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dc984

dc984
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  • Will The Allure Of Dividend Growth Continue? [View article]
    Thanks Smarty. I agree broadly with what you say. At the same time, though, careful of lumping all TR adherents into one box. The differences between different styles of TR, IMO, are much larger than the minor differences between DGI styles (and DGI adherents often complain about being generalised!)

    However, I place little weight on anyone claiming this or that on a message board. 14.6% over 30 years would make you one of the greatest investors of all time.
    Feb 18 12:21 AM | 3 Likes Like |Link to Comment
  • Will The Allure Of Dividend Growth Continue? [View article]
    "When the discussion started, it was about two $1 million portfolios."

    No it wasn't. Did anyone realise that it was David Crosetti who was giving himself the larger portfolio?

    "They wake up at 65 years of age. One guy has been seeing his dividends grow over the years and now he has a dividend income approaching 80k a year (me). The other guy decides that he wants to be a DG investor, so he takes his million dollar portfolio and invests in a basket of stocks that throw off a 4% yield. Some of his stocks are 6% yielders and some are 3% yielders as he likes a mix of blue chips. His 4% average yield is going to produce 40k a year. Mine is producing 80k a year, because I've enjoyed years of dividend growth. The other guy is converting and is beginning his dividend journey."

    An income of 80k per year, on 4% average (current) yield, is not a 1 million portfolio. So another investor (growth, DG, whatever) with 1 million, or even 1.5 million, will not be able to replicate his portfolio.
    Feb 17 08:02 PM | 2 Likes Like |Link to Comment
  • Will The Allure Of Dividend Growth Continue? [View article]
    Smarty:

    Thank you (and DVK) for your explanations. I understand you 100%, because what you say is very logical. I don't think you fully understand me, however.

    I did not once state that MPT or TR or whatever was absolutely better than DGI. DG is a fine strategy, and I do employ this strategy on a significant part of my portfolio. I was simply contending Mr. Crosetti's faulty logic. Please understand that I am not targeting Mr. Crosetti's specifically, though his belligerent and abrasive nature has no place on SA, as this is a viewpoint that I find not infrequent amongst DGI adherents.

    And that viewpoint is that there is no way that a non-DGI investor can achieve the same income as a DGI investor if he converts at a later age. Re-read his posts. He uses terms like "freaking maths", "the numbers are stacked against the non-DGI investor" (by, in his own example, giving the DGI investor a bigger portfolio), "the numbers don't work", with the implication being that with 30 years of compounding and dividend reinvestment and stock splits and whatnot, no other type of investor will have the financial resources to convert to his portfolio. Then later he backtracks and says that you can replicate it if you had the same money now (which can be obtained via any approach, DG, TR, bonds, lottery, whatever), which is the point I was trying to get across in the first place, though there might be psychological barriers against doing so.

    "Is it possible that someone could use TR to grow their capital at a rate faster than 14.6% annually over 30 years? Yes. I'm sure you could find people who managed to do so (excluding people who made fortunes by going public with their privately held business) but I'd be willing to bet that they are the exception and not the rule."
    "Dave has provided a concrete example to the contrary where a simple DGI approach applied over a long time span soundly beat an indexing approach, and by extension most individual investors who relied on TR over that same time span. "

    I'm can't debate that, because it is not a falsifiable hypothesis - a concrete example is nothing more than an anecdote, and does not a correlation make. I would myself be very happy with 14.6% annualized over 30 years, and the psychological safety that DG provides, which is again, why I also, in part, use this strategy. (Note also that TR is not the same as MPT/indexing, so your last sentence "by extension" may not be valid). My point only is, and Larry Melman's point (if I may speak for him) is that by limiting yourself to one strategy during the accumulation phase, may not necessarily be inferior to DGI (the point I was contending in the first place), and indeed, may provide more assets to convert to a DGI approach upon retirement (or at any time), psychological issues notwithstanding.
    Feb 17 07:49 PM | 1 Like Like |Link to Comment
  • How 2014 Could Be Like 1929 [View article]
    Thanks for the article Cam. What's the y-axis for the Chinese canaries? Apologies if it was already stated.
    Feb 17 12:19 PM | Likes Like |Link to Comment
  • Review Of 2013: Why My 9% Yield Excites Me More Than My 18% Total Return [View article]
    Another question Steve: how do you know that the stated discount on FOF represents a further discount due to the intrinsic discounts of the CEFs it holds, rather than a single discount to their NAV values only? I hope my question makes sense.
    Feb 17 09:22 AM | Likes Like |Link to Comment
  • Review Of 2013: Why My 9% Yield Excites Me More Than My 18% Total Return [View article]
    Steve, thanks, great article, lots of learn for a newer investor like me.

    Your table would be really helpful if you could have listed the discounts of each CEF as well at the time of writing. No biggie, but would have been nice. Thanks again.
    Feb 17 01:54 AM | 2 Likes Like |Link to Comment
  • Will The Allure Of Dividend Growth Continue? [View article]
    Dave,

    You say: "So, yes. If you have exactly the same amount of money as the value of my portfolio you will be able to recreate it exactly. Stock for stock. But the question here is "would you?" The answer is "probably not." Of course there are a lot of people out there investing in the stock market that really shouldn't be investing in the stock market."

    Yes, that sums it up. Thanks for your clarification. It's all psychological then. As long as both investors end up with the same amount of money (via DGI, value, growth, bonds, whatever), they can recreate it exactly.

