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  • What If My Stocks Crash And Burn? Part 2 [View article]
    What-If'ing various market circumstances in the future and how you will handle them is a great idea Faye, sort of a portfolio pre-view. As long as the actions you take or decide to take under changing circumstances remains within the confines of your plan it should prove to be a big plus by minimizing the emotional reactions you encounter under duress.

    I'm flattered that you found one of my comments worth including as part of the discussion.
    Apr 13 10:46 AM | Likes Like |Link to Comment
  • Dividend Growth Portfolio: Spring Checkup And Semi-Annual Review [View article]
    "You do know that I was just kidding my buddy chowdah, right?" - Mike Nadel

    As ridiculous as my comment was, you had to ask that?

    Check off the 'Just the right amount of subtlety' box ...

    Apr 9 12:18 AM | 5 Likes Like |Link to Comment
  • Dividend Growth Portfolio: Spring Checkup And Semi-Annual Review [View article]
    "Why aren't you 4 years ahead of schedule?!?!?!" - Mike Nadel

    Because he's two years ahead with half the beta. It's called risk-adjusted aheadedness. Look it up.
    Apr 8 05:37 PM | 12 Likes Like |Link to Comment
  • Dividend Growth Portfolio: Spring Checkup And Semi-Annual Review [View article]
    Nice review DVK. I would suggest that you also mention the portfolio Beta in the Total Performance section. While it's great to see you are beating SPY in TR, I feel it is equally as important to show you are beating SPY with lower risk, as (represented by the Beta).

    It seems that all the academic papers use the risk adjusted return as the metric of choice, and based on that comparison you are beating SPY handily.

    For SJR replacements to consider I might suggest VNR or DLR. Either one would boost your income immediately without slowing down the DGR. Then again, perhaps a nice steady-eddie utility would fit the bill.
    Apr 8 08:06 AM | 2 Likes Like |Link to Comment
  • The Most Important Article I Could Ever Write On Dividend Growth [View article]
    "Bonds could do anything, including stay low and range bound for a decade or two. Or not. ... They are as impossible to predict as stock markets." - Dale

    That's entirely true Dale. But it's also possible that inflation, and rates, could spike much higher given the highly expansionary effects of QE on the money supply. Foreign exporting countries are already taking measures to mitigate their exposure to the US dollar. If you look into the matter, you'll discover that the FED has been buying 90% of new government debt (indirectly, through the primary dealers) for at least the past two years.

    Per Bloomberg (December of 2012): "the Fed, in its efforts to boost growth, will [buy] about $45 billion of Treasuries a month ..., effectively absorbing about 90 percent of net new dollar-denominated fixed-income assets, according to JPMorgan Chase & Co."

    At some point funding a majority of federal deficit spending by printing money will result in higher inflation and higher rates. You may be correct in saying we can't know exactly when that might happen, but the odds of having continued low rates for "a decade or two" are likely at the low end of the scale. But if you're comfortable taking that bet then good for you. You might want to study how it turned out when Zimbabwe tried it.

    If I were interested in parking money in a bond vehicle like TLT I would probably put it in a solid REIT like O instead. Realty Income has a lot going for it as an effective bond-like holding:

    1) debt maturity of around 10 years (half of TLT duration) so less sensitive to interest rate changes
    2) Average duration of leases exceeds the debt maturity duration so debt defaults are very unlikely
    3) earnings exceed debt coverage by 6x so defaults are unlikely even in a slowing economy
    4) its yield is 50% higher than TLT
    5) a long history of increasing the dividend (vs a fixed bond payment)
    6) O owns a lot of real estate, which would appreciate significantly under an inflationary environment and put a floor under the book value

    A quick comparison of O vs TLT charts shows that over the past decade O has returned ~12.5% CAGR vs. TLT's ~6.1% CAGR. Wouldn't that be more amenable to a TR approach over the long run?

