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Market Strategies
  • Market Strategies - Rules Of The Game 29 comments
    Feb 26, 2013 3:34 AM

    Patrick Henry was right when he proclaimed that the only way to judge the future was by the past. As self directed investors, in order to make the best investment plans for the future, investors need access to long term performance results. It doesn't matter if you are an aggressive or conservative investor, Growth or Income, or Value or Momentum investor. You need to know what worked and what made it work. Then you need to determine if it will continue to work going forward.

    This instablog is a continuance of the thoughts, ideas and results of the research done by John O'Shaughnessy and published in his book, "What Works On Wall Street."

    I'm well aware that past performance doesn't guarantee future results, but try applying for a job without a resume. Your resume represents your past performance. Your resume tells that employer who you are and what you are all about. A stock's past performance doesn't guarantee future performance, but neither does your resume guarantee your future performance.

    If I know your past performance, I have something to measure your current and future results against. If you aren't living up to your resume, I know it and I know it a lot sooner than if I had nothing to measure your progress against.

    People want to believe the present is different from the past. People want to believe that strategies that worked 30 or 40 years ago won't work today. That simply isn't true. The reason history repeats itself is because people possess the same human emotions today that the Pilgrims, the Romans and the people of the ancient Chinese Dynasties possessed. Situations may differ, human activity based on emotion doesn't. We may be more sophisticated in our approach, but emotions don't change and emotions drive people, for better or for worse.

    If we apply these concepts to the market, the price of a stock is still determined by people. As long as people let fear, greed, hope and ignorance cloud their judgment, they will continue to misprice stocks and provide opportunities to those who use simple, time-tested strategies to pick stocks. Names may change, Industries may change, styles may come in and out of fashion, but the underlying characteristics that identify a good investment remain the same.

    It took me a lot of years of trying various methods before the light clicked on. It isn't about how well a stock performs, it's how well your strategy performs! Do the components that make up your stock selection process work in all market conditions?

    Please take the time to read the above paragraph. It's the essence of this instablog.

    Long term success, or the lack of it, is determined by how well your strategy performs! Do the components that make up your stock selection process work in all market conditions? Strategy is job one!

    O'Shaughnessy went on to say that all models must use explicitly stated rules. There must be no ambiguity in the statement of the rule to be tested. There is no allowance for a private or unique interpretation of the rule.

    People are always willing to share the time they ignored a rule or guideline and succeeded. That is a very dangerous concept to wrap yourself around as it helps solidify false motivation and undermines your strategy. What we won't hear from these same people is the number of times they ignored a rule or guideline and ended up losing.

    The odds are high that by making exceptions, it won't work in all market conditions, and it certainly won't produce consistent positive results. A good system needs to be consistent at all times. It's why computer models continuously beat the money managers. Models apply a consistent application of the rules.

    O'Shaughnessy tested scores of strategies over a 40 plus year period. He tested strategies that focused on Price to Earnings, Price to Sales, Return on Equity, Earnings Per Share, Relative Strength, Book Value and several other criteria. He also mixed and matched them.

    He then went on to test this criteria with small cap, mid cap and large cap stocks. He tested dividend paying against non-dividend paying. He tested absolute return vs risk adjusted return. The results might surprise some of you.

    The most successful strategy over the long term was small cap growth that included "all stocks." That really shouldn't surprise people. The problem with that strategy, and O'Shaughnessy points it out, is that price volatility is so intense, most people can't withstand the huge drawdowns. To most of us, it doesn't create an income either. So we move on.

    Since most of us are looking for income, while minimizing risk, I looked to the strategies that produced the best risk adjusted returns. What won't be a surprise to most here is that when it came to best risk adjusted returns, dividend paying stocks fared well. O'Shaughnessy found that over the longer term, dividends counted for more than half the market return, something that is confirmed by the Ned Davis research and that of others.

    You should know this, there is such a thing as good yield and bad yield. First the bad yield; O'Shaughnessy found that if you were to focus on "all stocks" (Large, Mid and Small), and went with the highest yields, that over 10 year rolling periods this strategy created negative returns. His studies showed that the strategy was successful just 18% of the time. Think about that! Just an 18% success ratio.

