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To add on to this, I would say learn to weld and learn to code. If you can't find a job as a coder, I bet you'd be able to find employment as a welder. Great post, Tim
2 months, 2 weeks ago on What Scares Me The Most About The American Economy
Tim, I think their clients *are* stupid, for the most part, or they would be doing their own investing like the rest of us =)
2 months, 3 weeks ago on The Condescension In The Financial Industry Continues To Bother Me
Would you rather own COP at 65, CVX at 108, or BP at 38? Thinking I may add all 3 ;)
2 months, 3 weeks ago on Myth: Everything Is Priced Into The Stock
If you were lucky enough to have bought in March 2009 and reinvested the distributions along the way, here are your annualized returns:
If you haven't already, you should check out the distribution growth of SXL and MMP. It'll drive you crazy that you didn't discover them earlier. They always appear overpriced/overvalued, but they keep outperforming expectations and raising distributions around 5% every single quarter.
3 months ago on Vanguard Natural Resources: A Brilliant Financial Crisis Income Investment
Tim, I rank TJX and ROST as "1a" and "1b" for just the kind of growth you describe in this article, and they seem to jockey for the coveted "1a" ranking on a regular basis. From a personal standpoint, I think TJ Maxx, Marshall's, and HomeGoods are vastly superior to Ross's collection of stores, and I think they hit a real sweet spot of being appealing to the more affluent in society (better brands, nicer stores, IMO) as well as drawing in the bargain shoppers and less affluent. They both serve a purpose in my portfolio though, and I hope I never have to sell either one. My only regrets are not owning more and not buying them sooner. Great job on ROST. I hope I can add to my position in 2015 on a nice dip
3 months, 1 week ago on A Very Lucrative Investment Over The Next Fifteen Years
Tim, this one sort of reminds me of Deere and all of what I would call "super cyclical" stocks that usually seem expensive when they're actually the cheapest, and seem cheapest when they're high in price b/c of the cyclical nature of earnings. I imagine the sell-off has to do with the fear of the eventual Chinese slowdown and concomitant drop in metal/ore prices. If all of these commodity prices tank, and BHP still has massive capex, there's a decent chance they would also have to cut the dividend, right? Obviously I am playing devil's advocate here, but I fear buying into these companies when they seem cheap -- they just scream value trap to me, until there's blood in the streets. I think, at some price, BHP would be wonderful for me, but I don't think there's enough panic yet.
Thanks for the distraction from work today...now I'm going to have to re-review BHP! Haha
3 months, 2 weeks ago on The Best Value Stock Investment In The Stock Market Right Now
Tim, for some reason this reminded me of something. I have a friend whose father has his hand in a lot of pies and through various business deals was granted hundreds of thousands of shares in what eventually became Pepsi and YUM (he owned them prior to the split). If I remember correctly, his cost basis for the Pepsi shares is less than $1, and he holds them in a taxable account. There's no reason for him to ever sell those shares, since he is diversified into many other assets, including land, water rights, cattle, and various other stock holdings in the bluest of blue chips, and he can likely pass all of it to his children and on down for generations. Wouldn't you love to have the problem of trying to figure out what to do with $2m in Pepsi dividends every year?
3 months, 3 weeks ago on John Bogle Doesn’t Rebalance His Portfolio
Tim, in the energy space, I favor KMI and COP. Is there a reason you prefer CVX to those, or is it just a personal / historical preference?
3 months, 3 weeks ago on Buying A Lot of Chevron Stock Right Now
@KeithX great point, Keith. I imagine that many of the DGI crowd have large enough positions in their stocks that they take dividends in cash to redeploy elsewhere, but having to pay the tax immediately and choose whether to reinvest in NSRGY or elsewhere definitely cuts into your compounding. I had never thought about that, so thank you for sharing your experience.
I had TEVA in a Roth a while back until I realized that I was just losing out on the taxed amount...what a pity, because the stock was so cheap at the time. Oh well.
As for NSRGY, I would happily hold it in a taxable account and collect the dividends in cash to fund IRA contributions or just reinvest into Nestle, even if it is a bit of a headache. Their stable of brands is just too strong not to appreciate...and the stock is approaching a level I wouldn't mind getting in.
3 months, 3 weeks ago on Nestle: The Only Must Own Stock Outside The United States
@Oscarc did you even write a comment, or are you just complaining?
@KeithX you can reclaim them at tax time, assuming they are in a taxable account, as he noted / alluded to in his post. I believe it is form 86, but check with the IRS site (irs.gov) or your tax professional
@jsarnow JSA, people have probably been asking the same question about some of the great investments of the past 20 years, for the past 20 years. Things like JNJ, KO, MMM, MO (the parent company of PM, MO, KRFT, MDLZ), CL, PG, and many other stellar performers. Many of the companies that were great performers 40 years ago (or 60 years, or 80 years) were also great performers 20 years ago, and will be great performers today. Due to the law of large numbers, I doubt if you can compound some of these very large stocks at 20% a year, but even if you "only" compound at 10-12%, you're doing quite well for yourself. Tim and others have written wonderful articles in the past to the effect of "what if you bought X stock at its peak in 1999 or 2000" and you still could have come out okay, especially if you reinvested dividends. Perhaps he can provide the link to those articles. I found them to be quite insightful
V, DFS, and MA seem to take turns being the lead pony, and any time any of them has offered any sort of meaningful sell-off, it has been a wonderful time to buy. I own all 3, and suffice it to say my only regret is not owning more of each. A couple weeks ago, I was hoping the market would panic-sell V down to my limit order at 190, but alas, it was not meant to be...
