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SDS (Seductive Dividend Stocks)

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  • Peter Lynch On Dividend Growth Investing [View article]
    When I read P.L. first time (~ 15 years ago) I ignored DG notes in his books. I re-read in summer 2014 (after being DGi for 8 years) I also noted that P.L. is very positive on DG. Is it conformation bias or what?
    SDS
    Dec 23, 2014. 08:03 AM | 3 Likes Like |Link to Comment
  • A 4% Dividend Yield Portfolio: A Post Mortem After A Wild Month [View article]
    Ron,
    My comment isn't against you - it is about common mistake of SA authors.

    What such portfolio 10-stocks represents? We know form statistics 101 that ~30 samples are needed to mimic normal distribution and more if the distribution is different. We know that stocks are not belong to the normal distribution. Hence 10-stock portfolio represents ONLY itself, we cannot learn nothing from it.

    This critique is not about diversification (but 10 is not enough) or stock picking (both are needed IMO), it is about quality of information we can obtain from such portfolios.
    I understand that many SA members started to invest recently and did not have time/money to assemble a representative portfolio. But in this case they should wait (i.e. not write SA articles about portfolio), save money, and spend out time and effort for more fruitful research in 2015.

    Good luck & Happy Holidays!
    SDS
    Dec 23, 2014. 07:52 AM | 2 Likes Like |Link to Comment
  • Why Write On Seeking Alpha? [View article]
    I agree with Matthew Dow, esp. with like/dislike buttons for article. Many comments (including several my) are just a'la "I like this article". Such comment has almost zero information and just a kudos to the author. The author (at least) should be able to see names of SA members who push one of these buttons.
    SDS
    Dec 22, 2014. 11:36 AM | Likes Like |Link to Comment
  • Retirement Strategy: My Exclusive 2015 Portfolio For Seeking Alpha Is Ready Right Now [View article]
    "The maximum number of stocks will be 20"
    Just a thought:
    What such portfolio represents? We know form statistics 101 that ~30 samples are needed to mimic normal distribution and more if the distribution is different. We know that stocks are not belong to the normal distribution. Hence 20-stock portfolio represents ONLY itself, we cannot learn nothing from it.

    This thought is not about FMBP (many other SA authors musses the same mistake), it is not about diversification or stock picking (both are needed IMO), it is about quality of information we can obtain from such portfolios.

    Let's avoid GIGO and spend out time and effort for more fruitful research.

    Happy Holidays!

    NB: I unchecked this article, so use SA email if you have any question on my comment.
    SDS
    Dec 21, 2014. 12:02 PM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    OFFTOPIC
    I hope SA will not kaput without notice. If they not we (DGis) can simple exchange real emails and find new forum.
    Another way is a DGI conference there we have meet face2face.
    SDS
    Dec 19, 2014. 07:22 PM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Minutemen,
    I kind of agree - I guess half were internet IPO. On another hand look on dynamic of DJ30 or S&P500 - they are far from passive.
    SDS
    Dec 19, 2014. 07:19 PM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Mike,
    I also like to delegate authority 8-).

    On serious note: Just look on Dow-Jones 30 - only GE is still there, other firms faced M&A or were deleted from the index. I own 36 from DG50 and hope to keep them forever. I watch other 23 (so I ignore only AAPL for now) and if they will be on sale I jump and also hope to keep them forever. But hope is NOT a strategy.

    SDS
    Dec 19, 2014. 07:17 PM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    OFFTOPIC
    Minutemen: Sorry I didn't understand that you was joking (English is not my native but I LOVE jokes).
    SDS
    Dec 19, 2014. 07:12 PM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Chowder,
    I didn't read comments, and just jumped on your question (because I follow you it appeared on my SA screen), so answer might be not original:
    I have no clue about beta of my portfolio but I worry about diversification because div. cuts are clustered in industry in time - see http://seekingalpha.co.... Coherent diversification supposes to help to deal with this - see http://seekingalpha.co...
    Sector/industry weighting is tricky - e.g. S&P500 follows market cap, many studies show that equal weight performs better, div. investors might weight by % of dividends delivered by each sector, I use quasi-equal weight adjusted to div. reliability (http://seekingalpha.co...). So I seek risk of div cut reduction from diversification.
    SDS
    Dec 19, 2014. 07:09 PM | 2 Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Sorry I don't have time to read all comments (see below), so may be I'm saying nothing new here.

