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smlaker

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  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    rraty, if I might add something here. Growth investors have used this approach for many years. Eventually if the gain is enough (doubles, to be exact), then you can sell 1/2 a position and you are "playing with the house's money", an old gambling trick.

    The quandary for a dividend growth investor seems to be that this concept goes against the grain of the traditional DGI mantra of "buy and hold"; sometimes forever. At least if the dividend is still above your target amount (which it wasn't for Robert, who wrote this article), and the dividend is still growing at a rate faster than inflation.

    As I Iearn more about this technique, the higher the market goes, the more the articles and comments here on SA seem to be skewed toward "selling" and not so much "buying". It's become a good dilemma to face, as the "Bernanke put" pushes the market higher and higher.

    We are going to learn a lot more about the "selling" side of DGI over the next several weeks or months!

    SM
    Sep 15 11:58 AM | 4 Likes Like |Link to Comment
  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    HackFab, I think we all have the same problem you have (Ha!, Ha!); that is to say, healthy gains in our dividend growth positions. I can't think of a problem I would rather have. Well, maybe so much cash I can't find enough mattresses to stuff it into. But I digress.

    I started DG investing a number of years ago. Slowly. Happened to be during the 2008 downturn. Couldn't have been a better time to grab some real bargains. Unfortunately, I didn't get a lot of stocks, but the ones I do have are way, way up, such as Chevron. Now that I considered myself better trained, I am ready for more positions going forward.

    I could sell CVX and walk away with nearly a 40% Cap. App. gain, but I'm already having trouble finding places for the cash I do have. I've been asking for help on various posts on SA for help in locating "fairly priced" DGI stocks, to round out my portfolio. So, selling CVX would do me little good right now, since I am trying to build a "safe" income portfolio, as I near retirement.

    Maybe selling a part position is the answer. Have a few others in the same boat.

    Wish I had a better crystal ball . . . . . . . . .

    Good luck going forward,

    SM
    Sep 15 11:44 AM | 1 Like Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    OK. I'll check it out.
    Sep 15 11:16 AM | Likes Like |Link to Comment
  • Trading Silver Wheaton On 'QE4-Ever' [View article]
    Good article. People have to be reminded periodically about Silver Wheaton's unique business model (there other silver streaming companies, but SLW is the 800 lb. gorilla). This model makes it a good investment going forward. However, like every other fad, it can be overdone in short order, so the entry price is not irrelevant.

    I bought years ago at less than 1/2 the current price, saw it run up into the 40's then fall back. I still hold and will for many years. A small but growing dividend and the possibility of $200/oz. silver keeps me holding on.

    Thanks again.

    SM
    Sep 15 11:13 AM | Likes Like |Link to Comment
  • Microsoft (MSFT) needs to hike its quarterly dividend by $0.03/share at next week's board meeting to keep investors happy, says MKM. The company announced a $0.04/share hike at last year's meeting, though a more modest increase is expected this time. MKM, which rates Microsoft a Neutral, is cutting its estimates due to both the usual set of PC-related concerns, and worries mixed reviews and OEM concerns about Windows 8 spell "a more elongated upgrade cycle." (previous[View news story]
    Here's the reasoning. Microsoft is no longer a growth company. The languishing stock price and slow earnings growth (if at all) tells us that. It's future, if it is to survive as a stock (not a company) is to become a dividend growth company. That's the usual path for a mature company to follow. See Clorox, Proctor and Gamble, Coke, Altria, etc.

    If Microsoft does not increase its dividend enough to keep up with inflation, and then some, it will not succeed as a dividend growth stock either. It then becomes a GM or Ford or Xerox. Neither a good growth company nor a good dividend payer. That spells doom for the stock, if not eventually the company.

    So, ask yourself this. Why would you own a stock with little prospect for capital appreciation (increase in stock price) and poor income payouts that don't keep up with inflation? You would be crazy to do that.

    Hope this helps.

