Chowder

Estrategia Referentes
220

Respecto a construcción de cartera cuando hay muchísimas posiciones de pequeño tamaño (punto 2).

TED FISCHER:

"when building out a portfolio…

(1) Either you make a long sequence of purchases of your best ideas, regardless of valuation. This is a good approach that I endorse!

(2) Or you buy whatever is cheap at the time and end up with a 100+ stock portfolio (because valuation is constantly changing).

(3) Or you are constantly selling what has appreciated to buy what is cheap. I’ve worked through that process myself, and it involves a LOT of trading. But I wasn’t ready for Chowder’s approach, and I was unwilling to end up with 40+ positions on a small portfolio."

CHOWDER

Acerca del punto 2.

"This is true! I’ve been working with a number of young people in setting up their portfolio and when I see a huge number of small positions, you find that they were concerned about not paying too much, and that meant, they bought what was cheap.

You know me, first recommendation is to identify your best ideas, sell off 10 or 20 of your worst ideas, put the cash into your best ideas and start building those positions. We’ll get to your second set of best ideas after we get your first 10 off to a good start size-wise."

221

"I am not going to have 400 small positions, but if that’s what others wish to do, then go for it.

I have stated many times, I try to keep all positions as equally weighted as possible, but when cash is limited, it’s going to what I consider my core holdings first and those are what I consider my best long term ideas.

When someone shows me a portfolio of 70 small positions and wants to start building up in scale, they have to start somewhere so I tell them to pick their 10 best ideas for a long term hold and start building those.

My son owns 50 companies, that’s as far as I am going to take it. I am operating this portfolio under the same concept of the DG50 except all of his investment money is going into those 50 companies and will continue to do so.

Out of 50 companies, maybe 4 or 5 don’t end up doing well, I don’t focus on the small numbers, I focus on the large numbers, and those numbers are going to get larger, those positions are going to get larger which means the dividend cash flows generated by them is going to get larger as well.

As I have said many times, if something isn’t worth building, it isn’t worth holding. I am not going to say. well the position is so small it really doesn’t matter. If it doesn’t matter on a small losing position, a small winning position doesn’t matter either, it’s too small to have an impact."

222

"A word on the condition of the market.

We are in a bear market, and when you are in a bear market you need to have a different mindset. When you see prices near 52 week lows, not all 52 week lows are created equally. Some are taken down due to poor company performance, missing earnings and revenue targets, lowering forward guidance, etc., and other companies that are performing well are seeing prices fall simply due to market sentiment. In a bear market people panic, and when people panic they start selling, and as selling picks up, the algorithmic machines take over and they sell everything regardless of performance and that takes prices even lower.

When we talk about accidental high yielders, these are the ones taken down solely by market sentiment, not lack of earnings and revenue. Not for lack of guiding future performance higher.Which brings me to a point about valuations. All that is known of a company is in the past, all of a company’s value is in the future. Using last year’s data and expectations are going to have you drawing the wrong conclusions about valuations going forward. There will be no tax cuts to stimulate where even poor performing companies were able to show better results this year. Next year’s performance is going to come from the companies who beat and raise, especially those who saw prices drop based on market sentiment.

We’re in a bear market, expect volatility to pick up. Be sure to put your big boy pants on and make sure it’s your Sunday best, the ones with magic pockets, ones that are deep enough to handle the dividend cash flows coming in, it may be those dividends that soften lack of performance."

223

"A word about defensive companies.

I see too many people who think owning a defensive company means they are protected from steep share price drops during bear markets, especially recessionary markets. This isn’t true!

Defensive companies are those where people will continue to buy their products or use their services regardless of economic times. We used to refer to them as necessity companies. Since people will continue to buy the products and use the services, this places a floor under the revenue stream a company will generate, and as long as they maintain a certain amount of revenue, they can maintain enough cash flow to pay the dividend. It’s the dividend that is protected via defensive companies, not the share price.

Anyone who went through the Great Recession with an equity portfolio knows that nearly all of the dividend cuts came from companies in the sectors considered cyclical and those considered sensitive to the economy.

Of the 40 plus equities I was holding, I had one dividend cut in a defensive position and that was PFE who needed the cash to purchase Wythe.Having been through 3 recessions and knowing that at my age now, I do not have time to make up for lost income, and this is why our portfolios are so heavily weighted towards defensive companies.

