Dogs of the TSE

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Shakespeare
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Re: Dogs of the TSE

Post by Shakespeare » 12 Nov 2015 19:17

It was interesting to see Ten Canadian stocks for the conservative investor - The Globe and Mail (behind paywall) today. Of the 10 stocks listed, all except one (RY) are in my TFSA, and I have a large RY holding in my RRSP.

Those who do a "dogs" strategy for several years wind up with mainly the same list.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Dogs of the TSE

Post by Shakespeare » 13 Nov 2015 11:27

Some comments from David Stanley, reproduced with permission:
David Stanley, by e-mail wrote:My take is that hardly anyone will take it at face value, but try to put their own spin on it-adding, subtracting, multiplying, or dividing by some extraneous factor that they think is important. In my opinion, they all lose sight of the goal, which is to construct a long-term hold portfolio of Canadian blue-chip dividend stocks that were acquired at a reasonable cost, and instead focus on the methodology, trying to show that their approach is a point or two better than what someone else has come up with. I think they concentrate on the trees and ignore the forest. For me, I am much more
sympathetic to another thread on those boards that says, "I find myself less and less interested in the investing process". That kind of describes me now. Using the BTSX process I have, over the years, acquired a good portfolio of Canadian dividend payers that have met my needs and more. What more can anyone ask? Why keep tinkering with a process that has done its job? I think someone said, "If it ain't broke, don't break it".

Maybe I should have added a bit about how one builds up the portfolio of dividend stocks. As you point out, the turnover in the list of 10 stocks is low, but suppose one of them falls off the list. That usually occurs because either the price has risen or the dividend has been cut. If it is due to the former case then there seems no reason to sell the stock since it is doing what you had hoped it would, i. e., increase in price. So, rather than sell that stock you can keep it and put it into your permanent portfolio. I used DRIP plans so I could accumulate shares rather than take the dividends as cash. Thus, over the years you amass a group of Canadian dividend paying stocks that have been acquired at a low cost. At retirement (or whenever needed) the dividends can be taken as cash, providing a tax efficient way of supplementing other retirement funds.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Dogs of the TSE

Post by DenisD » 13 Nov 2015 19:14

David Stanley, by e-mail wrote:My take is that hardly anyone will take it at face value, but try to put their own spin on it
I'm one of those who has put their own spin on it. Or, should I say, an O'Shaughnessy spin on it. In my defence, I'm following O'Shaughnessy's rules as closely as possible more or less.
In my opinion, they all lose sight of the goal, which is to construct a long-term hold portfolio of Canadian blue-chip dividend stocks that were acquired at a reasonable cost
Yes, I think David has mentioned this in some of his Canadian MoneySaver articles. It sounds like a plausible approach. But I thought the main point of the articles was to show how well a Dogs approach could work over the long term. That was what I found interesting.

There is an annoying lack of detail on how one constructs the long-term hold portfolio. How many companies should you own? Which ones should you sell when you reach the limit? When would you sell a company? When it cuts its dividend? When the price goes down 50%? When it's dropped from the index? Us stock screeners want rules! Sounds like it could be more complicated than the Dogs.

It would have been useful if, when he started his series of articles, David tracked the returns of two portfolios: the Dogs and the long-term holds. As it is, we don't know whether the long-term holds beat the Dogs or even beat the index.

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Re: Dogs of the TSE

Post by Shakespeare » 13 Nov 2015 19:17

It would have been useful if, when he started his series of articles, David tracked the returns of two portfolios: the Dogs and the long-term holds. As it is, we don't know whether the long-term holds beat the Dogs or even beat the index.
In real life, as opposed to on paper, it makes a big difference whether you are working in a taxable or registered account. The former encourages a more buy-and-hold approach because of cg taxes.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Dogs of the TSE

Post by DenisD » 13 Nov 2015 19:41

That's true. But at least the "on paper" results would give a starting point in the comparison.

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Re: Dogs of the TSE

Post by Jungle » 09 Jun 2016 10:25

Anyone still following this strategy?

How were the results for 2015? There would have been some dividend cuts?
YTD it looks like this might be outperforming, mainly oil stocks if included.

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Re: Dogs of the TSE

Post by Shakespeare » 26 Sep 2016 14:44

How a retired university professor outperforms the market - The Globe and Mail
David Stanley

Occupation

Retired university professor

The portfolio

Includes about 30 blue-chip, dividend stocks – the two largest positions being Enbridge Inc. and Toronto-Dominion Bank....

Mr. Stanley usually limits his holdings to Canadian TURF stocks (telecoms, utilities, REITs and financials). Some diversification is provided by U.S. dividend stocks and Vanguard ETFs that track foreign markets.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Dogs of the TSE

Post by Jungle » 12 Dec 2016 03:26

Looks like 2016 was a good year for BTSX.
Anyone looking at BTSX for 2017?

EMA
BCE
T
SJR.B
CM
POW
NA
FTS
BNS
ENB

Seems like a pretty strong group for 2017 screen stays the same.

RPABVG
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Re: Dogs of the TSE

Post by RPABVG » 10 Aug 2017 23:37

Great thread guys but its been a while since anyone posted. Any updates on BTSX strategy, results? Is everyone who was using it, still using it? Has anyone abandoned it? Where's Like_to_Retire? Cheers!

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