Smarty_Pants's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.com/user/249534/comments http://seekingalpha.com/article/1491632/comments?source=feed#comment-19833302 19833302
One additional reason to consider selling (for some) would be a significant change in management approach. This is kinda-sorta a fundamental change but it is very important that the company's management hasn't decided that it has NEW goals which drive their decisions to the detriment of a DGI shareholder.

One recent example of this was CTL. Their management basically decided it was more important to buy back shares than continue paying dividends to the shareholders. In fact they cut the dividend at the same time they 'announced' the change so that was another trigger to sell.

Still, it's possible that other management teams at other companies might decide that the old ways are out and that might be reason enough to consider selling a holding.

Congrats on reshaping your portfolio into a DGI based one. I think you'll find TGH will be a keeper if you can get it at a good price. My net cost was around 31 and it's been a good little doggie yielding a bit over 5.9% for me. Their management really seems to be on top of things.]]> Tue, 11 Jun 2013 08:13:15 -0400
One additional reason to consider selling (for some) would be a significant change in management approach. This is kinda-sorta a fundamental change but it is very important that the company's management hasn't decided that it has NEW goals which drive their decisions to the detriment of a DGI shareholder.

One recent example of this was CTL. Their management basically decided it was more important to buy back shares than continue paying dividends to the shareholders. In fact they cut the dividend at the same time they 'announced' the change so that was another trigger to sell.

Still, it's possible that other management teams at other companies might decide that the old ways are out and that might be reason enough to consider selling a holding.

Congrats on reshaping your portfolio into a DGI based one. I think you'll find TGH will be a keeper if you can get it at a good price. My net cost was around 31 and it's been a good little doggie yielding a bit over 5.9% for me. Their management really seems to be on top of things.]]> http://seekingalpha.com/article/1476721/comments?source=feed#comment-19694511 19694511
My own practice DGI portfolio is nearing the 2 1/2 year mark since I started it. I'm now up to 26 stocks and doing well despite a few stumbles along the way (CTL chief among them). My income is up over 40% from the first year's pace, though some of that is adding new stocks along the way.

My experience parallels that of the publicly posted portfolioss. The time it takes to keep an eye on them is minimal. I've finally gotten to the point where my chief regret is not having enough cash available when prices drop.

That gets really annoying sometimes. Ha!]]> Thu, 06 Jun 2013 17:10:35 -0400
My own practice DGI portfolio is nearing the 2 1/2 year mark since I started it. I'm now up to 26 stocks and doing well despite a few stumbles along the way (CTL chief among them). My income is up over 40% from the first year's pace, though some of that is adding new stocks along the way.

My experience parallels that of the publicly posted portfolioss. The time it takes to keep an eye on them is minimal. I've finally gotten to the point where my chief regret is not having enough cash available when prices drop.

That gets really annoying sometimes. Ha!]]> http://seekingalpha.com/instablog/874941-david-crosetti/1899041-a-million-dollar-portfolio-easier-than-you-might-think?source=feed#comment-19396611 19396611
That's about $277.00 per month of savings.

Dave's exercise is a good way to set up a predicted set of goals to compare your actual results against along the way. Year by year you can see if you are on schedule, or even ahead if you're lucky.

It's a great planning tool.]]> Wed, 29 May 2013 20:14:51 -0400
That's about $277.00 per month of savings.

Dave's exercise is a good way to set up a predicted set of goals to compare your actual results against along the way. Year by year you can see if you are on schedule, or even ahead if you're lucky.

It's a great planning tool.]]> http://seekingalpha.com/instablog/874941-david-crosetti/1899661-is-apple-a-tax-dodger-what-about-you?source=feed#comment-19349581 19349581
I honestly think that the tax code should be a single number. What percent of your net income to send in ...

Eliminate every other loophole, and dividends should be counted as an expense (since they are taxed as income of the shareholder).

That's fair to everyone and incredibly simple to administer.]]> Tue, 28 May 2013 20:28:25 -0400
I honestly think that the tax code should be a single number. What percent of your net income to send in ...

Eliminate every other loophole, and dividends should be counted as an expense (since they are taxed as income of the shareholder).

That's fair to everyone and incredibly simple to administer.]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18510871 18510871
That is the beauty of putting together a written plan. All the thinking is done at a time when you don't have a pressing decision to make. You get to take time to figure out how you want to handle a situation, then write it down in "The Rules".