    O'Shaughnessy found that the returns of high yielding, large stocks were entirely different. He clearly states that large stocks with high dividend yields offer the best risk adjusted returns available.

    By focusing on market cap, buying the larger well-known companies, they showed to have the stronger balance sheets and longer operating histories that make dividends, and dividend growth, possible.

    It was stated that 50 stocks, equally weighted, with dividends reinvested, and rebalanced annually fared best. This strategy was successful in rolling 10 year periods 91% of the time.

    You did notice that right? 50 stocks, equal weight, dividends reinvested, rebalanced annually!

    That is what his research shows!

    I know some of you can't get to the 50 stock level yet or may never wish to either. He did say you can enjoy some success with a 16 stock portfolio as long as you diversify by sector and/or industry.

    There was one strategy ... just one ... that was successful 100% of the time over 5 and 10 year rolling periods, but I'm not going to tell you what it is. ... Ha!

    I'm just kidding. I'll tell you in a moment. Before I do, this next comment is very important, and some of you may balk at it, but the results can not be disputed.

    Of the scores of strategies that O'Shaughnessy tested over a 40 plus year time frame, the Top 10 Most Successful Strategies all had just one component in common, just one. It was a component that most of you probably don't use, may surprise you, but was no surprise to me. That one component is Relative Strength.

    Relative Strength calculates which investments are the strongest performers, compared to the overall market, and recommends those investments for purchase. In its simplest form, it means price appreciation.

    Relative Strength is the engine that drives Momentum Investing. Now think about that! Investor's Business Daily promotes Relative Strength. Trend Investing promotes Relative Strength. Traders promote Relative Strength. Value Line uses Relative Strength as a main feature in their stock selection and portfolio management process. They call it their Timeliness Indicator. VL provides a Safety Rating and a Timeliness Rating.

    As you Value investors sit there and cringe at the thought of relative strength, O'Shaughnessy showed where it's also a basis for long term success in Value investing. This is what caught my attention and helped shape some of my views about combining value investing and momentum investing.

    If we stop and think about it, it does make sense. How many of us require a specific yield before we will consider investing in a company? Why is that? Why do we require a 3 to 4 percent yield and shun a 1 or 2 percent yield? The 1 percent yielding company may increase their dividend 3 or 4 times as much as the company with the 3 or 4 percent yield, and over time, the low yielding company will outperform the higher yielding company in dividend income. We know this is possible and we've seen it happen, yet we ignore it and still require the higher yield. Why?

    We require it because the higher yielding company gets us off to a much quicker start with regard to income. We are secure in knowing that it may take quite a few years for the low yield, high dividend growth company to catch up, provided they can. A bird in the hand is worth two in the bush. As the King of Siam said, "Excetera, Excetera, Excetera!"

    Guess what! ... That's exactly what relative strength (price momentum) does. It gets you off to a fast start. It's always nice to see that your new positions are at least profitable.

    The importance of profitable positions is to help steady you during market drawdowns. The last thing you want to do is undermine your strategy. Human nature, being what it is, makes it very difficult for us to stick with something that is showing a loss prior to a bear move, and now that loss is compounding to the downside as the market pulls back. It will test the emotional endurance of the best of us. Drawdowns are easier to handle when you have a profit as a moat. Relative strength helps to insure that profit a lot of the time. That total return (there, I said it), will help to keep you steady with regard to your strategy, as opposed to abandoning it at the time when you should be utilizing it even more.

    In a future blog, I will share some techniques of how and when to apply relative strength, not only to help you buy, but to show you when you need to stay put and let your winners run. Additionally, relative strength will aide you in knowing when to sell. We'll get to that later. This blog is about the Rules Of The Game. The things that work and the things that don't.

    The reason that Relative Strength works is because the market is about supply vs demand. Since so many strategies have Relative Strength as a criteria, when the indicator says go, you have a lot of various investors, using various strategies, bidding price higher due to the amount of demand coming to market.

