and enjoying cutting your losses as a lesson...Flaccidsteele wrote:Success comes primarily from being lucky.
Investing styles
Re: Investing styles
For the fun of it...Keith
Re: Investing styles
Trying to make each "safer" core dividend stock pay dividends of at least $1200 a year and less "safe" core stocks $600. A safer stock IMHO may be a Canadian bank. This would mean a stock like TD I would need to own about 650 shares and something like HSE I would only need about 500 shares A $34000 investment compared to a $11,000.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Re: Investing styles
BRIAN5000 wrote:A safer stock IMHO may be a Canadian bank. This would mean a stock like TD
Some ten days ago I decided to speculate a little with some of my play money. I knew that TD would update investors on its outlook, and I thought I would gamble on a positive reading. So I bought 100 shares. So far my loss is approaching 10%.
George
The juice is worth the squeeze
Re: Investing styles
I'm buying some NA on Monday if it doesn't pop.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Re: Investing styles
Yes, if has been quite a roller coasterghariton wrote:BRIAN5000 wrote:A safer stock IMHO may be a Canadian bank. This would mean a stock like TD
Some ten days ago I decided to speculate a little with some of my play money. I knew that TD would update investors on its outlook, and I thought I would gamble on a positive reading. So I bought 100 shares. So far my loss is approaching 10%.
George
- scomac
- Veteran Contributor
- Posts: 7788
- Joined: 19 Feb 2005 09:47
- Location: The Gateway to Wine Country
Re: Investing styles
This is nothing. It could get really entertaining if when housing rolls over. Everybody is banking on CMHC saving the day, but the ripple effects of such a roll over will be quite pronounced on banking profits none-the-less! The banks are beginning to look enticing with this correction, but we need to remind ourselves just how low they got the last go round!SQRT wrote:Yes, if has been quite a roller coasterghariton wrote:BRIAN5000 wrote:A safer stock IMHO may be a Canadian bank. This would mean a stock like TD
Some ten days ago I decided to speculate a little with some of my play money. I knew that TD would update investors on its outlook, and I thought I would gamble on a positive reading. So I bought 100 shares. So far my loss is approaching 10%.
George
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830
Thomas Babington Macaulay in 1830
Re: Investing styles
I generally insist on approximately 52 week lows (correction terrritory) to buy blue chips, especially in uncertain environments. I miss some (e.g. FTS, EMA) and get some that way (e.g. ACO.X). I think the opportunity could get there this time to buy some of the banks* that way. I am pretty much full up on BMO, RY and BNS. Waiting on TD to get there (~$47).
* Not CWB or NA as I consider them regional banks subject to regional peculiarities.
* Not CWB or NA as I consider them regional banks subject to regional peculiarities.
finiki, the Canadian financial wiki The go-to place to bolster your financial freedom
Re: Investing styles
Tinkering with a few 100 shares of the bank stocks (above core positions) I think they all pretty much have the same risk. So if I was to buy one I would throw a dart and buy the one which I thought had the most short term return potential. In this case I'm also adding to my lowest core position in a cycle 2 payer, bonus points.
BMO 3.8%* + div 4.10%
BNS 11.7%* + div 4.14%
CM 4.4%* + div 4.23%
TD 6.8%* + div 3.62%
NA 14.5%* + div 4.41%
RY 3.1%* + div 3.88%
*dart throw estimate of potential 1 year return
BMO 3.8%* + div 4.10%
BNS 11.7%* + div 4.14%
CM 4.4%* + div 4.23%
TD 6.8%* + div 3.62%
NA 14.5%* + div 4.41%
RY 3.1%* + div 3.88%
*dart throw estimate of potential 1 year return
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Re: Investing styles
Those darts seem pretty precise...to one decimal point. How did you get to that conclusion?BRIAN5000 wrote:*dart throw estimate of potential 1 year return
finiki, the Canadian financial wiki The go-to place to bolster your financial freedom
Re: Investing styles
Superior chimp, fed on only the best quality bananas.AltaRed wrote:Those darts seem pretty precise...to one decimal point. How did you get to that conclusion?
George
The juice is worth the squeeze
Re: Investing styles
Let's take one stock let's say TD you say $47 dollars.AltaRed wrote:Those darts seem pretty precise...to one decimal point. How did you get to that conclusion?BRIAN5000 wrote:*dart throw estimate of potential 1 year return
I say somewhere @ $47.47 - $49.97 it starts to look interesting. Depending on how bad I want it and what's happening in the market (all dart throwing) I might buy some at $49.97 or might wait till $47 ish or let it fall through $47 before I may buy depends on which way the wind is blowing.