Once "The Rules" are written, you simply do what they say. If you are uncomfortable with that, you can simply 'blame' The Rules (as though someone else had written them and it's not your fault).

Always follow The Rules!

If after some time passes you feel that The Rules are inadequate, you can sit down and think about changing them based on new knowledge, or different objectives, but only when you're not under the gun to decide what stock to buy or sell, or otherwise in the heat of the moment. Changes to The Rules should be considered dispassionately and rationally.

In theory, breaking The Rules should never happen (though it sometimes does).]]> Mon, 06 May 2013 17:49:11 -0400
That is the beauty of putting together a written plan. All the thinking is done at a time when you don't have a pressing decision to make. You get to take time to figure out how you want to handle a situation, then write it down in "The Rules".

Once "The Rules" are written, you simply do what they say. If you are uncomfortable with that, you can simply 'blame' The Rules (as though someone else had written them and it's not your fault).

Always follow The Rules!

If after some time passes you feel that The Rules are inadequate, you can sit down and think about changing them based on new knowledge, or different objectives, but only when you're not under the gun to decide what stock to buy or sell, or otherwise in the heat of the moment. Changes to The Rules should be considered dispassionately and rationally.

In theory, breaking The Rules should never happen (though it sometimes does).]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18421631 18421631
I recently picked up some TCAP. Worth a look.

Here is a recent article which reviews the business:

http://seekingalpha.co...]]> Fri, 03 May 2013 17:00:18 -0400
I recently picked up some TCAP. Worth a look.

Here is a recent article which reviews the business:

http://seekingalpha.co...]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18415021 18415021
I don't know if Harpists are as organized at Tubists, but there was an International Harp Festival which started on April 6, 2013 in Edinburgh Scottland.

Judging by your question I would guess you didn't offer to take your wife there. Maybe next year...]]> Fri, 03 May 2013 14:37:31 -0400
I don't know if Harpists are as organized at Tubists, but there was an International Harp Festival which started on April 6, 2013 in Edinburgh Scottland.

Judging by your question I would guess you didn't offer to take your wife there. Maybe next year...]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18395531 18395531
If you haven't already, you should real Chowder's instablogs. All of them. You will learn a great deal of useful information from a very sharp investor.

http://bit.ly/14QwcIB

One of his instablogs addresses portfolio weightings specifically:

http://seekingalpha.co...]]> Fri, 03 May 2013 08:18:45 -0400
If you haven't already, you should real Chowder's instablogs. All of them. You will learn a great deal of useful information from a very sharp investor.

http://bit.ly/14QwcIB

One of his instablogs addresses portfolio weightings specifically:

http://seekingalpha.co...]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18395311 18395311
Spoken like someone who may never have witnessed the ubiquitous 'end-of-the-world' SPAM dialogues in the DG section of SA. Every now and then we like to have some fun too. :-)]]> Fri, 03 May 2013 08:10:13 -0400
Spoken like someone who may never have witnessed the ubiquitous 'end-of-the-world' SPAM dialogues in the DG section of SA. Every now and then we like to have some fun too. :-)]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18382781 18382781
Hah!! What a timely comment...

Friday May 3rd is International Tuba Day!]]> Thu, 02 May 2013 19:56:48 -0400
Hah!! What a timely comment...

Friday May 3rd is International Tuba Day!]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18372541 18372541
Regardless of the eventual outcome of the IBM / KMB trades, this has been a "good" trade.

1) You have learned that everyone can fall prey to impulsive actions at times and you have had the opportunity to learn from it without significant negative impact (other than thepain of a ruler across the wrists from Chowder).

2) You have learned a few alternate ways to structure such a trade in the future.

3) You have learned that perhaps you need to revisit your investing plan and consider making some subtle changes.

4) You are a lot less likely to make this mistake again, at a time when it might wind up costing you a great deal of money.

Nobody's perfect. We all stray from the intended investing path. Learn and move forward. That's all you can hope for.

For those reasons, even if your trade turns out to be less than optimal it has still been a "good" trade. The value of the knowledge you gained will outweigh any potential loss in economic opportunity you suffered. Next time will be a different story.]]> Thu, 02 May 2013 16:08:31 -0400
Regardless of the eventual outcome of the IBM / KMB trades, this has been a "good" trade.