Great article, as always, Tim, and I couldn't agree more with your analysis. I have been really trying to build up the strong, blue chip growth companies in my portfolio lately (i.e. the past couple years), whether or not they pay a meaningful dividend: GILD, UA, V, MA, DFS, DIS, and TJX (and Apple, for now...) make up large portions of my portfolio. Barbelling that with meaningful positions in MCD, PM, MO, BAX, KMI, and other DGI all-stars has really proven to be a nice strategy for me so far.
I keep praying for [more] weakness in BF.B, HSY, and NSRGY so I can tuck those under my pillow...but I'll be patient
3 months, 3 weeks ago on Visa Stock Continues To Be A Spectacular Investment Choice
@frfrizzo381 when reporting taxes, if you have sold a position that you have reinvested dividends over time, you have the option for all stock that you've owned over 1 year to report the holding period as "various, over 1 year" to eliminate this problem. Thus, only dividends reinvested within a year of you selling will have to be reported as short-term, so it really isn't that complicated unless your broker doesn't track that information for you. I've done this numerous times, and I have been with Fidelity over 10 years.
4 months, 2 weeks ago on Pooling Dividends Vs. Automatic Reinvesting: Which Is Right For You?
I'm in the "do both" camp. I've got stuff like KMI, MCD, and DLR in my Roth, as well as stuff like AMBA and UA. Trying to barbell some good growth companies with some higher dividends. The end result is a decent blended yield with a pretty nice forward growth rate. So far, so good.
5 months, 3 weeks ago on Roth IRA Investments: Do You Want High Dividends Or Rapid Growth?
@Clarkaroo You can use the long-term capital losses to offset any long-term capital gains you may have upon selling other shares. Any unused capital losses can be carried forward to be used in future years, and I believe you can even use up to $3k to offset income; I don't know how this works with a trust though, so of course you should check with your adviser. BP is a good source of income and is back on the DGI path, but you should at least diversify a little bit. KMI seems like a nice choice, based on their consolidation and intentions to deliver nice dividend growth. The rest of it would be personal preferences, so I won't try to advise you there. It's definitely hard to go wrong with stuff like MO, KO/PEP, JNJ, T, XOM and most of the others you mention. SDRL gives me pause because of their massive debt and the way they keep shifting assets around, but it could be perfectly fine. Good luck
6 months ago on Citigroup Stock Pre-2008: When Investors Can Never Truly Recover
Tim, I wouldn't necessarily be terrified if someone compliments you or thanks you for "causing" them to buy something. Perhaps they mean "thank you for bringing this company to my attention that I wouldn't have otherwise known about; I researched it and liked what I saw, so I bought it." If it helps you sleep better at night, that's how you should view it.
6 months, 2 weeks ago on Dividend Growth Investing Right Now In 2014
With the exception of speculative (mostly tech or biotech positions), the only massive P/E stock I've bought is Under Armour. I bought the company when it was around a $7b market cap company with the idea that in the next 20-30 years, it is reasonable to believe it could be a $60-70b company. You see the brand everywhere, and they're slowly and deliberately expanding their offerings. They now have something like 16-17 straight quarters of better than 20% revenue growth. Obviously they won't be able to keep up that pace of sales growth forever, but they are really executing well. I wouldn't buy it at this price, but I did add to my position when it dipped to $50. I presume at some point in the future (probably after a few more stock splits), they may even start to pay a dividend. Either way, I don't think that company is going to be lower by the time I retire than it is now, so I am happy that I bought it whenever I did -- which I feared was overpaying at around 48x earnings, if I recall
6 months, 2 weeks ago on A Growth Stock Investing Lesson From Noodles & Company
@Thunderbuzzy Absolutely. Part of the reason I want him to get this kind of recognition is that he took such a beating during and after last year's playoffs. All of our guys have improved, and as long as we continue to minimize our mistakes and continue to scrap on defense, we have a great chance of playing a lot more games. By the way, it's nice to hear from others who are similarly optimistic, yet realistic at the same time. Cheers
2 years, 9 months ago on Thunder Player Power Rankings: First Round Edition
@Thunderbuzzy @Seviay31 I stand by the sentiment I expressed above, solely as the case for making WB #1 and KD #2, not to diminish any other players' contributions. We're splitting hairs, and I love them all, but I think WB should get credit where it's due.
I'd argue that WB should be #1, because this would be a very different series without his clutch buckets and free throws -- in games 1-3, especially. Without those, OKC might have been heading to Dallas down 0-2 or dealing with an 0-3 or 1-2 record after 3 games.