    SM
    Sep 15 10:56 AM | Likes Like |Link to Comment
  • Building A DIY Dividend Portfolio (Part 4): When Should You Sell A Stock? [View article]
    To calculate 0.5% of a number, multiply that number by 0.005. Remember, percentage needs to be divided by 100 before multiplying.

    0.005 x $100,000 does indeed = $500.

    I make a better engineer than investor. Hope this helps.

    Regards,

    SM
    Sep 14 11:14 PM | Likes Like |Link to Comment
  • Building A DIY Dividend Portfolio (Part 4): When Should You Sell A Stock? [View article]
    Floridagirl, you're my kind of investor. Any thoughts on good DGI stocks, which aren't yet too inflated in this Bernanke-driven market?

    Would you consider either CLF or KRO now, and use a stop loss in case this market turns?

    Regards,

    SM
    Sep 14 11:10 PM | Likes Like |Link to Comment
  • How To Raise Portfolio Income By Selling Overvalued Companies [View article]
    Great article and somewhat different advice than that given in Chuch Carnevale's article of today, which suggests that ignoring price when buying is OK (if I understand him correctly), providing the stock is still growing dividends and earnings. I prefer your approach. I think there are times to buy and times to sell, and even times to just sit and watch to see what happens and they ain't necessarily the same time, even if a stock can almost walk on water (KO, PG, et. al.).

    You seem to approach investing in a totally logical manner, something my wife frequently accuses me of doing way too much in all facets of my life. Must be the engineer in me. But in the world of investing it is the only way to go. Gotta somehow take the emotion out of the equation.

    Here's the best part:

    "Holding an overvalued company is more risky to your capital than holding an undervalued company. So by selling the overvalued [company] and putting the same capital to work in an undervalued company, you have reduced the risk to your capital."

    Great logic and I just love logic.

    Buying low, selling high has always made me money. Buying high and hoping to sell higher has not.

    Thanks,

    SM
    Sep 14 10:55 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    Any Canadian bank stocks look interesting to you now? I understand they forego the dividend withholding in U. S. IRA's.

    Thanks in advance,

    SM
    Sep 14 09:24 PM | Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    It was indeed aimed at you, and thanks for your comments.

    One post above theorizes that as the retail investor moves back into the market, now that Bernanke has opened the money spigot, investors will soon rotate out of the "dull, boring" DGI stocks and back into the high-flying growth stocks. Hey, that's exactly what I would have done, even as little as 10 years ago. Maybe I hold onto cash for a while??

    Had enough of that high-flying stuff. It's "bored stiff" for me going forward. If I could just stay away from those high-beta DGI stocks . . . . . . . . .

    Thanks,

    SM
    Sep 14 09:20 PM | Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    Thanks for something tangible to start from. My list has just grown by quantum leaps. Also, I need to take a fast, hard look at subscribing to fast graphs. So much time and so little to do (reverse that!!).

    I particularly like your "DISCLAIMER". Truer words could not be spoken.

    Regards,

    SM
    Sep 14 09:15 PM | 1 Like Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    Most excellent advice. Would like a good utility stock. Every time I find one, I find something not to like about it. Currently own PPL. Bought because of the low P/E and good SA vibes. If you have any other ideas, I would appreciate them. High debt ratios seem like a real bad idea, going into a possible recession (although everyone needs electricity, even when times get tough).

    BTW, I bought INTC so long ago that it would have to really, really tank for me to be in the red. So, I'll ride it out, unless they cut or freeze the dividend. Like you, I would hesitate to buy INTC now, just like I hesitated to buy CLF a couple of weeks ago. I had my finger on the buy button at $34 and chickened out. May yet turn out to be the right decision, although I'm smarting today!

    Yeah, should stay away from the high beta stuff, but I guess I'm addicted to the probability of at least some capital appreciation. I need a little padding to sleep at night, both figuratively and literally.

    Regards,

    SM
    Sep 14 09:10 PM | Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    Excellent ideas. There is still hope for us late comers!!! I'm making a list. Hope to be checking it (twice) around December.