1) You have learned that everyone can fall prey to impulsive actions at times and you have had the opportunity to learn from it without significant negative impact (other than thepain of a ruler across the wrists from Chowder).

2) You have learned a few alternate ways to structure such a trade in the future.

3) You have learned that perhaps you need to revisit your investing plan and consider making some subtle changes.

4) You are a lot less likely to make this mistake again, at a time when it might wind up costing you a great deal of money.

Nobody's perfect. We all stray from the intended investing path. Learn and move forward. That's all you can hope for.

For those reasons, even if your trade turns out to be less than optimal it has still been a "good" trade. The value of the knowledge you gained will outweigh any potential loss in economic opportunity you suffered. Next time will be a different story.]]> http://seekingalpha.com/article/1393581/comments?source=feed#comment-18361621 18361621
One area you didn't discuss was the potential for reducing your risk by selling and redeploying to multiple stocks. A possible alternative would be to sell your KMB (at 170% or 1.7x a 'full' position) and use the proceeds to buy three roughly half-sized positions in different stocks.

This 3-for-1 swap would further reduce the risk to your income stream by having more stocks, possibly in different segments of the market. Since the new positions would only be half-sized, you could add shares later on when they offered better valuations.

By beginning several smaller sized positions you might be willing to take a risk on less comfortable stocks like an mREIT or MLP and give your portfolio yield a little bit of a boost too, sort of with house money.

Just thinkin' out loud. There's always a different way to skin a cat if you consider the problem long enough.]]> Thu, 02 May 2013 12:28:00 -0400
One area you didn't discuss was the potential for reducing your risk by selling and redeploying to multiple stocks. A possible alternative would be to sell your KMB (at 170% or 1.7x a 'full' position) and use the proceeds to buy three roughly half-sized positions in different stocks.

This 3-for-1 swap would further reduce the risk to your income stream by having more stocks, possibly in different segments of the market. Since the new positions would only be half-sized, you could add shares later on when they offered better valuations.

By beginning several smaller sized positions you might be willing to take a risk on less comfortable stocks like an mREIT or MLP and give your portfolio yield a little bit of a boost too, sort of with house money.

Just thinkin' out loud. There's always a different way to skin a cat if you consider the problem long enough.]]> http://seekingalpha.com/instablog/874941-david-crosetti/1810271-guaranteed-retirement-accounts-good-idea-or-not?source=feed#comment-18326111 18326111
Title translation into layman's terms:

"How to get habitual savers to pay for the retirement of habitual squanderers."

Naturally not every so-called "poor" person is a squanderer. Some wind up there through no fault of their own and probably deserve a hand with necessary expenses (think widows, orphans, and those who suffer debilitating injuries or illnesses). Most likely this could be paid for by family members or via charitable contributions from those who have more than enough for their own needs, as it was throughout history.

However those who chose spending over savings when they had an option deserve to learn why squandering was a bad choice. Any expectation of a comfortable retirement on their part deserves little consideration on the part of savers.

Unfortunately a squanderer's vote counts every bit as much as a saver's vote and as we have seen in recent history, the people voted into office frequently cater to the squanderers at the expense of the savers, until the entire system implodes of its own weight.

There is no magic pixie-dust which pays for things we cannot afford the old-fashioned way, depite claims to the contrary by most of our elected officials. One day our country as a whole will regret the debt run up in our name by those elected to office.

Eventually the Piper must be paid.]]> Wed, 01 May 2013 15:02:35 -0400
Title translation into layman's terms:

"How to get habitual savers to pay for the retirement of habitual squanderers."

Naturally not every so-called "poor" person is a squanderer. Some wind up there through no fault of their own and probably deserve a hand with necessary expenses (think widows, orphans, and those who suffer debilitating injuries or illnesses). Most likely this could be paid for by family members or via charitable contributions from those who have more than enough for their own needs, as it was throughout history.

However those who chose spending over savings when they had an option deserve to learn why squandering was a bad choice. Any expectation of a comfortable retirement on their part deserves little consideration on the part of savers.

Unfortunately a squanderer's vote counts every bit as much as a saver's vote and as we have seen in recent history, the people voted into office frequently cater to the squanderers at the expense of the savers, until the entire system implodes of its own weight.