    It might make an interesting excursion to your investigations to substitute O for the bond fund of the day and see how it compares.
    Apr 7 08:59 AM | 2 Likes Like |Link to Comment
  • Periodic Table Of Dividend Champions [View article]
    For those who don't have excel or would be interested in checking out Open Office you can download the Windows version here:

    The Open Office website is here, for those who prefer to read a bit before they download:
    Apr 6 12:45 PM | Likes Like |Link to Comment
  • Periodic Table Of Dividend Champions [View article]
    "But each plotted point needs to have its symbol as a label, for example when the mouse hovers over it." - Be Here Now

    If I had to guess, I would think that in order to get a label to show for each data point you would have to add each stock one at a time and/or manually add the symbol. It's likely that excel can't do it automatically for a large number of rows at once.

    When I make a scatter plot using Open Office Calc and hover the mouse over the plotted point the pop-up identifies which data point I am viewing with a label "Data Point 4". I then have to go back to the spreadsheet and count down to the 4th row to see which stock that represents.

    I'm not sure what you're trying to do with the plot, but being able to figure out which stock correlates with which plotted point, even manually, is good enough for my purposes.
    Apr 6 11:15 AM | Likes Like |Link to Comment
  • Periodic Table Of Dividend Champions [View article]
    You can create a scatter plot from any two columns in excel like this:

    1) select the first column you wish to use (perhaps 'yield') by highlighting all the stocks you wish to evaluate

    2) Hold down the 'Ctrl' key and select the second column of data (like DGR). It should also become highlighted while the original column stays highlighted.

    Plot a 'scatter' plot of your data using only the data points (no connecting lines).

    The specific steps will vary with the different versions of Excel or Open Office Calc so you might have to experiment a bit. You can probably also include column headers on the chart too if you try.

    The main idea is to select two columns and make a scatter plot. Be sure both columns have the same number of row highlighted.
    Apr 5 11:12 AM | Likes Like |Link to Comment
  • The Most Important Article I Could Ever Write On Dividend Growth [View article]
    "You perhaps have the crystal ball to know what will happen in the future. I just deal with what we know." - varan

    Are you saying that you 'know' 20 year interest rates will continue their downward trend and be halved again in the next 6 years?

    That would imply a 20 year rate of around 1.75%, which would mean anyone buying TLT under those conditions would be locking their money into a vehicle which has essentially a zero real return for 40% of your portfolio, and that doesn't even begin to take future interest rate risks into consideration.

    I myself don't "know" what will happen with long rates, but it seems to me that the odds of rates going down that far are not a good bet. The downside risk on long term interest rate products is significant under current circumstances.

    If that's how you choose to invest your money, then more power to you. My comments are aimed at other readers so that they can research and consider all the risks implied by your approach, even the ones you choose to ignore.

    Furthermore, I don' see why you feel the need to denigrate my responses by claiming I am "flailing", or "huffing and puffing". I have done nothing more than present additional information for readers to consider, and I have done so respectfully.

    Are you unable to simply say that you disagree with my opinions and give facts or reasoning to explain why, then let the readers decide for themselves what to believe? Why do you feel the need to insult my opinions simply for disagreeing with yours?
    Apr 5 10:25 AM | 4 Likes Like |Link to Comment
  • The Most Important Article I Could Ever Write On Dividend Growth [View article]
    "To get the total return for rebalancing every year, you first add the 60% of second column, to the 40% of third, and the product of the numbers in the resulting column gives you 74% return." - varan

    A) This data is misleading for a long term strategy as the 20 year constant maturity interest rates over this time frame were halved due to the implementation of QE. Long term bond price gains are not representative of "normal" circumstances and TLT experienced a gain of 20% to 40% over this 6 year interval. I doubt you will see a similar gain over the next 6 years and in fact you are probably more likely to see no gain or losses instead.

    B) You did not include payment of capital gains taxes when rebalancing. (Yes, it can be done in a tax deferred / tax free account, but then your approach is only validated for those circumstances). If you remove 15% of the amount sold to rebalance your final gain is reduced to 60% vs. the 74% you claim.

    Even though this approach, after taxes, squeaks out a small advantage it only does so under an interest rate environment which favors using long bonds due to the abnormal changes in the long end of the rate curve. That continued drop in long interest rates cannot continue forever given the 20 year rate is within 10% of its all time lows. The artificial price boost of rapidly falling long term rates on TLT is unlikely to continue.

