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chowder

chowder
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ABT, AFL, APD, ARLP, AT, BDT, BF.B, BMO, BP, BRK.A, BRK.B, C, CBRL, CINF, CL, COP, CTL, CVX, D, DE, DRI, ENB, EPD, EXC, FSP, FTR, GD, GE, GILD, GIS, GPC, HCBK, HCN, HGIC, IBM, INTC, JNJ, KMB, KMI, KMP, KO, KRFT, LEG, LINE, LNCO, LO, MAA, MCD, MDLZ, MDT, MHR, MKC, MMP, MO, NFLX, NHI, NLY, NNN, O, OHI, PBI, PEP, PG, PM, PNY, PSX, RIG, RY, SBSI, SDRL, SDY, SNY, SO, SPY, SYY, T, TE, TGT, TIP, TOT, TUP, UHT, UNP, UNS, UTX, VIG, VVC, VZ, WAG, WEC, WM, WMT, WU, XLU, XOM
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  • Retirement Strategy: The Absurdity Of Believing That Dividends Don't Matter In Retirement [View article]
    When I look at a company to determine quality, it's the company's financial strength that I'm looking for. Using Value Line as an example, I look for companies that rate a 1 or 2 for safety. I can find both dividend and non-dividend paying companies that qualify. However, I go a step further and eliminate the non-dividend paying companies from consideration.

    I don't question the non-dividend company's ability to create cap appreciation, I simply don't wish to count on favorable market conditions in retirement to sell and provide an income. I prefer to receive my dividends which come regardless of market conditions and I don't have to touch the principal unless I choose to.
    Aug 12 01:18 AM | 26 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    martin, you may be right. I don't own IBM personally but I did make an initial purchase, which represents a 1/4 position, in a portfolio of a young person with 30 plus years to retirement.

    I'll wait until next year to determine if I add to the position or not.

    Good luck to you as well.
    Aug 12 12:01 AM | 1 Like Like |Link to Comment
  • Frothy Market, Impending Correction - What's A Dividend Growth Investor To Do? [View article]
    cross, you took my comments out of context. I know what the legal definition of total return is. It isn't a primary concern to me.

    The only thing that concerns me is knowing how much I need, when I need it, and knowing that it will be there, even if it means I have to save more than originally planned.

    I apologize if my tactics and results don't meet your goals. I'll try to do better in the future.
    Aug 11 11:32 PM | 7 Likes Like |Link to Comment
  • Kinder Morgan Has An Ace In The Hole [View article]
    Kinder is no longer going to be a MLP. Everything is going into KMI. I am going to keep KMI in it's entirety as Kinder has announced he will grow the dividend at 10% per year out to at least 2020.

    That works for me!
    Aug 11 11:16 PM | 5 Likes Like |Link to Comment
  • Dividend Reinvestment - Yes Or No? [View instapost]
    I think Scottrade has a similar plan called FRIP. I don't know the particulars as I don't use them. I've read comments by others.
    Aug 11 11:13 PM | 1 Like Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    >>> The thousands of people following this author, who think looking at S&P Capital IQ or Google Finance or MSN Money for 5 minutes is the right way to evaluate individual equities, need to ask themselves a few basic questions..... <<<

    I can't speak for the thousands of others because a lot of them may share your view about the research Chuck puts into his personal selections, and you and they would be wrong.

    On many occasions I have read where Chuck does quite amount of research on a company in order for it to make his watch list. I do the same thing.

    Once the watch list is put together, Chuck is showing how he looks for value using his service and other various sources, but only after the due diligence has been done.

    You probably haven't read all of Chuck's articles and that's probably why you came to the wrong conclusions.
    Aug 9 07:03 PM | 17 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    Miguel, it's a matter of timing with regard to cap appreciation.

    As a dividend growth investor, I expect to show cap appreciation on par with the market or better over a longer term period. I don't expect to see my portfolio value rise every year or keep up with the market every year.

    I do expect my income to grow every year though.