    Okay, the strategy that was 100% successful over a 40 plus year time frame when using rolling 5 and 10 year periods had these 3 criteria in common when applied to "all stocks," dividend and non dividend paying companies.

    1. Price-to-Sales Ratio (PSR) under 1.

    2. High 12 month Relative Strength (RSI) number (over 60).

    3. Price-to-Earnings Ratio (PE) under 20.

    Easy, eh? ... Not quite. It's difficult finding Large Cap companies with a PSR under 1. In that case, I will use PSR as a filter to help me choose between one company or the other. The lower the PSR the better according to O'Shaughnessy's research.

    Why does price performance work while other measures don't?

    According to O'Shaughnessy, price momentum conveys different information about the prospects of a stock and is a much better indicator than factors such as earnings growth rates. Many look at the disappointing results of buying stocks with the highest earnings gains and wonder why they differ from buying the best 1 year performers with regard to share price. Price performance is simply the market putting its money where its mouth is.

    This is why you may have seen me comment from time to time that I'm not afraid to pay a premium for quality. Key word being "quality."

    It was Runyon who said, winners continue to win and losers continue to lose.

    The advice is simple. Buy quality stocks with the best 1 year relative strength, but understand that their volatility will continue to test your emotional endurance. To help keep your emotions in check, know that Large Caps usually works best. It's easier to ride the storm with them. Focus on the financial safety of the company. Stick with companies that are rated high quality, that being an S&P rating of BBB+ or better.

    An asset is only as valuable as the income it creates. Covering the dividend isn't enough, covering the dividend growth is even better. That's where the financial strength, or credit rating if you will, comes into play. The larger well-known companies, with strong balance sheets, are in better position to pay and increase the dividend.

    In closing, we can learn much from the Taoist concept of Wu Wei. Taoism is one of three schools of Chinese philosophy that have guided thinkers for centuries. Literally, Wu Wei means "to act without action," but in spirit it means to let things occur as they are meant to occur. Don't try to put round pegs in square holes. Don't be more clever than you need to be. Don't look for meaning: Look for use!

    For investors, this means letting good strategies work. Don't second guess them. Don't try to outsmart them. Don't abandon them because they're experiencing a rough patch. Understand the nature of what you are using and let it work.

Back To chowder's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (29)
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  • Another great post! Keep them coming.
    Bob
    26 Feb 2013, 05:58 AM Reply Like
  • Wow, fantastic post from soup to nuts & top to bottom, Chowder. Many great points to be gleaned from within. Thanks.

     

    -GM
    26 Feb 2013, 06:25 AM Reply Like
  • Chowder,

     

    Thank you for good paper. My 2 cents are:
    “O'Shaughnessy went on to say that all models must use explicitly stated rules. There must be no ambiguity in the statement of the rule to be tested.”
    Unfortunately, often DGi-s propose and use untested rules. It is not easy/cheap to test but worth…..

     

    “O'Shaughnessy found that over the longer term, dividends counted for more than half the market return, something that is confirmed by the Ned Davis research and that of others.”
    It is correct at annual basis and not correct for long-term investment when dividends counted for more than 90% of the market return (see http://seekingalpha.co...)

     

    Please note contradiction between “The most successful strategy over the long term was small cap growth that included "all stocks”" and “50 stocks [of “the larger well-known companies”], equally weighted, with dividends reinvested, and rebalanced annually fared best. This strategy was successful in rolling 10 year periods 91% of the time.”
    As far as I remember O'Shaughnessy didn’t touch DG firms, am I correct?

     

    “The 1 percent yielding company may increase their dividend 3 or 4 times as much as the company with the 3 or 4 percent yield, and over time, the low yielding company will outperform the higher yielding company in dividend income.”
    Yes but this time frame might be good ONLY for young DGis while most of DG folks at least within SA are 40+ y.o. Here so-called Chowder Rule helps to select a proper stock YoC/DGR combination (NB: I use my proprietary YoC/DGR metrics that is quite different from Chowder Rule, so no advertisement here).

