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  • Dividend Buy Of The Month: Target Corporation [View article]
    Nicely done, and good purchase…..for the right reasons. I also have equal weight holdings between TGT and WMT -- the only retailers I think I need to own, as they cover a lot of territory all by themselves. (And, as we know, not necessarily the same territory.)

    I think all the data theft and Canada stuff will eventually play out. A few years ago, when I took my initial position in WMT, there was a lot of SA chatter about the investment being a "decade of dead money," etc. Charts supported that, but they also showed that divvys and earnings were growing throughout that period. Eventually WMT broke out of its range for good and -- ya' know what -- I don't see that argument being made about the company any more. I'm fairly certain TGT will get over these hurdles and we won't be talking about them at all in 3-5 years.

    I've really enjoyed your blog and the fact that you're now contributing to SA more frequently. Good luck, and keep up the great writing!
    Jan 15 06:51 AM | 1 Like Like |Link to Comment
  • Seasonality Suggests Owning Railroads In Q1 [View article]
    No Norfolk Southern? Would like to know your thoughts on that RR……Thanks!
    Jan 3 06:59 AM | Likes Like |Link to Comment
  • Blue-Chip Investing And The Back End Of Compounding [View article]
    Great answer – since I was already using a hybrid approach, and I’ll put some more thought into simply DRIP-ing a few of my “tentpole” holdings.

    The only problem I’ve ever had with pooling divvys is similar to arguments I’ve seen about selling DGI stocks: Sure, you can sell a winner if you want, but do you have a replacement stock that’s as good or better? In other words, is it better to DRIP the JNJ long-term and keep building that position, or is it better to add to an already-full position in IBM because the market temporarily doesn’t like the company? I know, I know – there’s no true way of knowing which answer is correct until all is said and done……

    What nice first-world problems to have.
    Nov 7 03:46 PM | Likes Like |Link to Comment
  • Blue-Chip Investing And The Back End Of Compounding [View article]

    Great article, as usual. But it got me debating the DRIP vs. strategic deployment of divvys question…..What’s your opinion and approach?

    Personally, I tend to take the divvys as cash, then redeploy them at some point to purchase either a new (preferably undervalued) position, or increase my holdings in a current position trading at fair value or less. However, with free DRIP services I modify that approach on occasion – right now, I’m taking my dividends in cash except for my positions in CAT, DE, IBM, GE, etc., where I feel like I can DRIP them at a nice discount. Once every couple of weeks I’ll review my DRIPs and decide whether to add or remove holdings – depends on valuation and where the market is taking them at that point in time.

    I’m always conflicted because your JNJ examples, I assume, include regular dividend reinvestment along the way. That’s a good argument for DRIP-ing your core holdings, but there are plenty of other good arguments for strategic redeployment.

    There isn’t a clear right or wrong answer here, but I am curious about your thoughts…….Thanks!
    Nov 7 11:37 AM | Likes Like |Link to Comment
  • Dividend Growth Investing And Beating The S&P 500 [View article]
    Dave -- Excellent article, as usual. I measure my results like you do, so I have no idea how I fared against the S&P (nor am I curious to find out). To me this is one way that DGI folks might differ when applying their principles. Just as you and I may have different entry/exit criteria, someone else may need to benchmark their results against the S&P. Nothing wrong with that approach -- it's just not something I do myself.

    BTW -- did you get to see any of Seattle on your Alaska trip? I'm a longtime Seattleite currently doing time in Georgia. It's been a fun experience, but I definitely don't get the South.....yet.
    Aug 6 08:19 PM | Likes Like |Link to Comment
  • The 7 Habits Of Highly Effective Dividend Growth Investors [View article]
    This may be one of my favorite SA articles, which is saying something when you're writing alongside Crosetti, Van Knapp, Carnevale and McAleelan. Every "habit" rings true -- even the ones where I need to show some improvement. Thanks for the inspiration, and thanks for the great read!

    Disclosure: For the record, I'm not praising this article just because I made a sizable purchase of $WAG last November......which I'm still holding.
    Jul 31 09:09 PM | 1 Like Like |Link to Comment
  • Dividend Stocks: Lose-Lose-Lose Proposition In Intermediate Term [View article]

    I'm a DGI, and I not even I can support your comment.

