10 4:relax:

Sweet! just had to share..

Bought ABT sometime last year, long before the "split" of ABBV. Well, ABBV has soared since the split (~36% for me), and ABBV took "most" of the ABT dividend with them. However, since I'm in it for the long term, I kept both halves of the split. ABT has bounced around anywhere from +1 to +15% for me since, with a measly .14/qtr dividend. Today however, that changed. Announced today they beat their profit estimates and the stock is up 6+%, also boosting the divvy 57%. Wowsers thats a "big" boost! Still only a 2.45% dividend, but its getting back to normal range, which I had a feeling it would eventually.

Don't ya just love dividend investing!!


A pay raise you didn't even have to ask for!

Why Do Dividend Growth Investors Like Price Pullbacks So Much?
 

Another article that I felt was worthy of sharing.

Disclosure: I am long KO, CA, WU, SWY, CSX, SPLS, PG, WMT, KMB, CL, JNJ. (More...)


In a recent article by David Van Knapp, "Which Popular Dividend Stocks Are Always' Overvalued," the author presents 59 Dividend Growth Stocks and views them through the window of a valuation tool, F.A.S.T. Graphs. He points out that this group of stocks seem to always be selling at valuations that are mostly on the high side of things.

The comment stream on this article has been very interesting and for the most part, very thoughtful. One comment in particular caught my attention, though. It was written by a person who questioned one of the more frequent notions expressed by many DG investors. Here's what that comment said:

All you Dividend Growth Investors that claim you love it when stock prices go down so you can buy more are getting what you wished for. I never want my stocks to go down in price no matter what.

Something to Consider

Stock prices go up and they go down. If I own a stock at a cost of $35 dollars a share and the stock goes up in price to $45, I have a paper profit (unrealized gain). Unless I sell my stock at $45 a share, I will not realize that profit. If I do sell the stock and it continues to go up in price, then what?

That same stock that rises to $45 a share experiences bad market day. The price drops to $40 a share. Did I lose money? No. I lost an unrealized gain.

Now with the stock priced at $40 (which is a pullback) does it represent a buying opportunity? Maybe, maybe not. It really depends on what my investment strategy is.

Based on my own metrics of value, I purchased the stock at $35 and based on my investment strategy [DG] the fundamental reasons for having bought it in the first place are still in place. That is an income stream that will grow year over year.

I might have a value range for this stock that is between $35 and $45 dollars. So a price of $40 with no real breakdown in fundamentals, but only a market glitch, may just make $40 a good place to add even more shares to my account.

What I Know:

Dividend Growth Investing is practiced by a very diverse group of people. While there is no definitive standard for the strategy, I think that many investors who are not familiar with the strategy or who want to learn more about it by spending some time reading Lowell Miller's book, "The Single Best Investment" to become familiar with the thought process behind the concept.

All too often, it would appear that many investors who are not familiar with the strategy and the concept of investing for dividend growth make a lot of assumptions that are off target.

That's not because they want to be contrary about DGI, but more from what I believe is a lack of understanding about the strategy itself. Let's take a look at how I approach DG investing and see if I can illustrate a few points about the strategy.

What You Should Know

My first goal is to find stocks that are priced at a value to intrinsic worth. Now one might argue that valuation is a subjective exercise. I would tend to agree with them. However, over time, an investor finds a methodology for addressing valuation and when that methodology produces positive results, the average investor tends to stick with that particular methodology. If that methodology is not working then you might need to make some adjustments.

As I become more comfortable with making decisions based on my particular set of criteria used for evaluating stocks, the method tends to become more objectified. In November of 2012, I made a purchase of Safeway (SWY) at $16.50 a share. To my criteria, SWY was priced at a value at that price. I also purchased Western Union (WU), CA Technology (CA), Staples (SPLS) and CSX Corp (CSX) at that same time.

My second goal is to find companies that have paid dividends for a long period of time. Now my own methodology allows for the purchase of companies that have a dividend payment history of at least 5 years.

The 5-year history is not, in and of itself, a deal breaker. Sometimes a company will have a more limited dividend growth time frame and that's ok. That stock might very well become a Dividend Challenger (a company with that 5-year history) soon enough.