My portfolio dropped close to 40% in value during the Great Recession, but my dividend income grew. I was paid more money (a pay raise) even though my portfolio under performed. That’s the value of owning defensive companies."

224

Añadir, algo al texto, en mi opinión diversificar es el mejor arma contra AKs, quiebras, etc… por lo que mi idea es tener el mayor numero de empresas de las que me gustan, no tengo en mente limitar el numero de ellas, podrá ser mas engorroso de cara a hacerles un aseguramiento en cuanto a resultados y entregas de dividendos.

Pero teniendo en cuenta que las empresas nos cuentan lo que ellas quieren, pues desconfío de la mayoría de ellas, por lo que opto por la opción de diversificar y evitar grandes posiciones en la cartera.

Por supuesto, cada uno es libre de seguir la estrategia que mejor le convenga o satisfaga :wink:

225

Hola fernandoserrano,

Totalmente de acuerdo contigo. Diversificar es seguridad, sin embargo el texto habla de construir posiciones, y si tienes una cartera de más de 100 empresas (mini-indexación casi), es muy difícil hacerlas crecer todas.

En mi opinión de eso es el texto referido. Es más fácil construir posiciones centrándote en las 10 empresas que consideres más seguro, estables o te gusten más y luego hacer crecer las siguientes 10 empresas hasta el resto, que diluirte comprando 70-90 empresas en pequeña cantidad.

Dicho esto, yo supero las 50 en mi cartera, pero también es verdad que me estoy centrando en aumentar posición de las que me faltaban por crecer y considero seguirán conmigo mucho tiempo así como también aumento las que considero CORE y ahora están de saldo.

Un saludo.

226

Yo tengo que elegir bien… sobre todo por las comisiones de compra que me dan en ING. No puedo ir añadiendo 3 o 4 acciones cada vez que quiera, o no me sale rentable.

227

A mi me parece que con 50 empresas ya se esta de sobra diversificado, incluso con 40. Es que teniendo 50 empresas estamos hablando que si todas estuvieran ponderadas por igual, cada empresa supondría un 2% de la cartera, lo cual no es nada dramático. Y si algunas pesaran mas, ya otras estarían incluso por el 1 y algo %. Si además tienes una buena diversificación sectorial, pues tampoco es necesario mas.

229

A mi me pasa lo mismo con ING, suelo hacer compras de 1000€ mínimo, para contrarrestar un poco las comisiones.

Las minicompras las hago con Degiro, y en un futuro no muy lejano, me abriré cuenta en IB.

230

"Well, the market is officially in a bear market, the S&P 500 has officially dropped over 20% in value from its most recent high.

Those of you who have been putting money into the market over the last several months are probably seeing red in those positions and also seeing your portfolio value dropping. It isn’t a very good feeling, I’m sure. You may have some butterflies fluttering around in your stomach, I know I have during the many market declines I have experienced over the last 30 years. But, I learned how to make those butterflies fly in formation.

As it is with most things in life, it’s our attitude that determines how we react in the face of adversity, and if we are determined not to be beat, there is always opportunity that can come out of chaos and it’s no different with investing.The market dropped 57% in value during the Great Recession and now that was scary. However, having been through two recessions prior to that last one, I was determined not to panic as I had done in the past. I knew from experience that, that too would pass, and it was at that time when I learned to build high quality defensive positions.

In 2009 I was buying shares in KO, PG, CL, JNJ, quite a few utility companies, VZ and other companies I believed would survive and thrive when that recession was over.

In the midst of all that chaos, and it was chaos when you see half of your portfolio value wiped out, that the market eventually did turn and even after this recent correction, the market is still up 190% from January 1, 2009 until today. That’s the value of long term investing.

I never would have enjoyed these types of returns if I got out of the market or stopped investing in fray that was ongoing at the time. I realized that with prices falling as much as they did, I could purchase more shares per dollar than I could previously when prices were higher, and it’s those shares that will determine how much cash flow dividends you receive that can be invested further. It’s the number of shares you own when entering retirement that will determine the level of income you receive every month in your account. It’s those shares you need to focus on now, not what the market is doing. Build your share count.

You’ve got to continue to stay focused on the long game, ignore the short term noise because this too shall pass. What you don’t want to have pass is the opportunity to buy more shares when valuations are at the best level we’ve seen in a while.