     

    “Relative Strength is the engine that drives Momentum Investing.” Yes and time horizon of Momentum Investing (MI) is usually less than 1 year while DGI time horizon is at least 1 decade IMO. So, are MI and DGI compatible?
    “Drawdowns are easier to handle when you have a profit as a moat. Relative strength helps to insure that profit a lot of the time.”
    Was it statistically proof that after positive relative strength period (again <1year) an average stock price is not drop down below the purchasing number? I doubt…..

     

    “In a future blog, I will share…”
    Wonderful! I follow you and few SA contributors.
    FOLKS:
    I don’t know how to filter articles and blogs from comments in SA “my feed”. Any help?

     

    SDS
    26 Feb 2013, 09:37 AM Reply Like
  • Author’s reply » >>> Unfortunately, often DGi-s propose and use untested rules. <<<

     

    That's why we're here SDS! We're here to help smooth out the learning curve. Others were kind enough to help me when I started out, I have an obligation to keep that spirit alive.

     

    >>> It is correct at annual basis and not correct for long-term investment when dividends counted for more than 90% of the market return <<<

     

    I think 90% equals more than half. Ha! Ha!

     

    >>> Please note contradiction between “The most successful strategy over the long term was small cap growth that included "all stocks”" and “50 stocks [of “the larger well-known companies”], equally weighted, with dividends reinvested, and rebalanced annually fared best. <<<

     

    There is no contradiction here. One strategy was more successful in absolute return, the other more successful on a risk adjusted return, and yes he did own dividend paying companies. In fact, one of the strategies he recommended, if one wants a Dog of the Dow type strategy, was to buy the top 10 utility companies in yield that rated a 1 or 2 for safety by Value Line, or a financial rating of BBB+ with S&P, and rotate based on a highest yield concept.

     

    >>> Yes and time horizon of Momentum Investing (MI) is usually less than 1 year while DGI time horizon is at least 1 decade IMO. So, are MI and DGI compatible? <<<

     

    Yes, they are compatible if you place them in proper perspective. Relative strength is being used here as a timing device, as something to prevent one from buying a falling knife. It's a tool to get you to purchase after the bottom is in. That way, you aren't fighting for the same ground twice, since you didn't lose any ground to begin with. It also keeps one from buying the dogs that aren't going to be hunting for a couple of years. It will help people from yield chasing to buying companies who are in a position to start moving forward at a faster pace.

     

    Nothing is guaranteed of course, but like anything else, you want to place the odds in your favor.
    27 Feb 2013, 12:21 AM Reply Like
  • Chowder,
    >>> Unfortunately, often DGi-s propose and use untested rules. <<<
    "We're here to help smooth out the learning curve."
    "you want to place the odds in your favor. "
    Agree but rarely I see at SA statistical conformation of a rule (so please show that odds are really for favor!).
    BTW, I just uploaded yesterday result of analysis of 113,995 dividend announcements at http://bit.ly/Mpfq86
    I hope it interesting for any dividend investor.

     

    "One strategy was more successful in absolute return, the other more successful on a risk adjusted return"
    Was risk still defined as volatility? (I guess you read newer edition of the book).

     

    >>> So, are MI and DGI compatible? <<<
    "Relative strength is being used here as a timing device, as something to prevent one from buying a falling knife. It's a tool to get you to purchase after the bottom is in. "
    I see the point and even use it to the same extend but let me challenge it. Let say stock touched some minimal price and then went up X% during some period of time. Of course this X% increase was not smooth curve as any experienced investor expect. So period of time to recognize the up trend is not infinitely small. As far as I know the momentum investing based on statistics that the trend /up or down/ exists during 4 -11 month period. As in any stock statistics nobody can guarantee that the stock will continue to go up after the period necessary to recognize the momentum of price lifting. Moreover the momentum investing says that after ~ 1 year price trend reverses (i.e. went down).
    Can anybody guarantee that during the reverse (when stock price goes down) the final price will be a) above purchase price or even b) above previous bottom? I guess not.... IMO advantage of a diversified DGi is a weak sensitivity to stock prices at scale of annual changes because a DGi hopes that price will follow rising dividends at scale of decade changes.
    Again IMO the only 2 factors a small investor can explore to beat proffi are - long time horizon (no annual reports are needed) and liquidity advantage in micro/nano-caps that Wall Street cannot explore (to them it doesn't make sense to invest less than let say 1M$ in a stock but for stocks of micro/nano-caps companies investment of 1M$ leads to significant price change).

