For the last few months I’ve been writing a regular column for Master Investor magazine called The Dividend Hunter.
I haven’t mentioned it here because I wanted to see if the collaboration would last, i.e. whether or not my articles were good enough for the magazine!
So far they seem to be, so from now on I’m going to link to each monthly Dividend Hunter article as it’s published.
Since there are already a few in “print” I’m going to link to all of them here, but going forward it’ll be just the latest one.
I hope you enjoy them and/or find them useful.
March 2016: Why I Love Bear Markets
April 2016: Dividend Investing for Retirement
May 2016: Dividend Investing à la Warren Buffett
June 2016: How to Diversify Your Dividends
July 2016: Debt-Free Dividend Investing
August 2016: Looking for a Bubble in Consumer Defensives
September 2016: Can Legal & General’s Market Busting Yield be Trusted?
Wow John, really good articles there! Thanks for sharing, and best compliments for this collaboration!
John Kingham says
Thanks, and you’re welcome.
Excellent advice in all the articles.
Thanks for sharing. Much appreciated.
Concerning this dividend focus, was reminded of the work from 1926 on of the Weiss family, culminating in the book by Geraldine Weiss, co-authored with her son, ‘The Dividend Connection’, published 1995.
That book probably was one of the triggers that dragged us out, and saved us from, the impending disaster that followed the late 90’s Stock Bubble.
For those not famiiar with the book, charts are used to draw a Channel or Track, to compare usually rising historic Stock Prices with usually rising historic dividends.
So for a stock in question, the lower limit of the channel or track might appear to be a yield of 5%, the upper say 3% yield.
The chart thus also showed at a glance the comparative volatilities of diffferent stocks.
We went so far as to coin a name for this measure, the ‘Track Ratio’, to define where a stock was at any particular time within the track, and to use that measure to determine our allocations to any given stock.
The book also applies a similar technique to Stocks as a whole.
The death of our DOS based computer and with it most of the data, brought to a halt this over-complex and time-consuming method.
Had however by then been struck by a thought!
In general all the stocks followed, tended to be pricey at the same time, and then cheap at the same time!
We had to move on!
John Kingham says
Hi Magneto, I haven’t read The Dividend Connection but I am familiar with it and Geraldine Weiss. I think any strategy that is based on buying income-generating assets (stocks, indices, houses etc) when the yield is historically high is likely to do well over the long haul.
The death of the DOS-based computer definitely contains a valuable lesson though: Always make sure you back up your data using external storage and keep computers vaguely up to date with the latest operating systems!
John, interesting, I’ll read them all, but as it’s high on my thought list at the moment I reread the Legal and General article, which is well written and makes a great fist of breaking down each part of the business.
I took a leap of faith and bought before the Brexit vote — silly me what?
Anyhow, I’m almost back to break even and having just exited HSBC at a profit, I’m now looking to do the same with LGEN. Why?
Well first I don’t think any of the financial companies will escape what is happening to Deutsche Bank and the effective insolvency of Italian Banks.
Also I’m really concerned about this :-
“”””However, perhaps a more important
and certainly more impressive trend
is the rapid growth of the company’s
Retirement business, which focuses on
de-risking defined benefit pension schemes””””
This reminds me of what happened to CDOs in the US housing market.
I simply don’t believe that LGEN will be expert (” who have the right
expertise to deal with them”) at managing these liabilities.
The fact that companies are offloading them like hot potatoes is probably a good indicator.
It seems like magic to consider longevity swap transactions as ways to hedge against these many billions of liabilities — and magic they usually are not, failing to pay out when the merde hits the fan.
Nigel Wilson as CEO seems to have no faith in his own business since he keeps selling his stock (January and May this year being the most recent). As a FTSE100 CEO he has to be the least exposed with his own money.
It’s all about gut feel I suppose, but the guys who are piling up an impressive EPS and Divi growth, and collecting large bonuses, are rarely the ones that stay around long enough to deal with the fall out.
Retirement plan deficits look like the next big financial disaster in the making — a reason why I’m out of BT and BAE.
John Kingham says
Hi LR, interesting views as always.
I think the DB pension issue will only get worse over time with low interest on bonds and an unwillingness (or inability) from pension trustees to move up the “risk scale” into equities or other asset classes.
The DB pension/CDO comparison is also interesting. With car insurance you know that each policy is an independent risk as it’s unlikely that a significant portion of policyholders are all going to be involved in the same crash. But with DB pensions the risks are systemic and highly correlated from one company to the next, i.e. pensioner longevity on the liability side and low interest rates on the asset side. If one DB pension de-risking deal goes bad for L&G, perhaps that means a significant portion of them will all go bad at about the same time?
An interesting thought, but guesswork really. Even with that in mind I would probably be happy to have a toe in the water of the growing DB pension de-risking market via L&G. Just a few percent of my portfolio as usual.
I’m going to be buying something new at the start of October, but whether or not it’s L&G will depend on what else is on offer.
John – It’s a coin flipper 🙂
Hopefully it’s not a “heads I win tails you lose” coin.
Shame you are not into AIM stocks, MANX looks interesting.
I made a small toe entry in to Victrex and will monitor and possibly build on it.
Well done on UK Mail by the way. I passed on that one and bought ARM instead. I guess either would have been OK depending on when you bought of course.