Weekend Reading – October 10, 2014

happyweekendWhew. What a roller coaster!

And by that, I’m talking about life and the stock market.

I’m finally back in the swing of things down here in Sarasota, and life is good. The sun is shining just as bright as I remember it, and the beautiful sands of Siesta Key are just a few miles away from where I live. I’m glad I traveled up to Michigan to see if there was a life for me up there, because it only reinforced my belief that my life is 100% where I’ve been busy building it over the last five years. I guess maybe I left a piece of myself up there, but I retrieved it and brought it back with me. I’m now completely focused on life in paradise.

Meanwhile, the stock market currently seems to be just as confused as I was a few months ago. Interest rates will stay low for the foreseeable future. Up! Demand for oil and commodities softening. Down! Job market recovering. Up! Where will growth come from? Down!

These ups and downs are exactly why I recommend to ignore the noise and focus on business fundamentals. Major companies don’t just swing in value by billions of dollars day after day. However, emotions tend to take over the market, causing Mr. Market to be very moody and irritable. But this volatility is a long-term investor’s boon. For me, volatility is just a synonym for opportunity. Lower stock prices means higher yields. Higher yields means more passive dividend income, which means financial independence is that much closer.

Now, I don’t just talk the talk. I walk the walk!

I’ve been busy putting capital to work a bit more aggressively than usual, trying to take advantage of what has amounted to a broader market sell-off over the last month – the S&P 500 index is down -4.49% over that period. I averaged down on my position in the world’s largest publicly traded net lease REIT in American Realty Capital Properties Inc. (ARCP) as soon as the month got underway, and then very soon thereafter averaged down on my position with the world’s largest miner in BHP Billiton Plc (BBL).

Nothing like a good stock sale on great companies to pry a couple bucks out of my wallet. On that note, I’m getting really crazy this month and just today initiated a new position in a company I’ve been watching for a long time now (check my Twitter stream). Recent weakness (it’s down over 7% over the last 30 days) caught my attention. I’m pretty much tapped out now, so I’ll probably just be busy collecting dividend income from here (I could think of worse positions to be in).

I’m looking forward to some time at the beach this weekend, as well as some football on Sunday. I hope all of you readers out there have a great weekend!

In the meanwhile, I’ve compiled some articles that I recently read and enjoyed. I hope there’s some value below. Thank you all once again for all the support. It’s very much appreciated.

30 Years Ago They Retired at 35: An Update
Who says a 60-year retirement isn’t possible? I came across this story via Joe at Retire by 40, and it was just awesome to see this couple still enjoying retirement and rolling with the punches three decades after they embarked on early retirement before it was fashionable or even thought to be realistic. These two are real trailblazers and I’m really happy to know that others are out there making it happen. Inspirational!

These 10 Dividend Growth Stocks Go Ex-Dividend Next Week
I put this list of dividend growth stocks that go ex-dividend next week together for Daily Trade Alert, and I also took a look at one of the stocks to see if it’s a buy here. Looks like it might have gotten ahead of itself.

Caution: This Dividend Growth Stock Looks 15% Overvalued
It appears to me that this defense contractor appears overvalued, after a massive run-up over the last year. It appears to be a great company with solid long-term prospects, but the price and value are not advantageously aligned right now. I also took a look at a stock on the flip side of the coin that appears undervalued right now.

Life is Like a Game. Here’s How You Master ANY Game
James put together an epic post full of solid advice that’s valuable for just about anyone in any situation. I found myself nodding my head as I read the article from top to bottom. I read a lot. I mean a lot. And this was one of the better pieces I’ve read recently. A highly recommended read this week. Please check it out.

Ten Dividend Seeds I Planted for Long Term Income
Dividend Growth Investor shared some of his recent buys, and I happen to be a fellow shareholder in six of these companies. There’s a couple in there that I continue to keep my eye on as well.

Outrage in Belgium, Federal Government Raises Retirement Age to 67
No More Waffles alerted us that there’s been a change in Belgium’s public pension system. This kind of stuff should just reinforce how important it is to save and invest on your own. I have no doubt that Social Security will be around when I’m an old man, but at what age will I be able to access that income? And what will the benefits be like? I don’t blame people for getting upset at changes midstream, because, after all, it’s not “free income”. We, as taxpayers, pay into the system, and rightfully so expect a payout when the time comes. However, SS isn’t designed to be the sole source of income for a retiree. Think carefully about how much control you want over your finances and ability to retire whenever you want.

