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No Free Cake

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  • Is Inflation Next? [View article]
    DE: "It would be nice if we didn't have to experience boom and bust cycles."

    Striving and occasionally failing is how we better ourselves.

    That we sometimes follow each other off a cliff is an off-shoot of our trend following and fad-loving nature.

    It's not just financial affairs - remember pet rocks, beanie babies, hula hoops, any number of hit songs, bell bottom pants, the 3 Martini lunch, etc, etc, etc

    I'll take the boom and busts. I enjoy being a free human.
    Apr 15 03:15 PM | 2 Likes Like |Link to Comment
  • Why Procter & Gamble Will Raise Its Dividend 7-9% Next Month [View article]
    Thanks loophole. I've been wrong before and will be wrong again.

    And, I may even be wrong about them wanting to (needing to) get payout levels back down (although I still believe they will). Yesterday they announced selling some pet food business to Mars for $2.9B. So far they said they'll use the proceeds for "general corporate purposes".

    At least it gives them extra cash for reinvestment if they wish rather than having to rely on operating cash which is going more towards dividends than historically.

    Money being fungible it's hard to know where it actually goes. For context, annual dividends are roughly $6.7B (ttm). Thus, the recent ~7% increase costs them an extra $470M in the first year. If they were paying dividends out based on the 10-year average ratio (35%), the dividend would be about $2B less annually.

    I agree with the author that their high payout levels limit dividend increases to underlying growth. The difference is I believe they need to constrain dividends further to get the levels back down.

    I hope they are successful. But, Lafley didn't come back because things were going well. There's still work to be done.
    Apr 10 01:59 AM | 1 Like Like |Link to Comment
  • Why Procter & Gamble Will Raise Its Dividend 7-9% Next Month [View article]
    Yes, I was wrong about this increase.

    But, was I wrong about them wanting to get payout levels down to historical (and peer) levels? We shall see when the 10Q and 10K come out. Hopefully they can increase operating cash by more than 7% so this happens.

    As an aside, on a calendar year basis this was the lowest increase in the last 10 years continuing a trend of ever-lower increases.

    I remain long PG.
    Apr 9 10:29 AM | 1 Like Like |Link to Comment
  • Is Inflation Next? [View article]
    Illuminati, that wireless and landlines take up the same percent in the index means that people, as a group, spend about as much on one as the other. It doesn't mean anything about relative costs for an individual.

    As for internet service, I suspect that may be rolled into Recreation/Cable in some cases and perhaps landlines in others (DSL). In any event, it's still a reflection of what a large population spends - not prices for any one person.
    Apr 9 09:33 AM | 1 Like Like |Link to Comment
  • The Top 7 Reasons To Buy Treasuries: Part 2 [View article]
    On Schwab.com go to the Trading or Research main sections and then choose Bonds. You get a grid of yields shown by durations and security type (Treasury, municipal, Corp AAA, etc). Selecting a spot on the grid (like 10Y Treasury) displays the available bonds by CUSIP.

    The USTs maturing in 2024 are currently priced to yield 2.72%. There are about a dozen different CUSIPs maturing then with coupons ranging from 2.75 to 7.5% plus a few TIPs.

    For rough checks of current 10Y UST yields I use ticker ^TNX on Yahoo
    Mar 29 07:58 PM | Likes Like |Link to Comment
  • The Top 7 Reasons To Buy Treasuries: Part 2 [View article]
    I get prices from my broker - Schwab. It has real-time online buying for notes and bonds of various kinds (selling requires a phone call).

    Alternatively, you can get daily prices from US Treasury Direct:
    http://1.usa.gov/1i3ZYy7
    Mar 29 02:16 PM | Likes Like |Link to Comment
  • Why Procter & Gamble Will Raise Its Dividend 7-9% Next Month [View article]
    "awesome PDF you put together"

    Thanks Brad.

    If they keep their payout ratios this high they are saying they don't see much business investment opportunity. Which might still be true and stay true for awhile. But, they've been reducing increases as the ratios have increased which says to me that they want to preserve cash for other than dividend.

    It won't be long and we'll all know.
    Mar 27 10:02 AM | Likes Like |Link to Comment
  • Why Procter & Gamble Will Raise Its Dividend 7-9% Next Month [View article]
    Tim, I side with Just Some Guy.

    Why do you think PG is happy with such a high earnings payout ratio? Not only is it at a 10-year high the amount of operating cash and free cash they payout to dividends is also at a 10-year high. I'd be very surprised if management was comfortable with their current 50% operating cash payout.

    You can see these trends easily on the two charts on page 2 of this pdf.
    http://bit.ly/MJ8Wr5

    Heck, they may be at 20-year highs for these ratios for all I know. I only have 10 years of history available to me.

    I don't see anything but an obligatory 2-3% dividend increase coming up.

