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HiloBeMagical

HiloBeMagical
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  • Constructing A Monthly Income Portfolio [View article]
    "Well, all in due time. I guess?"

    Yeah. I may have to go take something.
    Aug 14 01:01 PM | 1 Like Like |Link to Comment
  • Constructing A Monthly Income Portfolio [View article]
    "LOTS of negative people here lately"

    Well, Bill, given how goofy the sole premise of the article was... ;)

    Title: How to construct a monthly income portfolio.
    Premise: You might want to have income every month.
    Summary: Oh, wait. You're grown-ups and probably don't have to.

    I like Eli as much as the next guy, but, really, come on now...

    Best,
    Hilo
    Aug 14 12:48 PM | 1 Like Like |Link to Comment
  • Constructing A Monthly Income Portfolio [View article]
    "This might be the weakest premise for an article that I have ever seen."

    Larry,

    It took years, but I finally agree with something you wrote.

    Eli,

    I'm fairly certain any investor who has had the discipline to build an income generating portfolio over an entire lifetime probably has the discipline not to blow the excess cash flow in any given quarter. How, exactly, do you imagine they're managing their income? *1

    Hilo

    [1] "Honey! There's a new Sinatra's Greatest Hits boxed set!!! We got any dividend money???"
    Aug 14 12:28 PM | 2 Likes Like |Link to Comment
  • How Long Can High Dividend Growth Last? [View article]
    "I personally have room for both higher and lower yield stocks in my portfolio. each serves their own purpose."

    You're never going to make #1 Zealot with an attitude like that.
    Shape up.
    Jul 29 11:48 PM | 4 Likes Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    bjsheppard: "I find it hard to believe the average reader of these columns has only $50k in assets."

    Probably not. But, the "Average Joe" stats average all Americans. If the $50,000 is accurate, it means that the average of American's who have _any_ net worth to speak of probably have closer to $100K, because...

    hang on to your seat...

    It was reported somewhere in the printed press, (WSJ, iirc), this past year that 50% of all _working_, (not unemployed), Americans couldn't put their hands on $2,000 in cash if you gave them 24 hours to do it.

    Now, that's an alarming statistic.

    Fwiw,
    Hilo
    Jul 29 06:45 PM | 4 Likes Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    mjs deduced:

    "If they would just focus on math and reading skills all the other subjects fall into place. Everything else you do in school either requires reading or logic and reasoning skills that come from mathematics. "

    Hey mjs,

    In my opinion, the fact that school kids don't know the correct difference between 1/4 and 1/3...

    ...and the fact that the average Joe has only $50,000 for retirement...

    ...don't illustrate a lack of understanding of the importance of critical reading and thinking skills nearly as much as the fact that your response, thus far, has had exactly 0 "likes".

    Zero likes. On the one response in this comment stream that absolutely nails the problem and, (a large part of), the solution to it.

    I don't even know what to say except, for me, just clicking "like" wasn't enough. Thanks for your comment.

    Hilo
    Jul 29 08:36 AM | 1 Like Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    "HILO ...thank you for replying..."

    You're welcome. As far as your questions are concerned, I can't do better than to "+1" the answer Dave gave you.

    All the best,
    Hilo
    Jul 28 10:32 PM | 2 Likes Like |Link to Comment
  • How Long Can High Dividend Growth Last? [View article]
    "A lot more money these days goes to share buybacks than used to. I don't see that trend reversing, or more specifically, I don't see what catalyt(s) will cause it to reverse."

    Dave,

    Won't that change as interest rates rise?

    Haven't buybacks increased because companies can borrow money more cheaply than it would cost to pay the, say, 3.5% yield on the shares outstanding?

    Hilo
    Jul 28 10:07 AM | 1 Like Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    Misscbd puzzled:
    "But - question...Investment value changes from quarter to quarter -- sometimes the variable is huge --- so wouldn't dividing Div$ for the next 12 mos by CURRENT yield (in a good/bad market) make the projected yield somewhat distorted?"

    Hey Miss,

    In a word, no. :)

    Dave said he can "compute --dividend growth for any time period I choose."

    That's the growth of dividend dollars, not percent yield.

    Let's say your entire portfolio has 30 stocks in it with a value of 100,000. You run the current dividend dollar amounts as Dave and I have outlined, and find that your entire portfolio is going to send you $4K over the next 12 months, (disregarding any increases). Your portfolio's "current yield" is 4%.

    No matter how the investment values change over the next 12 months in each of your 30 stocks, the $4,000 is "fixed", just as it would be if you owned one share of one stock worth $100,000. *1

    Best,
    Hilo

    [1] The same applies, (although less set-in-stone), with the projected rate of dividend increase of the entire portfolio. By keeping track of the actual dollar values received from your portfolio from one year to the next, one can get a reasonably accurate "dividend growth rate", as I illustrated in the reply to Chowder, above.
    Jul 28 09:32 AM | 4 Likes Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    "Upstate NY water isn't as good as NYC tap water..."

    True dat. There's a reason Buffalo can't make a decent bagel.

