mentioned SPAM. I worry about all of the companies that deal in highly processed foods, I keep thinking that eventually the market will turn away from them for supposed health reasons. That said, obviously I've been wrong in that regard and the average consumer doesn't mind, because like you said, the stock's performance speaks for itself.
    Mar 3, 2015. 01:12 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    Rose, I really like MKC. It seems to hold such a dominant position within its industry. When you think spices, basically you think McCormick (or at least I do). I have a very small position but the stock does seem to be perpetually over priced, especially for the growth prospects it offers. Very steady performer otherwise.
    Mar 3, 2015. 01:09 PM | Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    Yes, looking at the chart, BF.B's P/E ratios are sky high but it received respectable marks in every other category minus yield (like you mentioned). The stock finished in the pale yellow, which is technically fair value range, but just barely. I think its important to remember that although some of these stocks appear to be ranked high because they are relative to their peers, none of them received an orange or red final rating - proving F.A.S.T. Graphs and Mr. Carnevale's opinion correct...none are bargains at the moment.
    Mar 3, 2015. 01:08 PM | 1 Like Like |Link to Comment
  • The Dividend House DGI Portfolio: The Good, The Bad, And The Ugly [View article]
    Nice article. A lot of good, easy to digest data in here. We share many of the same holdings. A great read for sure, you've earned yourself a follower.

    I will agree with what Scott said above - its nice to have few low yielders with very high dividend growth (and usually stock price appreciation) prospects. I own DIS, V, MA, and GILD to fill this role. Companies like these give the overall growth potential that I like (and might even need with so many sluggish, more income oriented holdings). Also, in the long-term, they offer you great income potential - sure, several of them only yield 1%...but they're growing their dividend at 20%+ annually. Most of these stocks are expensive right now but I'd check out GILD if your interested - no dividend growth accountability since it just recently initiated its dividend; however, I have high hopes - and its trading at a low P/E as opposed to the others mentioned.
    Mar 3, 2015. 02:39 AM | 6 Likes Like |Link to Comment
  • Ward's Dividend Heat Map Vol. 1: Dividend Champion Consumer Staples, March 2015 [View article]
    Yeah, I agree with you on DGIers and yield. I thought about giving any yield >1% a purple score, meaning -5, assuming that it would take quite a bit of high marks elsewhere to make up those points, meaning that any company with a >1% yield but made an acceptable grade would probably be worth a look on value considerations alone. I ultimately decided against it. Depending on how things go as I do more sector wide studies I may make that change. Nothing here is set in stone.
    Mar 3, 2015. 12:53 AM | Likes Like |Link to Comment
  • Chicago Bridge & Iron - Does Recent Rebound Signify A Long-Term Trend Or Yet Another Value Trap For Investors? [View article]
    Michael - I would measure them with the gap between current share price and one's fair value calculations.

    I appreciate all that you've brought to the comment stream of this article. Your opinions have sparked a lively debate - one that I'm sure will not come to a conclusion because of the dichotomy between the two schools of thought involved.

    I think you and I agree on many things, we just use different tools to find out answers. I too attempt to use market momentum, fear, and greed to my advantage when investing. I always look to buy shares with an ample margin of safety which I determine from the above mentioned fair value work. I usually buy beaten down companies when I believe those companies were treated unfairly by the market and their downturn was irrational.

    To combat my own fear an greed I do several things. First of all, I acknowledge that I am fallen, that I have those emotions, and I do my best to be aware of them and in control of them. This takes a great deal of discipline and patience, though I'm sure that I falter and give in to either market driving emotion from time to time. Secondly, I adhere to a dividend growth investing strategy, which is focused on buying and holding - moving into (and out of, though these occasions are rare) positions slowly, to ensure that I don't mistime the market. My goal is not to try and time the market. My goal is to give myself exposure to wonderful companies, let them do their work, increasing earnings, which leads to increased share price as the market adjusts pricing multiple ratios and increased dividends (for the most part). I use those dividends to buy more shares of wonderful companies on a monthly basis. I try to buy value but I don't stop my re-investment. I let my shares build over time, averaging themselves out. I count on my system to foster and provide portfolio growth, not my emotions. Its has worked well for me (and others on this site), though I know this strategy isn't for everyone. There are many ways to skin a cat in the market.

    Lastly, I think its worth mention, that while you say that using fundamentals to drive a decision is making a prayer based on the [meaningless] past, but technical are based on the present (which is a bit more pertinent to investments - I don't disagree), investors, both fundamentalists and those who like to use technicals need to understand that they are both making a "prayer" about the future because neither has the ability to predict the unknown.
    Mar 2, 2015. 11:04 PM | 1 Like Like |Link to Comment
  • Chicago Bridge & Iron - Does Recent Rebound Signify A Long-Term Trend Or Yet Another Value Trap For Investors? [View article]
    Yes, I agree that downside is rather limited in comparison to potential upside. The recent rebound is a bit worrisome; I wouldn't be totally surprised to see the ground that has been recently recovered lost if the market turns or if unexpected bad news arises. I see the recently released fundamentals/guidance holding this one up for the time being though. I haven't added at these 46/47 levels being that my position is already basically full. I will continue to monitor the stock and would be very interested in adding on any seemingly irrational pull back.
    Mar 2, 2015. 02:53 PM | 1 Like Like |Link to Comment
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