...

Go Back   Lateral-g Forums > Lateral-G Open Discussions > Off Topic Forums
User Name
Password



Reply
 
Thread Tools Display Modes
  #5881  
Old 11-16-2017, 10:48 AM
Vegas69's Avatar
Vegas69 Vegas69 is offline
Senior Member
 
Join Date: Dec 2006
Posts: 8,663
Thanks: 86
Thanked 210 Times in 119 Posts
Default

Quote:
Originally Posted by glassman View Post
Man i Love this Todd. SOOOO true, although, i must admit, i do fall from it from time to time. But def ain't living paycheck to paycheck.

I've got two great things i've learned here over the last few years: How divi's really work (absolutely never even heard of that before) AND in a down turn things "are on sale", I can seriously thank Greg for that, maybe even both.

Working on paying off the house (which is worth 1.1 at the moment, but i think its a 400k house at best lol). But hey, i have three places to leave a sh_t (you don't take one, you leave one) and running water. Perspective.

cheers, mike
You're human like the rest of us....

You live in a whole different country over there. People always tell me they can't wait to get out, but I've seen many become wealthy from business and real estate over there and cash out to a different economy. 1.1 gets you a nice spread over here. That's over 4 times the median price of a house in Southern Nevada.
__________________
Todd
Reply With Quote
  #5882  
Old 11-16-2017, 04:01 PM
SSLance's Avatar
SSLance SSLance is offline
Senior Member
 
Join Date: Oct 2013
Location: Peoria, AZ
Posts: 2,668
Thanks: 72
Thanked 337 Times in 211 Posts
Default

You talked me into it once again Greg... Thanks!!

I had some free time this afternoon so I finally made a spreadsheet up tracking all of my initial buys, divvies received, growth and earnings %s.

I had always tracked my investments inside Quicken, but it adds each dividend reinvestment to the initial cost basis which really skews the numbers. By figuring the earnings back against the initial investment, it gives a MUCH clearer picture of the results...and lets one make more intelligent trading decisions. With everything else going on in my life, I've let this stuff just sit and ride and while that hasn't really hurt me (thanks to Dividend Growth Investing strategy) it can be optimized which I'll be doing shortly.
__________________
Lance
1985 Monte Carlo SS Street Car
Reply With Quote
  #5883  
Old 11-16-2017, 04:43 PM
AU Doc AU Doc is offline
Member
 
Join Date: Sep 2016
Location: LA - Lower Alabama
Posts: 40
Thanks: 2
Thanked 3 Times in 3 Posts
Default

I'd be interested to hear a few details to everyone's approach to screening stocks. Over the past few days I've taken a few minutes here and there to play with the stock screener provided by my online brokerage house. My criteria were as follows:

Dividend > 4%
Stock Price > $5 (just to weed out the penny stocks)
growth > or = to the S&P 500 (I'm not entirely sure how the screener is applying this)

It narrows things down to 200-300 stocks, which is a pretty good chunk. Out of those remaining, I only see a handful that I recognize, and none that look to consistently beat the S&P over the past several years. So Even with a 4%-5% dividend, I would be better off with an index fund that's returning 12% or so.

It's likely I'm overlooking something, or didn't setup my charts to show what I think they're showing. I didn't have more than a few minutes to play around with it.

Is there something obvious that I'm missing? I'm looking for the first pass to get things down to a reasonable number of stocks to look through to find good candidates.

Last edited by AU Doc; 11-16-2017 at 04:47 PM.
Reply With Quote
  #5884  
Old 11-16-2017, 08:12 PM
GregWeld's Avatar
GregWeld GregWeld is offline
Lateral-g Supporting Member
 
Join Date: Jul 2005
Location: Scottsdale, AriDzona
Posts: 20,642
Thanks: 504
Thanked 1,076 Times in 384 Posts
Default

Quote:
Originally Posted by AU Doc View Post
I'd be interested to hear a few details to everyone's approach to screening stocks. Over the past few days I've taken a few minutes here and there to play with the stock screener provided by my online brokerage house. My criteria were as follows:

Dividend > 4%
Stock Price > $5 (just to weed out the penny stocks)
growth > or = to the S&P 500 (I'm not entirely sure how the screener is applying this)

It narrows things down to 200-300 stocks, which is a pretty good chunk. Out of those remaining, I only see a handful that I recognize, and none that look to consistently beat the S&P over the past several years. So Even with a 4%-5% dividend, I would be better off with an index fund that's returning 12% or so.

It's likely I'm overlooking something, or didn't setup my charts to show what I think they're showing. I didn't have more than a few minutes to play around with it.

Is there something obvious that I'm missing? I'm looking for the first pass to get things down to a reasonable number of stocks to look through to find good candidates.



Do some more reading here..... otherwise I'm just repeating and repeating everything that's been asked - exactly what you're asking - has been discussed a zillion times.