There is no magic pixie-dust which pays for things we cannot afford the old-fashioned way, depite claims to the contrary by most of our elected officials. One day our country as a whole will regret the debt run up in our name by those elected to office.

Eventually the Piper must be paid.]]> http://seekingalpha.com/instablog/874941-david-crosetti/1810271-guaranteed-retirement-accounts-good-idea-or-not?source=feed#comment-18306291 18306291
The eventual problem with any required Federal Government retirement system is that they WILL be investing most of your retirement money in special non-marketable Treasury issues, just like they do for Social Security.

Of course the "non-marketable Treasury issues" are really just IOUs. Your 'investment' money goes into the general fund and gets spent immediately, just like Social Security money does today. This is the only way the Feds can maintain the illusion of reducing the deficit, by 'investing' your retirement savings in nice, safe "bonds". Spending all the Social Security receipts isn't doing the trick any more, so they need another source of funding, and your retirement savings are now in their cross-hairs.

Count on it.]]> Wed, 01 May 2013 08:05:23 -0400
The eventual problem with any required Federal Government retirement system is that they WILL be investing most of your retirement money in special non-marketable Treasury issues, just like they do for Social Security.

Of course the "non-marketable Treasury issues" are really just IOUs. Your 'investment' money goes into the general fund and gets spent immediately, just like Social Security money does today. This is the only way the Feds can maintain the illusion of reducing the deficit, by 'investing' your retirement savings in nice, safe "bonds". Spending all the Social Security receipts isn't doing the trick any more, so they need another source of funding, and your retirement savings are now in their cross-hairs.

Count on it.]]> http://seekingalpha.com/instablog/874941-david-crosetti/1810271-guaranteed-retirement-accounts-good-idea-or-not?source=feed#comment-18287301 18287301
The high earner will still have a larger total income, just a smaller percentage of pre-retirement income.

61% of $60,000 = $36,600
71% of $40,000 = $28,400
89% of $20,000 = $17,800

The truly sad part is that by saving $250 per month (5% of $60,000 pay), and investing it at a 7.5% CAGR (very do-able with DGI), the worker could accumulate more than enough money to pay dividends of $39,000 annually (at a 4% yield), without the need to also pay government "fund managers" to administer the program.

What an incredibly bad plan a government administered savings program would be.

But we already knew that....]]> Tue, 30 Apr 2013 17:02:42 -0400
The high earner will still have a larger total income, just a smaller percentage of pre-retirement income.

61% of $60,000 = $36,600
71% of $40,000 = $28,400
89% of $20,000 = $17,800

The truly sad part is that by saving $250 per month (5% of $60,000 pay), and investing it at a 7.5% CAGR (very do-able with DGI), the worker could accumulate more than enough money to pay dividends of $39,000 annually (at a 4% yield), without the need to also pay government "fund managers" to administer the program.

What an incredibly bad plan a government administered savings program would be.

But we already knew that....]]> http://seekingalpha.com/article/1369871/comments?source=feed#comment-18107311 18107311
It's always enjoyable to help educate others that are just starting out on their own DGI journey and having more "real" experiences documented here on SA will help a lot of investors find a reliable long term methodology to follow in DGI. Keep 'em coming.]]> Thu, 25 Apr 2013 19:43:57 -0400
It's always enjoyable to help educate others that are just starting out on their own DGI journey and having more "real" experiences documented here on SA will help a lot of investors find a reliable long term methodology to follow in DGI. Keep 'em coming.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17911171 17911171
I didn't say they wouldn't try, just that it would be very difficult to implement successfully.

It would be a sad day indeed if it were to come to that.]]> Sun, 21 Apr 2013 19:17:59 -0400
I didn't say they wouldn't try, just that it would be very difficult to implement successfully.

It would be a sad day indeed if it were to come to that.]]> http://seekingalpha.com/article/1356471/comments?source=feed#comment-17897641 17897641
I disagree regarding the application of the "bubble" label to gold, not its suitability for any particular investor. I personally believe that gold will be making new highs before it goes under $1,000, but it's not without significant risk.]]> Sun, 21 Apr 2013 10:44:15 -0400
I disagree regarding the application of the "bubble" label to gold, not its suitability for any particular investor. I personally believe that gold will be making new highs before it goes under $1,000, but it's not without significant risk.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17896501 17896501
Gold's recent slump has not been as bad as the slump the S&P 500 experienced in 1987.