Opportunity is calling. … Opportunity … grab it!

My Christmas gift to you!"

231

"With the New Year coming up, people may want to look at where they are and where they want to go, and make adjustments as necessary.

In my son’s portfolio, to start the year off, and I will adjust as we go along, I’d like to bring up some of his smaller positions in size. So, I am looking at the 5 smallest positions which are … HD … TGT … V … NKE and NSC.

The first week of January I will add to one of these companies, I haven’t decided which one yet, leaning towards HD, but all of them will be purchased in the first quarter.

Now, don’t get me wrong, I’m not suggesting that others follow what I am doing, I’m simply providing an example of the companies being purchased are the companies that support the objective. You have to decide what yours is.

If your objective is higher yield, then using my son’s portfolio the top 5 choices would be SO … GIS … MO … TGT and DUK.

If your objective is dividend growth, then you would need to determine the top 5 dividend growth companies you own.

Anyway, that’s how I decide on who to add to. I don’t look for cheap prices, although I may see which of my 5 selections appear to be better valued, and I don’t try to guess who the better performer is going to be going forward because I don’t know how to do that.

There is always an objective, always a mission, and I recommend that you decide what your objective is going to be in 2019, then buy the companies that support it best."

232

Chowder eliminó ayer el hilo “The psychology of the market” y otros tantos.

Sólo se salvan “Young folk portfolio” and “Old folk portfolio”.

Su explicación: “I deleted everything to help simply things. I am going to keep the Old Folk blog and the Young Folk blog. That way there’s no confusion on where moves are being made, and I do think there’s a difference between managing a portfolio of older folks who have already achieved what they need, as opposed to young folks who have years of investing ahead of them. I felt that with all the various views and off topic socializing that went on in the Psychology blog that what I thought was important portfolio management tactics was getting lost in the conversation. I have been pondering this for a while and decided that now is the time to do it with a new year coming up.”

Menos mal que tenemos aquí su hilo y el que creé hace poco de Ted Fischer.

Entre tanta paja, había comentarios que eran verdaderas joyas y algunos hemos podido salvarlos.

233

Yo tengo sus artículos y comentarios guardados desde 2010. De este año de los que ha ido borrando supongo que se me habrán escapado unos cuantos ya que casi no me pasaba a leerlo…

235

"This message is important for you young folks. Older more experienced investors, those who have large portfolios, and have met their objectives, or are on schedule to meet their objectives may disagree with I’m about to say, but listen and think.

You are going to hear phrases like putting cash to work is a fallacy. Buying anything at any price isn’t putting cash to work. It’s being foolish.First of all, they use the term … “any price.”

Who in the world suggests any price? … I don’t mind paying a premium to what some might consider fair value, but that doesn’t mean I’ll pay any price.The way I see it, those who are already there can be picky. They can go to all cash if they wish and still be okay. You folks can’t. You don’t have scale, don’t have size, have a long way to go. You need to learn how ignore what others are doing, who are already satisfied with what they have and are only trying to enhance it.

You need to find something to invest in on a regular basis. The choices you make today will determine your performance decades from now. And keep in mind, even at age 65 you still have to plan for a couple of decades more.

Since you have so much time to go, any mistakes you make will be insignificant in the long run because you won’t be building on these losers, but the decisions you make today that turn out well will make an incredible difference in your financial safety in later years because you will be building on to your winners.

Focus on what you want to own, what you want to add to in your portfolio, and just do it, month after month after month, regardless of market conditions. I’ve been showing that in my son’s portfolio for the last 10 years. It’s a slow process because you may not have a lot of cash to work with, but a process that is necessary over the long term if you want to build a portfolio of size.

When construction workers are building anything, note how much time and effort goes into the foundation of the structure. Once that is in place, it’s nothing to slap up the rest of the structure. It’s the foundation that gets the most attention and takes the most time to build. It’s no different with building a portfolio. So build it, don’t sit on cash unless it’s going to work soon.

Think about it."

236

Resumen de la estrategia que han hecho en el hilo de Young folks. Me ha gustado.