This hasn't worked for me maybe because I'm not paitent enough.I generally insist on approximately 52 week lows (correction terrritory) to buy blue chips
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Re: Investing styles
Some more dart throwing
Considering nothing else but a short term return which of these stocks has the best relative value in the group or the best chance of making a few bucks on a couple 100 shares? Anyone have an automated system for determining this? If the intended trade goes wrong you would have to be willing to hold and collect the dividend.
Shakes IIRC used to use Trans Alta below $20 and above $22, another person on here uses Molson's with purely a price value. AltaRed just bought IAG but sounds more like he's building a position not a trade.
BMO BNS CM TD NA RY IGM PWF IAG GWO MFC SLF
Considering nothing else but a short term return which of these stocks has the best relative value in the group or the best chance of making a few bucks on a couple 100 shares? Anyone have an automated system for determining this? If the intended trade goes wrong you would have to be willing to hold and collect the dividend.
Shakes IIRC used to use Trans Alta below $20 and above $22, another person on here uses Molson's with purely a price value. AltaRed just bought IAG but sounds more like he's building a position not a trade.
BMO BNS CM TD NA RY IGM PWF IAG GWO MFC SLF
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
Re: Investing styles
If you had a ranking system, you could throw the darts with the odds in your favour.
Re: Investing styles
Behavioural portfolio management as a separate investing style?
Apparently the first principle is to NOT know the names of the stocks you own.
Another tidbit:
George
Apparently the first principle is to NOT know the names of the stocks you own.
Another tidbit:
The entire piece makes sense in a weird sort of way. It's quite funny throughout.I want companies with as much debt as possible.
George
The juice is worth the squeeze
Re: Investing styles
I don't know the names of most of the American small caps I own or what they do.ghariton wrote:Apparently the first principle is to NOT know the names of the stocks you own.
Re: Investing styles
Thanks, enjoyed the article. Many of his principles resonated with me, particularly the part about decisions being correct based on info available at that time, regardless of the outcome.
Thoughts of DenisD's screens popped into my head at one point, nice to see he approves. I think FS will find many affinities here too.
I remain a passive investor in large public markets, not so in less efficient areas.
Re: Investing styles
Jim O'Shaughnessy, the author of What Works on Wall StreetI want companies with as much debt as possible.
Beware companies piling on debt
So, is a company’s debt something you should worry about? For the most part, the answer is only in extreme cases. For example, when ranking our All Stocks Universe by debt, Decile 5 is smack dab in the middle of the All Stocks Universe—using debt, but in a responsible way. An Investment of $10,000 in that decile on December 31st, 1963 grew to an inflation-adjusted $704,541, a real average annual return of 8.87 percent.
...
It’s only at the extremes where we find the real culprits—looking at the 25 and 50 stocks which had the highest percentage change in debt is truly a portfolio destroying exercise. Had you consistently bought the 50 stocks with the highest percentage change in debt, your $10,000 would shrink to just $941, a real average annual loss of -4.61 percent a year. And if you REALLY want to destroy a portfolio, buy the 25 stocks with the highest percentage change in debt. $10,000 consistently invested in those names fell to just $196! That’s a real average annual loss of -7.55 percent!
Re: Investing styles
Good article. Thanks. A contrarion on almost every stock metric. Loved it.
It sure would produce less things to chat about in this forum.
It sure would produce less things to chat about in this forum.
For the fun of it...Keith
Re: Investing styles
The juice is worth the squeeze
Re: Investing styles
Some value styles involve looking at the price to book ratio. But how reliable are measures of book value? Here's a book of essays on the subject.
My summary: Value of intangible assets is very hard to measure. And the trend is for intangible assets to make up an increasing proportion of an increasing number of firms.
See also this paper by Baruch Lev(free).
Gorge
My summary: Value of intangible assets is very hard to measure. And the trend is for intangible assets to make up an increasing proportion of an increasing number of firms.
See also this paper by Baruch Lev(free).
Gorge
The juice is worth the squeeze
Re: Investing styles
Larry Swedroe on investing in dividend paying equities
George
I personally invest in broad market indices, such as VTI.The low yields generally available on safe bonds during the past six years have led many once-conservative investors to shift their allocations from safe bonds to much more risky dividend-paying stocks. This has been especially true for those who take an income, or cash flow, approach to investing, as opposed to the total return approach, which I believe is the right one.
The interest in dividends also arises from the belief that dividend-paying stocks are better investments.
