Chowder, Joni, & The Dividend Growth Community
I've been a member of Seeking Alpha for over six years now, and have seen tremendous progress in my investing knowledge during that time. When I first joined, it was as a lurker, reading articles that popped up on my Yahoo Finance news feed, doing research on stocks I was interested in, or learning about different sectors of the market. I rarely commented, and rarely thought twice about others who were using the site.
Then in early 2013, I came across some articles about dividend investing, and discovered that the discussion that followed was often as valuable as the articles themselves. I heard stories from long-time investors, and how they were able to build successful portfolios of dividend paying stocks that funded their retirements.
This was when I found Chowder, and began reading about the "Project $3 Million" portfolio he was managing for his son. Being a similar age, I was quite interested in the concept of the portfolio, and it wasn't long before I decided to build one myself. In March of 2013, I sold the mutual funds in my IRA and used the funds to create my own dividend growth portfolio, which I've been writing quarterly updates on ever since.
Needless to say, Chowder has had a huge impact on me and on my future. His influence helped me to get past the urge to look for the next big thing, and instead focus on high-quality dividend-paying companies that I can partner with for the next several decades, and eventually fund my retirement with.
Chowder has continued sharing his wisdom in the years since, and while his profile page shows 18.7k comments to his name, I know it is likely multiples of that in reality, as he's deleted thousands more over the years on his instablog posts.
These thousands of comments are part of what's become a tremendous community on Seeking Alpha, and are what's made it more than an investing site, but also a place to visit with familiar friends. And it's not just young investors like me that Chowder has helped but also many older investors who've used his knowledge to gain the confidence to run their own portfolios for retirement.
Which brings me to Joni.
Joni Repasch - Leaving A Legacy
Joni, or jrepasch as she's named on Seeking Alpha, became a member in 2011, two years before myself. She was also an active member of the site, with 4,774 comments to her name. At 78 years old, I always found comfort in her comments, as her warmth, wisdom, and eagerness to help others made her a joy to talk to.
"But we have a network here where we can actually go deeper than all that stuff and get to a point where we learn from one another, support one another, lift one another up in good times and bad times, and make a freaking difference in one another's lives."
I consider the DGI group my "Facebook." Don't subscribe to the latter.
In terms of "Friends" I have a few I consider true friends, not a lot but we are always there for each other.
My best friend, in some ways, is my hubby. He's not a drinking buddy 'cause we argue about everything, but when the chips are down he is my "fox-hole buddy." Always there for me when I really, really need him.
We've been married 57 years.
I am one blessed lady.
But Joni was far more than a kind soul, she was also an excellent and well-seasoned investor. According to her bio, she began investing around the age of 21, meaning she had 55+ years of investing experience. Take a look at her list of owned stocks on her profile bio, and you can see she had a keen sense when it comes to quality investing, and she was meticulous in tracking and reporting on it as well.
But she wasn't content just having that knowledge, she was also intent on sharing it with others. She regularly posted helpful links to books, articles, stock research, and whatever else she thought others would find useful. Whenever she found something especially interesting, she'd download the article and save it for future reference, with a folder kept for each author she followed.
This worked great for authors who posted frequent articles on Seeking Alpha, but in the case of Chowder (who I'd consider more a prolific commentator than prolific author), she went another step further. Chowder doesn't care much for the formal process of writing full-fledged, editor-reviewed articles. So instead, he's posted instablogs where he can quick share some thoughts and then let the conversations continue in the comment threads that follow. The downside of this is that Chowder deletes them as the comment threads get too large to load, which results in that history being lost.
The "Chowder Anthology"
Joni decided to save the best of these blogs and comments, categorized them, and then edited them into mini investment books with the hope of eventually sharing them with others to learn from. I was humbled and honored when Chowder approached me back in December to write an article to share her work. My sincerest apologies that it's taken until now for me to finally get this article written to fulfill her wish.
Joni composed and edited documents covering Chowder's investment blogs and the comments that followed them. The three topics she covered were: Young Folks Portfolio, An Older Folks Portfolio, and Food For Thought From Psychology Of The Market.