"I am thankful to everyone who comments on Chowder’s Articles. I learned a lot over all these years and would like to summarize what I learnt:

  1. Choose DGI or capital appreciation. DGI is my choice.
  2. choose about 30-40 companies , diversify, and build out and big positions over time.
  3. Try to invest in equal amounts in all the stocks you want to own.
  4. Always invest cash right away. Invest-able cash is the cash that is not required for atleast 5-10 yrs. (10yrs is the best).
  5. Choose 60-70% defensive companies and rest cyclical/technology companies.
  6. Choose the companies that can thrive in recession when building a portfolio; once you reach 30-40 companies limit start building bigger positions.
  7. valuation is important when starting a position but its hard to find and evaluate. But good thing is we will find atleast 4-5 reasonable valued stocks (in a year) or sectors (like REITS/Utilities in late 2017/ early 2018) even in bull market.
  8. once you initiated positions and have invest-able cash; try building up positions.
    a) in bull market condition - if company beats EPS; Revenue and raised guidance - buy
    b) in bear market condition - if company beats revenue; miss EPS and market reaction good and guidance is reasonable or higher buy. otherwise wait for other companies from your portfolio to release earnings and choose other companies to build
  9. its hard to get our minds straight on price point; so try reading M* report; valueline report; brokerage report; fastgraphs and come to price point (average them).
  10. be reasonable to pick a stock that won’t cut the dividend. So try companies with BBB+ rating.
  11. Companies with low yield high growth (AAPL) will take 12+ years to beat the income produced by high yield low growth (T)

Always assume:

  1. Your portfolio can cut down 50% at some point.
  2. as soon as you buy a stock it may go down;
  3. Hopefully there will be no dividend cuts during bad times. Even there are dividend cuts or freezes, it may be only for 1 or 2 qtr at the most.

Good part is Dividend income will grow over the years. It takes about 10-12yrs to see actual good income. Patience is important.

1 me gusta
237

"Although you young people do not need dividends for income at your young age, dividends play a vital role in how your portfolio grows over the years. Think of it this way. … How much more quickly does your 401K grow when your employer matches what you contribute? Your employer may only match up to 5% max, but over the years that money adds up and without it, you won’t have as much value in your 401K if the company contributions were not included.

That’s how I view dividends in a young folk portfolio. Those dividends serve the same purpose as your employers cash contributions to your 401K. So it’s the monthly cash contributions from dividends that I track in every portfolio I manage, including the younger folks.

Each year my objective is to see the dividend cash flow increase by 10% minimum, regardless of market conditions. Year 2017 was disappointing to me as the dividend growth was only 9.3%. I missed my goal.In missing that goal I went back to see where I went wrong, and it wasn’t too difficult to see where I went wrong. 2017 was the year of building low yield, high dividend growth and that meant buying companies like MA with a 0.7% yield, V with a 0.76% yield, ABT with a 1.8% yield, DG with a 1.0%, you get the picture.

Anyway, at the time I declared 2018 as the “year of the yield” where I focused more on companies with a 3% yield or better and a funny thing happened.

The higher yields obviously added more dividend cash flow growth, but those lower yielding companies had some double digit dividend growth to add as well.

This year my son’s portfolio saw 20.1% dividend cash flow growth. Double my objective!

Think of how delighted you would be if your employer increased their cash contribution in your 401K by 20%. … Mama Mia!

My son invests $500 per month in cash into his brokerage account, and now with his dividend cash flows, that he uses for reinvestment, he has an extra $600 per month to invest, and that number is going to continue to grow. That’s $1,100 per month being invested as opposed to $500 per month, and as we go along, that should make a profound difference in portfolio growth.

Imagine what happens when he has $1,000 per month in dividends, $2,000 per month in dividends, and that number continues to grow. Over the years those dividends become significant. I have an older folk portfolio now generating $150,000 per year in dividends. Think about it!

And people want to say dividends are irrelevant for young people? … Knucklehead analysis.

Nothing changes in 2019. Same objective; 10% dividend cash flow growth and I will continue to purchase something monthly as I build up each position in his portfolio. Since he already owns all he wants to own, it’s now a matter of building each position up in size. … 2019 is “The Year of The Build!”

Time, patience and discipline are the keys to success!

Easy peasy!"

238

When I started out using the dividend growth investing strategy, there were primarily 4 factors that I based my selections on.

  1. I had to like what the company did for a living.
  2. It had to have a Value Line Safety rating of 1 or 2.
  3. It had to have a Value Line Financial Strength rating of A and above.
  4. The company had to pay a dividend.