    I thought on Mike's idea and afraid it might be not very good as initially seems. Before explanation I have to point that I read the article quite fast (as most of other SA articles). So let me start from I got: Mike formed perpetual closed pure passive buy and hold portfolio from 50 top DG stocks (from expert opinions) and the only activity (except initial purpose and automatic div reinvestments) will be with merges.

    Mike's portfolio is closed (only spin-offs will be included), so ANY other company (existing today or tommorrow's IPO) which might be DGis dream in ~ 10-25 years cannot be added to this DG50. If Mike started this DG50 in 1990 few companies from DG50-2014 be missed in DG50-1990. On another hand few DG50-1990 went out of business with obvious failures (Kodak, GM assuming that they were in DG50-1990) and due to Mike's rule "Do nothing" created 100% capital loss (well for pure experiment it might be OK).

    According to research based on the University of Chicago's CRSP equity market database, about three-quarters of US shares lost value between 1980 and 2008. All the market gain (~10% annual in this period) was due to just about 25% of the shares. Mike selected "cream of the cream" but I doubt that pure Buy & Hold of these 50 will outperform few ETFs he uses as benchmarks because these ETFs use "Buy & Monitor" approach.

    Now on comments:
    i) SA is kind of club, so let establish new club rule: If article gain more that 100 (or 200) comments, the author creates digest of these comments and post it in SA blog. The author can post such digest if number of comments is smaller than 100 by her/his wish.
    ii) Some comments are pure off-topic. Let's write OFFTOPIC ib the front of such comment. Let's use SA emails for such offtopic notes to particular reader/author.
    iii) I (and others) often just thank the author for good article. Let's ask SA to have "LIKE" button for article and the author can see who clicked this button.

    Happy holidays!
    SDS
    Dec 19, 2014. 11:05 AM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Mike,
    Sorry I read too fast and missed that you already bought. Anyway all are busy at the end of year, so counting is better to do by 1/1/20XX.
    I thought about B&H of DG50 today. I think that a real comparison is 20-25 years ahead and who knows that happens with ETFs you use as benchmarks. On another hand, after 25 years absolutely passive portfolio will be probably kind of zoo but not DG one.
    Anyway good luck!
    SDS
    Dec 18, 2014. 06:34 PM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Minutemen

    There are more than 50K publicly traded stocks in the world.... It would be cheaper to use Vanguard Total or Global Stock Fund if you have less than 100M$.

    SDS
    Dec 18, 2014. 06:26 PM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Mike,
    Good idea....
    I think it would be better to lunch this portfolio in the first trading day of 2015 (it will be easy in the future to count).
    Many DGis review in SA their portfolios too often, I think annual review of DG50 will be more than enough. I'd also track YoC and DCR of DG50....
    What is about DG100... DG500 (similar to S&P1500)?

    I understand that you intend to make ABSOLUTELY passive buy & hold portfolio. May be it is worth to create VERY passive portfolio where stock is sold ONLY after div. suspension? How to use these money?

    "In the event of a spin-off, the new company will join the DG50 as kind of a plus-1." OK but what to do if the new company will not pay div in first N years? I'd wait 3 years (so my N=3) and then sell. How to use these money?

    SDS
    Dec 18, 2014. 09:58 AM | 1 Like Like |Link to Comment
  • Ranking My Portfolio On Yield, DPR, Chowder Number And Discount Rate [View article]
    Mark
    I have seen several scoring/ranking systems in different books and articles but no one of them is back tested including my 8-). So I often ask myself about value of doing a scoring/ranking . Analysis is simple if good database is available (well it is big IF for amateurs).
    I think it good topic for research.
    SDS
    Dec 18, 2014. 12:45 AM | 1 Like Like |Link to Comment
  • Is A Dividend Cut The End Of The World? Analysis Of Dividend-Cutting Companies, Part I [View article]
    On2Freedom,
    Thank you for excellent analysis but I think some of your numbers and conclusions might be wrong. The reason that you used initial CCC list and at thet time David Fish didn't know about 5% of Champions, about 20% of Contenders, and about 35% of Challengers (http://seekingalpha.co...). Several (as far as remember ~ 70) of these "unknown" companies did cut dividends during the analyzed period.
    Many banks reduced dividends to 1 cent, so it seems that 90+% cut happens more often (I didn't analyzed really, so seems is correct word).
    SDS
    Dec 18, 2014. 12:34 AM | Likes Like |Link to Comment
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