In a nutshell though --- the 5% rule is going to have you invested in 20 names TOPS - if you have 100K to invest -- if you have 10K to invest - I'd go with less than 10 names.

Rather than look at every stock in the market - most of which you'd have ZERO clue who they are or what they do.... ask yourself a few questions - where do you shop -- where do you buy gas - where do you bank - where do you buy building materials etc. IN OTHER WORDS ---- BUSINESSES YOU FREQUENT.

Then start comparing them against their competitors. i.e., Do you shop at Home Depot or Lowes - compare them.... Cost basis - dividend - growth - total return.... and go with what you feel or not.

Use a cell phone? Your provider is? Compare them against the others?

Who's your power provider?

Then once you gather a few names ---- names of businesses you know and trust and frequent..... start to diversify them by their category.... "financial" - "energy" - "retail" - etc.... so you don't end up with 5 names in the retail space etc.

Investing is NOT about when things are going great and everything is going up -- investing is about making money when things aren't going well in the markets -- and being able to ADD to your holdings when they're "on sale" -- so the only way most people are comfortable doing that is by starting out with businesses they know and understand and frequent.... Don't forget that you become a part owner in those businesses. Best to actually like them to begin with.

Now --- nobody can tell you who to invest in - and we don't do that in this thread -- this is about teaching you to fish - not catching you a fish.... everyone is different - everyone's finances are different - everyone's age is different.... So it's up to you to figure out how much TIME you have -- how much risk you're willing to accept - and what you're guts are going to feel like when your account is DOWN 20%.... because at some point it will be. Like about a week after you make your first buys... LOL
Reply With Quote
  #5885  
Old 11-16-2017, 08:15 PM
GregWeld's Avatar
GregWeld GregWeld is offline
Lateral-g Supporting Member
 
Join Date: Jul 2005
Location: Scottsdale, AriDzona
Posts: 20,642
Thanks: 504
Thanked 1,076 Times in 384 Posts
Default

Quote:
Originally Posted by SSLance View Post
You talked me into it once again Greg... Thanks!!

I had some free time this afternoon so I finally made a spreadsheet up tracking all of my initial buys, divvies received, growth and earnings %s.

I had always tracked my investments inside Quicken, but it adds each dividend reinvestment to the initial cost basis which really skews the numbers. By figuring the earnings back against the initial investment, it gives a MUCH clearer picture of the results...and lets one make more intelligent trading decisions. With everything else going on in my life, I've let this stuff just sit and ride and while that hasn't really hurt me (thanks to Dividend Growth Investing strategy) it can be optimized which I'll be doing shortly.


GOOD!!! This is not a sit on your hands game -- you (not YOU but everyone is you) need to pay attention - reassess where you're at - plan your next moves... plan what you're going to do and how you stack up WHEN the market takes a dump.... it's too late to start raising cash AFTER the market sucks - so if you're going to want to have some cash - best to do that when the market is hot not when it's not!

LOL
Reply With Quote
  #5886  
Old 11-16-2017, 08:59 PM
AU Doc AU Doc is offline
Member
 
Join Date: Sep 2016
Location: LA - Lower Alabama
Posts: 40
Thanks: 2
Thanked 3 Times in 3 Posts
Default

Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here
Reply With Quote
  #5887  
Old 11-16-2017, 09:57 PM
GregWeld's Avatar
GregWeld GregWeld is offline
Lateral-g Supporting Member
 
Join Date: Jul 2005
Location: Scottsdale, AriDzona
Posts: 20,642
Thanks: 504
Thanked 1,076 Times in 384 Posts
Default

Quote:
Originally Posted by AU Doc View Post
Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here





Keep reading.....


The entire thread is only about things to think about - ways to look at things - it's not about what to do or what you should or shouldn't invest in. It isn't math class -- it's more about critical thinking. That's the problem with investing / investments.... if you understand the basics - then you can begin to look at them with your own criteria and understanding. That's all this thread is about.

You asked about narrowing down the choices you found using your search criteria -- I responded with some ways to think about how to begin to help narrow the choices down. There's no magic bullet for selection. There ARE guidelines to help - such as don't put too much in one basket - diversify - know and understand the business you're investing in etc. Investing isn't just about numbers - it's much more about understanding WHY you invested in what you did -- perhaps applying what and how you feel about that particular investment going forward... at some point - you can only trust your own judgement because it's YOUR money.

My suggestion was to just simply look around you - where you live - what you do for a living - start to look up companies you personally do business with.... sometimes just thinking and starting with that - will lead you to look at competitors and start doing comparisons - and one thing leads to another.... and triggers your brain to look at some other company that popped into your brain.... start making lists of the things you've looked up - the more you poke around the more you'll learn, the more questions you'll ask yourself....

