Peace Out! This Blog is Over

30 Jul 2016 13:21

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The title of the blog says it all, after three years of dividend growth blogging I have decided to end this blog. The site has fulfilled its original mission into making me a more disciplined investor while transitioning a part of my investments into dividend growth. The site could continue on but what value does it bring? There are countless other blogs on the topic of dividend growth and so much so that keeping another one around probably does more harm than good. I will keep the site up for a couple more months but after that it will become private and inaccessible. With all that said here some of my favorite benefits from blogging.

Goal Setting a Must

Setting long term goals was something I casually approached in the past but blogging forced me to actually plan multiple goals over different stages of my life and to revisit them twice a year.

Investing without aligning to your goals is just pointless. Goals should determine your investing strategy or style and be a part of a decision process. For example I am currently sitting on a pile of cash that has yet to be invested. Why? Because I can’t find enough investments at the dividend yield and growth I require to meet my 10yr, 15yr, or 20yr goals!

It is absolutely stupid to invest for the sake of investing. If the results do not meet your goals in the timeframe you desire then you are just undermining yourself and will have to add even more capital to compensate. The only exception to this is my 401K because it is just stupid to leave a company matching contribution on the table! Someone wants to give you free money then take it!

Best Resource are Financial Statements

My writing style is definitely inadequate to describe how important financial statements are but I will give it my best shot. Blogging helped me shed years of speculation trading measures or per share measures and return to the basics of valuing a company.

I actually found my original accounting books from college (15+ years ago) as well as my class projects I had written in early versions of excel. The beautiful thing about accounting is that they are based on standards and standards do not change! Accounting standards for analyzing financial statements are truly neutral, they do not lie or get swayed by opinion.

Beyond the numbers, financial statement also provide insights into company’s leadership beginning with the CEO. The CEO letter to shareholders can be an insight to whether the CEO is inspiring, boring, exciting, or just an oblivious dick head. I discovered this during my analysis of Thor Industries (THO) and summarized it the post A CEO That Gets It!.

Risk is another aspect within a financial statement report that you can glean important information, take Kodak as a prime example. In their 1996 annual report there was no risk for digital images. It wasn’t until 1997/8 that they recognized the risk but by then their revenue was already getting decimated by rapidly declining sales in film. In reality they should have started identifying the risk back in 1995 when digital photography was starting to take off.

One last thing to remember is not to get cocky. Just because you performed a financial analysis and a stock pick has performed well does not equate to you being a great or expert stock picker. Truth is we live in a macro environment and not a micro environment. I could have listed a few hundred companies back in 2012 with strong financials and have a 5 year old child randomly pick 10 companies and all would have done great over the last 4 years. As long as a company has sound financials it will always move positive in lock step with the macro markets while their strong financials will allow them to perceiver through down times.

Tried to be Different

One aspect I have pride in was trying to be different by bringing smaller less well known dividend growers into focus to the dividend growth community. Many bloggers routinely analyze and post big well-known names like McDonalds (MCD), Johnson & Johnson (JNJ), Coca Cola (KO), or General Mills (GIS). These are great companies and I have many in my portfolio and am not disregarding them by any means but they are not the only fish in the sea.

The reason why they are so popular is because many investing “professionals” including Warren Buffet continually review, comment or invest in these big names. Why? Because they own funds that are so large that they need to invest in large enough companies that will move their portfolio yields without having negative effects on share price swings. Small companies simply do not have enough equity to make it worth their while. I realize that size can equate to market survival and do not discount this, being the big dog has advantages in regards to longevity and stability.

But there are other opportunities investors should not ignore and here is a list of my more favorites I have brought to light over the last three years:

  • Bar Harbor Bank (BHB)
  • Domtar (UFS)
  • Donaldson (DCI)
  • GATX Corp (GATX)
  • Linear Technologies (LLTC)
  • Maiden Holdings (MHLD)
  • Marine Products (MPX)
  • PetMed Express (PETS)
  • SPAN America (SPAN)
  • Thor Industries (THO)

And of course I did have a stinker in the bunch. Ensco (ESV) really killed me as I lost 50% on that and good thing I got out when I did as the stock plummeted even further. Only consolation was that my investment in ESV was only $1500 so the loss did not hurt my overall portfolio.

Final Thought & Farewell

To say the blog was popular is really a laughable moment but it was more important to me than readers (more like a personal journal). There never was intent to use this as a platform to generate passive income. I have made a few friends over the years who helped provide guidance and feedback that I will always value and I can never thank all of the readers and commenters enough for their support.

While my blog may be ending my visitation and commenting on other blogger sites will continue. But there are some blogs that I no longer will support because they have become abhorrently obsessed with turning their blog into a passive income machine. Of which I despise any blog with:

  1. pop-up windows (really! I just want to read the damn post)
  2. java script adverts (pages take forever to load, are instable and not secure)
  3. article redirects to other websites (click here to continue reading crap!)

Well it has been fun and as I leave the blogging sphere are so many quality blogging sites out there that I feel confident the topic of dividend growth is in good hands. :))

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