Life expectancy in the USA hits a record high
Life expectancy just broke a new record – 78.8 years. Life is better than ever, and it’s also getting longer than ever. This speaks well to my previous point. The quicker you can get in gear today and save for tomorrow, the quicker you’ll be free to enjoy your life on your terms. If you’re able to become financially independent by 40 years old, that means, on average, you’ll have almost 40 years of your life free to yourself. How awesome is that?

“I Like My Job And I’m Good At It, So Why Should I Care About Investing?”
I’ve written on this supposed conundrum a few times now, and Tim does a great job at making his point. You just don’t know what the future will bring, and who would you rather have calling the shots over your ability to pay for your lifestyle – you or your boss? Furthermore, what you enjoy today might not be what you enjoy tomorrow. Flexibility and freedom are no less valuable just because you happen to enjoy your job. If anything, you’ll find out just how much you really love your job when you have enough money to walk away at any time. You might be surprised.

Recent Buy
JC added to his position in a fast food giant. I’m a bit reluctant to invest too heavily in fast food purveyors due to predictably mediocre food perhaps not quite being the draw it used to be, along with more competition/choices. However, people have to eat and fast food isn’t going anywhere. That being said, I don’t think I’d want a large part of my net worth here.

What’s Wrong With This Picture?!
Bryan questioned the emotional volatility of the stock market, and declared to focus on what’s real: dividends. Couldn’t agree more!

36 Successful Bloggers Reveal Their Investing Styles
Steve was kind enough to include me in this massive tribute to a few different investment styles and those that use them. He compiled a short description from 36 different personal finance bloggers on how they invest and why. Good stuff, and the differences in style, perspective, and goals are definitely interesting.

45 Attractive Dividend Growth Stocks In Today’s Overheated Stock Market – Part 1
Chuck is the master at making sense of the market and valuations. If you don’t think there’s any value in the current market you may want to check this list out for further reference.

S&P 500 Companies Spend 95% of Profits on Buybacks, Payouts
I’m as happy as the next shareholder to receive dividends and watch a company reduce its share count; however, I do agree with the fundamental thesis here that managements across the board will have to start reinvesting into businesses at some point to make sure they’re ready for future growth. I’m optimistic that this is just a phase, and investment will ramp up at some point in the future. I’ve noticed Wall Street and companies alike can be like lemmings, where everyone is copying each other. One major company will start to invest for the future in substantial amounts, and others will see the value and copy.

Lanny’s September Income And Expense Summary
One of the Diplomats just released his budget for September, and it looks like he did great. He may have come just short of his lofty goal, but he still saved about 10 times what the average American manages. Bert, the other Diplomat, also recently released his budget as well, which showed he also had a great month of savings. Keep it up, guys.

September 2014 Expenditures
The Frugalwoods also updated us on their budget, and they knocked it out of the park again. They’re definitely frugaling it up over there.

Passive Income and Pageviews – September 2014 Update
WYOR had a fantastic month both in terms of his blog and his passive income. Love to see a plan come together!

Overheard at The Coffee Shop
J$ has been spending a lot of time blogging at coffee shops lately, and he decided to share some details involving overheard conversations. I guess you never know what you’re going to hear when eavesdropping on others!

Recent Buys: October 9th, 2014
Ryan just picked up shares in a couple of really high-quality companies. He averaged down on one of them in a big way. Nothing better than being able to pick up shares in a great company for even cheaper than you did before.

Full Disclosure: Long ARCP and BBL.

Thanks for reading.

Photo Credit: gubgib/FreeDigitalPhotos.net

Similar Posts

50 Comments

  1. Sounds like you’re enjoying the Florida weather. It’s getting cold an rainy here in Canada. Good thing it’s Thanksgiving long weekend! Yea to turkey!

    Thanks for sharing these great links.

  2. Thanks for sharing some good reads among our little community, as unveil check them out. Also, just checked your twitter to see the new buy.. Cannot go wrong with that company, so great buy while it’s weak!