Since we are talking about young folks, and my son was in his early 20’s, all other criteria was simply noise. The numbers at the time weren’t as critical to me because I knew that he would be making many add on purchases over the years. Any company I bought back then I have to pay higher prices today to add on. So, I didn’t worry about price. All I cared about was the 4 criteria above.

When it came to which company do I buy today? That’s when I used the numbers to decide which company gets added to.

AAPL Apple Inc
ABB ABB Ltd
ABT Abbott Laboratories
ACN Accenture Plc New
ADI Analog Devices Inc
ADM Archer Daniels Midland Company
ADP Automatic Data Proccessing Inc
AEE Ameren Corp
AEP American Electric Power Company Inc
AFL AFLAC Inc
AIZ Assurant Inc
AJG Arthur J Gallagher and Company
ALE Allete Inc
ALL Allstate Corporation
AME AMETEK Inc.
AMGN Amgen Inc
AMT American Tower Corporation
ANAT American National Insurance Company
ANTM Anthem Inc.
AON Aon PLC
APD Air Products and Chemicals Inc
APH Amphenol Corp
ATO Atmos Energy Corp
AVA Avista Corp
AVY Avery Dennison Corp
AWR American States Water Co
AXP American Express Company
BA Boeing Co
BAX Baxter International Inc
BBT BB and T Corporation
BDX Becton Dickinson and Company
BEN Franklin Resources Inc
BFB Brown Forman Corp (Class B)
BK Bank of New York Mellon Corporation
BKH Black Hills Corp
BLK BlackRock Inc
BMS Bemis Co Inc
BMY Bristol Myers Squibb Co
BNS.TO Bank of Nova Scotia
BRO Brown and Brown Inc
BUD Anheuser Busch Inbev SA NV
CAG Conagra Brands
CAJ Canon Inc
CAT Caterpillar Inc
CB Chubb Ltd.
CBOE Cboe Global Markets
CBRL Cracker Barrel Old Country Store Inc
CBSH Commerce Bancshares Inc
CBU Community Bank System Inc
CHD Church and Dwight Co Inc
CHRW CH Robinson Worldwide Inc
CI Cigna Corporation
CL Colgate Palmolive Co
CM.TO Canadian Imperial Bank of Commerce
CMCSA Comcast Corporation
CME CME Group Inc
CMI Cummins Inc
CNI Canadian National Railway Co
COO Cooper Companies Inc
COST Costco Wholesale Corporation
CSCO Cisco Systems Inc
CSL Carlisle Companies Inc
CTCA.TO Canadian Tire ‘A’
CTSH Cognizant Technology Solutions Corp
CVS CVS Caremark Corporation
CVX Chevron Corporation
DCI Donaldson Co
DE Deere and Co
DEO Diageo Plc
DFS Discover Financial Services
DHR Danaher Corp
DIS Walt Disney Co
DLB Dolby Laboratories Inc
DOV Dover Corp
DOX Amdocs Ltd
DUK Duke Energy Corp New
DWDP DowDuPont Inc.
ECL Ecolab Inc
ED Consolidated Edison Inc
EL Estee Lauder Companies Inc
EMR Emerson Electric Co
ES Eversource Energy
ETN Eaton Corp New
EXPD Expeditors International of Washington Inc
EXPO Exponent Inc
FAF First American Fin’l
FAST Fastenal Co
FDS FactSet Research Systems Inc
FDX FedEx Corp
FRT Federal Realty Investment Trust
GD General Dynamics Corporation
GHC Graham Holdings Company
GIS General Mills Inc
GPC Genuine Parts Co
GS Goldman Sachs Group Inc
GSK GlaxoSmithKline PLC
GWW WW Grainger Inc
HCSG Healthcare Services Group Inc
HD Home Depot Inc
HE Hawaiian Electric Industries Inc
HIG Hartford Financial Services Group Inc
HON Honeywell International Inc
HRL Hormel Foods Corporation
HRS Harris Corporation
HUBB Hubbell Inc.
IBM International Business Machines Corp
ICE Intercontinental Exch.
IDA IDACORP Inc
IFF International Flavors and Fragrances Inc
INFY Infosys Limited