My intent is to write a three-part series of articles, one for each theme of content that she documented. This first article will present the Young Folk Portfolio, as that seemed to be her passion, and is also the largest piece among the three.
Young Folk Portfolio
How much do you need? When do you need it? How sure are you that it will be there?
Those three questions are the foundation of Chowder's philosophy on investing.
This assembly of writings originated from Chowder's Project $3 Million set of articles, and then transitioned over to his instablog post called "Young Folk And New To Equity Investing Portfolio". The discussion was moved from regular articles to the blog format because the comment threads on the articles became too long to reasonably load on computers. This is pretty much unique to Chowder's writings, because I don't know that I've seen another article on Seeking Alpha with 4,000+ comments, which is what nearly every article that he's written has generated.
In this document, Joni has not only archived some of the best discussion from those comment threads but she's also assembled it into a mini book, complete with images, headers, and highlights of her favorite parts.
Here is the piece:
I really enjoy this work, and think it is an excellent crash course for beginning investors. It includes thoughts from Chowder on initial portfolio construction, building up positions, maintaining proper weighting of positions, and the mentality you should have when investing in the market.
This discussion is truly about starting from scratch, as Chowder tells the story of starting his son's investments when he was a child:
He started investing when he was 10 years old. So that's how old the portfolio is. I took 20% of his allowance every month to invest. I took 20% of his Xmas money, birthday money, and any money he made from odd jobs and selling aluminum cans back to the recycling plant. His very first investment was a birthday gift on his 10th birthday. I bought him 10 shares in the Boston Celtics at a time when they were a public company. From that point on, 20% of his allowance was about $10 per month... Ha! I found a company sponsored DRIP with the company Dial Soap and they allowed a minimum investment of $10 per month.
That portfolio is now worth nearly a quarter-million dollars, putting his son on a solid path to a comfortable retirement. It's an important point for new investors that you can start small, and grow big from there. It's not how much you have at the start that's important, it's the process you follow and the commitment you make to add steady and regular investments that produce big results over time.
I thought this was another very important point for young investors:
Time is your ally not your foe. Time is a foe for a lot of older people, they don't have enough of it, so be thankful. You will have more years to work with than they have and almost every older folk wishes they could change place with you. Don't let that go, embrace it and work with it. Show some patience and simply stick with your plan.
I think this is one of the most important points that Chowder makes, and is such a simple concept to understand. I so often see young investors looking to find the hot stock, new investment, and next best thing, when instead they could simply buy the tried and true and get rich in a nearly fail-safe manner. It's so easy to get caught up in the flavor of the day like marijuana stocks, bitcoin, or the hottest tech, but often that leads to losses as the craze ends and prices fall.
Another of my favorite comments from Chowder is when he discusses valuation, and how focusing too much on it can be harmful:
When we talk about valuations, I have a tendency to ignore them when building positions up in size. I have seen too many portfolios where peoples best performers were small in size and they didn't take advantage of the company's outperformance. Ask them why and they say the company was always overvalued. No it wasn't! It was selling at a premium, a premium that was justified due to the company's performance. If the company were overvalued, the price would have declined. If you want quality, often times you have to pay for it unless we are in a recession, and we aren't in a recession. People have to consider the condition of the market.
I've been guilty of this plenty of times over the years, buying the beaten down "value" stocks because they offered a better price and higher yield than others on my watch list. It caused me to wait for years to buy companies like NextEra Energy (NEE), Visa (V), and UnitedHealth Group (UNH) because they always looked overvalued, only to watch them march higher as they continued to produce excellent earnings growth.
Here is Chowder's response to a reader who asked about averaging down on losing positions and his fear about averaging up on stocks he has gains with:
If you are going to hold companies for the long term, how are you going to average down years from now? What if you bought MMM under $50 back in March of 2009, what are the odds of you getting an opportunity to average down? And what good does it do you if you held just a small position, never averaged up, and MMM has risen 500% in that time frame? How do you get to take advantage of that move if you don't keep adding shares?