  3. DM,

    Wow! Great articles here and what a week it really has been for you and for us all. You have made some BIG moves not just this past week with purchases, but in the last month. Thank you again for honoring our blog – it is extremely humbling that you read our work and you are a huge inspiration to us, which is also an understatement. Hope your Friday is going well Jason, you’re on an awesome path that inspires us all!

    -Lanny

  4. Great set of articles, DM. I’ll have to catch up on a couple that I missed from the week

    Have a great wknd
    R2R

  5. Tawcan,

    Haha. Yay to turkey, indeed!! 🙂

    Stay warm. I know it’s getting a bit cold up there, but leading into the fall and holidays is always a nice time of year.

    Have a great weekend!

    Best regards.

  6. SAD,

    I hope you find some value here. I think there’s some pretty good stuff in there. I’m a voracious reader, so I’m always reading something. 🙂

    Thanks for dropping by. Enjoy your weekend!

    Best wishes.

  7. Lanny,

    Thanks, bud. It’s been a crazy month or so here. But in a really good way. I’ve settled back into a groove here, and I’m back to doing what I do best. I’m reading a ton, writing a lot, and investing like a madman (as much as my capital will allow). Life is good. 🙂

    I hope everything remains well up in Cleveland. Looking forward to hearing about some purchases from you!

    Have a great weekend.

    Cheers.

  8. R2R,

    There’s a couple of decent articles in there. The couple that has been retired for 30 years now is a real inspiration. Looks like they’re living it up in Thailand. 🙂

    Great job with the CVX purchase. Keep up the great work!!

    Best regards.

  9. Some great articles there.. I will have to read some of those that tweak my interests. 3 buys so far this month for you. These purchases will pay you “dividends” in more ways than one year after year. This sure beats wasting money on a new phone, new TV etc when the old ones work just as good.

  10. Thanks for sharing some these reads. It seems harder and harder catching up on all the great FI/DGI blogs out there as more and more keep popping up and sharing their finances. Always nice to catch up on my late night reads. Have a great weekend.

  11. The honour was all mine that you bestowed the collaboration with your insights! Thanks for including it in your roundup – it wouldn’t have been possible without you and all the other bloggers who participated! 🙂

  12. Great list of articles: that’s my Sunday morning reading list sorted! I’m still fearful of the market at these levels, but maybe all I need is some more information to push me over the edge.

  13. Thanks for sharing my post Jason. Glad you’re enjoying our great weather. I’m trying to squeeze some kayak fishing in. Have a great weekend.
    -Bryan

  14. Thanks so much for sharing my September expenditures :)! It really did turn out to be a frugal month for us. Glad to hear all is going well for you in Florida. Enjoy the sunshine this weekend! (it’s cold and rainy here in Boston today…)

  15. Thanks for the pimping sir. I’m waiting to come across YOU at these coffee shops so I can blog all about it 😉 Though I reckon it would be more like “dividend this” and “early retirement” that in your conversations. Not much to make fun of there, haha…

  16. IP,

    Nothing pays dividends quite like dividends themselves, right? 🙂

    Some people really enjoy buying new gadgets. I prefer new stocks. That’s just me.

    Have a great weekend.

    Cheers!

  17. DivHut,

    I hear you! Since I started blogging back in 2011, there’s been huge growth in the number of blogs in both the general personal finance space and more specifically those saving/investing in dividend growth stocks on the way to financial independence. It’s really great to have this growing community.

    Thanks for stopping by. I hope you have a great weekend as well!

    Best regards.

  18. Steve,

    I appreciate it very much! It was great to participate, and I’m really humbled to have been included. I hope readers found a lot of value in the piece. It was a hell of a compilation. 🙂

    Thanks again!! Have a great weekend.

    Cheers.

  19. Myles,

    Well, I’m not sure if there’s any reading in there that will alleviate your inner fear of investing in stocks, but I know I’m certainly happy to see the waters get a little choppy. 🙂

    Thanks for stopping by!

    Take care.

  20. Mrs. FW,

    Happy to share. It’s good to know that there are others out there enjoying frugality. We’re all frugal weirdos together. 🙂

    I’ll try to send a little sunshine up your way!

    Best wishes.

  21. Recently started to read your blog. Really terrific information. Your strategy is very compelling.

    I added some UTX and EMR this week. Looking to initiate position in 3M if it gets to mid 120’s, V below 200 – your thoughts?

