Just about everyone has more than one pair of shoes, some people need closets for theirs. When you have more than one pair of shoes, you tend to have a favourite. If you are remotely similar to me, you do have a favourite. One of my favourites is an old pair of loafers than work well in the winter as slippers. The other day, it was noticed the shoes needed repair, in an earlier stage they would have gone to a shoe repair place. However the repair bill would be worth more than the shoes are worth, but the shoes are still wearable and have lots of goodwill and wear in them. A do it yourself repair of a  a stitch or two was done, to make them last for another 6 months and maybe even longer.

Linking to dividend producing stocks when something works, why change it drastically? Although it is important to examine if you are getting what you expect  and if you are, it can be good. In a recent study dividend producing stocks went down less than the market index, bounced back sooner and did better than index in an up market. The reason is the dividend payment provides ensures a minimum stock price, and when the market goes up, the profit making stocks always go up first. What you miss is not the  stock that goes up 4 times or more in a short period of time.If you can live with losing less and gaining more, then dividend producing stocks is something you should have your money in.

There are more questions than answers, till the next time – to raising questions

In the urban city where I reside, the city is built by the lake and on days when the temperature goes up, it is wonderful to go for a walk by the lake. While down at the lake, a stop was required at the park benches, it this case the view was an inner harbour protected by a breakwater. Given the temperature was expected and did go down fast there was a wind in the air. The waves on the lake did not seem to be high, but when they hit the breakwater, a few rolled over the top. It was a pretty picture and  showed the power of water.

Linking to dividend producing stocks – most of the time, the stocks are well protected by the breakwater known as competitive advantage. But all is not perfect, the water inside the inner harbour is affected by the waves in the marketplace. Dividend producing stocks have the advantage that they should be more secure with what happens in the market. However the breakwater over time, perhaps a long period of time, will be breached and something will change.In order to ensure competitive advantage remains, you need to evaluate your holdings every once in a while to see if the breakwater is in solid shape.

There are more questions than answers, till the next time – to raising questions

Last summer, the writer went by a public park and the flowers consisted of what many would consider weeds. Weeds have value, the monarch butterfly only lays its eggs on milkweed, weeds produce flowers (usually smaller ones) and there are many valuable reasons why weeds exist, however breath taking beauty is not one of the attributes. Last summer my thoughts were does the public park not have the money to update and make the passed area a showcase?  The area could easily use traditional flowers to add a wonderful dimension to the area. A few days ago, I was in the area and passed by the same spot with the sun shining. The green weeds had turned to the colours of yellow and red and looked very good. Perhaps this was the effect the people were trying to achieve by design, although I would be surprised.

Linking to dividend producing stocks – if a stock has a long history of producing dividends and their model is working well, then perhaps it does not need to be changed. Many years ago, the writer worked for a dividend producing company that from my standpoint needed a great deal of change. The company had all the correct products but was not good at selling them. Those that knew about them were very loyal, but those that did not know, would likely never know (the company has since been sold to a bigger dividend paying company which does know how to sell). Sometimes it is best to see the whole cycle or picture before you judge.

There are more questions than answers, till the next time – to raising questions

In the days of days of old, when the armies marched into new lands, the first construction was a fort with a moat or areas where the commanders believed the fort would have a competitive advantage over the enemy and would be considered safe. Most of the time it was true, the forts were constructed where the enemy would not go, but sometimes the enemy goes where it is not expected. Think of the Lawrence of Arabia movie – they came across the desert because the other side did not expect them to come across the desert. Companies who consistently make money have solid moats or defences that make it very hard for them not to make money. Although things do change with technology or the companies have to have “bad” management or a combination of other things.

According to data from Morningstar some companies to consider for they have demonstrated advantages Morningstar examined 5 year annualized growth rate of earnings per share; one year total return; and upward revisions by analysts over the past 90 days. The companies are Visa, Comcast, Intuitive Surgical, Home Depot, Express Scripts Holding, Amgen, Starbucks, ebay, Walt Disney, Magellan Midstream Partners, Dun and Bradstreet, Blackrock, Philip Morris International, Brown-Forman, Franklin Resources, ONEOK Partners, Mondelez International, T Rowe Price, Fiserv, and Wal-mart. All of these companies have done well in the past and are continuing to do well.

