+- Dividend Growth Forum (http://DividendGrowthForum.com)
+-- Forum: Dividend Growth Investing (http://DividendGrowthForum.com/forumdisplay.php?fid=15)
+--- Forum: Dividend Growth Investing (http://DividendGrowthForum.com/forumdisplay.php?fid=33)
+--- Thread: Groupthink (/showthread.php?tid=2069)
Groupthink - rnsmth - 12-12-2021
I fellow I have respect for, who posts on SA, wrote a post about groupthink today. I am not going to quote his post, but I am going to post my response to it.
Do you see much groupthink in dividend growth investing groups?
+++
Many of us have similar goals. A safe, reliable and growing income stream from our equity portfolios.
From there, we branch off. Some have an affinity for very low yield faster dividend growth companies. Some for high yield, lower dividend growth companies. Some for mid-yield mid growth dividend companies. Some for a mix of the three.
I did a portfolio reconstruction program starting in 2018 that was done by late 2019 to early 2020. The goal was to rapidly increase portfolio income. I accomplished that goal. Since then I have worked, in part, on increasing the portfolio's dividend growth. That is also being accomplished.
Do I pay attention to what folks here do? Yes, I do. My sweet spot is mid-yield (roughly 2.5% to 4% yield) with average to very fast dividend growth (5% to 12%+). I get the funds for these investments via two methods, accumulating dividiends from our portfolios, that include higher yield, lower growth companies like VZ, ENB, KMI, PBA and TU (for example) and investing in the sweet spot. The second method was demononstrated by my sale this week of MDU and the purchase of EOG.
Groupthink? Frankly, I do not care. It is goal directed behavior for this 70 year old investor and his wife.
Mid-yield, Safe and Very Safe SSD rated companies that improve our income and income growth. That is my personal sweet spot for the use of funds generated by both methods described in this post.
A couple of companies are currently on what we used to call probation back when Bob Wells was around. CSCO is one of those I have talked about lately, but not the only one. Replacements have been identified and I have written about those, either here or on SI and the Dividend Growth Forum.
I know that some folks tend to follow others in their investments. It is probably a good idea for some. I reject widespread groupthink, though. I think there is too much variety of thought and of investment practice here to provide strong support for that hypothesis. Little sniffs of it from time to time? Sure. Widespread practice. I do not think so.
+++
RE: Groupthink - crimsonghost747 - 12-13-2021
The thing is that even though the general idea (dividend growth investing) is the same, everyone has a very different set of goals and a different set of risk tolerance. And all investment decisions need to be tailored to fit the needs of the individual doing the investing.
These forums are amazing for getting ideas and for seeing what others are doing, but at the same time everyone needs to make their own decisions that are appropriate for them. I have always been slightly chasing yield, it might not have been the best course of action but it is very well suited to my lifestyle and my future plans.
RE: Groupthink - fenders53 - 12-13-2021
Yes, I see a tremendous amount of group think on forums though I don't believe it is confined to dividend investing. When I see a new article posted on SA I know with a high degree of accuracy how it will be received.
We do a pretty good job of disagreeing with each other here and I find that useful. I don't come here to be agreed with if my logic is flawed, and it's a disservice to others to not be honest when assessing their investment decisions.
RE: Groupthink - Scooterd - 12-13-2021
(12-13-2021, 08:06 AM)fenders53 Wrote: Yes, I see a tremendous amount of group think on forums though I don't believe it is confined to dividend investing. When I see a new article posted on SA I know with a high degree of accuracy how it will be received.
We do a pretty good job of disagreeing with each other here and I find that useful. I don't come here to be agreed with if my logic is flawed, and it's a disservice to others to not be honest when assessing their investment decisions.
I find very little value from what any individual investor may be investing within at any given moment, However, in the same vein, I find great value in an individuals thesis (when they provide their reasoning) in support of their investment thesis as to why, the purpose of their investment in a particular company - metrics, Growth, Value, portfolio positioning, sector weighting etc...
It is that level of information sharing (for me) that provides the greatest value and generates open discussion and positive exchanges of ideas.
- Just thoughts
- Scoot
RE: Groupthink - fenders53 - 12-13-2021
Completely agree. The sharing of other's investment thesis is helpful. Sometimes it does cause a few others here to buy or sell on a given day but there is generally a coherent reason and not just cheerleading. Head over to YouTube or other large sited like Yahoo and it's often a bit more like sheep mentality. That's usually more about FOMO specs and less so about dividend stocks.
RE: Groupthink - ken-do-nim - 12-14-2021
My investment thesis is:
1. Industrialization of Africa/Asia has been going on for decades and will continue as such. It is the equivalent of a whole new Manhattan every month! The picture of Beijing from 1990 vs. 2020 is astounding.
Outcome: steel stocks (Rio, Vale), infrastructure (BroadCom, Cisco).
2. Massive technological revolution
Outcome: chip stocks are and will be in greater and greater demand for decades, also cloud computing (Oracle, Microsoft, Okta, Amazon), and storage/network for it (Seagate), 3D printing & laptops (Hewlett Packard). Less clear is whether electric vehicles will really take off; they have serious limitations, but if anyone can fix the battery life/charging issues it is Tesla. Apple is still the king of consumer tech retail.