<snip>
It’s also important for investors to understand that the popularity of a strategy correlates negatively with future expected returns. In short, the popularity of dividend-paying strategies has altered their very nature. Dividend-paying strategies historically have been value strategies.
Yet Morningstar data shows that, as of April 29, 2015, the price-to-earnings (P/E) ratio of SDY was 19.6, higher than the P/E ratio of 18.1 for the SPDR S&P 500 ETF (SPY | A-98). The price-to-book ratio for SDY is also higher, at 2.6, compared with SPY, which is at 2.4. Higher price-to-earnings ratios and book value forecast lower future returns.
<snip>
In summary, 2008 should have taught investors that dividend-paying stocks aren’t a viable alternative to safe bonds. Unfortunately, far too many investors failed to learn that lesson, one that could prove to be very expensive when the next bear market arrives. The problem is compounded by the fact that the popularity of dividend strategies has led to valuations now above those of the overall market. Forewarned is forearmed.
George
The juice is worth the squeeze
Re: Investing styles
Yet another popular approach.ghariton wrote:I personally invest in broad market indices, such as VTI.It’s also important for investors to understand that the popularity of a strategy correlates negatively with future expected returns.
Re: Investing styles
True enough.NormR wrote:Yet another popular approach.ghariton wrote:I personally invest in broad market indices, such as VTI.It’s also important for investors to understand that the popularity of a strategy correlates negatively with future expected returns.
Except that, this time around, the approach is pretty well guaranteed to deliver the broad market return (after fees and taxes). If one believes that, over the long term, broad market returns are determined by productivity in the economy (and resulting earnings) rather than by the investing styles of various subsets of investors, then it doesn't much matter how popular broad indexing is.
What does matter is the valuation of equities as a whole, as opposed to other asset classes (including cash). Here, I'm not smart enough to figure out the answer.
George
The juice is worth the squeeze
Re: Investing styles
Swedroe has been griping about dividend stocks for years now, until I got tired of reading his articles on them. He's responding to a different audience (Americans) where the last time I looked, they don't have anything remotely close to Canada's dividend tax credit in a taxable account.
There's a few dividend investors post on here, and from what I've seen we're not all owning the same stocks.
Since I myself, wear two hats in investing, both broad based indexing and owning individual Canadian stocks, I learn from doing both. I don't do market timing and whatever is down, whether it's an index or a sector of individual equities, then that's where any fresh money gets invested. A mild form of value investing.
As far as individual equities, I've said this before. If there's going to be a sharp downturn in the near future for stocks, with no mass dividend cuts across the board, like back in the 1930's, then I for one will be looking forward to it, since not only will the equities themselves be cheaper, but the dividend yields will also be higher. If dividends continue to increase, it just makes for more capital I can allocate with any new purchases.
In a bear market, as long as I'm a buyer and not a seller, even in retirement, then everything's fine. If dividend investors could make it through the stock market of the mid-60's through to the early 80's, then I'm confident that with some persistence, they can do it through just about anything thrown at them.
There's a few dividend investors post on here, and from what I've seen we're not all owning the same stocks.
Since I myself, wear two hats in investing, both broad based indexing and owning individual Canadian stocks, I learn from doing both. I don't do market timing and whatever is down, whether it's an index or a sector of individual equities, then that's where any fresh money gets invested. A mild form of value investing.
As far as individual equities, I've said this before. If there's going to be a sharp downturn in the near future for stocks, with no mass dividend cuts across the board, like back in the 1930's, then I for one will be looking forward to it, since not only will the equities themselves be cheaper, but the dividend yields will also be higher. If dividends continue to increase, it just makes for more capital I can allocate with any new purchases.
In a bear market, as long as I'm a buyer and not a seller, even in retirement, then everything's fine. If dividend investors could make it through the stock market of the mid-60's through to the early 80's, then I'm confident that with some persistence, they can do it through just about anything thrown at them.
-
- Veteran Contributor
- Posts: 5923
- Joined: 27 Feb 2005 07:14
- Location: Canada
Re: Investing styles
What lesson was learned in 2008? All my dividends continued to pay, while the lower share prices that had no effect on my income allowed for some nice purchases. Compare this to the Total Return followers who had to sell depressed stocks to feed their income needs. I know the lesson I learned - dividend investing works.ghariton wrote:Larry Swedroe wrote:In summary, 2008 should have taught investors that dividend-paying stocks aren’t a viable alternative to safe bonds. Unfortunately, far too many investors failed to learn that lesson, one that could prove to be very expensive when the next bear market arrives.
ltr