Gold: Peak $1923 Bottom: $1350 Slump: 30%

S&P in 1987: Peak 338 Bottom: 220 Slump: 35%

The S&P continued upward nearly 700% from that low in 1987. I don't see gold's recent slump as anything more than an extreme in normal market variability. I bought my physical gold at $800 or less in 2009 so that small portion of my holdings is still doing pretty well despite the slump (CAGR over 15% at current prices).

I'll continue to hold until I see real interest rates turn positive, at which point I'll put a stop under my holdings and ride prices higher as far as they go.]]> Sun, 21 Apr 2013 10:25:03 -0400
Gold's recent slump has not been as bad as the slump the S&P 500 experienced in 1987.

Gold: Peak $1923 Bottom: $1350 Slump: 30%

S&P in 1987: Peak 338 Bottom: 220 Slump: 35%

The S&P continued upward nearly 700% from that low in 1987. I don't see gold's recent slump as anything more than an extreme in normal market variability. I bought my physical gold at $800 or less in 2009 so that small portion of my holdings is still doing pretty well despite the slump (CAGR over 15% at current prices).

I'll continue to hold until I see real interest rates turn positive, at which point I'll put a stop under my holdings and ride prices higher as far as they go.]]> http://seekingalpha.com/article/1356471/comments?source=feed#comment-17895871 17895871
Mr. Short appears to be playing games with charts which appear similar in order to make them BE the same.

The current bull market in gold is a relative youngster compared to the S&P 'bubble'.

The S&P rose from 122.5 in 1982 to 1500 in 2000. That's a gain of over 1200% in 18 years.

Gold has risen from $278 in 2002 to a peak of $1923 in 2011. That's a gain of over 690% in 9 years.

In order for gold to reach the same 'bubble' heights as the S&P it would need to reach $3,400. Price-wise gold is currently at the point the S&P held in mid 1997. Gold's recent 'plunge' has been no worse than the drop seen by the S&P in 1987, which no one claims to have been the popping of that bubble in retrospect.

I find data-fitting manipulations like those Mr. Short employed to be somewhat disingenuous. Percent comparisons should be made with the STARTING points equal, not the high points.]]> Sun, 21 Apr 2013 10:05:44 -0400
Mr. Short appears to be playing games with charts which appear similar in order to make them BE the same.

The current bull market in gold is a relative youngster compared to the S&P 'bubble'.

The S&P rose from 122.5 in 1982 to 1500 in 2000. That's a gain of over 1200% in 18 years.

Gold has risen from $278 in 2002 to a peak of $1923 in 2011. That's a gain of over 690% in 9 years.

In order for gold to reach the same 'bubble' heights as the S&P it would need to reach $3,400. Price-wise gold is currently at the point the S&P held in mid 1997. Gold's recent 'plunge' has been no worse than the drop seen by the S&P in 1987, which no one claims to have been the popping of that bubble in retrospect.

I find data-fitting manipulations like those Mr. Short employed to be somewhat disingenuous. Percent comparisons should be made with the STARTING points equal, not the high points.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17893921 17893921
The answer is to not own it after 1980. Believe it or not, there are ways to know when to protect yourself from the downside of owning gold. The reasons why it works is completely different than why DGI works, but it is still a valid methodology.

The key factor is ... real interest rates. Gold tends to rise strongly when real interest rates are negative and fall or stagnate when they are positive.

Here is a chart of real interest rates going back to the late 1960s (the blue line on this chart):

http://bit.ly/107jvTy

On that chart you'll see that real interest rates went negative around 1974 and stayed negative until around 1980. During that time gold rose strongly from ~$150 to over $800.

When real interest rates turned positive in 1980 gold stagnated and fell (see the black line on this chart).

http://bit.ly/ZdE3OL

Real interest rates remained positive until 2002 and gold fell back to ~$300. At that point real interest rates again turned negative, briefly rose to positive territory in 2005 and fell back into negative rates in 2007. In 2002 you could buy gold at $300-ish and ride it up to current prices at ~$1400 (or to the peak at $1900 if you like to cherry pick data points).