    Some times growth and income are on the same page. At other times they diverse and it's those times where one needs to decide which is more important, the growth or the income. If it's growth, they may have to start liquidating positions to protect principal, or use some form of option trading.

    If income has priority, one has the luxury of doing nothing except collect the income and decide how to spend it.
    Aug 9 04:18 PM | 3 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    R.J. price may drift but that dividend isn't going to drift and I'm betting the dividend growth will continue.

    There's is a significant difference of opinion from those concerned with cap appreciation and those concerned with dividend growth.

    IBM may continue to lag the next few years yet still be able to grow the amount of income this asset creates.

    There's a big difference between a growth & income strategy as opposed to an income & growth strategy.

    I'm looking at income & growth. IBM would qualify under that criteria as a buy right now. If I were looking at growth & income, maybe it wouldn't qualify from a timing aspect.

    A drop in price to $170 is only an 8% draw-down, hardly anything to shudder about, but certainly good enough to add to the position if purchased today. Anyone looking to hold this for the long-term would hardly know the difference years from now.
    Aug 9 01:33 PM | 2 Likes Like |Link to Comment
  • A Dividend Growth Portfolio For New Investors And Retirees Yielding 4.8%, Part 1 [View article]
    The MLP's that I own are KMP, MMP and EPD. I also own KMI and KMR in the Kinder family. These are among the best of the MLP's from a financial strength aspect in my opinion. If I were to add another it would be PAA.

    I have KMI and KMR in non-taxable accounts, the others are for taxable accounts.
    Aug 9 01:23 PM | 5 Likes Like |Link to Comment
  • A Dividend Growth Portfolio For New Investors And Retirees Yielding 4.8%, Part 1 [View article]
    My son is currently 29 years old. Here's how we approached his portfolio.

    When we started, I made a list of 20 companies we would like to see him own one day. As soon as he accumulated $1,000, he purchased a company from the list. When he accumulated another $1,000, he bought another company.

    At that time, $1,000 represented a full position. He kept adding companies one at a time, $1,000 at a time, until he owned 10 companies. Then he went back and started adding to each of those companies $1,000 at a time again, thus making $2,000 a full position.

    He then started adding new companies while adding to old companies. He's now up to a point where $4,000 equals a full position and he currently owns about 30 companies.

    It takes time to build and grow, but that's the approach we took.
    Aug 9 11:20 AM | 11 Likes Like |Link to Comment
  • Dividend Growth Investors - Mind Your Own Business [View article]
    >>> Also, am I the only one who think that commentators that denigrate DGI either have a inferiority complex or have a vested interest in discouraging the practice? <<<

    No. Like most humans, they take it personal. It's an affront to their decision making process.
    Aug 9 11:14 AM | 13 Likes Like |Link to Comment
  • I Feel Like A Thief Buying IBM At Today's Low Valuation [View article]
    @Rohrshack ... >>> Can you identify for me some dividend producing companies, in addition to IBM, that I should be considering at this time? <<<

    Tough one, depending on what you might be looking for.

    If you wish to look at high quality companies selling at a decent discount to fair value (I only looked at my watch list, not the entire market of companies), I see where MA is selling at a 14.4% discount to fair value according to S&P and an 8.6% discount to fair value by M*. I prefer to see at least 10% by both, but this is close enough.

    However, MA doesn't have that long history of strong dividend growth and although S&P and M* thinks they are selling at a discount, the PE doesn't confirm it. The normal PE for the last 10 years has been 23.7 and it's currently at 26.4.

    CB is selling at a discount, 24.3% according to S&P and 9.4% according to M*. However, CB almost always sells at a discount so I'm thinking I would need to see M* agree with S&P before I would consider.

    The dividend growth is decent though. Over the last 15 years they have grown the dividend at an annual rate of 7.8%.

    Some could argue that XOM and CVX are undervalued but they too always sell at a discount. Thus, I would consider them more fairly valued than discounted.

    CSCO is selling at a decent discount to fair value but it doesn't have a decent dividend growth history.