In a bull market, averaging down means you are adding to companies in trouble. In a bull market, averaging up has you buying companies performing better than expected. Instead of focusing on the share price, I focus on whether the company is performing well or not. As long as it's performing well, my investment will remain profitable and I want to own more of profitable companies, not less.
Another important lesson to focus on is how the company is performing rather than your gain or loss on your position. Looking back I made too many add-on buys to losers over the last few years rather than to my winners, and I'm sure my portfolio returns have suffered as a result.
This final quote I'll share is of Chowder giving his definitions and comparisons between "speculating" and "investing" in the stock market and how you shouldn't sweat the price you pay for each purchase, but instead focus simply on building your share count and ownership over time.
People will try to beat you over the head about valuations, and for a lot of you, valuations should not be a primary concern because you are investing smaller amounts of money. There's a difference between putting $1k to work as opposed to $50k. There's a difference between buying at one price and looking to sell at another and investing. Buy low and sell high is speculating. Speculating requires you to get a cheap price. Investing allows you to buy at many price points over the years and today's price won't even be a blip on the radar 20 years from now.
You young investors with your smaller investment amounts are not speculating, you are investing. What seems expensive today will seem minuscule in the grand scheme of things 15 to 20 years from now. It won't be what you paid that you will regret at that point in time, it will be what you didn't buy and wish you did. Own what you want to own and build your positions over time. Time is the ally of the young, foe of the old. Know where you are in your investment time frame and invest accordingly.
This is another important change in philosophy that took me a while to understand. When I first started buying stocks, I looked at them more as trading pieces than actual ownership in a successful company. Taking a long-term view and focusing on what companies you most want to partner with for the next twenty years makes a ton of sense.
I agree with the second part too, although that is another struggle for me. I don't think twice about having my 401k contribution taken out of my paycheck every two weeks and being automatically invested regardless of market prices, yet when making single-stock transactions, price was nearly always my biggest focus. I know looking back now, that the focus on value and price caused me to buy things that were of lesser quality because they appeared cheaper.
As is often the case in life, it's better to pay up for quality, because buying cheap things often ends up giving you heartburn down the road.
I could go on and on sharing more quotes, but I think I'll leave the rest of the work up to readers to dive into Joni's article for themselves. It truly is a fantastic collection of information, and I hope that others find it as useful as I have.
For those who prefer a PDF version, here is an upload link for that format: 2-Young_Folk_Portfolio.pdf
Additional Project Insight From gabby1945
As I mentioned above, one thing that makes the Seeking Alpha community so great is the fact that everyone is willing to help each other out with questions about investing, and life in general. This helpful spirit is what led to Joni's work being shared with everyone today. And while I am writing this article to finally highlight her work, another fellow member, gabby1945, was even more instrumental in making sure this happened.
He shared with me some of the behind the scenes discussion with Joni, and asked me to share some stories of her. I've debated how much of this to share, but I really want to honor Joni and her legacy, and think it's important to know what she did to help others before she passed.
This was her initial contact with Gabby to get things rolling:
If you would be so kind I’m hoping you can help me with a project I’m working on. Some of the commenters on the above blog asked if I would compile a compilation of Chowder’s Food for Thought comments on this blog. I have done so and sent a PM to Chowder asking him if he gave his okay for me to post this on that blog... I was hoping you could give me some help with this.
I PM Mike on a regular basis and I’m sure he’d be happy to help if possible. As my hubby, Joe, would say “You’re good people” even if you don’t like green veggies. Ha!"
All this time I’m taking up with you and if I were successful, I wonder how many folks would read it?
I don’t know why but your avatar reminds me so much of a friend I grew up with. Actually we both went to nursery school together in the mid-40s. Alec and I went through some rough times during the years from kindergarten through 7th grade then became close friends later on. If I can find a photo of him I’ll send it on. I was a terrible tom boy and did my share of playground fighting with several of my classmates. Ended up in the principal’s office on more than one occasion.
