Woulda, Coulda, Shoulda.
Value, Dividend Investing, Growth At A Reasonable Price, Portfolio Strategy
Seeking Alpha Analyst Since 2011
A while back, I discovered a woman named Geraldine Weiss. She was way ahead of her time, being a woman in what was a man's world of investing, back in the day. She came up with a valuation metric to help her select stocks that was uncanny in it's application. She perfected the valuation tool and wrote a book about it called, "Dividends Don't Lie." It was transformative for my stock investing as I was already a Dividend Growth Investor. But applying her valuation metrics to my stock selections has exploded my investment results beyond my wildest expectations. Since 2005, I have been on a roll, growing my portfolio value like never before. Her valuation methods limit the kind of stocks I invest in to Blue Chip, Dividend Growth companies. But that's ok by me, because that's where my interests are. Blue Chip, Dividend Growth. Not only for income, but for capital appreciation. You might want to get her book and change your life.
Summary
- Have you ever had someone tell you that if you had invested $10k in Apple stock, in 1995, you would have 15 million dollars today?
- Great. But you didn't invest $10k in Apple stock in 1995, so that bit of information is useless, unless you have a time machine in your garage.
- When people back test stocks vs. an Index, they are really wasting time and effort. Back testing is as useless as looking at Yield on Cost.
- Investing is forward looking. Don't tell me about an investment woulda, coulda, shoulda when what I need to know is what I should be buying today. Not what I should have bought in 1995.
The other day on Seeking Alpha, I had read an article and then gone down into the comment thread.
As always, there were criticisms of the article and the author's strategy for investing his money.
You see, the author was a Dividend Growth Investor, who set out, years ago, to build a portfolio of stocks that would increase dividends annually, at a rate that was greater than inflation. He would reinvest those dividends from the companies paying them, back into additional shares, in order to increase his share counts and at the same time, the dividend dollars coming to him from that particular stock.
Some people refer to this as "the miracle of compounding."
But some people have this need to be critical of this Dividend Growth Investor and his strategy for creating a future income stream, from which he could draw additional monies to supplement his Social Security benefit and let him live a nice life in retirement.
They (the critics) told him, "If you bought $10,000 dollars worth of Apple (AAPL) stock back in 1995, today, that position would be worth 15 million dollars.
A classic "Woulda-Coulda-Shoulda" commentary.
When people make comments like that, they prove an important point about investing successfully.
Successful investing is not about looking back, but successful investing is about looking forward.
None of us can go back to 1995 and invest $10k in Apple (AAPL) or any other stock. We can't go back in time and change any of our decisions, relative to an investment decision.
Investing decisions are "changed" in the here and now and not in the past.
If you buy something today, because it meets your investing strategy criteria, then how that investment performs, relative to your objective, will determine what you do with it. Investment decisions have to be actionable. Going back to 1985 is not an actionable decision. Can't be done.
But there are some bigger flaws in the "argument" about having bought Apple (AAPL) stock back in 1995 that people don't seem to understand.
1. You didn't buy Apple stock back in 1995.
2. You don't have a time machine, so you can't go back and buy any shares.
3. The reason you didn't buy any shares is because the company looked like a complete bag of manure, in 1995.
4. If you want to impress me with how smart you are, then tell me what I should be buying to say. Right now. Not what I should have bought. That information is useless to me.
5. If you like Apple back in 1995, then tell me this. How do you like Peloton? How about Sorrento Theraputics? How do you like PetroChina? CreditCorp? Booking? Arrowhead Pharmaceuticals? Aluminum Company of China? Allegro Microsystems? Shopify? Facebook? TradeDesk? Amazon? Roku? Pinterest? Square? Okta? Beyond Meat? Chegg? DropBox? PayPal? Adobe? Five Below? Sales Force? Sunnova Energy? DocuSign? Etsy? StoneCo? Exact Sciences?
6. You can't back test these companies, so those "brilliant investors" who practice the voodoo art of back testing will have to actually put their necks on the line with a lot of these companies.
7. You can't go back in time and try to show everyone what a genius you are. Instead, here's a challenge for you. Buy $10k worth of the best growth stock you can find. The one you think that we should all buy today to be multi millionaires in 25 years.
8. Tell us on this blog post and then paste and copy your broker trade notification on a separate blog post (your own) and show us what kind of balls you have. Especially looking for those back testing mavens. You know who you are. Step up and play the game so that in 10 or 15 or 20 years the rest of us dummies, who thought you were crazy, can all say:
I woulda, coulda, shoulda.
PS: These are the stocks that I purchased in June of this year:
Peloton (PTON)
Etsy (ETSY)
Zoom (ZM)
Generac Holdings (GNRC)
Slack Technology (WORK)
Parker Hannifin (PH)
VF Corp (VFC)
MSA Safety (MSA)
Qualcomm (QCOM)
FedEx Corp (FDX)
Tupperware (TUP)
Yeti Holdings (YETI)
Kontoor Brands (KTB)
Analyst's Disclosure: I am/we are long PTON GNRC ZM ETSY PH MSA VFC QCOM YETI.
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