At the same time, this goal of a 5-year history, does not prevent me from buying companies with a 3-year dividend growth history, especially if the company is priced at a value. In the example given above, Western Union and CA Technology both had dividend histories that were less than 5 years, but both can become part of the Dividend Challenger list very soon.

My third goal is to find companies that have been increasing their dividends at a rate that is historically greater than inflation. Why is that important to me?

Since I am attempting to create an income stream that will increase annually, in order to fund my retirement years, I want a Dividend Growth Rate [DGR] that stays ahead of inflation.

By the very nature of portfolio building and using valuation as an entry point, there are going to be stocks in my portfolio that grow their dividends at different rates. Addressing those companies that fail to meet my metric of exceeding inflation would make a stock like AT&T (T) one that I might be keeping an eye on and perhaps eliminating it from the portfolio at some point in time.

Points to Consider

Now as a long term investor, there are companies that I have owned for a very long time. There are also companies that I have not owned very long, like the ones previously mentioned.

If I am going to make the decision to add to an existing holding I want that stock to be priced at a value. That means that sometimes, I won't be adding to that holding except through dividend reinvestment. That's ok. In keeping with my initial strategy (buying at a value) these existing holdings may or may not be priced at a value to intrinsic worth.

So a pullback on that company's price may present a buying opportunity to add to my existing position. If I own a particular company and I am wanting to complete my position in that company I may be better served if and when that stock "pulls-back" from current pricing levels.

If one of my metrics is a PE below 15 for example, doing the math to arrive at a price that would give me a PE below 15 is not all that difficult. The same is true with other metrics that an investor might use, such as price to sales, price to book, etc.

Coca-Cola (KO), for example is a company that I've held since 1984. While I have a full position with this company, my wife's Roth account did not have a position in KO. With the recent pullback in price and the corresponding dividend yield point exceeding 3%, KO seemed to be priced at a point where adding it to her portfolio made sense. A pullback taken advantage of.

That brings us to the second notion concerning pullbacks. If you don't own a particular company, but want to have it as part of your portfolio, buying it at an overvalued price does not always serve you very well.

On the other hand, buying on a pullback and having an entry point at a value point relative to the true worth of a company is a pathway to success.

I don't recommend stocks for people to buy. I write articles about my different portfolios and share what companies I am looking at and which companies I am purchasing. If someone reading one of my articles decides to purchase stock in a company that I mention, I would hope that that investor would do their own due diligence before following my lead. Right now, I find that oil refiners are beginning to look attractive. I've recently purchased Holly Frontier (HFC) and I am watching Marathon Petroleum (MPC) and Phillips 66 (PSX). I have also been watching fertilizer companies and have been looking at Potash (POT), Mosaic (MOS), and Agrium (AGU).

Summary and Conclusion

But, don't forget that if a particular company has gotten ahead of itself, even with a pullback, it might not be at a value point that would indicate a "buy" point.

Know where the "price" needs to be, in order to meet your own standard of value and be content to wait on your stock to reach that price.

Remember, buying Coca-Cola on the recent pullback accomplishes a number of things for me. First, I bought a great addition to my wife's portfolio. Second, I bought a company that yields 3% at the price I paid for it. Third, I bought a company that has a 51 year history of paying and increasing dividends. Fourth, I bought a company that has been increasing those dividends at a DGR of 8% for the last 1, 3, 5, and 10 year periods.

Do I like pullbacks? You bet I do.

I just watch Google break $1,000 per share..........:confused59:

A couple of thoughts about the article....


Investing is a way of life... Using some criteria to pick what to invest in is something everyone must do, otherwise how could anyone make any decision to buy or sell. You must have some reason for the decision.

What I have found over the last 30 years of making these choices is that it's very easy to "justify" the purchase.... and it's very easy to be "scared out" of that decision (price drops - market drops - or some other hiccup)...

It's my belief that generally I've lost money when I've bought something I didn't really believe in --- and or --- used money that I needed for something else.

So - let's take FaceBook for an example.... "Everyone" bought the hype and the froth... and then when the shares didn't do as "expected" --- they were dumped. That's an investment trap that happens a lot and that everyone needs to be aware of. So then what happens is you were burned by "expectations" and now are wary of the next "big thing" and miss out on the shares that DO go up 100% on the first day. It's why I've just decided to steer clear of this kind of stuff. It becomes too emotional.