    ** It's not a new paradigm. Dividends have been the bulk of market returns for well over a century. If anything, it's an "old-fashioned" way to invest.

    ** There are lots of academic studies supporting DGI. It's not the only way to play the market, but a proven one.

    ** It's not immune from market fluctuations. However, from time to time Mr. Market makes it a little harder or a little easier to identify opportunities, as the case may be.

    ** Not all DG risks can be determined in advance. Some dividend cuts or evolving business conditions can't be spotted from a mile away.

    ** DGI is neither fool-proof or risk-free. No investing method is.
    Jun 7 05:42 PM | 10 Likes Like |Link to Comment
  • Dividend Stocks: Lose-Lose-Lose Proposition In Intermediate Term [View article]
    I guess I'm not following -- if dividend stocks head lower by 6%-8% at some point over the next few years, my entry point at that time just got better. Lower entry point, higher yield...what's not to like?
    Jun 7 12:19 PM | 14 Likes Like |Link to Comment
  • Dividend Stocks: Lose-Lose-Lose Proposition In Intermediate Term [View article]
    I certainly hope you're correct. As a dividend growth investor, my long-term goal is to grow my income stream year over year and utilize the power of compounding. That's not to say I don't care about capital gains, but it's not my main focus. Personally I would welcome a few years when I could purchase JNJ for a P/E of 14 or less, so I'm not necessarily troubled by any of those three scenarios on the surface.

    I have a 25+ year time frame, so what happens in the market over the short term (and to me the next couple of years is short term) doesn't matter. As long as company fundamentals remain intact, that to me is a buying opportunity. Investors made it through the 1973-1974 recession, the October 1987 crash, the tech bust and the mortgage meltdown. "Blood in the streets," as it's often said -- downturns are a great time to zig while investors zag. Dividend investing won't go away, it just won't be as popular as it has been recently.
    Jun 7 12:12 PM | 11 Likes Like |Link to Comment
  • Is Wal-Mart A Permanent Dividend Holding? [View article]

    Yet another great article. Not sure how you have so much time to write -- I myself am having a hard time keeping up with all your output. But don't stop doing what you do....

    I own 2 retail stocks -- WalMart (WMT) and Target (TGT). There are many others I could own, but those two cover ample ground all by themselves. I don't think either are going away any time soon (TGT is just starting to expand into Canada, for instance), but as you've demonstrated any retail giant faces a number of potential business threats. But it's unlikely that any of those threats, if they emerge, will take down a company in a short period of time. It's not like people woke up one day and suddenly realized that JCPenney (JCP) or Sears (SHLD) were in serious trouble -- they've both been experiencing a slow bleed that's been going on for many years.

    This is exactly why we call it "buy and monitor".....technologies change, consumer tastes/preferences change, and business outlooks change. If either WMT or TGT begin to stumble, most likely there will be ample warning over multiple years. Even if I finally needed to make a change in my portfolio 10 years from now, I bought both WMT and TGT at fair prices and will have had at least a decade of price appreciation and dividend payments under my belt. Barring some catastrophic event, if I must exit either position the likelihood of doing so at a significant loss (if any) is fairly slim. Dividend growth investing gives me the confidence that I can still be a long-term "winner" even if my stock picks don't hang around as long as I do.
    May 25 10:39 AM | 3 Likes Like |Link to Comment
  • Is It Worth Holding Cash And Being Patient? [View article]
    Inzkeeper --

    Just know that you and I are in the same boat (as are many others). I had a rollover come through in early November and was able to take advantage of several bargains in the post-election selloff. (WAG under $33? Thank you....) But, there were several potential targets (JNJ, PG, NSC, UNP and IBM) that I've simply watched get farther and farther away from my target price. I'm still waiting for most of those, although I was able to jump into IBM just recently on the earnings dip. (And CAT. And BBL.)

    So be patient, monitor your watch list and be ready for opportunities when they come up. I may not get into JNJ or PG any time soon (at least for what I'd like to pay), but that doesn't mean I can't take advantage of something that's handed to me with a large margin of safety. I currently have full positions in WAG and AFL, but I probably would not have loaded up on either if the market hadn't beaten them down so much.