It's true that you won't get in at the exact bottom, nor out at the very top, but the odds are heavily in your favor if you follow real interest rates. The "smart money" crowd (professional investors) understand that parking money in bonds during a negative real interest rate environment WILL lose purchasing power. Gold does a better job of maintaining that purchasing power when real rates are negative so the longer real rates stay there the more smart money moves into gold related assets as a defensive measure.

When a 1 year T-Bill yields less than the official CPI (which you can argue understates actual inflation) you can anticipate gold will perform well, as the last 40+ years have demonstrated.

Returns in the gold mining sector have outperformed gold though they usually lag in the cycle. PM miners are so far out of favor now that not owning successful operations which pay a dividend should bring criminal charges (that's a light-hearted personal opinion).

Keep your eye on real interest rates and you can harness the utility of gold in your portfolio.]]> Sun, 21 Apr 2013 09:21:49 -0400
The answer is to not own it after 1980. Believe it or not, there are ways to know when to protect yourself from the downside of owning gold. The reasons why it works is completely different than why DGI works, but it is still a valid methodology.

The key factor is ... real interest rates. Gold tends to rise strongly when real interest rates are negative and fall or stagnate when they are positive.

Here is a chart of real interest rates going back to the late 1960s (the blue line on this chart):

http://bit.ly/107jvTy

On that chart you'll see that real interest rates went negative around 1974 and stayed negative until around 1980. During that time gold rose strongly from ~$150 to over $800.

When real interest rates turned positive in 1980 gold stagnated and fell (see the black line on this chart).

http://bit.ly/ZdE3OL

Real interest rates remained positive until 2002 and gold fell back to ~$300. At that point real interest rates again turned negative, briefly rose to positive territory in 2005 and fell back into negative rates in 2007. In 2002 you could buy gold at $300-ish and ride it up to current prices at ~$1400 (or to the peak at $1900 if you like to cherry pick data points).

It's true that you won't get in at the exact bottom, nor out at the very top, but the odds are heavily in your favor if you follow real interest rates. The "smart money" crowd (professional investors) understand that parking money in bonds during a negative real interest rate environment WILL lose purchasing power. Gold does a better job of maintaining that purchasing power when real rates are negative so the longer real rates stay there the more smart money moves into gold related assets as a defensive measure.

When a 1 year T-Bill yields less than the official CPI (which you can argue understates actual inflation) you can anticipate gold will perform well, as the last 40+ years have demonstrated.

Returns in the gold mining sector have outperformed gold though they usually lag in the cycle. PM miners are so far out of favor now that not owning successful operations which pay a dividend should bring criminal charges (that's a light-hearted personal opinion).

Keep your eye on real interest rates and you can harness the utility of gold in your portfolio.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17880771 17880771
Tsk, tsk Dave. Your thinking is stuck in a dollar-centric valuation system. Who says someone couldn't TRADE their gold for other items without the necessity to figure out how many dollars that represents? You might sell the gold for Swiss Francs and buy a house in the Alps.

In truth, the dollar "does not even have the same purchasing power as a week ago.". When I put 10 gallons of gas in my car the gas itself doesn't change, only the price. What part of that change is driven by the dollar's loss of purchasing power and what part due to costs of production and delivery or taxes?

Some historical perspective on gold valuation:

Median house price in 1970: $17,000 (US Census)
Price of gold in 1970: $38/oz
One median 1970 house: 447+ oz of gold
(when gold was a monetary metal)

Median house price in 2000: $119,600 (US Census)
Price of gold in 2000: $279/oz
One median 2000 house: 428+ oz of gold

Median house price in 2008: $210,000 (Natl Assoc of Realtors)
Price of gold in 2008: $800/oz
One median 2008 house: 262+ oz of gold

Median house price in 2012: $175,000 (Natl Assoc of Realtors)
Price of gold in 2008: $1500/oz
One median 2008 house: 116+ oz of gold

If you sold a (median valued) house in 1970, bought gold with the proceeds, and waited until 2000, 2008, or 2012 you could buy a (median valued) house using less between 26% and 96% of the pile of gold you got for the house in 1970 when the "value" gold was fixed relative to the dollar. I imagine the median houses in 2000, 2008, and 2012 were much nicer than the one in 1970 as well.