This is investing 102 - beginners investing... you can pull up all manor of "criteria" -- and tape the list on the wall - close your eyes and throw a dart - and put money in whatever the dart landed on..... OR you can start with businesses you actually know their names - might do business with.... places that you might actually want to be a partner with. Do you want a rental house in a neighborhood you've never driven thru and know nothing about? Or would you sleep better at night with a rental in a place you kind of are familiar with and you've known the neighborhood since you were 10?
Reply With Quote
  #5888  
Old 11-17-2017, 08:31 AM
GregWeld's Avatar
GregWeld GregWeld is offline
Lateral-g Supporting Member
 
Join Date: Jul 2005
Location: Scottsdale, AriDzona
Posts: 20,642
Thanks: 504
Thanked 1,076 Times in 384 Posts
Default

Here's something --- I've just been checking certain stocks this morning and thought of this -- or "found" this and thought it useful..... it's something that would never come up in any "criteria" search.... and as my favorite saying is -- Better LUCKY than smart....


Cisco (CSCO) in July 2011 began paying a dividend -- it paid .06 a share per quarter.... PALTRY by any standard (.35%)... but here we are 6 years later -- and it now pays .29 cents per quarter.

Had you been lucky enough to have bought it - and held it - your cost would be $15.74 a share.... you'd be UP 126% and you'd be earning 7.36% dividend on your original investment.

OH BUDDY --- yeah that's what TIME and a little bit of luck gets you.
Reply With Quote
  #5889  
Old 11-17-2017, 09:46 AM
Woody Woody is offline
Member
 
Join Date: Apr 2005
Location: San Diego
Posts: 67
Thanks: 1
Thanked 0 Times in 0 Posts
Default

Quote:
Originally Posted by AU Doc View Post
Thanks for taking the time to reply to everyone’s questions. I know the same questions get asked over and over.

That said, I’m through the first hundred or so pages and haven’t run across my particular question. At least not that I recognized, anyway.

Let me try again. It looks like the average dividend yield across the market is between 2% and 3%. Take Home Depot for example. It’s current dividend yield is 2.13%, which isn’t enough to warrant a buy on the dividend alone. It is however benefiting from the current housing growth and the stock price has been on a steady climb.

Another example is Ford. It pays a dividend of almost 5%, but the stock price has been on a decline since 2014. So again, it doesn’t fit the criteria.

Verizon has a nearly 6% dividend, but the stock has been mostly flat for the past five years. So it’s beating inflation, but still well behind the market.

I suppose what I’m saying is so far the intersection of stocks with a 5% dividend and a flat to increasing share price has been a bit like finding a unicorn for me Based on my difficulties so far, I’m wondering if I’m misunderstanding some of the terminology, or if these stocks are just difficult to find.

Thanks again! Just trying to put all the pieces together here
What you are describing is normal. In most cases, the stocks that pay the higher dividends have slower stock price appreciation. It is going to be difficult to find a stock with a 5.0% dividend that is a "growth" stock. There is usually a trade off between the dividend rate and growth or appreciation rate of a stock.

What is best (high dividend vs. high growth) is very dependent on your particular situation. If you are not retired and don't need the dividends to live on, I believe total return is the most important thing to concentrate on.
If on the other hand you are retired and need the dividend income, finding the stocks with higher dividend rates may be more important.

Another thing to consider is the dividend growth rate of a stock. For example, AT&T (T) pays a current yield of 5.65%. Over the last ten years, it has had an average dividend increase of 3.8% per year and more recently has been closer to 2.5%. Johnson and Johnson (JNJ) pays a current yield of 2.42%, but its dividend has increased an average of 8.0% over the last ten years. JNJ currently pays a much lower dividend than T, but it has grown its dividend at a much faster pace. Additionally JNJ stock appreciation has been much greater than T's stock price appreciation.

Total return for T over the last 10 years was 7.93% per year, while total return for JNJ was 13.2% per year. As you can see T's current yield is much higher than JNJ, but its total return has been much lower.

If you are a young investor trying to grow your money at the fastest rate possible, I believe a stock like JNJ would be a better choice. If you are retired and needed to live off of your dividends, a stock like T would probably make more sense.

The stocks I selected are just real life examples and are not recommendations, but you should be able to research stocks that interest you and make similar comparisons.
Reply With Quote
  #5890  
Old 11-17-2017, 10:08 AM
AU Doc AU Doc is offline
Member
 
Join Date: Sep 2016
Location: LA - Lower Alabama
Posts: 40
Thanks: 2
Thanked 3 Times in 3 Posts
Default

@Woody, that’s exactly what I’m getting at. The market averages about a 12% return. So I tend to use that as a quick check for various investment opportunities. In this case, I would want my stocks to provide a 12% return whether that be through straight growth or a combination of growth and dividend yield.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 05:31 AM.


Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2024, vBulletin Solutions Inc.
Copyright Lateral-g.net