Welcome to the board. You and I have pretty similar histories, as you are probably aware if you’ve read the Knowledgebase, which is at the top right of each of these pages. I am also an old guy, retired in 96, so I’ve been living off my market gains for 20 years now, and also sent my daughter to college and graduate school, bought a couple of houses for cash, paid all living expenses and taxes and my portfolio is now about twelve times as much as I started with (although probably worth less than ten times after figuring in inflation). I have to say that, in contrast to your focus, I pay no attention at all to income. I am totally focussed on the growth of my portfolio. I also think you are very courageous having just 8 stocks in your portfolio, having seen quite a few high conviction stocks blow up over the years. Since you are new to the board, I’d like to recommend that you do read the Knowledgebase if you haven’t already.
You and I have pretty similar histories,<<<<
Actually more similar than you think. My first name is also Saul. In fact while wandering around on Goggle I ran across your Message Board on MF and investigated. The name attracted me, the interest grew as I kept reading for the past few weeks.
I have to say that, in contrast to your focus, I pay no attention at all to income. I am totally focussed on the growth of my portfolio.<<<<
I focus on the income because as it grows it tends to drag the share prices up. I am at the point that the portfolio generates about double what I spend, so even if the prices remain at current levels (No increases in share prices) The portfolio generates a large reinvestment fund that allows me to add to the portfolio which adds to the income which covers the inflation and the rising expenses and taxes
After 13 years my portfolio is up about 11 times after all expenses and taxes and gifts.
My best wishes for your continued success.
After 13 years my portfolio is up about 11 times after all expenses and taxes and gifts.
That’s quite an impressive accomplishment in itself!
Care to elaborate on your main investment strategies…a “knowledge base”, so to speak?
I understand this is Saul’s board, and it sounds like your method is a bit different than his, but has generated similar results. I feel I’ve learned a lot from Saul and other Fools from this board, and have tried to implement some of what I’ve learned, although I have not jumped in 100% just because I’m more cautious than that. I still have a wide diversification of stocks and don’t sell near as quickly as Saul. But I also have not had knockout returns to brag about, pretty pedestrian/average by most accounts. But I enjoy it.
If Saul doesn’t want this discussion on his board, I would love to have you email me any info you would be willing to share as I’m always trying to learn what will work best for me.
Or you could start your own board, “Saul’s Investing Discussions”, wait, I think that one’s taken.
If Saul doesn’t want this discussion on his board,
Glad to have someone discuss how he picks individual stocks.
By the way, b&w, if you want to post something in italics you put < i > in front of it (without the spaces between the brackets and the i) and < /i > after it (also without the spaces). (All these tricks are described near the end of the Knowledgebase)
Everyone has different goals and needs and wants and fears. If two people had the exact same portfolio the results could and probably would vary from possibly very good to very bad based upon our individual handling of the portfolio
First of all–There is nothing magic in my portfolio.
My main objective is to make money To reach that objective, I look for stocks that have certain basic characteristics i look for. I look for companies with a small market cap in a growing industry with a growing distribution.
Small market cap-So the company has the chance to grow and I have the chance to add to it many times as it is growing so my portfolio can expand my wealth. Adding more shares as it grows will give me larger dividends that can be dripped into even more shares creating more growing dividends. I also seek companies that pay either partially or mostly tax deferred distributions Less taxes to pay means more money is being compounded. If the stock price remains steady while the dividend is increased the additional shares can get dripped at a lower cost per invested dollar. To be clear My portfolio can increase in value even if the stock price doesn’t go up if I have more income coming in than I spend or need.
I personally would never buy a stock like AMZN for the following reasons.
Price is $790 with a market cap of $372B- How many shares will a person buy and what is the potential $ gain before they sell? And is it worth it? 25 shares will cost $19750-If AMZN goes up to $900 down the road the profit will be $2750. That a lot or risk for only $2750 considering that it will take a $51 BILLION GROWTH OF MARKET CAP to give you that $2750
2)AMZN doesn’t pay any dividend so if Mr Market doesn’t reward AMZN with a $51 B market cap value increase you have nothing to show for your investment
What I’m saying is that there are thousands of stocks that go up. You can’t own them all. I believe it is best to buy the few that will benefit you as opposed to the latest fad that everyone thinks is the greatest thing since sliced bread was invented. i also believe that everyone can do better with their investing by upgrading THEIR OWN PORTFOLIO. Everyone owns some good stocks already. Here is a simple upgrade–Sell your worst stock and add to the best one in your portfolio.