Linking to dividend producing stocks – each of the above have a vast number of competitors, but they also have a large advantage over their competitors. It can shrink, they are dependent of a variety of expectations in the economy, but if you look at each of them and determine why their model works, you can occasionally check to determine if it is continuing to work. If you are satisfied it is working, then you have the luxury of not doing anything. If the model is not working then you have adjust your holdings.

There are more questions than answers, till next time – to raising questions.

A new movie is being released today – the latest James Bond movie or franchise. The movies over the years have proven to be money generators for the movie industry at large and the owners MGM/Columbia Pictures. This particular movie has the added attraction of being rated a very good movie, some of the other movies had one or two great scenes but not really a very good movie. The franchise will continue for years to come for every good franchise movie has an ending that will lead to the continuing saga. From a financial perspective, there are enough young and older folks who will go to the movie (including the writer) that the revenues from this franchise will ensure more movies are made.

Linking to dividend producing stocks – not every movie released by MGM will do well from a financial point of view, but there are enough including James Bond to ensure the company will continue to generate revenues. This is the key to dividend producing stocks as you do your research what is the reason or the business model for the company to continue to make money. If that reason continues to be a competitive advantage, you investment is good and it will do better than an index fund.

There are more questions than answers, till the next time – to raising questions.

The other day, the writer went to a fall fair for agriculture to see the animals, the food, and to celebrate both. At one of the displays, understanding most displays are to encourage you to eat more, was the cheese display. One of the many recipe booklets was different methods to have a grilled cheese sandwich. If you were making a grilled cheese sandwich for a child, you would tend to make it relatively simple – butter the bread, cheese in the middle and cook it. The cheese melts and it is fun to eat (besides it is good for you, even better if you add some fruit). As an adult, there are a thousand choice of cheese, toppings, bread, etc. to enhance the sandwich. Many of them are very good to eat. We tend to forget what is simple is also effective.

Linking to dividend producing stocks – what is simple is effective. If you take a company that has been consistently made money and buy the shares on the expectation the pattern will continue. As an investor, you must decided how does the company consistently make money and will that continue? If you determine the money making will continue, then as a long term investment your work is done and you can enjoy the simple but effective pleasure of receiving dividends for a long time to come.

There are more questions than answers, till the next time – to raising questions.

Most ot us have credit cards, life is easier if you have one. If you consistently pay off your credit cards, life is easier, for the credit card interest rate is higher than most investments will earn. Each year the credit card folks give you something new which results in understanding the credit card just that much more difficult. Is a cash back better than rewards? if you accumulate points, what is there end date or when do you have to use them? how many points does it take you to gain a “free” trip? Do the extra features make senses for you? There are many questions that you have answered and resulted in the card(s)  in your wallet.

Linking to dividend producing stocks – since you have answered many of the questions regarding credit cards, a similar process is done with investing in stocks. There is rarely a perfect answer, but it depends on the individual and their circumstances. However, picking dividend stocks, which have consistently increased their dividend rate over the years has proven to be a successful.

There are more questions than answers, till the next time – to raising questions

Posted on November 6, 2012 by Doug

In the United States there is a general vote on Tuesday – besides the Presidential election, there are many other votes for office and many states have special votes. If you are a citizen, you should vote. If for no other reason, November 11 is coming forth and we remember those who lost lives in part to allow people to vote.If you are near a mythical average voter, you will likely have a variety of different views on subjects which makes it good, the polls indicate the presidential vote is close. Your vote is needed.

One of the many advantages of dividend producing stocks is you can vote for management or even against them if you wish. Voting is something you do on a regular basis. It is easier to vote for shares than it is for politicians. If you vote you shares you can vote over the phone, the computer, mail in your vote, attend the meeting or vote by proxy. If you vote for politicians, most places you have to do it in person. (The writer has never understood why it is easier to vote for shares than voting for people who likely have a bigger influence in your lives, it is after all voting.) Anyways voting is important, if you vote about a company’s management and you are eligible to vote, you should vote.

There are more questions than answers, till the next time – to raising questions