Gold maintained a store of value in comparison to housing over a 42 year span. Not bad for an inert lump of metal.]]> Sat, 20 Apr 2013 17:11:21 -0400
Tsk, tsk Dave. Your thinking is stuck in a dollar-centric valuation system. Who says someone couldn't TRADE their gold for other items without the necessity to figure out how many dollars that represents? You might sell the gold for Swiss Francs and buy a house in the Alps.

In truth, the dollar "does not even have the same purchasing power as a week ago.". When I put 10 gallons of gas in my car the gas itself doesn't change, only the price. What part of that change is driven by the dollar's loss of purchasing power and what part due to costs of production and delivery or taxes?

Some historical perspective on gold valuation:

Median house price in 1970: $17,000 (US Census)
Price of gold in 1970: $38/oz
One median 1970 house: 447+ oz of gold
(when gold was a monetary metal)

Median house price in 2000: $119,600 (US Census)
Price of gold in 2000: $279/oz
One median 2000 house: 428+ oz of gold

Median house price in 2008: $210,000 (Natl Assoc of Realtors)
Price of gold in 2008: $800/oz
One median 2008 house: 262+ oz of gold

Median house price in 2012: $175,000 (Natl Assoc of Realtors)
Price of gold in 2008: $1500/oz
One median 2008 house: 116+ oz of gold

If you sold a (median valued) house in 1970, bought gold with the proceeds, and waited until 2000, 2008, or 2012 you could buy a (median valued) house using less between 26% and 96% of the pile of gold you got for the house in 1970 when the "value" gold was fixed relative to the dollar. I imagine the median houses in 2000, 2008, and 2012 were much nicer than the one in 1970 as well.

Gold maintained a store of value in comparison to housing over a 42 year span. Not bad for an inert lump of metal.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17880281 17880281
Not likely. FDR's 'seizing' of US gold only applied to coins and bullion in excess of 5 ounces per person (a family of 5 could keep 25 ounces).

The only reliable way to ensure most of the gold got collected was to force banks to turn in the coins when a customer deposited them. Anyone who simply buried their coins or stashed them in the mattress would probably have been able to keep them a long time (though not be able to use them often). In addition, jewelry and dental gold was not collected. People could melt or take a hammer to their gold coins and keep the resulting gold as "jewelry".

Given that gold is no longer used as money, FDR's primary mechanism for collecting gold coins no longer works. Nobody deposits gold coins at a bank any more. Confiscation is highly unlikely these days. There's no good way to know where all the gold coins are anymore without going through everyone's sock drawer at the point of a gun.]]> Sat, 20 Apr 2013 16:46:59 -0400
Not likely. FDR's 'seizing' of US gold only applied to coins and bullion in excess of 5 ounces per person (a family of 5 could keep 25 ounces).

The only reliable way to ensure most of the gold got collected was to force banks to turn in the coins when a customer deposited them. Anyone who simply buried their coins or stashed them in the mattress would probably have been able to keep them a long time (though not be able to use them often). In addition, jewelry and dental gold was not collected. People could melt or take a hammer to their gold coins and keep the resulting gold as "jewelry".

Given that gold is no longer used as money, FDR's primary mechanism for collecting gold coins no longer works. Nobody deposits gold coins at a bank any more. Confiscation is highly unlikely these days. There's no good way to know where all the gold coins are anymore without going through everyone's sock drawer at the point of a gun.]]> http://seekingalpha.com/article/1355411/comments?source=feed#comment-17880061 17880061
A valid point. The price of gold was held fixed in terms of US dollars until after Nixon allowed it the dollar to float.

1971: Gold: $35 / oz S&P 500: 95
Today: Gold: $1406 / oz S&P 500: 1555

Gains: Gold: +4017% S&P 500: +1637%

To be complete, the numbers for the S&P 500 are based only on price and do not include reinvested dividends, nor does it represent a more focused collection of high quality DGI type stocks.

Still, it's not like gold was a complete waste of time. It has its uses.]]> Sat, 20 Apr 2013 16:37:23 -0400
A valid point. The price of gold was held fixed in terms of US dollars until after Nixon allowed it the dollar to float.

1971: Gold: $35 / oz S&P 500: 95
Today: Gold: $1406 / oz S&P 500: 1555

Gains: Gold: +4017% S&P 500: +1637%

To be complete, the numbers for the S&P 500 are based only on price and do not include reinvested dividends, nor does it represent a more focused collection of high quality DGI type stocks.