    If the 20 year rates remain roughly constant your TR will fall back toward the 53% TR point.

    When and if rates begin rising again the TR of this approach will not be anywhere near this good and may be very bad indeed as stocks also tend to decline when rates rise. Furthermore, if long rates rise sufficiently you may find yourself in a position where you need to sell your positions at a loss in order to rebalance annually.
    Apr 5 09:20 AM | 1 Like Like |Link to Comment
  • The Most Important Article I Could Ever Write On Dividend Growth [View article]
    "Could an investor boost or juice the market beating potential of the Dividend Aristocrats by over-weighting to the low payout ratio stocks, or by not including the high payout ratio components? Ha, I'm getting into dangerous territory here as an indexer, I'm starting to think." - Dale Roberts

    Just imagine how much better your TR would be if you also have the patience to buy those very stocks you winnowed out of the herd ONLY when they are undervalued (based on historic valuation criteria). Logically one would conclude that should boost TR even further than simply buying them based on a fixed starting date (and regardless of relative valuations).

    This is one advantage of the individual stock-picker. They don't have to buy an overvalued stock, individually or via an ETF / fund, even if it IS one of those that will outperform the index over time. If they buy each component stock only when undervalued the TR should be even better over time than what you show.

    It appears you have almost convinced yourself regarding many of the claims that 'stock-picking' DGI types have been making for the past few years.

    Thanks for having the intellectual honesty to examine the actual data and draw conclusions without the filter of preconceived biases.

    And ... Welcome to the Dark Side. ;-)
    Apr 2 08:43 AM | 10 Likes Like |Link to Comment
  • Dividend Champions For April 2014 [View article]
    I have to wonder how many people are on the Standard & Poor's staff keeping track of the Aristocrats vs. David Fish updating the larger and faster growing CCC list.

    From the looks of it David Fish is a Champion in his own right.

    Again, many repeated thanks for your efforts to enlighten the investing world David.
    Apr 1 08:34 AM | 33 Likes Like |Link to Comment
  • Callahan Auto Parts Offering IPO: American Made Brake Pads [View instapost]
    I hear that Calahan is running a one day IPO special.

    Buy some new brake pads and get a bag of peanut M&Ms to put in your dash blower vent. It really ups the resale value of your car.
    Mar 31 02:57 PM | 2 Likes Like |Link to Comment
  • Callahan Auto Parts Offering IPO: American Made Brake Pads [View instapost]
    Dave, I'm picking up on your sarcasm (you're laying it on pretty thick).

    Hmmmmm, let's think about this for a minute ...

    With my cat-like speed and reflexes I think I'll be able to snap up some shares in this worthy IPO. After that we'll be co-shareholders and we'll be doing lots of dumb stuff together. Wait 'til Christmas.

    If not, I'll just yank the wheel into a Gosh-Darn bridge abutment. (Sonova ... that's gonna leave a mark!)
    Mar 31 02:28 PM | 2 Likes Like |Link to Comment
  • Spring Changes [View article]
    "Crazy Mr. Market doesn't often hand us great deals in our core holdings ... These sort of 'trades' have given my portfolio a nice boost from time to time and while we wait for the price appreciation we can enjoy their dividends. ... We need to invent a name for using this sort of tactic as a sub-set of the DGI approach" - Inzkeeper

    Indeed Faye. I have done something similar in my own portfolio. Whenever I get one of those "deals of a lifetime" discounts on a potential core holding I buy more than my full position size and set a limit order to sell off the excess after a nice gain. That leaves me with a full position at a discount price since I harvest the gains on the excess shares.

    It works well when you have extra cash on hand. Once you're fully invested it's a difficult feat to pull off. I never did come up with a name for the process though.

    Thanks for writing and congratulations on the ongoing transformation of your multitudinous holdings. Nice to hear you're on a glide slope to a successful retirement.
    Mar 28 03:43 PM | Likes Like |Link to Comment