Dividend Growth Forum

(04-08-2020, 11:21 AM)Binary Wrote: [ -> ]

(04-08-2020, 10:59 AM)Otter Wrote: [ -> ]

(04-08-2020, 10:57 AM)fenders53 Wrote: [ -> ]We are going to struggle with recent low price bias.  I don't know about anybody else, but I didn't start a DGI port from scratch last month and buy all my positions at five year low prices.  This is why we need some earning guidance.  I was good with blindly buying quality brands that were suddenly 50% off.  Now I look at a stock only 15% off it's ATH and think hmmmmm, I wonder if they will struggle for five quarters with much higher debt?   That's not priced in anymore.  That greatly affects how much I am going to pay.  There will be more deals soon.

Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

Agree totally. Luckily earnings season starts in a week or two.

Yup. Got my buy list ready to update with earnings figures.

(04-08-2020, 11:29 AM)fenders53 Wrote: [ -> ]

(04-08-2020, 10:59 AM)Otter Wrote: [ -> ]

(04-08-2020, 10:57 AM)fenders53 Wrote: [ -> ]We are going to struggle with recent low price bias.  I don't know about anybody else, but I didn't start a DGI port from scratch last month and buy all my positions at five year low prices.  This is why we need some earning guidance.  I was good with blindly buying quality brands that were suddenly 50% off.  Now I look at a stock only 15% off it's ATH and think hmmmmm, I wonder if they will struggle for five quarters with much higher debt?   That's not priced in anymore.  That greatly affects how much I am going to pay.  There will be more deals soon.

Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

This may not be the best plan but I do have a plan.  I nibbled quality all the way down and it was scary, and slowly trimming all the way back up.  I prayed for a bear market bounce but nobody predicted this outcome.  I suspected it would be months before we had any clarity on company financials and that came true.  I do want some earnings guidance, but waiting for the all clear signal will be WAY too late like always.  The market is running on nothing this week.  The last bounce was understandable.  There were stocks selling for pre-BK pricing (Wendy's at sub $8 when they are not shut down comes to mind).  This run is irrational.  The momentum algo machines have taken over lol.  The market will work it out when they get some facts.  There will be some downgrades when the numbers come to light.

Still holding a few SPY puts just in case.  I am four years from needing some of this port and another 30% haircut would not be welcomed.  Anything I share here should be read in that context.  When I was 30 I invested with my hair on fire.  Painful but it worked out.

Even if you waited for the all-clear and technical end of the last recession (June 2009, actual reported figures confirming available a few months later), you did okay in the decade afterwards. 

My initial buys after earnings come out will be companies with pristine balance sheets that don't have earnings deteriorating to a point that points to skyrocketing debt.

Stuff lower down the quality food chain can wait for the all-clear. I won't catch the bottom, but debt is dynamite with a lit fuse at this point.

(04-08-2020, 11:20 AM)DividendGarden Wrote: [ -> ]Added to CARR (one of the two spinoffs when UTX & Raytheon merged to become RTX).  I'm not interested in OTIS, although I'll hold those shares forever.  CARR seems like it should be worth $30/share and it's trading at $14.  Thoughts?

Watching them like a hawk.  I mentioned that in my pre-merger thread.  It is 1000% normal for spin-offs to dip so I wouldn't buy the initial offering.  A million soinoff shareholders get awarded a small position and the majority just sell it off like always.  Company doesn't want them anymore so why should I?

Info is very sparse. It's my understanding UTX dumped some debt on them.  What a shock, not   They do have cash set aside for  Div.  $550M if I remember correctly.  I know with absolute certainty Carrier is a premiere brand in heating and air conditioning equipment.  That's a cyclical business.  My thoughts are CARR is not as good as RTN was, but very likely no worse than the short-term outlook for position UTX retained in aircraft parts.  The story changed big-time since they announced the merger plans.  Give me a down market day and I'll be nibbling some CARR.  OTIS gets cheap enough I'll consider that too.  Another good brand and the service contracts are much of their game when when new buildings aren't going up.

(04-08-2020, 11:36 AM)Otter Wrote: [ -> ]

(04-08-2020, 11:29 AM)fenders53 Wrote: [ -> ]

(04-08-2020, 10:59 AM)Otter Wrote: [ -> ]

(04-08-2020, 10:57 AM)fenders53 Wrote: [ -> ]We are going to struggle with recent low price bias.  I don't know about anybody else, but I didn't start a DGI port from scratch last month and buy all my positions at five year low prices.  This is why we need some earning guidance.  I was good with blindly buying quality brands that were suddenly 50% off.  Now I look at a stock only 15% off it's ATH and think hmmmmm, I wonder if they will struggle for five quarters with much higher debt?   That's not priced in anymore.  That greatly affects how much I am going to pay.  There will be more deals soon.

Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

This may not be the best plan but I do have a plan.  I nibbled quality all the way down and it was scary, and slowly trimming all the way back up.  I prayed for a bear market bounce but nobody predicted this outcome.  I suspected it would be months before we had any clarity on company financials and that came true.  I do want some earnings guidance, but waiting for the all clear signal will be WAY too late like always.  The market is running on nothing this week.  The last bounce was understandable.  There were stocks selling for pre-BK pricing (Wendy's at sub $8 when they are not shut down comes to mind).  This run is irrational.  The momentum algo machines have taken over lol.  The market will work it out when they get some facts.  There will be some downgrades when the numbers come to light.

Still holding a few SPY puts just in case.  I am four years from needing some of this port and another 30% haircut would not be welcomed.  Anything I share here should be read in that context.  When I was 30 I invested with my hair on fire.  Painful but it worked out.

Even if you waited for the all-clear and technical end of the last recession (June 2009, actual reported figures confirming available a few months later), you did okay in the decade afterwards. 

My initial buys after earnings come out will be companies with pristine balance sheets that don't have earnings deteriorating to a point that points to skyrocketing debt.

Stuff lower down the quality food chain can wait for the all-clear. I won't catch the bottom, but debt is dynamite with a lit fuse at this point.

I understand your fear of the current uncertainties and you can make a case.  I can also make a case I've been rewarded for looking a forward and taking a chance by averaging back into the fear.  I'll respectfully disagree on waiting for a vibrant economy.  A considerable portion of the rebound happens while the sky is gray, not blue.  You are younger than I am.  That affects my decisions.  

I am receptive to being disagreed with.  I watch the too bullish fools on S.A. high five themselves into crushing losses in certain sectors.  Oil, REITs.  I doubt I need to explain that further.  I come here everyday hoping somebody will disagree with me and cause me to research something I may have underestimated.  

Excessive fear, greed, and a closed mind are the greatest risk to my net worth.  I believe that strongly.

(04-08-2020, 12:00 PM)fenders53 Wrote: [ -> ]

(04-08-2020, 11:36 AM)Otter Wrote: [ -> ]

(04-08-2020, 11:29 AM)fenders53 Wrote: [ -> ]

(04-08-2020, 10:59 AM)Otter Wrote: [ -> ]

(04-08-2020, 10:57 AM)fenders53 Wrote: [ -> ]We are going to struggle with recent low price bias.  I don't know about anybody else, but I didn't start a DGI port from scratch last month and buy all my positions at five year low prices.  This is why we need some earning guidance.  I was good with blindly buying quality brands that were suddenly 50% off.  Now I look at a stock only 15% off it's ATH and think hmmmmm, I wonder if they will struggle for five quarters with much higher debt?   That's not priced in anymore.  That greatly affects how much I am going to pay.  There will be more deals soon.

Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

This may not be the best plan but I do have a plan.  I nibbled quality all the way down and it was scary, and slowly trimming all the way back up.  I prayed for a bear market bounce but nobody predicted this outcome.  I suspected it would be months before we had any clarity on company financials and that came true.  I do want some earnings guidance, but waiting for the all clear signal will be WAY too late like always.  The market is running on nothing this week.  The last bounce was understandable.  There were stocks selling for pre-BK pricing (Wendy's at sub $8 when they are not shut down comes to mind).  This run is irrational.  The momentum algo machines have taken over lol.  The market will work it out when they get some facts.  There will be some downgrades when the numbers come to light.

Still holding a few SPY puts just in case.  I am four years from needing some of this port and another 30% haircut would not be welcomed.  Anything I share here should be read in that context.  When I was 30 I invested with my hair on fire.  Painful but it worked out.

Even if you waited for the all-clear and technical end of the last recession (June 2009, actual reported figures confirming available a few months later), you did okay in the decade afterwards. 

My initial buys after earnings come out will be companies with pristine balance sheets that don't have earnings deteriorating to a point that points to skyrocketing debt.

Stuff lower down the quality food chain can wait for the all-clear. I won't catch the bottom, but debt is dynamite with a lit fuse at this point.

I understand your fear of the current uncertainties and you can make a case.  I can also make a case I've been rewarded for looking a forward and taking a chance by averaging back into the fear.  I'll respectfully disagree on waiting for a vibrant economy.  A considerable portion of the rebound happens while the sky is gray, not blue.  You are younger than I am.  That affects my decisions.  

I am receptive to being disagreed with.  I watch the too bullish fools on S.A. high five themselves into crushing losses in certain sectors.  Oil, REITs.  I doubt I need to explain that further.  I come here everyday hoping somebody will disagree with me and cause me to research something I may have underestimated.  