That is why I say that for Investing 102 -- that you simply choose stocks of companies that you like and know and understand their business. It's just a simple "criteria" that you can live with. Then you look for your investments to be somewhat diversified.

Investing only gets complicated when you start to build your portfolio and begin to have some "real" money working. What I mean by that is that once you get about 50 or 100 grand invested... and you have your 20 names.... and now you're trying to "reach" a bit. Reaching for more yield - reaching for more diversification - reaching to catch that next Google etc. But my feeling about that is that you should have an EXCELLENT base of investments and you should have a relatively good understanding of YOURSELF and what your reactions and expectations are by the time you've built your portfolio to this point. It's funny that the more money you have in the market - the less "afraid" you become. When you're starting out with $2500 -- you're almost paralyzed by the thought of investing it. That's when you need to have a criteria that is comfortable more than anything else.

I chalk that one up as "the one that got away". What a huge miss on my part...


Ya just can't own 'em all -- at least that's how I justify that mistake.

Same here. yowza.

Up 35+% since January, pays no dividend other than that whimpy gain. :sieg:

Think I'll buy 1 share just for portfolio bragging rights. LOL! Yeah I own Google.........How many shares do you have?.......Uh, enough to make me happy............if it splits a few times! :sieg:

1 bought $25 worth back in like 2006 when it was roughly $550 share. Which is like .04 shares worth. lol

It sat stagnant around that $550 price for a long long time (last year and a half or so). Its now worth $46. An 85% gain.

I also bought $25 worth of Apple at that same time. It was roughly $140/share. Its now worth $100 for a 261% gain. lol (was quite a bit more earlier this year when they were in the $600-700's).

But, all in all, even with those large gains, its not worth it to sell em. It'll be a large % of the gain in the selling fee ($8?ish) and have to mess with capital gains tax. Not worth it for a 85% ($10 gain) lol.

BUT, I can say i own some from "back in the day". :P

I had purchased Apple and Google at the same time. Both at around $600. Google is definately making up for my Apple.

This is why investing is so interesting -- and is so variable. I would tell a young guy (younger) to invest in some Google or Apple or similar type stock if they were so inclined.... For "retirees" like me -- they're non-starters because you're just depending on the growth in capital. Then in order to get any "income" out of them you have to sell... selling creates tax issues (short term or long term capital gains).


I'm glad you guys own some. I cashed out of my Apple when my wife retired 3 or so years ago and we then switched all of our investments to create income. I still love tracking these kinds of stocks though. I just don't buy them.

These are the emails I enjoy receiving at 5 am:

Indices Price Performance for Stated Period
Market Benchmarks 3rd Quarter, 2013 1 Year 3 Year
Large-Cap Stocks +4.69 +16.72 +13.79
Small-Cap Stocks +10.21 +30.06 +18.29
International Stocks +11.56 +23.77 +8.47

Fixed Income Benchmarks (Treasury Yields as of 09/30/2013)
5-Year US Treasury Note +1.39
10-Year US Treasury Note +2.64
30-Year US Treasury Note +3.69

You should only really gloat IF your portfolio BEAT those benchmarks.... otherwise - you're just "average". HAHAHAHAHAHAHAHAHAHAHA



This last three years the stock market has been like shooting fish in a barrel. Which actually kind of worries me. Things have a way of seeking their natural levels (or averages). But then I fall back on the fact that even if the share price s drop - my annual income shouldn't. And for those reinvesting the dividends that means they're buying more shares so in the long run that would be a good thing.

Don't look now but Bitcoin is $200.... RUN! lol.

I suspect manipulation again - since the fall of Silk Road did not bring it down, they are inflating to price to try and crash it like they did before. My personal theory there.

Pass the popcorn...it'll be fun to watch what happens to the price. Knowing BTC users, they aren't going to be cashing out anytime soon, if ever.