    What’s on your shopping list and @ what price?

    Cheers,
    Stockman22

  22. Stockman22,

    Glad you found the blog! 🙂

    Those are all great companies. I don’t UTX or MMM yet, but they’re titans. Would love to have them in the portfolio at some point. UTX seems like the better bet right now. I think V below $200 would be a great buy, considering the growth. I initiated my position a bit higher than current prices, but if I could average down in the $190s or so I would probably jump on that.

    As far as my shopping list goes, you can see what I’ve recently purchased. Nothing says more about conviction than putting money to work. I also think DEO makes sense here. Oil supermajors have also become attractive again, as have many oil services stocks. Commodities have taken a hit, which is why I recently added to BBL. Long-term plays, but there could be more pain ahead.

    Best of luck!

    Take care.

  23. Thanks, Jason.

    I appreciate your excellent comments.

    I have held DEO for a while, and I believe it is very well priced here. I am overweighted in oils, so I am taking a hit; but clearly there is value in CVX, COP etc.

    Am underweighted in Industrials and Healthcare, so looking there first to balance out, and potentially pick up some buys on this downturn.

    I also own GLD, SLV as a hedge.

    Best regards,
    Stockman22

  24. Jason, I have been a shareholder of UL since early 2007 at $28, and held through the madness of the great recession. It has been a great stock to own and provided me with a lot of cash flow to keep me level headed when the crash was ongoing. It also gives you a little more international exposure in a company with great products that the world wants to buy. Glad to have you as a fellow shareholder (and good to see how often great minds think alike in the DGI world!).

  25. Jason,

    I hope you’re at the beach right now having a nice peaceful afternoon. I’m so happy to hear about your amazing schedule these days because you deserve it! I’ve been enjoying Daily Trade Alert a ton lately, and you’ve had some stellar articles as usual and I’ve enjoyed other authors as well. Thanks for including my purchase in this weekly reading. These posts always turn me on to new articles and content I might have otherwise missed.

    Best Regards,
    Ryan

  26. Gotta love DEO. That’s been with me for many years as well and their stable of top selling brands really gives this company a core strength through good and bad times.

  27. Jason, thank you for the link and mention. Things are looking up indeed and I am grateful for those willing to share my journey with others as you have here. Enjoy the gorgeous weather and rest of your weekend!

  28. Hi DivHut, Just looked at your portfolio – nice job! When did you get started with that portfolio? See you have 3M – what would you see as good entry price?

  29. Dnaiel,

    Thanks! Glad to hear from a fellow shareholder. The cash flow is definitely pretty strong, with the yield being as high as it is. The brands are strong and I definitely love the emerging markets exposure. We’ll see how this gone goes. 🙂

    Appreciate you stopping by.

    Cheers!

  30. Ryan,

    Had a great night. We watched sunset at the beach. It was beautiful. I hope you had a great Saturday as well!

    Glad you’ve been enjoying some of the stuff at DTA. They’ve been really supportive of what I’m doing. And there’s some quality articles over there. I’m doing my best to include some solid content as often as possible.

    Glad to include your post. You’re doing a great job over there. 🙂

    Keep it up!

    Take care.

  31. Thanks for the kind words about my portfolio. I started slowly about seven years ago buying up small bits whenever I could. MMM is a solid long term holding in my portfolio. I haven’t added to my position in a long time and I would most likely wait to get in. While its PE is coming in line with the market as a whole it is still well above its historical levels and with the market so fickle these days I’d wait to pull the trigger perhaps to when the yield gets closer to 3%. Just my 2 cents.

  32. Great article on investment strategies of 30 bloggers. I think I’d fit in the mixed category as well. I love dividends and cash flow from rental real estate, but als like the ease of industry allocation through indexing. A long term target for me would probably result in around 25% investment property, 30% indexing, and 25% dividends, 20% p2p/value/growth/speculating. Bit of a moving target, but seems like something I’d be comfortable with.

    Btw, looking into schwab brokerage for myself. I like the no fee globally accepted debit card (trying to slim down my wallet), and the brokersge seems to be well reviewed. 8.95 is slightly steep for trading fees, but it’s really not much more to pay since 5-7 is the normal range for most. I’d like to avoid going too far over 500k in any brokerage long term, so who knows what will be next. Are you still exclusively using scotttrade?