Excessive fear, greed, and a closed mind are the greatest risk to my net worth.  I believe that strongly.

I wasn't talking about a vibrant economy. I remember 2008 and 2009 vividly. Even when the technical data showed an end to the recession, no one thought the economy was vibrant in 2009. The U-shaped recovery took a long time, and people and analysts were generally pessimistic into 2011, as the market continued to climb a wall of worry.

My strategy is to start buying the highest-quality companies with pristine balance sheets after upcoming earnings. Even if this is equivalent to purchasing in October/November 2008, those picks should still do well within five years (and I will average into them if they continue to decline).

The lower quality equities with worrying debt/equity levels can wait for my purchases until there are technical indicators that a recession has ended and their earnings are stable. Even missing the bottom should be fine, on those. It's a fair risk trade-off given those companies' historically poor allocation of capital

(04-08-2020, 12:16 PM)Otter Wrote: [ -> ]

(04-08-2020, 12:00 PM)fenders53 Wrote: [ -> ]

(04-08-2020, 11:36 AM)Otter Wrote: [ -> ]

(04-08-2020, 11:29 AM)fenders53 Wrote: [ -> ]

(04-08-2020, 10:59 AM)Otter Wrote: [ -> ]Yes. I have been waiting for more clarity on the "E" side of the P/E equation. That clarity will also end up moving the P.

Edited to add - The "E" information also plays in to most of my other metrics for determining DGI value, like payout ratio, and how realistic Chowder Numbers based on past 5yrs results are likely to be.

This may not be the best plan but I do have a plan.  I nibbled quality all the way down and it was scary, and slowly trimming all the way back up.  I prayed for a bear market bounce but nobody predicted this outcome.  I suspected it would be months before we had any clarity on company financials and that came true.  I do want some earnings guidance, but waiting for the all clear signal will be WAY too late like always.  The market is running on nothing this week.  The last bounce was understandable.  There were stocks selling for pre-BK pricing (Wendy's at sub $8 when they are not shut down comes to mind).  This run is irrational.  The momentum algo machines have taken over lol.  The market will work it out when they get some facts.  There will be some downgrades when the numbers come to light.

Still holding a few SPY puts just in case.  I am four years from needing some of this port and another 30% haircut would not be welcomed.  Anything I share here should be read in that context.  When I was 30 I invested with my hair on fire.  Painful but it worked out.

Even if you waited for the all-clear and technical end of the last recession (June 2009, actual reported figures confirming available a few months later), you did okay in the decade afterwards. 

My initial buys after earnings come out will be companies with pristine balance sheets that don't have earnings deteriorating to a point that points to skyrocketing debt.

Stuff lower down the quality food chain can wait for the all-clear. I won't catch the bottom, but debt is dynamite with a lit fuse at this point.

I understand your fear of the current uncertainties and you can make a case.  I can also make a case I've been rewarded for looking a forward and taking a chance by averaging back into the fear.  I'll respectfully disagree on waiting for a vibrant economy.  A considerable portion of the rebound happens while the sky is gray, not blue.  You are younger than I am.  That affects my decisions.  

I am receptive to being disagreed with.  I watch the too bullish fools on S.A. high five themselves into crushing losses in certain sectors.  Oil, REITs.  I doubt I need to explain that further.  I come here everyday hoping somebody will disagree with me and cause me to research something I may have underestimated.  

Excessive fear, greed, and a closed mind are the greatest risk to my net worth.  I believe that strongly.

I wasn't talking about a vibrant economy. I remember 2008 and 2009 vividly. Even when the technical data showed an end to the recession, no one thought the economy was vibrant in 2009. The U-shaped recovery took a long time, and people and analysts were generally pessimistic into 2011, as the market continued to climb a wall of worry.

My strategy is to start buying the highest-quality companies with pristine balance sheets after upcoming earnings. Even if this is equivalent to purchasing in October/November 2008, those picks should still do well within five years (and I will average into them if they continue to decline).

The lower quality equities with worrying debt/equity levels can wait for my purchases until there are technical indicators that a recession has ended and their earnings are stable. Even missing the bottom should be fine, on those. It's a fair risk trade-off given those companies' historically poor allocation of capital

I will again disagree because it's much more productive than posting up our our latest successful trades.  I have some awesome recent short term trades to share.  I've had an amazing few weeks .  Who really cares?  I do because I got caught with some stocks with awesome balance sheets that suddenly vaporized with zero revenues now and managed to fix it some.  Your list of companies with pristine balance sheets is going to be very short and most have already run 20% and likely near fair value because they are already obvious.   Waiting has a cost.  You already missed half the run.  I missed some runs myself on stocks I wanted to own.   Now we wait and hope for the market to give us another chance.  This timing thing is always hard.  Buffet and Lynch warned us decades ago.  Balancing fear and greed is hard, very hard.  You called the dip big-time, now don't mess up the re-entry being too scared.  It's hard to get both parts of the trade right.  I sense fear right now.  I too hope for a big dip soon.  We'll see what actually happens.  We may or may not have seen the market bottom.   We definitely haven't seen the economy bottom.    