     

    SDS
    27 Feb 2013, 09:25 AM Reply Like
  • Thank you for sharing you experience. I have bookmarked this article for future reference.

     

    Lowell Miller in "The Single Best Investment" singled out relative strength as the only technical indicator that has forecasting value.

     

    I am familiar with Welles Wilder's RSI using the 14 day period and have some experience applying it. Is it true that the same equations are used to calculate the 12 month, i.e. 365 day, RSI?
    26 Feb 2013, 11:17 AM Reply Like
  • Author’s reply » Be Here, I forget what the equation is. Those things aren't important to me. Most charting services provide a relative strength indicator, so that's all I need, a way to measure the performance.
    27 Feb 2013, 12:22 AM Reply Like
  • chowder,

     

    As you say, the equation is not important because charting services do it for you. However, after writing my comment above, I decided to try for a 365 day RSI at several charting services I use. Yahoo Finance will not go past 99 periods, and BigCharts will not go past 30 periods. Can you tell me what service you use?
    27 Feb 2013, 01:22 AM Reply Like
  • Author’s reply » I dropped my charting services since I don't trade anymore. I simply use the weekly charts at Stockcharts. I can get a view up to 3 years. It's free.

     

    http://bit.ly/YysXRb
    27 Feb 2013, 01:30 AM Reply Like
  • I know about the free Stockcharts, I just assumed you couldn't use a 365 period RSI, but I see that you can. If you run it on PG, you get what is basically a straight line. That cannot be what you mean by a 12 month RSI.
    27 Feb 2013, 01:47 AM Reply Like
  • Author’s reply » I didn't post the PG chart to provide an example of strong relative strength. When I click on Stockcharts, it's the chart that shows up. I just posted the chart to show you can get a 3 year history of relative strength.

     

    I suppose the easiest way to explain this is that I sub contract a lot of my analysis out. I let others track most of my holdings. It's why I subscribe to Value Line.

     

    With regard to relative strength, Value Line has a Timeliness Rating. It goes from 1 to 5. Companies that rate a 1 or 2 for Timeliness is VL's measure of the expected price performance of a stock for the coming 6 or 12 months relative to the rest of the market. Those rated 3 are expected to be average. Those rated 4 or 5 are expected to underperform.

     

    PG has an upgraded Timeliness rating of 2 as of 12/28.

     

    When it's time to make a purchase, I'll look my list over and try to identify those who are rated 1 or 2, in other words relative strength is in their favor, and that's what I will purchase. If none are rated 1 or 2, then I'll step down to a 3, knowing not to expect great things this year, but I do expect them to provide good long term results.

     

    I just purchased DRI with a 5 rating. I know it isn't going to do much the next couple of years, but I purchased it to start building a position now.

     

    Relative strength can help break a tie when you are unsure between two companies. We need to keep that in mind as well.
    27 Feb 2013, 02:07 AM Reply Like
  • Be Here Now
    I think FinViz & Value Line publish relative strength numbers (probably different) and as far as I remember John O'Shaughnessy used VL number but FinViz is free.
    SDS
    27 Feb 2013, 09:32 AM Reply Like
  • Be Here and Chowder,

     

    First of all, great article, Chowder. Thank you for yet another great post.

     

    I have a question, though. I too am unclear about RSI > 60. I use thinkorswim and tried charting RSIWilder with my watchlist and current positions. BTW, these lists include many of the usual suspects that everyone at SA is familiar with. I set up a 5 year weekly chart using a 52 week period for RSI. It seems pretty much any ticker I put in runs between 40 and 60 RSI. In general, it appears that >50 seems to correlate more closely with uptrends in stock price and indicate possible buying points. Only a few stocks have even touched 60 in the last 5 years, and when they do, it is usually only briefly, and seems to indicate a relative top in stock price as opposed to a general point at which to invest.