I absolutely love her sense of humor and humility as she approached the project, and also her story-telling to go along with it. I can't help but think of my own grandparents, and how they used to tell stories from their earlier days growing up.
Here are some of her comments as the project progressed, following some editorial work by Gabby. Her health was failing at this point, but her energy to see the project through is amazing.
Oh, Gabby, you are such a saint. The final you did looks beautiful. Someday I will try to explain why my heath has not been too good. It’s a long story and I have not mentioned it on SA and probably won’t... Bottom line: It’s cancer. The last couple of months have been hectic. I have a doctor’s appointment on Friday, otherwise, and a get together at my house so two of my friends can come visit on Wednesday, other than that, I should be fairly free to work on this project, energy, notwithstanding.
And here Gabby's comments about working with Joni on the project.
She considered Chowder's works a blessing to the present investors and to the future investors. She wanted a record of the comments and thought processes that Chowder supplied from the Psychology of the processes, the Young, who were starting out building their financial future, and those who were about to enter retirement, or those who were already there. She was a gentle soul with a feisty attitude, when that was needed. She truly came from the era of the school of hard knocks and we shared similar problems growing up. I believe that had a lot to do with her contacting me in the first place. She PM'ed me on a few occasions seeking an explanation of how she should apply it [ideas] to her portfolios. Sometimes it was something Chowder stated, sometimes something I stated, or something some other person commented about that could be read and interpreted in multiple ways.
We talked about the days before TV and the joy that Saturday nights brought with the radio broadcasts of "Amos and Andy, the Lone Ranger, Abbott & Costello, and the spooky, The Shadow." The kids would be on the floor listening to every word, giggling at the comedies and wary of the scary. A grownup's "Boo" might make you wet your pants. We were young and naive about many things back then, but at a young age learned about responsibility, work, and how all members of a family worked toward a common goal. One did not have to live on a farm for that experience, it was just a more vivid reality guiding actions and interactions while eating or starving hung in the balance.
The goal for her now was to have something to share for family members, friends, future family members, or anyone interested in this journey. The Chowder articles gave her hope, initiative, and a plan to incorporate into her existing positions and future positions. The writings (Chowder) were logical, an in your face process that the average person could comprehend without an advanced finance degree.
Many women admired her, her accomplishments, her drive to succeed, and the gems of wisdom she wrote to cheer lead others they could do it too. Her portfolio started many years before there were Chowder articles or blogs. These articles supplied the tools to transform and build something with a purpose in mind rather than a haphazard potpourri of many paths to retirement. She wanted to make sure others had access to these words of wisdom before Chowder stopped writing or she passed. One can read the dated, "The Single Best Investment: Creating Wealth with Dividend Growth" for the thought process, and in addition in real time, the actions Chowder pursued and wrote about for the good of others.
I really liked her and it was my honor to help her "works" come to completion before the "C" took her from us. She will, and has been missed by all that knew her, and those that "knew of" her. You can be sad that she is gone, but be even more thankful she came into your life, even if you never met her in person. The bottom line of the sentence above is, "Grief sucks."
Cancer is a horrible, horrible disease that took two of my own grandparents and several great aunts and uncles. Knowing how it saps a person's energy makes it so impressive to me that Joni worked past it and made sure this project was completed.
But I don't want this to end as a sad story, but rather a celebration of Joni's life and her commitment to seeing this project through as a way to help others succeed with investing. I never met her personally, but she's certainly had an impact on me, and I hope this article does its part in helping her make an impact on others' lives as well.
Before I close, I once again would like to thank Chowder for approaching me, and asking me to share and promote Joni's work. I feel truly honored and blessed to play a small part in this project. I'd also like to thank Gabby, who helped Joni see the project through, and also helped me tell the story behind it.
Best wishes to all, and Happy Investing!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am an engineer by trade and am not a professional investment adviser or financial analyst. This article is not an endorsement for the stocks mentioned. Please perform your own due diligence before you decide to trade any securities or other products.