Soon I gotta go play door guard at HD and deal with entitled idiots that "need" lawn care products and don't want to wait five minutes while we control the customers in the store.  I'll read your reply when I get a break.  I always appreciate your insight.

My estimation of whether a balance sheet is pristine very much depends on upcoming earnings. I have a shopping list predicated upon what the lay of the land is right now, but that information will be updated soon.

I don't think I will regret prioritizing purchasing quality, which always carries a premium. The initial list will be small, as sadly there are few companies out there that consistently allocate capital and manage debt well. If an overall recovery gets underway, I expect the quality to maintain solid performance (I certainly don't regret owning JNJ).

Folks who bought in 2009 after the recession was technically declared over did not miss half the run. A recession hasn't technically been declared begun yet, although the Bloomberg estimator is now at 100%. I think the earliest you'd receive reliable economic data to declare a recession technically over is around the end of this year.

There were years after 2009 where you could pick DGI stocks lower down the quality rankings than JNJ and MSFT, and make large paper returns and significant dividend income for your effort. Most of us here did it, as documented in the thousands of posts in this thread. I'll have plenty of time to sort through those as this shakes out over time. I plan to buy them again, but they just aren't first on my list. If not prioritizing quality now, then when?

I've been prioritizing quality since about day three of this when it became obvious this would be brutal. Like others I've owned JNJ and MSFT for over 20 years so those continue to be easy. I grabbed a lot JNJ down hard on the dip because it's always obvious. Even had a chance to sell a few shares on the run. Solid balance sheets and a hope for some growth will be the ones to find. I look for them too. I need to add to MSFT but I probably missed my chance weeks ago. I'll just hope for another chance.

Decided after all that to take a position in BA. I have missed this stock over the years only to see it triple. These levels here are low enough where I can wait it out. Its so heavily shorted that any positive news and this could go up $40 in a day. if it goes lower I will just add more.

(04-08-2020, 02:41 PM)stockguru Wrote: [ -> ]Decided after all that to take a position in BA. I have missed this stock over the years only to see it triple. These levels here are low enough where I can wait it out. Its so heavily shorted that any positive news and this could go up $40 in a day. if it goes lower I will just add more.

I don't think you will regret this purchase five years down the road. Essential defense contractor that has a nice duopoly role in the severely distressed commercial aviation market, which will eventually bounce back. Don't get discouraged if there is significant volatility in the next year or so. Boeing will reward you handsomely in the end. 

I sold out because they violated my rule about cutting dividends, but I will eventually get back in.

(04-08-2020, 02:41 PM)stockguru Wrote: [ -> ]Decided after all that to take a position in BA. I have missed this stock over the years only to see it triple. These levels here are low enough where I can wait it out. Its so heavily shorted that any positive news and this could go up $40 in a day. if it goes lower I will just add more.

Doesn't sound like a bad long-term plan to me.  You were patient.  Others were piling in over $100 ago believing it couldn't get worse.  I think you have a long wait for a dividend but it will run higher eventually.  It will be a premiere US company again.  I suspect you can buy, hold or short this shock and make money for awhile.  I'll be surprised if it doesn't remain volatile so you should have some chances to add a little lower if you decide to.  Keep an eye on DAL and LUV.  They have to get well for BA to get well.  AAL already upgraded their fleet so I don't think they matter much to BA for a long-time.  The defense contracts are good.  They just have to stop messing everything up, and I believe they will.

Added yet again to fenders' favourite, Red Electrica de Espana. (REE)
I'm seeing less and less good deals in the US markets, and my little plan for this coronavirus says to resume buys there if the sp500 falls to 2500. That is for extra buys, of course my regular monthly contribution will always go into the market no matter what.

So REE is where I go to, and I've been nibbling quite a bit recently.
Over 90% of their revenue comes from electric grids, both from owning the lines as well as managing the whole system. So that revenue stream and profit is not going anywhere, there could be maybe slightly less income if the electricity consumption goes down due to some factories being shut down, but it won't have a huge effect.
Excluding this coronavirus thing, the last time the price hit 15 euros was in the beginning of 2014. Dividend is pretty juicy around 6.5%.

I just don't see how I could go wrong with this one long term unless Spain turns into zombieland.