06-24-2015, 08:29 AM
Hey Dash -- I agree it is a nice collection of stocks you're putting together. And I appreciate your discipline. It can be tough to be patient and wait for your price on a stock you'd really like to own. To me, the first rule of investing is "know thyself," and it sounds like you do!
I think there really is something to this point. I've thought about it a lot, but have never really nailed it down. I would (and have) happily buy KO or PEP on a nice dip, but I suspect that you are right that the next 30 years will look little like the last. It is easy to be lulled into the DG narrative by looking at the last 30 years, but I think that can be misleading because the last 30 years, especially for a name like KO, included the double tail-wind of huge international expansion and the retail popularization of stock ownership. I do not think this invalidates the DG philosophy in any way, but it certainly tempers my enthusiasm about some of the "core" DG companies.
Don't get me wrong, I think KO is a great and profitable company that will continue to find ways to deliver EPS and dividend growth going forward. But valuation will matter much more in deciding whether to jump in than it did, say, 15 or 20 years ago. And I think it is possible to find other DG names that have better valuation and potential.
So there, we can be traitors together, Dash!
(06-23-2015, 05:41 PM)Dash Wrote: And call me a traitor to DGI, but I just don't see the next 50 years of Coke and Pepsi being what they previous 50 years have been. Soda/fake foods/transfats are the new tobacco. They will continue to exist and likely grow overseas but in the US the tide has turned, and I just don't love companies whose future growth is more dependent on foreign countries that I don't really understand. So paying over 20 times earnings for KO or PEP is not something I'm willing to do. If that means I never get them, I'm ok with that.
I think there really is something to this point. I've thought about it a lot, but have never really nailed it down. I would (and have) happily buy KO or PEP on a nice dip, but I suspect that you are right that the next 30 years will look little like the last. It is easy to be lulled into the DG narrative by looking at the last 30 years, but I think that can be misleading because the last 30 years, especially for a name like KO, included the double tail-wind of huge international expansion and the retail popularization of stock ownership. I do not think this invalidates the DG philosophy in any way, but it certainly tempers my enthusiasm about some of the "core" DG companies.
Don't get me wrong, I think KO is a great and profitable company that will continue to find ways to deliver EPS and dividend growth going forward. But valuation will matter much more in deciding whether to jump in than it did, say, 15 or 20 years ago. And I think it is possible to find other DG names that have better valuation and potential.
So there, we can be traitors together, Dash!