    From your lengthy discourse on stock splits, % yields, blue-chips, dividend growing, 1984, dividend growth vs non-growth, I thought you actually had a point about DGI investing somehow ending up with more income per year than the non-DG investor:

    You said:
    "Let's just leave it at this Larry. Two investors. Each saving and investing. One with dividend stocks one with whatever. They wake up at 65 years of age. One guy has been seeing his dividends grow over the years and now he has a dividend income approaching 80k a year (me). The other guy decides that he wants to be a DG investor, so he takes his million dollar portfolio and invests in a basket of stocks that throw off a 4% yield. Some of his stocks are 6% yielders and some are 3% yielders as he likes a mix of blue chips. His 4% average yield is going to produce 40k a year. Mine is producing 80k a year, because I've enjoyed years of dividend growth. The other guy is converting and is beginning his dividend journey."
    "But time involved with DG investing produces results that cannot be duplicated by someone who decides to "convert" at some time in the future. The numbers are stacked against that investor.
    I didn't make up the numbers, they are what they are. Learn to deal with it Larry. Sorry that you're wrong, but hey, it is what it is."

    Did you realize that you gave the DG investor about twice the portfolio value of the non-DG investor in your example? "The numbers are stacked against that investor." LOL. Indeed.
    Feb 17 12:46 AM | 2 Likes Like |Link to Comment
  • Will The Allure Of Dividend Growth Continue? [View article]
    David Croseti: do you still not get the flaw in your argument?

    I'm not debating the pros and flaws of DGI here: I'm only tackling your "maths".

    You say:
    "At the end of 1984, through my Coca-Cola 401k plan, I had accumulated 400 shares of Coca-Cola stock (KO)."
    "In order to duplicated my position with Coca-Cola--that is have 19200 shares with a $1.12 dividend that returns $21504 income, the "switcher" would need to purchase 19200 shares on Monday."
    "That means the new investor will need to purchase 19200 shares of KO at a current price of $38.93 and he will need to spend $747,456 on Monday to buy KO."
    "Now here's the hard part. If this guy has 1.5 million dollars as you suggest, then he has a problem. He's only got $753,000 left and he hasn't even considered buying the other holdings in my portfolio."

    I commend you on the great choice of KO. You've clearly amassed a large gain from this investment. Now, my question to you is: does it matter HOW the second investor amasses the $747,456? Could it be by DGI? (perhaps switching to KO from another DGI stock?), or a value strategy, growth, hybrid, income, bonds, anything? As long as he/she has that capital, it doesn't matter whether you've accumulated your 19220 shares of KO 30 years ago or yesterday.

    The logic is the same even if you include dividends of KO (just increase $747,456 to whatever value you desire that represents your total return).

    Here's the main problem:
    "Let me try to give you one example of the difference between someone like me who started DG investing years ago and someone who decides to convert to DG late in life after either creating a portfolio that is larger than my own by a little or a lot. Doesn't really matter."

    Your example shows that your DGI portfolio is greatly worth more than $1.5 million (current value, not 1984). So obviously a person with $1.5 million cannot duplicate it. Have you tried to calculated the total value of your portfolio? (including dividends?). Let's say it's $10 million. If someone had $10 million dollars, would he then be able to replicate your portfolio, with its current income, exactly? The answer is yes.
    Feb 16 07:43 PM | 2 Likes Like |Link to Comment
  • Will The Allure Of Dividend Growth Continue? [View article]
    LarryMelman, what you're saying is painfully obvious, but some people just don't get it.
    Feb 16 10:10 AM | 3 Likes Like |Link to Comment
  • After A 177% Gain, What Should Investors Emphasize Now? [View article]
    Can you break this down for me like an 8 year old. If the real stage 4 is coming, which sectors are you the most positive on? Thanks for the articke, really informative.
    Jan 30 08:53 AM | 1 Like Like |Link to Comment
  • Mindray Medical: The Smoking Gun [View article]
    FWIW, the benchmark-crushing First State China Growth fund has MR as a top holding:

    http://bit.ly/1bccsj6
    Jan 19 07:25 PM | 3 Likes Like |Link to Comment
  • Are The VXX And XIV Just Providing Leveraged Market Exposure? [View article]
    thanks for the article.

    is shorting vxx more risky, mathematically, than going long xiv?

    my intuition tells me they should be the same, yet if vix quadruples in a crisis, what would the effect be? would you only lose 75% of the value of xiv but be down 400% if you were short vxx?
    Jan 7 07:47 PM | Likes Like |Link to Comment
  • Lessons From 2013: Part I [View article]
    Larry - i understand that a combination of high quality bonds with stocks has given reasonable returns with much lower volatility compared to an all-equity portfolio over the last few decades.

    I wonder though about the impact of the huge bull market in bonds in achieving this historical performance? If the bull market in bonds has indeed ended, wouldn't that diminish the expected value of including high-quality bonds in your portfolio?

    thank you for your expert insight
    Jan 6 10:10 PM | Likes Like |Link to Comment
  • The New High-Yield, Monthly Dividend MLP Fund [View article]
    surf, I'm new to investing and would not pretend to know more than you. but from the IB link you posted (of which I am a client), the rate seems to say 1.58%. Where did you get 11.39% from?
    Dec 26 10:20 PM | Likes Like |Link to Comment
  • The New High-Yield, Monthly Dividend MLP Fund [View article]
    i used to pay 8% margin interest at firstrade...but now less than 2% at interactive brokers.
    Dec 26 05:45 AM | Likes Like |Link to Comment
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