I’m going to use this article to make a small announcement. For any readers unaware, I will no longer be a part of the Chasing Financial Freedom Podcast. It was a joint-project with my pal Kraig over at Young Cheap Living, and it was something I really enjoyed being a part of. However, I lack the necessary time that a project like this really requires. It was a concern I shared with Kraig early on, but we decided to go forth with the podcast and see how it went. Unfortunately, my fears turned into a reality and I found it nigh impossible to keep up with the podcast on top of everything else on my plate. This is a microcosm of my life, and a good example of why I’m chasing financial independence with such voracity. I simply desire, no I need more time.
For any parties interested in the podcast going forward, I would highly encourage you all to visit Kraig at his site because he’ll be continuing the podcast without me. It was a lot of fun being a part of such a wonderful project, and I wish Kraig the best with it. I’m quite sure he’ll do a great job with the CFF Podcast from here! You can listen to Episode #6 here.
Looking forward, I’m excited to still bring quality content to the table here at Dividend Mantra. I’m always interested in feedback on articles you’d like me to write, or topics of interest. I have probably 20-30 working titles with general outlines already sketched out in my head, but I’ve gotten some great feedback via email lately from you readers and it’s all greatly appreciated. I think what I enjoy most about this blog is the interaction with you guys. Sometimes I’ll get a question or a suggestion via a comment or email and I think about all the ways I could turn that small discussion into a great post. So, this blog is really an extension of everyone who visits and shapes it.
Anyways, I always appreciate you guys for supporting my journey and I just hope that I can repay that through my writing. I look forward to continue sharing our aspirations as we mutually inspire each other to greatness!
Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.
Aflac: Still Undervalued, Still With Risk
Dividend Monk analyzed Aflac Incorporated (AFL) and highlighted the value inherent within the shares, but also cautioned investors of potential risk with the company’s exposure to Japan. I’m personally long AFL, and it’s one of my biggest positions. Although I don’t know if I’d load up here at today’s prices, I did buy as much as I could when it was in the mid-$30’s.
Should Dividend Investors Ever Break Their Rules?
Dividend Growth Investor wrote a great post on the need for an investor to have rules, but also remain flexible. I’m learning as I go, as we all do. And one thing I’ve learned for myself, is that I prefer strong guidelines over hard and fast rules. Valuing stocks is just as much art as it is science, and investing is psychological to a great degree. I’m doing better as I go in not overly complicating investing by setting up rigid rules. Companies change over time, and so will we as investors. Limiting yourself to strict entry yields or P/E ratios might actually do as much harm as good, as you may end up missing out on great opportunities.
Supporting David Van Knapp’s Views On Popular Dividend Growth Stocks That Are Always Undervalued
As an extension to the discussion above, Chuck Carnevale recently wrote a couple of great articles that actually followed up on a discussion put forth via a set of articles by David Van Knapp over at Seeking Alpha. There are a subset of popular dividend growth stocks (namely Big Oil and defense contractors) that appear to be chronically undervalued. Conversely, there also appears to be a subset of stocks (namely high quality consumer stocks) that appear to be chronically overvalued, as Chuck highlighted here. This is an interesting phenomenon, and not something to ignore. Recognizing that the market regularly places discounts or premiums on certain stocks helps an individual investor know when it’s a great time to purchase an equity position in a certain company, because while at first glance a stock may appear cheap or expensive it could be quite the opposite based on historical valuations. Everything is relative, and again it’s important to recognize that. I’m getting better at this as I go as well.
What Is Due Diligence? Here’s How I Do It
Chuck has been on a roll lately. Here’s another great article that defines due diligence from a long-term investor’s perspective, and what Chuck does on a regular basis to research companies for potential investment. Great stuff here. After reading this article I’m quite surprised I’ve never written an article on this subject matter myself, so I’ll have to rectify that soon.
How Big Is Your Circle Of Control
MMM reminded us all that we need to waste less energy and time worrying about things we can’t control, and instead use those valuable resources focusing on the things we can control. This is exactly what I’m talking about all the time in regards to investing. People like to read into political situations like the recent government shutdown and pending debt ceiling issues, or watch CNBC all day for macroeconomic news. This is all just a big waste of time, and I’ve recommended since the beginning to ignore all the noise. I rarely discuss macroeconomic news here (like QE, politics, China, etc.) because, in the end, there is nothing you or I can really do about any of this. I instead choose to focus on what I can control: limiting my expenses, maximizing my income and investing in high quality companies at opportune valuations. Focusing on the decisions you can make will limit a lot of heartache and stress that could otherwise be avoided.
Should You Buy Twitter?
Dividend Ninja recently discussed the IPO (Initial Public Offering) of Twitter, and why he’s not interested at this time. I concur with Ninja here. Twitter doesn’t generate a profit, and having a cool platform and lots of users doesn’t equate to being a great investment. Not to mention that there is obviously no dividend here. I’ll stick to my tried-and-true high quality companies with sound economic moats that have a history of paying ever higher dividends. Twitter is popular now, but there was a time not long ago when there was no such thing as a ‘tweet’ and, all the same, there could be an even better service down the road that hasn’t even been invented yet that could disrupt Twitter heavily. Uncertainty creates risk, and I prefer to avoid both as much as possible.
You don’t need to be Financially Independent to Retire Early
Joe highlighted that it’s possible to quit your full-time job before you’re actually financially independent and ‘coast’ to FI. Part-time jobs are an easy way to bridge the gap between the passive income you have already been able to generate and the likely lowered expenses you have on a recurring basis. In addition, one can easily concentrate more of their available free time (now that you’re not working full-time any more) into hobbies and parlay that into a possible side income as well. The possibilities are endless, and the more I think about it the more I like this idea!
10 Years and A Day
Jeremy summed up how 10 years of relative sacrifice allowed him a lifetime of opportunity via travel and freedom. He figured out early on that the lower he could get his expenses, the more he could save and therefore the earlier he could quit his job and focus on his passions. That sounds like someone else I know…
A Real Dividend Growth Machine: Q3 2013 Review
DGM reviews his portfolio over the third quarter of 2013 and it looks like he had another very successful run. He’s built a robust machine and it’s spitting out ever greater output over time. Fantastic stuff!
Semi Recent Buys
Passive Income Pursuit reviews some of his recent stock purchases. He added to his positions in The Procter & Gamble Company (PG) and Baxter International Inc. (BAX), a company I recently invested in. Some fine purchases here, and I hope to also add to my positions with both of these companies sooner rather than later.
21 Dividend Champions Poised to Boost Payouts
David Fish highlighted a great list of 21 Dividend Champions (25 or more straight years of dividend growth) that are poised to raise their payouts soon. As always, David Fish’s work is most appreciated!
Full Disclosure: Long AFL, PG, BAX
Thanks for reading.
Photo Credit: Benoit Mahe