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emac99

emac99
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ABBV, AMZN, BMO, BX, CL, CLX, ED, ETP, GE, GIS, GMCR, INTC, JNJ, KMI, KMP, KO, LO, MCD, MSFT, MWE, O, OHI, PEP, PM, SDRL, SO, SYY, T, VALE, VNQ, VOD, WAG, WMT, XOM
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  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Bob,

    Thank you, I will look into that book.

    I agree with the basic premise.

    emac
    Jul 30, 2015. 01:45 PM | Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Chowder,

    <<I don't think we're headed for another recession, but I do think we will see very slow GDP growth. This would indicate a period of time more like the Lost Decade where prices traded sideways all of those years.>>

    Great comment. 2015 so far is certainly displaying signs of the start of that trend, isn't it?

    << This environment is where dividend growth investing takes over and the larger portion of the total return equation will come from dividends and the reinvestment of those dividends. >>

    ...Reaffirming the "defensive" nature of a DG strategy - might underperform in a bull market but likely to outperform in a bear.

    Less volatile prices, more dependable income. Works for me. :)

    emac
    Jul 30, 2015. 01:44 PM | 2 Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    maybenot,

    Like you, I'm holding both BAX and BXLT. I like the growth prospects for both and have reclassified them from DG to just growth. And I can live with that.

    There's room in our DG portfolio for growth, and most aspects of health care, especially medical products and biopharma, seem to have a long runway ahead.

    I own JNJ, too - and much more of it than either BAX or BXLT.

    Agree it's good to have some "variety" including a few low-yielders if they offer other benefits.

    emac
    Jul 30, 2015. 12:55 PM | Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Kathy,

    Thanks for the link to Eric's in depth analysis of Industrials.

    Also Tack's comments on debt levels in the energy sector and the general state of the global economy (and in particular, China).

    Hard to argue against caution under these conditions.

    emac
    Jul 30, 2015. 12:30 PM | 1 Like Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Robert,

    emac: <<My thinking is, companies within certain sectors seem to move in tandem, energy being one. But obviously this doesn't hold for all companies, or even all sectors.>>

    Robert: <<emac, that makes intuitive sense, but I wonder if there is any hard data out there to back up that idea. Do you happen to know of any? I would be curious.>>

    Great question. I don't have hard data. Only observations of the "herd mentality" that can send all stock prices in a sector down (or up) based on what happens with one of them, regardless of fundamentals. An analyst's downgrade, for example. Or the taper tantrum effect. Or the price of oil.

    If anyone has studied this, or seen a study, I would also love to see it.

    emac
    Jul 29, 2015. 09:50 PM | 1 Like Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Dave,

    Thanks for clarifying what you do.

    I don't have sector "targets" so much as I have sector "limits." For example, I don't want eREITs to account for more than 6%-7% of the portfolio. Or MLPs more than 10%. More of a risk mitigation move than "I must buy more lesser performing companies in order to fill a quota."

    My thinking is, companies within certain sectors seem to move in tandem, energy being one. But obviously this doesn't hold for all companies, or even all sectors. Consumer Staples includes companies as varied as PG, KO, and WMT.

    But, to your question to Mike: rather than adding a "second-rate" company (e.g., sacrificing quality) just to meet a target, it does make sense to focus instead on buying as many high quality companies as possible, regardless of sector.

    emac
    Jul 28, 2015. 10:35 PM | 4 Likes Like |Link to Comment
  • Is Hasbro Seriously Overvalued? Should I Trim It Or Sell It? [View article]
    DVK,

    Great piece. Very timely.

    I, too, purchased HAS in 2012, before the big run-up. Grappled with this issue myself recently. It was one of the first tests of my portfolio guidelines specific to over-valuation (low yield) and slowing DGR of an otherwise solid company.

    While I completely respect your thought process on HAS and your personal decision to hold, for me HAS was one of those really rare times when the indicators pointed to sell.

    So I did. All of it.

    Yikes!

    My thought process:
    - the ~85% gain I locked in was the equivalent of 16 years of today's dividends.
    - the gain was tax-free in an IRA.
    - I was overly diversified and looking to concentrate the portfolio.
    - HAS, while a stellar performer, was never core for me, as its business relies on discretionary vs "necessary" spending.
    - I was able to reinvest the HAS proceeds into a mix of higher yield or higher DGR stocks at FV which improved both the safety and the income.

    Different plan, different outcome. But it's all good. :)

    emac
    Jul 28, 2015. 06:45 PM | 3 Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    FWIW, here is Morningstar's Josh Peters' take on the EMR restructuring (from August 2015 Dividend Investor Newsletter):

    "On June 30, [EMR] announced plans to exit operations
    generating one-third of current revenue. The most
    notable of these is the network power business—a
    collection of acquisitions intended to be a one-stop
    shop for data centers, but the hoped-for synergies
    never panned out. This unit is slated for a spin-off
    rather than a split-off or outright asset sale, which I
    suspect reflects a lack of willing buyers. As in the
    case of P&G, a smaller Emerson stands to be more
    profitable and faster-growing than the present form.
    But while Emerson expects to maintain its laudable
    dividend policy, the spin-off may not pay a dividend at
    all; it is likely to be loaded up with debt instead.

    For now, Emerson looks quite cheap relative to our
    reaffirmed fair value estimate of $65. The 3.5% yield
    is appealing too, but I’m reluctant to buy more. The
    repositioning is probably a plus, but it’s also an admission
    that the business hasn’t been well run in recent
    years, especially on the capital-allocation front."

    Some caution seems prudent.

    emac
    Jul 27, 2015. 09:00 PM | 2 Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    Bob,

    LOL, well I did say "Dave or anyone?" and you are most definitely someone. :) So thanks for your reply.