    All of these companies have some of the highest financial strength ratings and are worthy on consideration if one is willing to pay up to fair value.

    Only IBM presents a deep discount to value, high financial strength ratings, and an excellent dividend growth history having grown the dividend at an annual rate of 16.8% over the last 15 years.

    I don't expect that rate to continue but I'd be happy as long as it stays above 8%.

    I kept my search to companies with the highest Value Line ratings for safety and were on my watch list.
    Aug 9 11:04 AM | 6 Likes Like |Link to Comment
  • Frothy Market, Impending Correction - What's A Dividend Growth Investor To Do? [View article]
    >>> Ours is 87% income optimization, 13% aggressive growth <<<

    Ron, this is a great comment.

    I catch some grief over Project $3 Million because it's an all dividend growth portfolio to date and no pure growth companies while the owner of that portfolio is just 29 years old.

    I will eventually start investing in some pure growth companies like CELG, AMZN or AMGN one day, but only after the portfolio has met some intermediate term objectives, which require owning specific dividend growth companies first, and having the intermediate term goal of that portfolio producing over $500 per month in dividends.

    I do expect to see that portfolio with a ratio similar to yours where it will have some aggressive growth companies.

    But first patience. I'm still establishing the base, and I only have so much money to work with. ... Ha!
    Aug 9 09:54 AM | 6 Likes Like |Link to Comment
  • A Surprising New Portfolio Diversifier [View article]
    Yes, utilities are interest rate sensitive. And yes, if T-bills become attractive again, some people will switch from utilities to T-bills. The question is when?

    By the time T-bills are attractive, I may have 200% profits or more in some of my utilities. Would the cap gains tax be worth the switch?

    There have been quite a few utility mergers in the last couple of years as utility companies are strengthening their financial position against those higher interest rates.

    Utilities may take an initial dip in price, but they are also going to pass on the higher cost of interest rates to the consumer. This is why I think it is imperative to invest in the companies with the friendliest regulators. It will raise the odds of recouping the full cost of doing business.

    I wouldn't advise overpaying for utilities, but I don't mind paying fair value for the most financially sound companies. Longer term I believe they are going higher. Baby Boomers need a place to generate income and fixed income isn't doing it for them in the form of bonds, CD's or T-bills.

    Long: AVA, D, LNT, PNY, SO, SRE, WEC and XCEL
    Aug 9 09:05 AM | 6 Likes Like |Link to Comment
  • Frothy Market, Impending Correction - What's A Dividend Growth Investor To Do? [View article]
    Most investors fail to reach their income objectives because they didn't have that objective from the start.

    The theory is that they will go for growth and the growth will be there when they need it, and at that time they will seek income producing investments.

    That strategy failed miserably for those who were ready to retire in 2006, 2007, 2008 and 2009. Many had to try to go back to work or simply put off retirement.

    Waiting until you're ready to retire isn't a good time to find out your strategy was unsuccessful all along.

    How about those ready to retire now?

    Many new income investors are forced to chase yield in order to achieve their income objectives. Many of those people are reading this comment. I've seen their comments on SA as they try to adjust their income holdings to something more high quality.

    The S&P 500 is overvalued. After a lifetime of investing in undervalued companies, are those same people going to change over into overvalued companies?

    Over the last 5 years the market has an annual rate of return of 15.9%. Are we to assume the market will grow at an annual rate of 15.9% over the next 5 years? ... Is this the time to switch from a lifetime of growth to income investing for the best possible results? Something is better than nothing of course, but I'm sure the anxiety level is quite high for those who must do it.

    My attitude is that I don't need the income now. However, I can use that income to purchase other income producing companies and use the income from those companies to buy even more.

    Since the end result is going to be income anyway, I'm suggesting that people start from the beginning to insure it will be there, and you'll be doing it at a time when you can afford to be conservative. You don't need to take on the risks of those who didn't start managing for income years before they needed it.
    Aug 9 08:44 AM | 7 Likes Like |Link to Comment
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