INTC Intel Corporation
INTU Intuit Inc
ITW Illinois Tool Works Inc
JBHT J B Hunt Transport Services Inc
JJSF J and J Snack Foods Corp
JKHY Jack Henry and Associates Inc
JNJ Johnson and Johnson
JPM JP Morgan Chase and Co
K Kellogg Company
KHC Kraft Heinz Co.
KMB Kimberly Clark Corp
KO Coca Cola Company
LANC Lancaster Colony Corporation
LEG Leggett and Platt Inc
LLY Eli Lilly and Co
LMT Lockheed Martin Corp
LNT Alliant Energy Corp
LOW Lowes Companies Inc
LSTR Landstar System Inc
LUXTY Luxottica Group Spa
MA Mastercard Incorporated
MAA Mid-America Apartment
MCD McDonalds Corp
MCK McKesson Corp
MDLZ Mondelez International Inc
MDT Medtronic plc
MDU MDU Resources Group Inc
MFI.TO Maple Leaf Foods
MGEE MGE Energy Inc
MKC McCormick and Co
MMC Marsh and McLennan Companies Inc
MMM 3M Company
MORN Morningstar Inc
MRK Merck and Co Inc
MSFT Microsoft Corporation
MSM MSC Industrial Direct Co Inc
MTB M&T Bank Corporation
NEE NextEra Energy Inc
NEU NewMarket Corporation
NJR New Jersey Resources Corp
NKE Nike Inc
NOC Northrop Grumman Corp Holding Co
NSC Norfolk Southern Corp
NSRGY Nestle SA
NVO Novo Nordisk
NVS Novartis AG
NWN Northwest Natural
O Realty Income Corporation
ODFL Old Dominion Freight Line Inc
OGE OGE Energy Corp
OGS ONE Gas Inc.
ORCL Oracle Corp
OTTR Otter Tail Corp
PAYX Paychex Inc
PCAR PACCAR Inc
PEG Public Service Enterprise Group Inc
PEP PepsiCo Inc
PFE Pfizer Inc
PG Procter and Gamble Co
PH Parker Hannifin Corp
PNC PNC Financial Services Group Inc
PNW Pinnacle West Capital Corp
PPG PPG Industries Inc
PSA Public Storage
PSX Phillips 66
RDSB Royal Dutch Shell Plc (Class B)
RE Everest Re Group Ltd
RGA Reinsurance Group of America Inc
RHI Robert Half International Inc
ROK Rockwell Automation Inc
ROL Rollins Inc
ROP Roper Tech.
ROST Ross Stores Inc
RTN Raytheon Co
RY.TO Royal Bank of Canada
SAFT Safety Insurance Group Inc
SAP SAP AE
SAP.TO Saputo Inc.
SBUX Starbucks Corporation
SEIC SEI Investments Company
SHW Sherwin Williams
SIEGY Siemens AG
SJI South Jersey Industries Inc
SJM JM Smucker Company
SLB Schlumberger Ltd
SNA Snap on Inc
SNY Sanofi
SO Southern Co
SON Sonoco Products
SPG Simon Property Group Inc
SPGI S&P Global
SRE Sempra Energy
STE STERIS plc
SWK Stanley Black and Decker Inc
SXT Sensient Technologies Corp
SYK Stryker Corp
SYY Sysco Corp
T AT&T
TD.TO Toronto Dominion Bank
TECH Bio-Techne Corp.
TEL TE Connectivity Ltd
TFX Teleflex Inc
TIF Tiffany and Co
TJX TJX Companies Inc
TM Toyota Motor Corporation
TMK Torchmark Cap Tr III
TMO Thermo Fisher Scientific Inc
TOT Total SA
TR Tootsie Roll
TROW T Rowe Price Group Inc
TRV The Travelers Companies Inc
TSM Taiwan Semiconductor Manufacturing Co Ltd
TXN Texas Instruments Incorporated
UL Unilever PLC
UNF UniFirst Corp
UNH UnitedHealth Group
UNP Union Pacific Corp
UPS United Parcel Service
USB US Bancorp
UTX United Technologies Corporation
V Visa Inc
VFC V F Corp
VVC Vectren Corp
VZ Verizon Communications Inc
WBA Walgreens Boots
WDFC WD 40 Co
WEC WEC Energy Group
WFC Wells Fargo and Company
WM Waste Management
WMT Walmart Inc.
WPP WPP PLC
WRB WR Berkley Corp
WSM Williams Sonoma
WSO Watsco Inc
WST West Pharmaceutical Services Inc
WTM White Moutains Insurance Group Ltd
WTR Aqua America Inc
XEL Xcel Energy Inc
XOM Exxon Mobil Corp
ZBH Zimmer Biomet Hldgs.