3. Migration out of cities
Outcome: home building/improvement (Home Depot, Sherwin Williams)
Of course I also have stocks in my port that "seem to be good" but don't fit a thesis like Target and Blackstone.
RE: Groupthink - Scooterd - 12-14-2021
(12-14-2021, 09:27 AM)ken-do-nim Wrote: My investment thesis is:
...... The picture of Beijing from 1990 vs. 2020 is astounding.
I recently caught a 60 minutes (I think it was 60 minutes) How China was propping up their Government, Economy, employment. developers etc.. and The impact - IE: Ghost Cities of China. The corruption was on a massive scale, touched all areas of Government, all the way down to the local level. Developers would borrow huge sums of monies, build huge cities (facade) then sell to buyers, then abandon the development projects mid construction, leaving the buyers with no electricity or running water or any other amenities (no operational elevators etc..) and sticking them with 30 year mortgages and zero recourse.
It was amazing how prevalent the pattern of payoffs, corruption and kickbacks were from the highest levels down to lowly administrators that issued building permits etc...
RE: Groupthink - rnsmth - 12-14-2021
(12-13-2021, 03:58 PM)Scooterd Wrote:(12-13-2021, 08:06 AM)fenders53 Wrote: Yes, I see a tremendous amount of group think on forums though I don't believe it is confined to dividend investing. When I see a new article posted on SA I know with a high degree of accuracy how it will be received.
We do a pretty good job of disagreeing with each other here and I find that useful. I don't come here to be agreed with if my logic is flawed, and it's a disservice to others to not be honest when assessing their investment decisions.
I find very little value from what any individual investor may be investing within at any given moment, However, in the same vein, I find great value in an individuals thesis (when they provide their reasoning) in support of their investment thesis as to why, the purpose of their investment in a particular company - metrics, Growth, Value, portfolio positioning, sector weighting etc...
It is that level of information sharing (for me) that provides the greatest value and generates open discussion and positive exchanges of ideas.
- Just thoughts
- Scoot
I find value in both in cases where I know the individual investor who may post a buy without much other information. It is an easy click to two to decide if I want to look at it more closely.
RE: Groupthink - ken-do-nim - 12-14-2021
(12-14-2021, 09:37 AM)Scooterd Wrote:(12-14-2021, 09:27 AM)ken-do-nim Wrote: My investment thesis is:
...... The picture of Beijing from 1990 vs. 2020 is astounding.
I recently caught a 60 minutes (I think it was 60 minutes) How China was propping up their Government, employment. developers etc.. and The impact - IE: Ghost Cities of China. The corruption was on a massive scale, touched all areas of Government, all the way down to the local level. Developers would build huge cities (facade) then sell to buyers, then abandon development projects leaving the buyers with no electricity or running water or any other amenities and sticking them with 30 year mortgages and zero recourse.
It was amazing how prevalent the pattern of payoffs, corruption and kickbacks were from the highest levels down to lowly the administrators that issued the building permits.
I knew that was happening in India; didn't realize it was happening in China too. Very sad.
RE: Groupthink - fenders53 - 12-14-2021
(12-14-2021, 09:37 AM)Scooterd Wrote:China is propping up a fragile economy where real estate means much more than their stock market where the common folk invest a fraction of what we do in the US. If I take off my red white and blue hat for a moment, we allowed similar foolishness that led to the GFC. Just last year the FED purchased junk bonds to my surprise, and Congress bailed out companies with grants to those that squandered all their cash buying back shares for the benefit of us investors. But we were OK with that. We've been buying bonds ever since. Our game is about as shaky as most of the world.(12-14-2021, 09:27 AM)ken-do-nim Wrote: My investment thesis is:
...... The picture of Beijing from 1990 vs. 2020 is astounding.
I recently caught a 60 minutes (I think it was 60 minutes) How China was propping up their Government, employment. developers etc.. and The impact - IE: Ghost Cities of China. The corruption was on a massive scale, touched all areas of Government, all the way down to the local level. Developers would build huge cities (facade) then sell to buyers, then abandon development projects leaving the buyers with no electricity or running water or any other amenities and sticking them with 30 year mortgages and zero recourse.
It was amazing how prevalent the pattern of payoffs, corruption and kickbacks were from the highest levels down to lowly the administrators that issued the building permits.
RE: Groupthink - Kerim - 12-14-2021
From the first few google results:
"Groupthink is a psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome."
"Groupthink occurs when people's desire to maintain group loyalty becomes more important than making the best choices. People often find it hard to think and act independently in group situations."
"Groupthink is a phenomenon developed in groups marked by the consensus of opinion without critical reasoning or evaluation of consequences or alternatives."
I think DG investors understandably gravitate to / revolve around a relatively static set of companies, and we're all here to share thoughts and ideas. And when I've come to respect a person, I am happy to give their thoughts and opinions more weight. So knowing that they are putting their money the same place I am can be reassuring. But I never buy just on another person's say-so. And as for you all, I've never worried about your independent-mindedness!