     

    Chowder, can you clarify further about this? I must be missing something here.
    3 Mar 2013, 08:37 AM Reply Like
  • Author’s reply » Jantis, good question. The thing about technical indicators is that you have to use them in the time frame you are talking about. Since I was talking about 1 year relative strength, you have to shorten your charts from 5 years to one year.

     

    The longer the time frame, the more smoother the ride appears to be and you found that out using the 5 year chart.

     

    When I use a 1 year chart, I'm using it to gauge the next 6 to 12 months, nothing more! I'll look for that short term momentum to get the position off to a fast start. That's all we're looking for. By getting off to a fast start, you generate a buffer for when the market pulls back.

     

    If you can't find a company with strong relative strength for the past year, that doesn't mean you can't purchase it. I just bought DRI knowing it might take a year or two for them to start generating decent return.

     

    When I'm trying to decide between two companies, and they are close in comparison, then I'll go with the stronger relative strength and then come back to the other company at a later date.
    3 Mar 2013, 10:18 AM Reply Like
  • Chowder, do you fully understand how valuable your blog posts, comments are???? Many of the comments from other SA readers appear to be from highly intelligent and experienced financial readers......I'm like a kindergartener in a college class.....yet you are helping me so very much. For instance, back in summer of 2011 I blindly stumbled into DGI. One of the positions I bought was CTL. I sold half of my position several months ago with about a 10% gain, not including dividends received. Last week as CTL reduced its dividend and dropped. I watched it fall below my price point, however I put in a stop loss after market thinking there may be some buying the next day...and there was. What kept going thru my mind was Chowder Rules: sell when a dividend is cut, reduced or growth is on a multi-year slowing....you helped me eliminate the emotion and focus on your formula ( even tho the yield was to remain about 5%). I still have CTL, but have increased the stop loss...I'm sure it will be sold soon to free up some cash for a quality new position to add to my portfolio.....thank you for all you do. I appreciate more than I can say.
    Cheryl
    26 Feb 2013, 01:36 PM Reply Like
  • Very useful information. Gives me a few more criteria with which to filter my screens with. Thank you Chowder. Your work is appreciated.
    26 Feb 2013, 01:57 PM Reply Like
  • Chowder,

     

    Thanks for another great blog post. My wife and I are slowly acquiring a DGI portfolio using your rules and that of DVK, and Bob Wells as a foundation for analysis and action. As a young retiree (59...pre- pension and SS) living out of my bank account the next few years are critical for us to assemble the right core group of DG stocks so your thoughts are very much appreciated.
    26 Feb 2013, 02:03 PM Reply Like
  • Hey Chowder,
    I'm having a bit of difficulty wrapping my head around the following:

     

    In the search for great companies with acceptable initial dividend yields, aren't I looking for a company, (usually, from the CCC list), who's price has recently _not_ been especially strong?

     

    If I'm considering a great stock because it's RS is outstanding, aren't I by definition looking at a stock who's dividend yield has fallen due to it's high price?

     

    Thanks for your thoughts on this.
    All the best,
    Hilo
    26 Feb 2013, 02:50 PM Reply Like
  • Author’s reply » Hilo, I don't use the CCC list to see whose price hasn't been performing. I use it to determine dividend growth.

     

    When I look at the CCC list, the information I focus on is the section on dividend growth where David shows the 1 year, 3 year, 5 year and 10 year growth rates.

     

    I look for the companies that have the most consistent high single digit, or better dividend growth. Those are the ones I purchase, or put on a watch list for potential future purchases.

     

    Example:

     

    KO -

     

    1 year ... 8.5%
    3 year ... 7.5%
    5 year ... 8.4%
    10 year ... 9.8%

     

    I like, and count on that consistency. I don't look for the highest yields, I simply start with the Large Cap companies that sell a product or service that people will use regardless of economic conditions.