    Hey Dave, I'll be in Batavia in 10 days. You can shoot me then. :)
    Jul 25 06:43 PM | 1 Like Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    Chowder reported:
    "T has a yield of 5.1%, 5 year CAGR of 2.34%
    IBM ... 2.3% ... 14.03%
    DE ... 2.7% ... 14.03%
    ROST ... 1.3% ... 29.48%
    Equal positions were purchased in each.
    The average yield is 2.7%. Average dividend growth is 14.97%. The Chowder Rule number is 17.67 and when the yield is under 3%, I use a Modified Chowder Rule number of 15."

    Hey Chowder,

    Look at your statement: "Average dividend growth is 14.97%".

    It's important to point out that the 14.97% "average dividend growth rate" is not the same as saying that the dividends from the four stocks you bought will yield a dividend growth rate of 14.97% on average, even though you bought equal dollar amounts of each.

    The two statements are not the same. And because I didn't, at first, understand that, I expected more dollar increases from my dividend growth than I received.

    Because of the differences in the first year's dollar value of dividends received, the growth rate of those values will affect the "average" growth rate of a portfolio differently. And in this case _significantly_ so.

    Let's look at your examples and assume you bought $1000 in each:

    T paid you $51 in dividends, and raised it by 2.34% after a year = $52.19.
    IBM paid... $23 and raised it by 14.03% to $26.23.
    DE paid... $27 and raised it by 14.03% to $30.79.
    ROST paid... $13 and raised it by 29.48% to 16.83.

    So in your first year you received a total of $114.
    In your second year you received a total of $126.04

    Even though your average of the DGRs is correct at 14.97%, that is not the same as the average growth rate of this 4-stock portfolio's dividends.

    The "average" growth of your dividend stream will be $126/$114 = 10.56%.

    This example illustrates why I was careful in my original reply to spell out that I actually calculate the dollar value of my expected dividend raises when purchasing a stock and evaluate how it will affect the average dividend increase for the entire portfolio. *1, *2

    Hope this helps, (even if it does make the numbers look less appealing),

    Hilo

    [1] Or, hell, I could be wrong. I'm a marketing guy not a mathematician, and although my math is correct, I may not even be using the word "averages" correctly. But hopefully this illustrates there is a difference in predicting the dollar value of a portfolio's dividend increases over time.

    [2] And since you've were in the business for years I figure you already knew this but wanted to share it for the newer folks.
    Jul 25 06:17 PM | 5 Likes Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    "You could turn several HGTV shows into dividend versions"

    And over on the Food Channel Guy Fieri and Maria Bartoromo are hookin' up to produce "Diners, Drive-Ins, and Dividends."
    Jul 24 11:14 AM | 2 Likes Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    emac reminded: "Remember, that could just as easily have been $8,000 of losses. :)"

    Well, there is that. And, I did keep 200 shares. ;)
    Jul 23 11:45 PM | 2 Likes Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    "I understand they don't fit the bill for others in the true heritage of DGI. I believe they could easily be a core DGI holding when they grow up (10 years - 20 years?)."

    Hey DB,

    I'm probably treading on iconoclast territory here, but my "Dividend Growth" Portfolio is exactly that: An entire _portfolio_ that grows its dividends reliably and predictably every year. As mentioned earlier it pays a current yield of 3.7% and has a 3-year DGR of 7.3%.

    Now, many (most?) people here who talk about their Dividend Growth Portfolios do so implying that they have a portfolio that holds only good, solid dividend growth _stocks_. I understand that thinking and at one time my DG portfolio held nothing else.

    However once I understood that (for _me_) a Dividend Growth Portfolio is to be managed as a single unit, I allowed myself the latitude to explore other investments that would not have met my earlier criteria.

    I've already told you that I hold SBUX. I know it won't grow it's dividend 23%/year forever, and it's starting yield is really low, but I believe they offer an outsized chance of capital gains and the inclusion of the stock in the portfolio still had me with a portfolio with the yield and growth rate mentioned above.

    I even have some LNREF in my "dividend growth portfolio" although it pays <shudder> no dividends whatsoever. Even so, the entire portfolio still throws off 3.7% currently.

    My core positions fit the most stringent of DG requirements. The entire portfolio meets my yield and growth rate requirements. I get to play with everything else and invest where I find the best value. As Crosetti says, "value is where you find it", and sometimes I've been too rigid in "sticking to my guns". *1

    Best,
    Hilo

    [1] Last January, when they didn't increase their dividend, I sold 4/5 of my position in INTC. They didn't meet "my metrics" for inclusion in DG portfolio. I whined that my dividends didn't go up by the expected 8 cents per share and sold out of 800 shares because they didn't give me my $64. Sixty four dollars. What was I thinking?

    I missed out on $8,000 of gains because I didn't get my expected $64.
    Lesson learned.*2


    [2] (Richjoy, you were right, I was wrong. Just want to get that on the record.)
    Jul 23 03:17 PM | 3 Likes Like |Link to Comment
  • Does Higher Dividend Growth Lead To Higher Dividend Income? [View article]
    "[1] I keep hoping for a merger: Starbucks and Baxter.
    "Starbax (SBAX). Coffee, now in a convenient slow-drip inject-able form.""

    And, apropos of absolutely nothing, I just got the bill for my gall bladder surgery. I'm sure glad I own Baxter. With their dividend, (and assuming they continue with their past 3-year dividend growth rate), the income from that one investment will pay off the entire hospital bill.

    In 44 years.

    H-

    "I'd like to make payments, please."
    Jul 23 11:48 AM | 6 Likes Like |Link to Comment
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