Still, it's not like gold was a complete waste of time. It has its uses.]]> http://seekingalpha.com/article/1352441/comments?source=feed#comment-17832761 17832761
Indeed. Any company that RELIES on short term financing to pay the bills or fund operations is potentially skating on thin ice. Tim noted Wachovia but you could see the same problem unfold at many other businesses: GE, Bear Stearns, and GM among them.]]> Fri, 19 Apr 2013 10:53:46 -0400
Indeed. Any company that RELIES on short term financing to pay the bills or fund operations is potentially skating on thin ice. Tim noted Wachovia but you could see the same problem unfold at many other businesses: GE, Bear Stearns, and GM among them.]]> http://seekingalpha.com/article/1342891/comments?source=feed#comment-17745681 17745681 Wed, 17 Apr 2013 14:03:12 -0400 http://seekingalpha.com/article/1347921/comments?source=feed#comment-17741981 17741981
The results would tend to validate that your original plan was well thought out and smartly executed.

It won't be long before the DGI SA community has several years of real-world portfolio data which shows that individual stock-picking investors CAN beat the S&P 500 over time. Some will beat 'the market' quite handily it seems, but I don't imagine many of them will be flooded with offers to work for a mutual/hedge fund any time soon.

I suppose we'll have to be happy with educating the public for free here on SA and setting the example which demonstrates the principle for the indexing MPT masses who want to find a better way to save for retirement.]]> Wed, 17 Apr 2013 12:54:25 -0400
The results would tend to validate that your original plan was well thought out and smartly executed.

It won't be long before the DGI SA community has several years of real-world portfolio data which shows that individual stock-picking investors CAN beat the S&P 500 over time. Some will beat 'the market' quite handily it seems, but I don't imagine many of them will be flooded with offers to work for a mutual/hedge fund any time soon.

I suppose we'll have to be happy with educating the public for free here on SA and setting the example which demonstrates the principle for the indexing MPT masses who want to find a better way to save for retirement.]]> http://seekingalpha.com/article/1342891/comments?source=feed#comment-17688261 17688261
Everyone _KNOWS_ that stock-picking doesn't work reliably....

... unless you follow a DGI methodology.

Your simple sifting exercise makes the point quite clearly. Some stocks are better than others when it comes to reliable growth over time. Finding them takes a little work, but it pays off in the end.

(I thought a little comic relief might help to suppress the eventual flames from the MPT crowd)]]> Tue, 16 Apr 2013 10:21:25 -0400
Everyone _KNOWS_ that stock-picking doesn't work reliably....

... unless you follow a DGI methodology.

Your simple sifting exercise makes the point quite clearly. Some stocks are better than others when it comes to reliable growth over time. Finding them takes a little work, but it pays off in the end.

(I thought a little comic relief might help to suppress the eventual flames from the MPT crowd)]]> http://seekingalpha.com/article/1324031/comments?source=feed#comment-17462421 17462421
WAG increases their dividend by 22.2% to $1.10 per share which translates to a yield on cost of 3.69% for my buy price.

This Dividend Growth Investing stuff is great! Check it out.]]> Wed, 10 Apr 2013 15:39:11 -0400
WAG increases their dividend by 22.2% to $1.10 per share which translates to a yield on cost of 3.69% for my buy price.

This Dividend Growth Investing stuff is great! Check it out.]]> http://seekingalpha.com/article/1324031/comments?source=feed#comment-17299071 17299071
I bought WAG in June of 2012 at $29.82. It closed at $47.01 this past Friday, for a 10 month gain of 57.6%. In addition, I've collected $0.825 per share in dividends (2.76%) over that time. Owning WAG seems to be working for me, I think I'll hold or maybe even add shares on any significant pull-back.

Your results may vary.]]> Sat, 06 Apr 2013 09:55:15 -0400
I bought WAG in June of 2012 at $29.82. It closed at $47.01 this past Friday, for a 10 month gain of 57.6%. In addition, I've collected $0.825 per share in dividends (2.76%) over that time. Owning WAG seems to be working for me, I think I'll hold or maybe even add shares on any significant pull-back.

Your results may vary.]]>