    Thanks,

    SM
    Sep 14 08:59 PM | Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    spielerman, excellent question, although perhaps not intuitively so. Most people would say the answer is obvious. I grant you that it is really not all that obvious, unless you've been in the stock market for over for 40 years as I have been.

    I saw the malaise of the 60's, followed by the Arab oil embargo of 1974, when the market really tanked and cars were lined up for several blocks, trying to get an allotment of gasoline. No stocks held up. So,I bought penny mining stocks and made thousands of percent in days. Others went to zero overnight. Net gain; a little.

    I've seen silver go to 50 plus bucks per ounce, and everyone was buying everything they could get a hold of (reminds me of Chevron stock circa 2012). I waited and bought a few years later at $7.00 per ounce.

    I have just about figured out or have seen every way to approach the market, and I have never been successful when buying when the market is behaving like a runaway train (think dot.com era, although I did make a small fortune then by throwing darts, but lost some of it when the train derailed). I've lost tons and made tons (not quite the same amount of tons).

    Now I'm at the point in life when I do not wish to "gamble" like I used to. In fact, I want a pretty boring portfolio.

    Right now I will buy a stock only if the price is 15%+ below the 52-week high, because I believe this market is running on irrational exuberance. Penny mining stock mania circa 1975. Silver mania circa 1979. Dot.com mania circa 1999.

    Don't get me wrong. The market can stay overbought for a very long time (years), but that usually happens when there are solid fundamentals looking forward.

    All I see looking forward for the foreseeable future is stagflation (lived through that already), high unemployment (less Crest toothpaste and more generic) and a fiscal cliff (this is going to be a new experience, even for me).

    When we do get a correction, and we will, everyone's portfolio here is going to suffer, albeit less than someone who is solely buying high-flying growth stocks or penny mining stocks.

    So, I am looking for stocks priced at or below fair market value, which pay a current dividend at 3% or more. I don't have time to "grow" into the stock, meaning lower yield and higher DGR. Just don't have the time. Wish I did, but I don't. Being priced at fair value gives me a hope of not getting caught with my pants all of the way down when the next major correction comes.

    I like Bob Well's approach of low-beta DGI stocks. Just not sure if many of them meet my criteria. Haven't found any that I'm not already overweighted in that sector.

    I also follow Fish's articles. Picked up some good info. Unfortunately, what I am seeing now on SA (as of late!!) is a dearth of new ideas. Not hard to explain with the market at a four year high. Not many "good" stocks being underpriced by the current market. Just a lot of bad ones being overpriced. That's the normal market cycle. First the cream rises to the top, then people start buying the whey. Finally they buy the water, which has settled at the bottom. I think were approaching the "whey", if not already there. I keep seeing the same stocks mentioned over and over, from most of the people posting respectable articles (not pump and dump stuff).

    Guess I'm just frustrated.

    Regards,

    SM
    Sep 14 08:54 PM | 3 Likes Like |Link to Comment
  • Dividend Growth Investing; Give Us Your Tired, Poor And Unguided [View article]
    Thanks Bob. Own COP and INTC and have for years. Read the article some time ago about "overvalued utility stocks". I'm thinking Chuck Carnevale, but I may be wrong. It pretty much convinced me to hold off for now, and that was before the latest market runup. Have owned PPL for some time now, so that buy wasn't affected by said article. Anyway, I would like another utility stock, just don't know if now is the time to buy. Looking at the P/E ratios, most everything else looks "pricey", as this article points out. Can't afford a 10% pullback with me holding, if I'm only getting 5% dividend yield (or less)! Too old for a two-year makeup period. I'll look at DUK anyway. Haven't seriously considered GIS or LO. Good, fresh information. Thanks a bunch, and don't be surprised if I come back with fresh questions about these two.

    Regards,

    SM
    Sep 14 08:11 PM | Likes Like |Link to Comment
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