    It seems frustrating to "do nothing," but time is your friend. It's frustrating to sit on cash, but patience can really pay off in the long run. Good luck!
    May 7 12:42 PM | 1 Like Like |Link to Comment
  • When To DRIP And When To Redeploy Dividends Manually [View article]
    Nice article, as usual. I take a hybrid approach to dividends – not as “complicated” as you describe, but I’m a fairly uncomplicated guy so it works for me.

    About 35% of my portfolio is made up of large core holdings like CVX, MCD, KO, JNJ and PG. I DRIP these divvys so I’m always adding to my core, and do so mainly because these stocks don’t go on sale as often as I’d like. For the remaining 65% of my portfolio, however, I take the divvys as cash and deploy them toward (a) current holdings that are undervalued, or (b) a new position that is undervalued. I also make monthly contributions to my account, so my divvys are added to my new $$. I'm generally making a purchase or two every quarter (or more frequently if there's a particularly good bargain out there).

    As someone in the accumulation phase, I think it’s important to use my divvy income to make additional purchases. There’s really no wrong answer here -- DRIP some or all of those divvys, or take everything as cash and identify positions with the best long-term DGI prospects. There are compelling arguments for either method.

    Thanks for the great articles!
    Mar 5 08:36 AM | 3 Likes Like |Link to Comment
  • Optimizing Returns By Selling Overvalued Companies [View article]
    Actually, in your example I think you've harvested a $20K capital gain but you've lowered your incoming dividend amount. In other words, if shares were $100 apiece, you'd be selling 200 shares to get you back down to your original $100K investment level. But that's 200 less shares that you'll be earning a divvy on going forward, and you'd be putting those proceeds towards a new stock yielding less.

    Obviously, the amount of time you've held your original stock purchase can affect the calculation. You may have originally purchased a 4% yield, but after a few divvy increases your YOC may be higher and help make up for whatever you might "lose" by taking your $20K cap gain. And of course there are tax issues, as you mentioned.
    Jan 17 09:49 AM | Likes Like |Link to Comment
  • A Dividend Growth Investor's 5-Step Preparation Plan For Earnings Season [View article]
    Bob --

    Fantastic article. I have also found earnings season to be a good time to establish or add to my positions. Last October one of the stocks I was watching, $DOV, plunged quite a bit after beating on earnings but missing on revenue. I was able to establish a small position that is currently up 18.6% in 3 months. (If only there was a guarantee that it would stay that way....)

    I could use options and get paid for waiting, but I've never been comfortable with that process. (For my purposes, that moves me more toward a "trading" mentality that I'd like to avoid. Plus it involves more work, and typically try to avoid that at all costs.) I will use limit orders, but usually when a stock is very, very close to my target price. Most of the time I prefer to have the "control" you mentioned over where my $$ is going. After all, if I had my October funds locked up over a potential $EMR purchase, I would not have been able to take advantage the $DOV dip when the opportunity fell into my lap.

    Love your articles......

    Jan 16 03:41 PM | 1 Like Like |Link to Comment
  • Why I Choose Dividend Growth Investing [View article]
    Fantastic article. I am also a DG investor, and can particularly appreciate the simplicity factor, which doesn't always get a lot of play here on Seeking Alpha -- many contributors are trying way too hard to demonstrate how "smart" they are. I'm not that smart, but I'm smart enough to know it.

    But I can do my homework. I use David Fish's CCC lists to filter potential stocks against the criteria that's important to me. Then I identify possible candidates for purchase, tag them in SA, and start learning all I can about those businesses and what others (professionals and non-professionals) are saying about them. When the time is right, I may or may not pull the trigger -- it all depends on what I learn.

    Foolproof? Nope -- in hindsight, not every decision I make is going to be a good one. But then, the professionals don't always make good decisions either.

    If someone else can make more in the market, and quicker, more power to them. I don't want to be rich by next Thursday, I want to have a fairly reliable income stream when I retire in 20 years.

    I also want David Crosetti's cost basis. That needs to be said here as well.
    Nov 26 11:15 AM | 9 Likes Like |Link to Comment