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AlbionWood

AlbionWood
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  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    giorgio - This would only help you understand, if many investors actually followed that rule. Few do, so it's irrelevant. (Put another way, buying high and selling low are decisions made on some other basis, not an engineering analysis.)
    Sep 11 05:04 PM | 1 Like Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    In Engineering Economics, I learned the first rule was: Always Forget the Past. What you paid for something yesterday has absolutely no relevance to decisions made today; it simply does not appear in the calculation of Net Present Value. I apply similiar thinking to investments, or try to anyway; it's really difficult not to let your previous decisions affect your thinking about a stock.

    That's why I continue to be baffled by your advocacy for YOC. Everything else you say makes complete sense to me, especially the parts about tracking the growth of one's income and ignoring the price fluctuations. It's this one fixation on price that bothers me, because it seems inconsistent with the rest of your advice.
    Sep 11 12:04 PM | 3 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    snoopy - I don't think many people struggle to understand what it is; we struggle to understand why it should be "a vitally important consideration."
    Sep 11 11:49 AM | 3 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    "A useful metric, of quality, should not be vulnerable to so many differing interpretations. " Precisely so.
    Sep 9 12:32 PM | Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    TF17 - Yes, I was describing the kind of thinking that many investors fall into, "anchoring" the investment to their entry price. To my way of thinking, YOC is one manifestation of that. It is usually a mistake, because one's entry price has nothing to do with the stock's value.
    Sep 9 12:30 PM | Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    DC - As you note, YOC is personal, not part of the stock's fundamentals.

    DGR by contrast is in fact a fundamental stock metric that every income investor should be tracking; it is indeed "vitally important."

    Chuck is normally relentless in his focus on stock fundamentals; it's the F in FAST after all! So it still puzzles me why he would attempt to claim that an investor's personal history with a stock somehow becomes a part of that stock's fundamentals.
    Sep 8 11:58 PM | 3 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Tx - "Too many commentators are hung up on YOC" - Gotta say that gave me a chuckle. Did you happen to notice the title of the article? :)
    Sep 8 11:47 PM | 1 Like Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    I for one am not confused - that is in fact partly why I think YOC has the potential to do more harm than good. It's a way to fall in love with a stock because of when you bought it.
    Sep 8 11:43 PM | 2 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    :) You can do as you like, fine by me!

    I find focusing on my personal history with a stock tends to impair my judgement. The price I paid should have no bearing on my decision whether to buy, sell, or hold (other than the tax implications), because that price has absolutely nothing to do with the stock's current value or future prospects. How many times have we all said, when a stock declined, "I'll sell when it gets back to where I bought it?" That is exactly the same kind of thinking YOC represents.
    Sep 8 11:33 PM | Likes Like |Link to Comment
  • Building An Income Portfolio With Closed-End Funds. Part 1: Real Estate [View article]
    Great job, LB, this is an excellent article. Graphics are unusually good at conveying information and you gave us just the right level of explanation. This is a sector about which I knew very little, and you gave me a solid foundation to work from. Thanks!
    Sep 8 11:45 AM | 2 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Roger - Exactly.
    Sep 5 06:29 PM | Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Retail is, however, correct in the conclusion that YOC was never actually used as either an objective, or to make decisions. Income and income growth were, and are, the relevant metrics. I continue to be baffled as to why Chuck and others are confusing YOC with DGR.
    Sep 5 06:27 PM | 3 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Chuck, that's what I wish you'd said all along, instead of unnecessarily and confusingly defending YOC. Portfolio dividend growth rate is a function of the stocks, has nothing to do with the investor's purchasing points, and is indeed a vital criterion.
    Sep 5 06:17 PM | 5 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    Yes, that is my objetion to YOC - it is an unnecessarily complication. Income and income growth are the goals; the percentages are irrelevant.
    Sep 5 06:06 PM | 2 Likes Like |Link to Comment
  • Yield On Cost: A Vitally Important Consideration For Retired Investors [View article]
    We agree that Chuck's articles contain more and better information than the usual short-form crap we all wade through, here and elsewhere. Nevertheless, his articles could be edited to convey exactly the same information with at least 20% fewer words. Try this: take out every sentence that begins with the word "However" and see if there is any less information.
    Sep 5 06:04 PM | 4 Likes Like |Link to Comment
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793 Comments
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