Here's what I love to see when I wake up in the AM..... HAHAHAHAHAHAHAHA









10/21/2013
as of
10/20/2013 BPT B P PRUDHOE BAY RLTY TR ROYALTY TRUST
type: ORD DIV - CASH
$17,343.45
10/10/2013 MO ALTRIA GROUP INC
type: QUALIFIED DIV
$9,600.00
10/07/2013 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$2,223.86
10/03/2013 Buy 500 CVX CHEVRON CORPORATION
Details $118.41 -$59,213.95 $8.95
10/01/2013 KO COCA COLA COMPANY
type: QUALIFIED DIV
$2,800.00

10/10/2013 MO ALTRIA GROUP INC type: QUALIFIED DIV $51.73

http://www.acurazine.com/forums/imag...ies/finger.gif..... HAHAHAHAHAHAHAHA


:idea: How bout you loan me a few of your positions for a couple years :whistling:

Funny I was just going to ask the same thing. Big difference in his quartely dividend.
my MO was only $97.56

I'm really busy right now... let me get back to ya.....

Bah. My MO Div: $17.14 :ohsnap: :newbie:

30 years ago that's about all I got too.....



Look what you have to look forward to! :D

yeah... we all gotta start somewhere. :)

I do have just a tad over 30 years before I retire anyway. I gots some time.

:D How do you guys sleep at night investing in a company like that?

So seriously -- Gwen and I HATE HATE HATE smoking.... it's just a disgusting habit. And of course - as many know here - I haven't had a drink for 29 years now.... (quit at 31 and just turned 60 -- oh yeah - I quit smoking at 21 and took up drinking!). We're in europe and EVERYONE there smokes --- and she starts bitching about it... and all I said was "honey -- you should hope they KEEP smoking 'cause they paid for your trip!"


HAHAHAHAHAHAHA

It was on my buy list and Kelli talked me out of it this round. We both hate it with a passion as well.

Haters will hate and profit takers will take. :D

I just noticed in my portfolio that holdings with dividend reinvestment position programs have some listed as Long and others listed as Short. Anyone have a quick explanation as to why this is. I plan on looking into this but I'm standing on the freeway dodging traffic working.

I used to subscribe to the statement "nobody ever went broke taking a profit".... but then I realized that now I have the cash -- but now need to invest it - which usually meant just buying some other stock which has also already gained in share price. Now I have to pay taxes on the gain - and I've raised my cost basis.

I've learned to "trim" rather than just sell.... which means -- let's say I have 1000 shares @ cost basis of $50 a share.... it's now $60 a share which means I have 10K gain. IF I need the cash for something -- I'll sell just 100 shares and hold the 900. I don't do this very often - and usually reserve those trimmings for when I have a really outsized gain... and have my eye on some other investment *use for the cash gain*.


What I've "learned" is that I feel better long term about my NET WORTH growing --- and NOT paying taxes --- and just collecting the income and living within my means and only spending the income rather than the income and the "gains". Taking the gain only felt good temporarily - kinda like a drug addict - then there was the downer that came afterwards which was the tax due - and the "stress" of having to buy some other investment with it. Now I pretty much just let it ride.

When I was in "sales" ---- there were customers I couldn't stand but had to work with anyway. I justified it mentally by thinking that there's one way to get even with them - and that was to sell them something. Made it all mo beta.


People are going to smoke - and they're going to drink - so I might as well make money off them. It's called "laughing all the way to the bank".

Its like gun stocks also.
I bought RGR at $55 and all the teachers union pension funds started dumping it cause of the mass shootings. Its value dropped to $40 I bought more on the way down. All while collecting some nice dividends. Now its $67.
I hope those teachers unions bought JCpenny.

If you want to peer into the mind of Warren Buffet this evening, here's a pretty cool "memo" (19 pages) he wrote to the Washington Post CEO in 1975. Re: Pension Plans.

http://finance.fortune.cnn.com/2013/...graham-letter/

Direct link to download the memo in pdf:
http://www.scribd.com/document_downl...d&source=embed

Enjoy!

Greg, that is a great way to put it. I have customers that i DONT like, but, the price is reflected in it. Good way too look at the stocks...

I completely agree and almost wrote something similar. It's their life and choice. I'm certainly not fanning the flames, you taking advantage of an opportunity. I did read that the number of smokers are diminishing some, that was also a factor.

So without "pitching" a particular stock -- as this is NOT what this thread should turn into...


I hold Altria (MO) because they're terbacky AND booze... Great brands in both. In fact I added 3000 shares this morning - and now hold 23,000 shares. :>)

I had the same concern you did, why invest in something that people are aware of the cancer risks and less people are smoking and more are quiting.

