Sanitized content

[hendi_alex]

One of the least desirable traits that I sometimes see in investing message boards shows itself as what I'll call an excess of optimism, or more specifically, an absence of critical review of content. Think about it. Those drawn to a particular themed board are filtered by the nature of the board selection process. The more narrowly themed the board, the more homogenous the poster's attitudes and goals. I would prefer to see more lively debate here and less of the 'wonderful bunch of holdings' kinds of comments. Most everyone posting here seems to always have his/her available cash 'burning a hole in their pockets.' It seems that stocks of really good companies are being bought at the most awful time in terms of valuation, yet almost nobody ever says or suggests that.

While the board members are courteous and friendly, there seems to be very little peer review of strategies, selections, alternatives, etc. DG investing is great, but when does some alternative action represent the more sensible move? Is the theme of always accumulating no matter what the price, the most efficient way to accumulate wealth? I guess that the idea of lively debate appeals to me. Is there deep value in the current market? Where can it be found? What cautions must the potential investor consider when investing in that particular area? Which DG stocks are over priced such that they should be tracked, while waiting for a good entry? Is selling puts a good way to buy a favorite issue at a better entry price? Should DG investing be an all or nothing strategy, or would an investor be better served using multiple strategies? These kinds of questions, IMO, would generate much more useful information for the value oriented DG type of investor.

JMO, and I do enjoy this board, visiting the site daily.

[benjamen]

Great post hendi! Personally, I hold a good deal of low cost mutual funds in my 401k. I also look at real estate investments. I am a bit inexperienced in options, so I have yet to utilize them.

As far as DGI, I think we could see oil stay low for a year or two. I don't agree with everyone overloading on energy stocks so quickly. I think some of the bigger energy stocks, such as XOM, have further to fall.

I also wince whenever I see someone loading up on a stock with a really high payout ratio. I have to be very comfortable with a company to invest in one with a ratio over 70%. I also strongly consider what their forward looking earnings to dividend ratio looks like. Going back to oil for a moment, some of these energy companies could easily have payout ratios of 90%, 100%, or more if oil stays low for even just a year.

[hendi_alex]

While I have moved to strongly overweight on energy, my holding are diverse, including: integrated oil, rig lease, shipping, midstream pipeline, oil services index, and nuclear. Also, my approach is diverse as the cumulative weighting of core holdings is under 20% with the other 20%+ being in transient plays, most of which include significant infusions via call sells. Further, profits were skimmed, about 10%-15% from about half of the first round buys that took place in mid December. Proceeds were redeployed later into current speculative positions. As of today, all are nicely in the green to the tune of around 15%, so there is a little cushion there. Further, much of the current play will come to an end as short calls get exercised and pull the shares away.

So while I've chosen to go long energy in a big way, I also agree with you, that as quarterly numbers come in over the first couple of quarters this year, prices of many tickers will take significant hits. I also believe that as crude recovers, there will be a prolonged period when crude stays in the $75-$85 range. That will deflate earnings of everyone in the sector.

IMO the name of the game in energy is to stay nimble. Be ready to cut losses of any speculative positions early, if they come. Keep any overweight manageable, and mostly short duration. Good names, meaning industry leaders, are good to accumulate, but very slowly, very patiently.

[EricL]

(02-05-2015, 09:02 AM)hendi_alex Wrote: One of the least desirable traits that I sometimes see in investing message boards shows itself as what I'll call an excess of optimism, or more specifically, an absence of critical review of content. Think about it. Those drawn to a particular themed board are filtered by the nature of the board selection process. The more narrowly themed the board, the more homogenous the poster's attitudes and goals. I would prefer to see more lively debate here and less of the 'wonderful bunch of holdings' kinds of comments. Most everyone posting here seems to always have his/her available cash 'burning a hole in their pockets.' It seems that stocks of really good companies are being bought at the most awful time in terms of valuation, yet almost nobody ever says or suggests that.

While the board members are courteous and friendly, there seems to be very little peer review of strategies, selections, alternatives, etc. DG investing is great, but when does some alternative action represent the more sensible move? Is the theme of always accumulating no matter what the price, the most efficient way to accumulate wealth? I guess that the idea of lively debate appeals to me. Is there deep value in the current market? Where can it be found? What cautions must the potential investor consider when investing in that particular area? Which DG stocks are over priced such that they should be tracked, while waiting for a good entry? Is selling puts a good way to buy a favorite issue at a better entry price? Should DG investing be an all or nothing strategy, or would an investor be better served using multiple strategies? These kinds of questions, IMO, would generate much more useful information for the value oriented DG type of investor.

JMO, and I do enjoy this board, visiting the site daily.

I think I have been very honest in my thoughts about companies when people present them as ideas for investments. I can think of plenty of times when I've told people the stocks they are considering are either overvalued or not high enough quality to put money into.

I do agree with you in that I wish there was more discussion but I disagree about this board just being a bunch of mindless cheerleaders.

[hendi_alex]

"mindless cheerleaders" is far above anything that I see. There is lots of good factual info. My criticism is that the content is mostly biased toward the notion that DG growth investing is the best thing since sliced bread, and that steady accumulation any time one has cash is the best mode toward portfolio growth. There is little critical review regarding buys under those two premises. This is a very good forum, but IMO could be much better if those on both sides of the investment were typically voicing pros and cons of a potential buy, and each were tossing out alternate ideas.

