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A Market Crash Dividend Shopping Spree

Mar. 02, 2020 9:10 AM ET30 Comments
Investment Pancake profile picture
Investment Pancake


  • Mix equal parts compounding and bargain shopping, shake and serve chilled.
  • SA Reader Balthazar-B comes up with a clever formula to help investors like me develop a market crash shopping list.
  • A spreadsheet tool that adds yield, distance from the 52-week high, and historical dividend growth rate for each of my stocks. And the bigger the result, the better.

I posted a blog entry last week and one of SA's readers, Balthazar-B, made a very clever suggestion. Before I tell you, I have to give you some background.

Like many of you, my investment strategy is based almost purely on compounding. I own the highest quality businesses that I can find with the most reliable dividends, which I reinvest into shares of any company in my portfolio that seems like the best deal at the time. I don't pay too much attention to my portfolio's net worth - my only goal is to grow my portfolio dividend income at an exponential rate. And whenever I reinvest dividends, I would obviously much rather pay lower prices than higher prices because all things being equal, lower prices will make my dividend compounding grow the portfolio income that much quicker. And as anyone who knows me can attest, I am hardly known for my patience.

So, to make a long story short, I watched the market collapse last week with a sense of vast excitement and greed. So, many lovely, lovely companies to buy on sale! Ah, but which one? I enjoy collecting a good yield from a great company and enjoy it all the more when that company is trading at a steep discount. So that's what gave me the idea for a back-of-the-envelope formula to help me make my stock shopping list: calculate the distance the stock is trading from its 52-week high, add the yield, and presto! I take the result for each of the stocks in my portfolio and whichever result is the biggest is probably a stock I am going to consider closely when I reinvest my portfolio dividends this month.

Here's where Balthazar-B comes in. His (or her) suggestion was to basically a riff off the

This article was written by

Investment Pancake profile picture
Individual value investor with strong penchant for dividend growth.  A former tax and estates attorney who retired in his early 40s and expatriated to Lisbon, Portugal with his family. Now writes about tax law, portfolio strategy and life in sunny Portugal and tutors students in personal financial planning.Association with SA author Evelyn TriasContributor, CNBCProducer of "The Quarterly Compounder" channel on YouTube.com.

Analyst’s Disclosure: I am/we are long RY. 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.

I am long every position shown in the attached spreadsheets and have no other financial positions besides those. I am not an investment advisor and nothing contained in this article or the attached spreadsheet tool can be relied on for accuracy, or as investment advice, or basically for anything at all besides entertainment value at best (and a waste of your valuable time at worst). Check your own data!

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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