I have no problem with doing that. I will also give you my portfolio as of Monday’s close of Oct 31,2016. I want you to know there are no magic stocks in my portfolio. I doubt if you heard of many of them. You probably will find better stocks for you sitting right now in your own portfolio because you are familiar with them. I tend to look at investing somewhat differently than others.
For example —If you have 20 stocks in your portfolio and a new fresh $5000 in your hands to invest and you don’t believe any of your current 20 securities are worthwhile adding money to and you are looking for something new, I would respectfully suggest you sell your entire portfolio. The more stocks you own, the harder it is to keep track of them
To start with I currently own 8 securities and I stress income.As of 10/31/16 my current estimated projected income (without any expected increases and no decreases) for 2016 will be about 42.88% above the income received in 2015.
Here is the portfolio: Portfolio was a mixed bag in October
October portfolio was down 2.98%
Year to date portfolio was up 11.48%
HASI 22.52% (REIT)(Div about 70% Tax deferred)
GAB 20.90% (Closed End Fund)(26% Tax Deferred)
MPLX 20.14% (MLP) (100% deferred
ARCC 14.89% (BDC) (Sitting in IRA’s 100% deferred)
ETE 11.79% (MLP) ((100% Deferred)
EVA 5.97% (MLP) (100% deferred)
UTF 0.92% (CEF) (In IRA 100% deferred))
NRZ 0.20% (In IRA 100% deferred)
Cash 1.66% -(Expecting a large influx of cash distributions around middle of November)
All dividends and distributions are partially, mostly or all tax deferred. My biggest taxable event normally is the RMD’s I have to take out of my IRA’s each year. This year however I paid a massive FED and STATE tax bill due to a merger that closed in DEC 2015
The 42.88% increase in projected income is partially from a merger that will probably happen in 2017 that already sold the old company (In an IRA with no dividend and bought 1.6X the shares of the new company (In an IRA with a 10+% dividend)
You probably never heard of most of the companies because they are, for the most part, off the beaten path.
I’m not infaliable. I do make mistakes But so far, even with the current depressed prices in the overall market, I am way ahead.
I hope this post helps you all out there I’m sure some will have questions.
info omitted from last message----
Portfolio transactions in October
No sales in October
Cash purchases in October
MPLX (2 buys)
GAB (1)
HASI (1)
Dripped additional shares in October
UTF – ARCC – HASI
Added very small amount of cash from NRZ dividend
Today Nov 1 I received the dripped monthly shares from UTF
MPLX goes X-Div tomorrow and will pay an increased payment of $0.52 on Nov 14
ETE goes X-Div on Nov 3 and will pay the regular $0.285 per unit on Nov 18
EVA hasn’t announced yet but they are expected to pay an increased dividend on or about Nov 15
GAB hasn’t announced their Dec dividend yet but they have been paying a $0.19 dividend in late December for the past few years
ARCC is due to announce the December $0.38 dividend soon Probably pay early January
HASI is expected to increase their Dec dividend from $0.30 to $0.34 and pay the first week of January
UTF which just paid today is a monthly payer and will go X-Div on Nov 16 and pay on Nov 30 —and then will do it all over again in December going X-Div on Dec 9 and pay on Dec 30 __And when I drip the divvies on UTF I get the dividends paid on all the old and new dripped shares added each month.
So there is a lot for me to do to keep track of the divvies on the 8 securities I hold. Some stocks are held in as many as 6 different accounts.
Price is $790 with a market cap of $372B- How many shares will a person buy and what is the potential $ gain before they sell? And is it worth it? 25 shares will cost $19750-If AMZN goes up to $900 down the road the profit will be $2750. That a lot or risk for only $2750 considering that it will take a $51 BILLION GROWTH OF MARKET CAP to give you that $2750
I’m not following your logic on the share price/number of shares thing. Buffet never split Berkshire Hathaway, and its price is really high, but it’s certainly been a great investment over the years.
I guess I’m slow, because I’m also not following your market cap argument. Market cap is simply stock price times number of shares. To argue that “Mr Market” won’t “reward” Amazon with an additional $51B of market cap provides no additional insight over saying a stock price at $790 won’t go to $900. I think it’s probably easier to look at this as simply a growth in the stock price of under 14%. Considering how quickly AWS itself is growing (over 50% YOY I believe), seeing the stock price increase 14% doesn’t seem like such a stretch.
Where I see the danger in Amazon is that everyone expects Amazon to grow and grow and that expectations are so high that any no superlative growth will hurt the expectations built into its current price. And, that’s why I haven’t yet bought Amazon.