    Agree, moving slowly seems appropriate. It's hard to find the bottom until afterwards.

    Probably can't go wrong adding small amounts of AAA-rated XOM at a historically high yield. Especially if not planning to sell.

    Other cyclicals / industrials are less clear to me, as well. I have half positions in EMR (at FV but shedding non performing business lines still), LMT (too expensive to add), RTN (ditto) and GE (also transforming). MMM is on my watch list but I feel it could drop further.

    As you say, many moving parts. And yes, it sure would be great to hear from Doug Meeks, six, or others.

    emac
    Jul 27, 2015. 08:50 PM | 1 Like Like |Link to Comment
  • One Design For A Retirement Income Portfolio [View article]
    Miz,

    Exactly! I use different colors for all sorts of things on my Excel sheet.

    Excel colors inside the lines better than I ever could. And conditional formatting is my new best friend. :)

    emac
    Jul 27, 2015. 08:37 PM | 2 Likes Like |Link to Comment
  • One Design For A Retirement Income Portfolio [View article]
    ScottU,

    It's actually not that complex. 6 tabs + CCC. Didn't mean to suggest each position has its own tab. That would be nuts, even for me. :)

    Like you, my main sheet is the "key": all positions listed with number of shares, cost basis, current price, yield, and dividends in USD.

    I believe in instant gratification- total run-rate portfolio income and composite yield all there, at a glance.

    emac
    Jul 27, 2015. 08:30 PM | Likes Like |Link to Comment
  • One Design For A Retirement Income Portfolio [View article]
    DS,

    Fun and informative article. Enjoyed the humor and the info equally. :)

    No index cards here, but I do live and die by my integrated Excel workbook. One document, with separate tabs for individual positions / valuations, income, ratings, dividend changes, portfolio level metrics, my Buy List (and prices), David Fish's wonderful CCC, and, of course, my portfolio business plan.

    Updates made in any one sheet cascade where appropriate through all the sheets, so there's not much administration required. That was key for me.

    Re: design, as a recent retiree seeking both income to live off and income to reinvest (compound), I'm reluctant to have any one (or few) holdings responsible for too large a percent of that income. So my portfolio is designed specifically to address that: no more than 5% in any one position, or 20% in any one sector.

    Quality is also paramount in my portfolio. So it's designed to allocate 90%+ to investment grade companies, with a tiny few lower than BBB+.

    A diverse mix of yields and dividend growth rates is another design element. At the portfolio level, I manage to both a composite yield goal (around 4%) and a composite DGR goal (around 8%). Individual positions don't need to accomplish both, so they are assigned one role or the other.

    What I learned while evolving my portfolio is that having a written plan is a great way to not only capture the design elements important to me, but to simplify the tracking and the action / execution. The intent is to minimize selling, but it's buy and monitor, not set it and forget it.

    Beauty is in the eye of the beholder. I would go so far as to say, DS, that *any* portfolio design that meets the goals, timeline, and temperament of that particular investor is, IMO, optimally "elegant."

    Thanks for sharing yours! In the next extended power outage, I may regret not having those low-tech index cards. :)

    emac
    Jul 27, 2015. 06:45 PM | 6 Likes Like |Link to Comment
  • My Second Quarter 2015 Portfolio Review - Building Quality, Income And Dividend Growth [View article]
    DVK,

    << In my business plan, I just have simple guidelines for the maximum size a position can be. I do not express that in dollars, because those change as the market goes up and down. Instead I express that as a percentage of the whole portfolio. >>

    That's more or less what I do, too.

    My intent is to have at least 60% of the portfolio value (and income) from core stocks (max 5% on any one); 30-35% from high conviction satellites (max 2% on any one) and less than 10% speculative.

    My quandary is this: when a sector (like oil) gets beat up, all my related holdings drop in concert - in this case, XOM, CVX, COP and my midstream MLPs. They will recover eventually. Meanwhile, we're looking at very tempting prices (and a chance to DCA down), which would bring the % by stock back up to target. But then I risk being very overweight in energy when the sector recovers. What to do?

    Whether one tracks positions by dollar value or percent, I guess this might be a similar issue. How are you managing this scenario? (Dave or anyone?)

    emac
    Jul 27, 2015. 06:02 PM | Likes Like |Link to Comment
  • Why Dividend Growth Investing Is Not Always Best [View article]
    Brian Barbour,

    << I don't particularly have end goal that I would say I am looking to accomplish. I see investing as an ongoing process without a particular end.>>

    I read your article with interest until I got to this reply you made in response to a comment by Emerald (who asked about your plan/goals). At which point, I'm sorry, but you lost all credibility with me.

    Investing without a plan - *any* style, be it growth investing, income investing, growth & income investing, speculation, whatever - is like sailing without a compass. Not only won't you know where you're going, but you won't know when you get there, either. Or if you're on or off course.

    So it seems a bit pointless for you to argue how much better total return investing is than dividend growth investing. "Better" how? For whom? And how can you personally draw that conclusion without goals or a plan?

    Best of luck, however, in your open-ended investing. I truly hope it works out for you.

    emac
    Jul 27, 2015. 03:30 PM | 2 Likes Like |Link to Comment
  • Patience, Cash And Dividend Growth Investing [View article]
    Chowder,

    <<I'm not so sure that macro issues aren't preventing some people from buying XOM, but that is considered market timing....>>

    Thanks for the clarifications above.

    Also for your views on CVX vs. XOM.

    I've been doing pretty much the same with those two stocks this year. Holding but not adding to CVX, ignoring it for the most part until 2016. And building a full position in XOM - it IS hard to ignore that 3.65% yield and AAA rating!

    emac
    Jul 26, 2015. 10:42 PM | 2 Likes Like |Link to Comment
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