If someone can’t find 30 or 40 quality companies from that list, they aren’t trying. Save that comment folks if you are interested. I’ll leave it up for about a week before I use the velvet eraser.

239

"Time for a little therapy session … Ha!

Let me start by saying that although this session is about AAPL, I do not own AAPL, don’t know anything about AAPL, don’t plan on knowing anything about AAPL, and am only using it because I think it’s a good example of what I am going to try and convey here.

I have not read the AAPL comments in this blog, when I see the ticker symbol, I scroll past the entire series of comments because I don’t waste my time reading about stuff I have no interest in. However, I do know that a lot of you do, I can see that by how long the AAPL comment section is.

What I have noticed though with not only AAPL but a lot of companies, is that people are still price focused. People are still looking for hero prices. People have a tendency to try and defend their decision to own a company by “averaging down” on their cost basis, and there’s a good time to do that and a bad time. And that’s what I want to discuss.

I do not have a clue if a bottom is in. I do not have a clue what AAPL is going to do going forward. But here is what I do know, and it applies to any company, I do not average down off of lower company guidance. There’s a difference between an analyst lowering expectations than there is when a company does it. HUGE difference!I do read the business news and I did see where AAPL lowered guidance not only for the first quarter but the second as well. I did read where China may continue to impact AAPL’s business and not in a short term positive way.

We all know the news, we all know the situation AAPL is in, it’s how we interpret that information that is important.

All I can do is suggest different ways of looking at things, it’s your choice to make a decision and I have no intention of trying to change minds, but here’s how I do things.

When a company lowers expectations I do not add any more shares until those expectations flatten out and start to show some encouragement. I prefer to buy on strength, and by strength that means improving company fundamentals. I do not prefer to buy on weakness, and by weakness I mean declining company fundamentals.

If it were me, and if I had an interest in AAPL, I would wait until they provided more encouraging news even if it means I didn’t catch the bottom. However, by waiting for more encouraging news, and when it comes I have to pay a higher price, I would buy a larger position than I did if I were to buy at these prices today.

When you buy on strength, you can buy larger lots with confidence if cash is available, and you should have time to raise that cash because this one isn’t going far until you get better news in my opinion.

Averaging down on lower company guidance isn’t really a prudent way to put cash to work in spite of what few examples where others can show they lucked out on. Smart traders refer to those who do that as dumb money. … Just sayin’."

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Yo tengo 22 empresas del listado pero me gustaria tener unas cuantas mas.

En este momento tengo 71 posiciones, y teniendo en cuenta las q quiero tener y las q no me quiero quitar acabare con unas 90-100. Tampoco me importa el numero, el seguimiento q hago es a traves de este foro y alguna pagina mas, de muchas de mis empresas no creo q necesite mas q estar al dia de nuevas noticias, resultados y poco mas. Este numero de posiciones me protege tanto de quiebras como de recortes de dividendo.

Es verdad q con tantas posiciones es dificil aumentar ponderacion en momentos como el actual, mi posicion mas grande pesa algo mas de un 4% q es MO, pero tampoco quiero ser esclavo de los numeros o de los pesos, mi cartera se va construyendo dia a dia segun lo q pase en los mercados, seguramente 5 años antes mi cartera seria completamente diferente pero tambien seria valida para mi, al fin y al cabo no me interesan tanto los nombres como lo q pagan en dividendos. Mi objetivo es la IF, no tener una u otra empresa.

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"If you young folks want a tool to try and determine what you need to do in order to achieve long term objectives, I used the following calculator.

In using the following calculator, where it says interest rate, use the number that you can reasonably expect the market to grow at over the time frame you have until retirement.

I would suggest you don’t use a number higher than an 8% compounded annual growth rate.

The market has only grown at a rate of 5.7% annualized over the last 20 years, and I am on record as stating I’m only expecting 6% annualized returns. If I get 8%, I’ll take it.

This will provide you with a portfolio value and then you simply multiply that by your current portfolio yield to get an income number at retirement age. My son’s current portfolio yields 3.2%.

www.planningtips.com/cgi-bin/savings.pl"