Hi Smorgasbord:
Yes Berkshire Hathaway has been a great investment—For Warren Buffett. Not so good for the average you and me. It always was a high priced stock which limited the shares one could buy. Since in paid no dividend the return was locked up. To get a return on the investment, one had to sell the stock and pay a hefty tax on the unlocked profit and give up the investment.
Back to AMZN–You aren’t slow, just thinking differently.
My goal is to grow my total portfolio not whether AMZN will reach the moon or not. To start with, I don’t knowingly buy stocks looking for a 14% increase in price. Especially if it is currently selling at a price I consider to be excessive. Don’t get me wrong, I’m not saying AMZN won’t reach $900—I hope it does and It probably will.
I tend to invest in smaller cap stocks that are paying growing distributions because there is much more room for them to grow and that’s what grows my portfolio. they give me the opportunity to add many more shares to bolster my portfolio value as they travel their lonely road growing in almost total obscurity under the radar.
Yes Berkshire Hathaway has been a great investment—For Warren Buffett. Not so good for the average you and me. It always was a high priced stock which limited the shares one could buy.
Not really - at least since 1996 with the BRK.B shares at 1/30th the cost. I’m still not getting your aversion to a high stock price. It’s dollar amount that matters, not how many shares.
Since in paid no dividend the return was locked up. To get a return on the investment, one had to sell the stock and pay a hefty tax on the unlocked profit and give up the investment.
Actually, you pay more tax on dividends received than on stock appreciation held over 1 year. So, I’m again not following your logic.
I tend to invest in smaller cap stocks that are paying growing distributions because there is much more room for them to grow and that’s what grows my portfolio.
Hmm, my experience is that fast growing companies don’t pay dividends since they’re investing in future growth. I guess you’ve been good at finding the outliers.
Hmm, my experience is that fast growing companies don’t pay dividends since they’re investing in future growth. I guess you’ve been good at finding the outliers
I focus my investing on what I decide is best for me --Growing income that sometimes will drive the market price up.
Growing income with stable share prices will give me more portfolio growth than rising share prices and no portfolio income. Also the portfolio will be less volatile because stable prices will not attract the day traders, option traders and momentum traders.
How do you find these under the radar companies? Do you use screeners and if so, do you care to share?
I don’t use any screeners. I am trying to share, but as I said before, I have no magic bullets, so don’t look for them.
Here is an example of where I found 2 stocks. During the market meltdown of 2008-9 when the market was collapsing and had 600 to 750 stocks hitting new lows on a daily basis one day during the gloom and doom I noticed that the usual 750 stocks were at new lows, I looked at the new highs on that day. There were 8. I looked to find out why they were at new 52 week highs and found it was a comparatively new bank with 5 branches and less than $200M market cap. Earnings were increasing over 100% each quarter. They paid a 9% cash dividend plus 2 10% and one 2 for 1 split in 15 months. The original $8.50 share price was trading at $30 and I had accumulated over 8000 shares when Management sold out to a larger bank. The bank was in Oregon and I called and spoke to management. I was told management consisted of 4 gentlemen that had sold their individual banks to larger institutions and wanted to build their own bank before retiring. The other bank was in upper NY state and they also sold out, but before I had an opportunity to build a position
I mentioned a few times in previous posts. I only hold a few stocks (8 now) I rarely trade–So I don’t need to keep looking for new things to invest in. So I spend my time trying to upgrade my portfolio.
Everybody has some trash in their portfolio and hopefully some good in there. Upgrade your portfolio by selling one or two of the ones that are not DOING WHAT YOU BOUGHT THEM FOR and add to the top one or two THAT IS DOING WHAT YOU BOUGHT THEM FOR Yes you might make a mistake here and there but hopefully you will make your portfolio better and make more money. I don’t consider this as being a game. And I have noone to lean on if I’m not successful
I don’t believe you need more screeners and stocks to look at. You probably will buy more of the same type you have been buyingYou probably need to manage better what you have now, because I’m sure you have some good stocks.
How many stocks do you have in your portfolio now? is the portfolio keeping up with the market?
How many individual stocks are keeping up with the market?
How many are not?
Are you satisfied with your performance?
What are your goals? What are your needs?
I have listed my portfolio on this board for the whole world to see starting in # 24450
Maybe you might want to go back and read again and print what I wrote if you are interested and think it might be beneficial
Wow B&W - that’s an amazing record. Looking at your holdings which seems exclusively made up of funds and trusts makes me wonder a on few points.