  33. DM,

    What is your favorite football team? I’m a Raider fan, they are tough tough to watch but I’m loyal to my teams.

  34. Jason,

    Thank you for including me again in your excellent reading list! Much appreciated. I really liked Steve from Kapitalust’s round-up of investment styles.

    As a fellow shareholder, I’m glad you initiated a position in Unilever. Great company, great products, great dividend payer. Quite undervalued too, I feel.

    Odly enough I also have ARCP and BHP on my list – although how odd is it that we both want to invest in great dividend companies? I was thinking of buying into ARCP at the end of the month to enjoy their high dividend yield and monthly compounding as a result.

    Keep it up over there in Sarasota,
    NMW

  35. rmendpara,

    I’m on the same page as you in regards to brokerage limits. I’d like to say at about $500k. I’m nearing $200k, which will be the limit for me. I figure through appreciation and dividend reinvestment I’ll cross over $500k at some point in the next decade or so anyway. So I’ll have to start considering a new brokerage within the next year. I definitely don’t want to go too far over SIPC limits.

    That sounds like a nice asset allocation mix. I think rental properties can be a very attractive asset in regards to cash flow, but I have absolutely no desire to get in that game myself. REITs will be my preferred way to go there.

    Thanks for stopping by!

    Cheers.

  36. DE,

    Well, my hometown team is the Lions. And my adopted hometown team is the Bucs. But I would say my favorite team is the Broncos. I was sad to see them get pummeled in the SB, but the Seahawks were just the better team. Took it to them, as they should have.

    I don’t get to see a lot of Raiders games, living on the East Coast. It’s great that you’re loyal, though. 🙂

    Take care!

  37. NMW,

    I agree. That round-up was great, and I was happy to be a part of it.

    UL seems pretty solid here. I think it’s somewhere around 10% undervalued, although even a fair price for UL would be worth it. Great brands, and great exposure to emerging markets. I like it! Glad to be a fellow shareholder. May they continue to serve us well. 🙂

    ARCP is great for the high yield, although I think the dividend growth is likely to be quite modest for the next couple of years until they can absorb all of their changes and get AFFO to a comfortable level. We’ll see. In the meanwhile, that high yield can’t be ignored, and I see no reason why the dividend is in danger here.

    Thanks for stopping by. Hope you had a great weekend!

    Best regards.

  38. Hi Jason,

    Thank you so much for mentioning my article on the ten companies I bought earlier this month. I am hopeful stock prices keep sliding to the end of the year, so I can buy more shares for the same amount of dollars i have.

    Best Regards,

    Dividend Growth Investor

  39. Greetings from rainy Finland! First, I’d like to share a humble thanks to you for the great blog & sharing of your thoughts on your way towards FI. Your blog is very motivational and encouraging to read – mostly because of the concrete examples you provide us followers and because your success proves that it is possible to compound wealth through rigorous self management, without sacrificing too much on the money shrine.

    My personal investment story is somewhat similar to yours – I mainly invest in Finnish companies that pay steady (and preferably growing) dividend. However I have lately been looking at stocks that side of Atlantic Ocean, because the Finnish stock market offering is more or less narrow when it comes to finding these nice businesses. And what more, in US companies the dividend is being paid quarterly rather than annually which is the case in Finnish market. Your blog has provided good information for my search.

    Keep up the good work collecting those monthly paychecks and sharing it with us followers! Hopefully the more bearish lately market provides us all with good opportunities of collecting nice additions to our portfolios.

  40. Fjonsson,

    Thanks for stopping by! I’m humbled to have readers from all over the world, like yourself.

    It sounds like your off to a great start over there. It’s a shame that the Finnish market offers somewhat limited choices and annual dividends, but the good news is that our economy has become global over the last 10-20 years, and your options are greater than ever. It’s a great time to be saving and investing toward freedom right now. I hope you find the opportunities you’re looking for over here.

    I appreciate the support very much. I’m definitely doing my best to prove that financial independence is realistic for everyone, even if you don’t make a lot of money. Discipline, consistency, patience, persistence, and will are excellent personality traits to have, and far more important than how much money you make. 🙂

    I hope you stay in touch!

    Best regards.

Leave a Reply