     

    I owned LEG at one time because of their double digit dividend growth. Here are their latest numbers.

     

    LEG -

     

    1 year ... 3.7%
    3 year ... 3.8%
    5 year ... 10.1%
    10 year ... 8.7%

     

    Since LEG did not keep the dividend growth consistent, and the dividend growth dropped below 5% for more than a couple of years, I sold my position in LEG.

     

    Since my goal is to build an income stream that is reliable, predictable and increasing, KO supports that objective where LEG no longer did.

     

    That's the part of the CCC list I use the most. That and the Chowder Rule, which I was using before it became a part of the CCC. It was the CCC DGR numbers that I used to formulate the Chowder Rule and apply it.

     

    To answer the second question, when you have high relative strength, the yield may be down due to price performance, but that doesn't mean the yield still doesn't qualify. Yield may have dropped from 5% to 4% or from 4% to 3%, but the yield isn't the focus. Company fundamentals are, the "safety" of the dividends are, and the growth of those dividends are. I don't focus on a high yield. I will use a minimum yield requirement, but whatever yield I do choose, it must be safe and it must be growing. Relative strength doesn't undermine that.
    27 Feb 2013, 12:36 AM Reply Like
  • "the yield isn't the focus. Company fundamentals are, the "safety" of the dividends are, and the growth of those dividends are. I don't focus on a high yield. I will use a minimum yield requirement, but whatever yield I do choose, it must be safe and it must be growing."

     

    Spot on. Thanks, friend.

     

    Hilo
    27 Feb 2013, 04:41 PM Reply Like
  • Chowder,

     

    Thank you for not only this blog but also all of your helpful comments. I'm fairly young and just starting out in DG investing. I have learned so much from everything you post. Thank you. I really appreciate it!
    26 Feb 2013, 06:08 PM Reply Like
  • Author’s reply » Thanks to all for your kind words. I appreciate it. If it's okay with ya'll, Percy and I are going to share a cold one now. ... Salute!
    27 Feb 2013, 12:37 AM Reply Like
  • Nice post Chowder... thank you!

     

    Like other commenter's before me, I struggle with determining the entry point. (Particularly in this run up which just won't quit in the face of all odds...) I've tried looking at all sorts of metrics but none seem to jump out at me and clearly say "use me!!!". I totally lack the experience in that regard, so thank you for sharing all those years of experience. I'm really looking forward to those insights in your next post.
    Thanks again Chowder.
    27 Feb 2013, 03:29 AM Reply Like
  • Author’s reply » Thanks for the kind words Zalach.

     

    My next blog is going to be about comparing our results to a benchmark. This has really been eating at me and I want to get that out of the way first. Once that is completed, I will do a blog on entry points and show you what to look for. That will be a week or two away. It takes time for me to gather my thoughts and try to present it in a way where it halfway makes sense. ... Ha!
    27 Feb 2013, 03:33 AM Reply Like
  • Most excellent Chowder. Take your time, we're in this for the long haul anyway...

     

    Great comments SDS...
    27 Feb 2013, 06:39 PM Reply Like
  • Chowder,

     

    I just posted "Momentum And Dividend Investings Are NOT Compatible: Illustrative Comment To Chowder's Blogpost “Market Strategies - Rules Of The Game”" in http://bit.ly/ZLm4AO to our discussion.

     

    SDS
    28 Feb 2013, 08:05 AM Reply Like
  • Author’s reply » Sorry SDS, but I disagree. All I have to do is look at my portfolio. ... Ha!
    28 Feb 2013, 10:30 AM Reply Like
  • ... and I look at my.... 8-)
    Let me translate (not perfectly) proverb for girls "If the best person in your mirror is you, you'll never be married".
    SDS
    28 Feb 2013, 02:36 PM Reply Like
  • Great Job Chowder. You keep teaching I keep studying and learning. Something new now so I will gt with it. Thanks and keep up writing so we can keep up learning. Studying charts and RSI next.
    8 Mar 2013, 08:49 PM Reply Like
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