    Long: PG
    Mar 26 08:45 PM | 2 Likes Like |Link to Comment
  • Dividend Portfolio For The Strong Stomached: Q4 2013 Update [View article]
    Re-balancing would not be a "fund level" event and thus would not require any additional bookkeeping. Just imagine your portfolio as a mutual fund (or ETF). The portfolio managers change stuff all the time yet the share count outstanding and NAV are not affected.

    It is really only creating those two new items - a NAV and a share count. You can accumulate dividends separately or create a money market account inside the portfolio. I do it separately as I spend them.

    For example, if you started with 50,000 on day 1 and you wished your starting NAV to be 100.00 then you would have 500 (50,000 / 100) initial shares. Going forward your share count is only adjusted when adding money to or subtracting money from the portfolio.

    Any changes in the value of your holdings affects your NAV. Simply divide your current total value by the shares (500 initially in my example) for the current NAV. I do this daily but note it monthly for historical purposes.

    You add up all your dividends across whatever period you want (monthly, quarterly, yearly) to derive a dividends / share figure that can be compared to anything fairly. I use monthly but many equity funds are quarterly. If you reinvest dividends in the portfolio that is new money that would buy additional shares - just like any other new money. Example, if you reinvest 1,000 when your NAV that day was 106 then you add 9.4339 shares to your share count. Your NAV will still be 106 at that moment but start changing the next day when your holdings start trading.

    Sadly, you won't find much help on this anywhere. You just have to think it through. It's not that hard though.
    Mar 26 12:59 AM | 1 Like Like |Link to Comment
  • Dividend Portfolio For The Strong Stomached: Q4 2013 Update [View article]
    I am glad I was able to help you find your mistake.

    You wondered in your article how to best show data. The best way is to "wrap" a mutual fund/ETF style accounting around your portfolio. That way you have a NAV and income/share of your portfolio. This allows you to compare total return and income to any fund over any time period. I may be the only individual who uses this sort of institutional approach but find it extremely helpful.

    The more transactions you have the more work it will be. If you don't often add or subtract money from the portfolio it's pretty easy. If you frequently reinvest dividends (new money) those large volume of small transactions could be burdensome. Just swapping out one holding for another isn't adding or subtracting money - just rearranging so is trivial to handle.
    Mar 25 11:12 PM | Likes Like |Link to Comment
  • Dividend Portfolio For The Strong Stomached: Q4 2013 Update [View article]
    Yahoo shows the closing on Mar20 as 34.09. See here:
    http://yhoo.it/1dLJoRf

    My Schwab Pro trading platform says it closed at 34.11 that day. The Schwab close may be slightly different due to after hours activity. In any event, neither of these match what you say.

    You still haven't even clarified what those numbers were supposed to be. The bottom line is inception to date and matches the Jan2013 column. Yet, you keep talking about the most recent quarter. I think you need more rigor in your reporting.
    Mar 25 09:11 PM | Likes Like |Link to Comment
  • Dividend Portfolio For The Strong Stomached: Q4 2013 Update [View article]
    But, staying with just T, your "Initial Position" column says it was 10,000.

    Your final position value of T is 9,776, a -2.2% from the initial.

    How could that happen when T had a positive 1.1% price-only return over that period?

    Are the columns mislabeled?
    Mar 25 08:11 PM | Likes Like |Link to Comment
  • Simply Buy The Dividend Aristocrats And Perhaps Beat The Market [View article]
    YW. To be fair they may be able to reduce the current 0.78% actual rate if they can grow the fund considerably or find other operational savings. This is hard to estimate without further guidance from them but they don't provide any.

    And, while growing assets rapidly *may* help reduce costs, it will also impair distributions in that period. The reason is they would be collecting dividends from the underlying companies on a smaller asset base at the beginning of a quarter but paying out that collected cash to a larger shareholder group at the end.

    It's an interesting concept. Time will tell on the execution. Heck, even 0.35% seems high for what should be a fairly static set of (very liquid) holdings. I agree at 0.78% it would be, um, hard to justify.
    Mar 25 05:41 PM | 1 Like Like |Link to Comment
  • Dividend Portfolio For The Strong Stomached: Q4 2013 Update [View article]
    I am not able to follow the return figures you provide for your holdings.

    Example: T on Jan 1 2013 (close of Dec 31 2012) was 33.71 and on Mar 20 2014 was 34.09. This is a +1.1% price only return - not a -2.2% loss as shown on your graph.

    A couple of the other holdings are also off. Can you explain?
    Mar 25 03:19 PM | Likes Like |Link to Comment
  • Simply Buy The Dividend Aristocrats And Perhaps Beat The Market [View article]
    The current 0.35% fee is due to a contractual reduction ending in Sep 2015.

    In about 18 months, the fee will more closely reflect the actual operating costs which are currently running 0.78%.

    See the prospectus for details:
    http://bit.ly/1gyuCTO

    This is highlighted in their fact sheet:
    http://bit.ly/1gBmrTq

    If the costs stay that high then that eats up much of the dividends paid. Which means this would become mostly a total return play - not so much a dividend growth one.
    Mar 25 02:58 PM | 7 Likes Like |Link to Comment
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