Full disclosure: I did learn about MO through this thread and Greg bringing it up a few times. He always mentioned it as a tobacco company.

So I did some research. www.altria.com I looked around hit the ABOUT tab.
hit the investor tab. They own smokless tobacco companies, Cigar company, and they own Wineries that I have spent thousands of dollars with (Robyn is a wino).
The wineries really made it that more attractive for me. They also have a ventures side of the company that looks to buy other companies. In the future it could aquire some e-cigarettes, or more booze. So I bought some.

I do recommend researching the company as much as you can and make a somewhat educated purchase, no one can predict what will happen in the future but if you do some homework upfront it may pay you back in the future.

This is all part of UNDERSTANDING what you own and WHY.... Which helps you when the chips are down and you're struggling with "what to do".

Nobody cares when the market is flying....

The worry about "the market" and your investments begins when you're dying the death of a 1000 cuts... and your portfolio starts to sound like a punctured tire. THAT is when (you need to KNOW BEFORE THIS HAPPENS) you must have faith in the names you've chosen to invest in.

That is also why I don't think ANYONE should buy anything because someone else told them about it. Hot stock tip or not... KNOW what you buy. There's 10's of 1000's of companies out there -- you only need to know 20 of them at most. Being comfortable with them will save you from bailing out at the bottom (the old buy high and sell low syndrome). It might also help you to continue to buy in down markets === which for me === is how I've made real money.

Be careful of course -- of buying more of a company "just because it's down" -- make sure there isn't a fundamental reason why it's down, first.

I saw your email today Greg and has actually logged onto their site and checked out all the branches last week. Your email has more info and I'll take a look when I'm ready to buy more.

Why did so many of my stocks end up down today when the dow went up? Are people selling? I'm as green as they come.

Well.... who knows. Some days I see the market is down - and my account is positive -- some times it's the opposite... There's just now telling why on any given day some shares are up and some are down. When you think you have it all figured out --- somebody on wall street pulls the rug out from under you.


Remember too -- that particularly with DIVIDEND paying stocks -- the day they go "EX" dividend or pay the dividend (which is the pay date not the EX date) they'll go down the amount they paid out.

So here's an explanation of "EX" date and "PAYABLE DATE" -- because they're different.

The "EX" date is the date on which anyone that owns the shares on that DATE is going to be paid the dividend on the Pay date.

You can sell the shares the next day and still pick up the dividend -- or you can buy the shares the day before (maybe even the day of but don't count on it) and get the dividend.

Some "TRADERS" do nothing but try to buy shares - pick up the dividend - and move on.



A typical news release showing the EX and PAY dates -- I happen to own these shares.






The Board of Directors of National Retail Properties, Inc. (NYSE: NNN), a real estate investment trust, declared a quarterly dividend of 40.5 cents per share payable November 15, 2013 to common shareholders of record on October 31, 2013. National Retail Properties is one of only four publicly traded REITs and 102 publicly traded companies in America to have increased annual dividends for 24 or more consecutive years.

Apple "earnings" declined this quarter compared to the year ago quarter… now for anyone that pays attention to anything -- was that a DOH moment?

When you sell a lot of stuff - and the ASP (average selling price) is LESS - doesn't it make sense that then your numbers might suffer.

This is why I say it's so easy to invest -- if you pay the least amount of attention to your investments and just give normal fundamentals a thought.

If you went into a store that USED to be swamped with people -- and YOU noticed the last couple of times you went in there were LESS people… maybe that should be a clue you'd think about. Or -- is the inventory at the store you buy all your hardware at - shoddy and missing and crap is laying in the aisles? Then maybe that's a hunch things aren't being run so well.

Here's one - if you used to eat at some place all the time and EVERYONE was talking about the same place - and you noticed you've not been back there for months and nobody is talking about it any more -- what would you think their business might be like?


UH HUH…. pretty simple.

Now - I don't smoke and I don't drink and I don't often eat at McDonalds. But I pay attention to these things via news articles - in other words - if I see an article about those things - I read it! I want to know what people are thinking and saying and how they're reacting.

If I'm not interested -- then I should sell those investments and buy some where I have some connection and want to pay attention to them.

You wouldn't buy a rental house and then never drive by it - or bother to check the neighborhood would you?