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  • What Is Due Diligence? Here's How I Do It [View article]
    I guess my English dictionary & spell checker confuse me - while spell checker dislikes "failsafe" Chuck used, dictionary gives 3 quite different translations for failsafe, fail-safe, and "fail safe" words.
    Does Chuck mean that any DD cannot guarantee that stock price drops down, dividend cut, etc? In this case I agree.

    SDS
    Oct 9, 2013. 03:28 PM | Likes Like |Link to Comment
  • What Is Due Diligence? Here's How I Do It [View article]
    Jon

    I refer to studies of several thousand investors performance based on brokerage data (as far as I remember they earn less than 4% in 10% market). No doubt that some individuals outperform the market and no doubts that "do nothing" is usually best approach, but again statistically individuals underperform significantly. So who wins?

    SDS
    Oct 9, 2013. 03:21 PM | Likes Like |Link to Comment
  • Super Dividend Contenders: October 2013 Edition [View article]
    OFFTOPIC.

    David,
    There is some "mystery" with Japanese ADRs: US investor often get dividends significantly later than Japanese investors in "original" stocks. Sometimes only Japanese investors receive money while US are not. This observation beyond NTT and DCM and I don't know why....
    SDS
    Oct 9, 2013. 12:09 PM | Likes Like |Link to Comment
  • Super Dividend Contenders: October 2013 Edition [View article]
    John,
    IMO you better to confirm your idea than to expand it. "Words are cheap, data are important" (the slogan popular in Intel).
    SDS
    Oct 9, 2013. 12:04 PM | Likes Like |Link to Comment
  • What Is Due Diligence? Here's How I Do It [View article]
    Mike,
    I read studies that a) active Mutual Funds underperform the Market (after the fees at least), and b) individual investors also underperform active Mutual Funds (mostly because bad timing).
    So if 2 big groups underperform the Market it should group which outperform the Market. Recent tale was "Hedge Funds" but it seems that this myth is debunked now (no surprise based on their over-greed fee structure). Myth popular on SA that DGis outperform the Market but being a DGi I consider that we do not have enough historical data to proof it (that is why I run the project http://seekingalpha.co... and
    http://seekingalpha.co...).
    .
    So who is really outperform the Market?
    SDS
    Oct 9, 2013. 12:01 PM | Likes Like |Link to Comment
  • What Is Due Diligence? Here's How I Do It [View article]
    Good question although it might be just semantic, so overvalued = trades at a premium.
    Oct 9, 2013. 11:53 AM | Likes Like |Link to Comment
  • What Is Due Diligence? Here's How I Do It [View article]
    OFFTOPIC:
    Chuck mention that he subscribes to Morningstar. I access Morningstar services due to local University library subscription.
    For almost any company Morningstar report in pdf format is downloadable via link in upper right part at "Quote" page of a company. Previously I got good pdf report (~ 8pages) for company with analyst options, financial data, Bulls/Bears Say, etc. Now I get 1 page pdf report with only financial data and for the rest I need to go to different pages on their WWW site which is time consuming.

    Chuck/Folks with Morningstar subscription:
    What kind of pdf report you get now (1 page or several pages, e.g. for XOM)? Please answer by SA email.
    Thank you.
    SDS
    Oct 9, 2013. 11:26 AM | 1 Like Like |Link to Comment
  • What Is Due Diligence? Here's How I Do It [View article]
    Chuck,
    Thank you very much for sharing your methodology. Rephrasing Bible (as far as I know) "it is always better to teach how to catch a fish than to give a fish".

    I often involve in reliability analysis of new technologies/products and try to answer 3 major question "How to break it?", "To what limits can it sustain?", and "How long can it work?". I try to answer almost the same questions in my dividend investing (some results in my SA blog).
    In contrast with technologies/products kind of engineering or real scientific experiments are almost impossible in investing. So I'm puzzling with your statement "Therefore, as essential and necessary as I believe due diligence is, it must also be recognized that it is not failsafe." How do you figure out if your DD is "fail safe" or not? (In my pure English failsafe = fail safe).

    Before your first step as indicated in the article As a dividend investor (DG/HY) I look on dividend history and yield (esp. if DCR=0 or dividends are random) first. I stop if data are non-impressive(this is 10-second crash test I used for more than 25,000 companies). Otherwise I read company description and try to understand what they are doing and estimate if their generic product/service will be needed and not replaced by known alternative in the future (let say in 10 years). It save me lot of time although I can drop some companies I misunderstand.
    Do you think that I reject too many? Can company presentations really change an investor opinion if we know that CEO are often perma-bull on the firm and that presentation's info is usually already priced on?

    Small question on "effective due diligence process is, and should be, investment-philosophy agnostic." I think I understand (and agree with) your idea that DD depends on investment style but definition of agnostic (http://bit.ly/1gqi9iy) is quite different. Do you use correct word? What do you actually mean? Also for new SA readers it would be nice to have a paragraph about your investment philosophy in this excellent article.

    SDS
    Oct 9, 2013. 11:13 AM | 1 Like Like |Link to Comment
  • My Thoughts About “Stay 100% Investing” [View instapost]
    Canadian,
    I was quite lucky (well I'd like to pretend to be smart but lucky is more correct) to quite market in Feb. 2000 and Apr. 2008 to have cash to invest after crashes. I do "manual deployment" of dividends - thank you for the good term.
    SDS
    Oct 9, 2013. 09:35 AM | Likes Like |Link to Comment
  • Dividend Growth Strategy Needs Time [View article]
    I agree investor needs 20+ years for all fruits of DGI, hence short term price performance is almost irrelevant.
    IMO graph title should be RELATIVE yield growth. I think it is the same as YoC.
    SDS
    Oct 8, 2013. 09:11 PM | Likes Like |Link to Comment
  • Why Building A Cash Position For My Dividend Income Portfolio Makes Sense [View article]
    Guess who wants you to have fully invested? Answer is here http://seekingalpha.co....

    “Don't underestimate the value of doing nothing, of just going along, listening to all the things you can't hear, and not bothering.” Winnie-the-Pooh. I think it is applicable to cash in today's market.

    SDS
    Oct 8, 2013. 10:45 AM | Likes Like |Link to Comment
  • Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [View article]
    See 7 Oct, 08:18 PM update.
    Oct 7, 2013. 08:20 PM | Likes Like |Link to Comment
  • Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [View article]
    David,
    I think that if you run FAST Graphs for "unknown" CCC companies with small institutional/analysts interest - (see http://bit.ly/17cBahu and http://bit.ly/VJDOXn), you find that their avarage P/E is smaller than well-known CCC companies have.
    The rest (positive EGR, trust) is probably the same.
    SDS
    SDS
    Oct 7, 2013. 08:18 PM | Likes Like |Link to Comment
  • Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [View article]
    I don't think so.
    Oct 7, 2013. 07:02 PM | Likes Like |Link to Comment
  • Which Popular Dividend Growth Stocks Are 'Always' Overvalued? [View article]
    1/(P/E) is ~6.67% for P/E=15 and "magic" DGR is ~ 6.55%
    Oct 7, 2013. 06:58 PM | 1 Like Like |Link to Comment
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