Do you always disproportionately favour trusts and funds rather than ordinary stocks?
Clearly REITs and the natural gas/shale boom have been 2 of the most significant wealth creating sectors of our generation - have you been holding these REITS and Shale/Nat Gas MLPs from the beginning or are these additions you have made at this point in the cycle since the GFC and the oil collapse?
When you say small cap what would be your definition (us Brits would consider anything over 1Bn as large cap but you have plenty multi billion $ holdings)?
Looking at your holdings which seems exclusively made up of funds and trusts makes me wonder a on few points.
Do you always disproportionately favour trusts and funds rather than ordinary stocks?
No. The common thread of my portfolio is to support me by paying my bills. I have no other source of income and nobody that I could ask for money in times of need.
I prefer they pay me as we go. I’m not interested in buying BRK and waiting 50 years for Warren Buffett to make a zillion dollars and for him to have all the money and I have to wait. Same thing with AMZN-I don’t want to wait 20-30 years for my paycheck.
Clearly REITs and the natural gas/shale boom have been 2 of the most significant wealth creating sectors of our generation - have you been holding these REITS and Shale/Nat Gas MLPs from the beginning or are these additions you have made at this point in the cycle since the GFC and the oil collapse?
When I first started, I knew nothing other than I better start learning. I started looking at the Yahoo message boards and started some conversations with a couple of people that appeared to me to make sense. I asked questions. I was lucky. He answered-So I asked more questions. I was still lucky. He kept answering. And thats how I started.
When you say small cap what would be your definition (us Brits would consider anything over 1Bn as large cap but you have plenty multi billion $ holdings)?
Good point—THAT’S THE OBJECT—(Don’t worry about definitions) To buy small caps that grow. And if you keep feeding these growing companies and the position gets larger (buy more shares-receive more dividends-price starts to creep up) Prune your portfolio of your worst non-performing stock(s) and use the proceeds to add to the growing up small cap that is reaching $1B and $5B status. Thats where the exponential growth comes from.
You can’t do that with AAPL $500B market cap-You can’t do that with AMZN $375B market cap-You can’t do it with BRK’s $300B market cap. But right now I’m working on doing it with HASI and EVA the others are there to crank out income to grow the portfolio if they falter.
You only need one or two real winners and a continuing income stream and most important YOU NEED PATIENCE
b&w
Wow B&W - that’s an amazing record. Looking at your holdings which seems exclusively made up of funds and trusts makes me wonder a on few points.
Do you always disproportionately favour trusts and funds rather than ordinary stocks?
Ant:
I also noticed the interesting and unusual makeup of buyandwin’s portfolio but what I find most remarkable is that he has created a rather unique strategy for himself. It’s hard to beat the market when you are doing the same thing as everyone else but that’s what most people will do.
B&W, with investing in closed end funds, what’s your opinion on buying a new fund at a premium, where the market price is above the NAV, versus trying to find ones that are below NAV. Right now GAB seems to be falling a bit, market price at 5.15 and NAV at 5.56. Do you consider it a good time to enter into that fund for both price and dividend gains? I entered into NCV after it’s price plummeted earlier in the year and have had pretty substantial gains with that, though its price plummeted initially because it couldn’t sustain its higher dividend %, so there is risk associated with it.
I also noticed the interesting and unusual makeup of buyandwin’s portfolio but what I find most remarkable is that he has created a rather unique strategy for himself. It’s hard to beat the market when you are doing the same thing as everyone else but that’s what most people will do.
I did not start out with any perceived notions on creating a strategy. like everyone else I bought a few funds that did nothing. Switched over to some stocks. No strategy-Just stocks. Most did nothing or worse. Once in a while something worked a little and I made a few dollars. Gradually i started cleaning out the garbage and redeployed the funds into performing stocks and then I had a stock I started to do well with and was adding to it when management announced they were taking the company private and gave me a 20% premium. There was all kinds of excitement on the message board everybody congradulating each other happy with the 20% premium. Thats when it dawned on me that they were giving me 20% because they knew it was worth 100% or 200% premium and they wanted that money for themselves. Basically they were stealing the future profits from me. They weren’t paying a dividend so all I got a big tax bill at the end of the year.
I have had a number of stocks taken private over the years. They only want the good ones, Never the crap. Thats why IMHO everyone should upgrade and prune their portfolio to improve performance.
I also noticed that none of my non-performing stocks were taken private. They didn’t want them back. they had me and my money for a Patsy.
