Rudester

Rudester
Send Message
View as an RSS Feed
  • Why I Trimmed My Position In Altria  [View article]
    I can't fault your logic in selling part of your MO holdings. However, I wouldn't do that until and unless I had already determined a replacement stock that has the same earnings quality of MO, that would have a higher yield and 5 year dividend growth rate.

    Have you identified such a stock?
    Oct 23, 2014. 09:52 PM | 7 Likes Like |Link to Comment
  • Dividend Aristocrats In Focus Part 26 Of 54: Is Walgreen Healthy Or In Need Of Medication?  [View article]
    I sold WAG a few months ago, when it got too pricey. Its P/E is still stratospheric.
    Oct 23, 2014. 06:07 PM | 1 Like Like |Link to Comment
  • A Realistic Path To A 10% Yield On Cost In 5 Years  [View article]
    David Fish,

    "Simple example: You're looking at two stocks, each of which has a current yield of 3%...but stock A has a Dividend Growth Rate of 10& while stock B has a DGR of just 5%. Stock A will have a better FUTURE YOC."

    Absolutely true. But why go through all the math when instead we can look at the Chowder number column in your spreadsheet? ;-)
    Oct 23, 2014. 01:43 PM | 2 Likes Like |Link to Comment
  • A Realistic Path To A 10% Yield On Cost In 5 Years  [View article]
    Be Here Now,

    "I put all investment dollars - original capital, additional capital, dividend reinvestments - into one pot and divide the dividend by that amount, which is what I think Rudester means by YOTC."

    That is precisely what I meant.
    Oct 23, 2014. 01:41 PM | Likes Like |Link to Comment
  • Is American Realty Capital Properties A 'Sucker Yield' Bet?  [View article]
    I don't know why, but as I was reading your post, the image of Jim Cramer crept into my mind.
    Oct 23, 2014. 11:49 AM | 5 Likes Like |Link to Comment
  • The New Nifty Fifty, Part 2: Dividend Growth Investing's Greatest Hits  [View article]
    I'm loving this series. Thanks Mike.
    Oct 23, 2014. 11:38 AM | 2 Likes Like |Link to Comment
  • Retirement Strategy: Is It Time To Dump These Dividend Aristocrats?  [View article]
    Agree wholeheartedly. I voted against Muhtar and every director that was a member of the compensation committee. Unfortunately, there weren't enough of us. Thank God for Wintergreen.
    Oct 23, 2014. 11:02 AM | 10 Likes Like |Link to Comment
  • McDonald's - A Nearly 4% Yield Now On Sale  [View article]
    MCD is in desperate need of a new CEO. Preferably one with decisiveness and experience.
    Oct 23, 2014. 10:18 AM | 1 Like Like |Link to Comment
  • A Realistic Path To A 10% Yield On Cost In 5 Years  [View article]
    David,

    I can deal with YOC in either context in the SA articles. In my portfolio however, I strictly deal in YOTC (yield on total cost).
    Oct 23, 2014. 10:03 AM | Likes Like |Link to Comment
  • A Realistic Path To A 10% Yield On Cost In 5 Years  [View article]
    I have a fundamental issue with the term "Yield on Cost". Let me illustrate.

    Suppose I have a money making machine inside a box. I put some initial amount of money and let it work its magic for 10 years. At the end of the 10 years, I open the box and I note that it is generating money at a rate of 10% per annum of my initial investment. This is what some authors term "Yield on Cost" or Yield on Original Cost.

    Now suppose the money machine works a little different. I put the same initial amount of money as in the previous example, but this machine works a little differently. Every 3 months this machine spits out some money. I make a note of this money and put it back in the machine. Sure enough, the following quarter, it spits outs money again, a little more than the previous quarter. I take note of this amount again, by adding it to my list of all the money I've put inside the machine. At the end of 10 years, this machine is spitting out the same amount of money as the other machine, but when I look at what percentage this money represents, compared to all the money I've put in the machine, it is nowhere near 10% of all the money I put in.

    So, the question is: What is really your cost basis in the money machine? DVK and others argue that the Yield on Cost refers to your initial outlay and don't count all the moneys that were paid out in dividends and reinvested. I believe, much like your broker does in the monthly statements they send you, as well as Uncle Sam, that your real cost is all the money you have put into buying shares. That is, your initial cost, plus all of the dividends you have reinvested. Under this latter definition of Cost, it is much harder (but not impossible) to get to a 10% YOC.

    Which definition of YOC is better? The first one illustrates the power of compounding, but the latter is a better metric to use when comparing your investment with alternative ones.
    Oct 22, 2014. 10:19 PM | 15 Likes Like |Link to Comment
  • It's Still Time To Sell Verizon  [View article]
    Funny, just today there was another SA article on why VZ is a best pick.
    http://seekingalpha.co...

    I guess this is what makes a market.

    Long VZ.
    Oct 22, 2014. 12:31 PM | 2 Likes Like |Link to Comment
  • Margins improve for Tupperware although forex impacts sales growth  [View news story]
    Great time to start a position. The dollar is as strong as it is going to get and when it starts to drop, TUP's dollar denominated earnings will be amplified, adding to their organic sales growth.
    Oct 22, 2014. 12:29 PM | Likes Like |Link to Comment
  • What Do You Do If Share Prices Drop 20%?  [View article]
    One disadvantage of dripping dividends is that when the market gyrates, one doesn't have as much gunpowder ready to deploy.
    Oct 22, 2014. 12:23 PM | 2 Likes Like |Link to Comment
  • Coca-Cola: Is This Dividend Champ Fizzling Out?  [View article]
    "Long-time Coca-Cola shareholders, including this author, are asking what happened for the company to post such terrible numbers. "

    The author and other KO stockholders should also wonder why KO's board awarded such a lavish "wealth transfer" package to the CEO and vote them down on the next proxy vote.

    Long KO but disappointed with the Board.
    Oct 22, 2014. 12:18 PM | 1 Like Like |Link to Comment
  • Update: Lockheed Martin Q3 '14 Earnings  [View article]
    I'm with you Jay.
    Oct 21, 2014. 10:52 PM | Likes Like |Link to Comment
COMMENTS STATS
3,273 Comments
6,804 Likes