[EricL]

(02-05-2015, 10:38 AM)hendi_alex Wrote: "mindless cheerleaders" is far above anything that I see. There is lots of good factual info. My criticism is that the content is mostly biased toward the notion that DG growth investing is the best thing since sliced bread, and that steady accumulation any time one has cash is the best mode toward portfolio growth. There is little critical review regarding buys under those two premises. This is a very good forum, but IMO could be much better if those on both sides of the investment were typically voicing pros and cons of a potential buy, and each were tossing out alternate ideas.

Well, the site is called "Dividend Growth Forum", so it would make sense that most of the content is biased towards the Dividend Growth method of investing.

I do think there is generally good discussion on pros/cons of investments, like in the PG discussion today. I will try to be more active in throwing out alternative ideas.

Some good thoughts and discussion Alex, thanks for getting some talk going today!

[hendi_alex]

Dividend Growth investing is a strategy. So while most discussion here should center around dividend growth investing, that doesn't mean that there is little room for lively debate centering on things such as where value can be found. What weighting should DG investing hold in one's portfolio? What alternate strategies are working for an investor? Constantly questioning the premises related to DG investing, etc.

Some folks may think that DG is the holy grail of investing and may employ the strategy for 100% of their portfolio. Others may subscribe to something like age based allocations and may use DG strategies for the common stock portion of the portfolio. Still others may employ a variety of strategies in their stock portfolio. I'm of the latter group, shooting for about 50% of my portfolio to include longer term positions that are held primarily for their dividend stream and about 50% for more active trading. My dividend investments are split between higher yield low growth and lower yield higher growth stocks, but nothing that pays less than 4%(usually 5%) makes the cut. Consequently most DG types of stocks that come from lists such as Dividend Aristocrats have been excluded. When the next brutal market collapse hits, I will definitely restructure to include as much as 50% of those higher quality tickers in the dividend portion of the portfolio.

While I see the value of DG investing, it seems to have more relevance to investors who are in the early to middle phase of accumulation. Since I'm retired, I'm more interested in generating a current income stream and have no patience for waiting on dividend increases to move a sub 3% yielding stock up to a 4%+ yield. The break even between that and buying a current 5% yielding low growth investment is just too far out into the future.

I enjoy reading the info that is shared on this board and am constantly adding to my tracking list as ideas are shares. Also, I'm constantly reviewing my methods and without shame steal any useful ideas that I may be able to employ.

[rapidacid]

When I post in the "What Did You Buy Today" thread that represents a purchase that has made it through my own filters that include screening, sector allocation, whimsy etc.

When others post in the "What Did You Buy Today" I assume they have gone through the same process.

When I look at what others post what they just bought I have zero interest in telling people they may have "overpaid" when that would only be according to my own criteria, subjective and objective alike. I have zero interest in being "right".

I also have zero interest in accumulating cash until the time is "right". My goal is to accumulate cash until the commission of a single purchase would be no larger than 0.5% of the transaction. When I have that cash accumulated I run through my screens, my checklists, my gut feelings, and apply that cash in the form of a purchase.

I don't care if you think that's a bad way of doing business. That is my business. I don't care if you think I'm wrong and you're right.

I read every single new post on this forum. I run every stock mentioned through my screeners. Anything that passes the most basic acid test I add to it my "To Research" watchlist. Anything I research that increases appeal I add it to my "To Buy" watchlist. When it's time to buy I run everything ( screener, allocation, gut ) against my current holdings and against my To Buy watchlist. I then buy the best option as determined by no one but me.

Some posters on this forum continuously provide symbols that happen to match up with my criteria. Other posters provide ideas that continuously miss my goals.

In neither case do I praise nor chastise, "right" or "wrong".

[hendi_alex]

I read a article a while back that related to 'most people'. Basically the article asserts that ticker in the first half of the alphabet generally perform better than those in the last half of the alphabet. When presented with a stock list or screen result, almost everyone's eyes start to glaze over by about letter 'g'. So choices are almost always made from tickers in the first third to first half of the alphabet.

What I'm suggesting above is that most investors are pretty lame in DD, yours truly included. Given limited interest or limited capacity for DD, any thoughtful, informed discussion related to various tickers is likely to be of help to many investors. Those comments don't necessarily have to indicate right or wrong, but rather should represent perceived weak points and strong points. A good example is recent discussion on this forum of PG where chart trends, projected earning growth rate, pay out ratio, and value were mentioned. IMO all of that content could be useful to a novice through mid level investor or better, and nothing was said in an intentionally condescending way. Nothing was sugar coated however, and the comments helped provide a balance of view points.

[rapidacid]

(02-05-2015, 04:47 PM)hendi_alex Wrote: I read a article a while back that related to 'most people'. Basically the article asserts that ticker in the first half of the alphabet generally perform better than those in the last half of the alphabet.

Of course, why do you think its AAPL and not APPL. Ever notice how many AAAAAARalph's Towing Services there are in the yellow pages?

(02-05-2015, 04:47 PM)hendi_alex Wrote: When presented with a stock list or screen result, almost everyone's eyes start to glaze over by about letter 'g'. So choices are almost always made from tickers in the first third to first half of the alphabet.

If there are honestly people who have this problem they need to get with 21st century engineering.



In the immortal words of Benny Garfield: "All he has to do is read"

[earthtodan]

Funny, I've been wanting to post a thread about how dividends are becoming a less important component of my stock picking strategy, even though DGI was my gateway to serious investing. I just haven't sat down and hammered it out yet.

I agree that things would be better if we had more of a tennis match of ideas.