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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Dividend Strategy failing this year Date: 6/30/2008 4:17 PM
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From a post on thestreet{dot}com:

"Passive Dividend Strategy Failing in 2008

In this volatile trading environment, you would think that dividends would offer investors a safe haven. But the selling so far in 2008 has been without prejudice, and even the Dow Jones Select Dividend Index (DVY) is down more than 20% year-to-date. "

Sorry to rain on JWR's parade.

Except, of course, JWR would have only bought ultra-safe stocks with yields of 6%+, what with him being smarter than the iShares managers and all.
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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63079 of 75340
Subject: Re: Dividend Strategy failing this year Date: 6/30/2008 5:31 PM
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This report is typical of a capital appreciation investor, not an income and/or dividend investor.

The PRICE change of DVY has done nothing to its income stream. Dividend cuts in the financial sector have.

Since the PRICE of DVY is lower, its initial yield is more attractive. You can purchase an income stream at a more favorable price.

Compare the outlook of income and dividend investors to those who depend on price increases for income. This year is a bad year for capital appreciation investors. They have to liquidate holdings.

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63083 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 7:32 AM
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The PRICE change of DVY has done nothing to its income stream. Dividend cuts in the financial sector have.

Ahh...the great dividend reduction that cannot happen in your strategy...

If dividends have been cut, people that retired using your "safe withdrawal rate" are completely hosed. Their income stream has been reduced while inflation makes them need more money.

Game over. Do not pass "Go" and definitely do not collect $200.

In 2006, DVY paid $1.699/share in dividends. In 2007, it paid just 1.157/share. This is a 31.9% *REDUCTION* in dividend. Your entire scheme is based on these dividends increasing by 8% or more per year. And even then it falls apart when you handle inflation correctly.

Q: So what happens in a time like this when your income is cut by one-third AND inflation is higher than your ridiculously low assumption?

A: You get hosed.



You can purchase an income stream at a more favorable price.

Irrelevant to someone that retired 6 months ago. They have no new money to use to buy shares.



Compare the outlook of income and dividend investors to those who depend on price increases for income. This year is a bad year for capital appreciation investors. They have to liquidate holdings.

So do retired investors in your scheme. If they don't, they cannot pay their bills.

Someone that retired with $1,000,000 in 2006 and figured they could have $60K per year needed $61,708.93 in 2007. Too bad their glorious DVY income stream dropped 31.9%. The only way for them to make up the difference is....SELL SHARES!

But I'm sure you will tell me I just don't understand. And you are correct -- I don't understand why anyone would listen to your advice on any financial matter.

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63085 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 10:51 AM
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DVY' payout has risen in spite of financials.

DVY at Morningstar
http://socialize.morningstar.com/NewSocialize/forums/thread/...

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63086 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 11:24 AM
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DVY' payout has risen in spite of financials.

Wrong. But I am not at all surprised that you would think it has gone up. After all, the last payment was higher than the prior, so the dividend must have gone up!

But what happened to the March payment? Hmm...they seem to have skipped a payment.

In 2005 DVY made quarterly payments. In 2006, they cut one -- BAD SIGN. In 2007, they cut another one. So what was once a QUARTERLY payout, became a slightly larger SEMI-ANNUAL payout. But the increase was not anywhere near enough to overcome the cut in payments.

Why? Because the dividends of the underlying holdings were cut. Duh.


Dividend Payments
Year Total Dividend Change from Prior Year
---- -------------- ----------------------
2005 $1.851/share N/A
2006 $1.699/share -8.2% (oops...losing year!)
2007 $1.157 -31.9% (oh my...we got reamed!)


So no, despite your shouting at the wind, the dividend HAS NOT gone up over time. In fact, the mighty fund you proclaim as the great savior or 6% safe-withdrawal rates has had decreasing dividends each of the last 2 years. Given these results, how exactly are we going to get that 8% annual increase? You know...the increase we MUST have EVERY year if your scheme has even the remotest prayer of succeeding...

But I'm sure you have some way of sweeping this under the rug. More likely, you will just ignore it. That's been your strategy all along since you NEVER address any of the issues pointed out to you.

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63087 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 12:40 PM
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We will get to the bottom of this.

I assume that you are using Yahoo Finance.

Here are a couple of links of interest.

http://www.ishares.com/product_info/fund/distributions/DVY.h...
http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFI...

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63088 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 1:05 PM
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We will get to the bottom of this.

OK.



I assume that you are using Yahoo Finance.

Initially, yes. But for that post, I was using the link you provided ( http://socialize.morningstar.com/NewSocialize/forums/thread/... ).



Here are a couple of links of interest.

They appear to show a different picture. But using the new links, the dividends paid still dropped from 2004 to 2005. How does your method handle a year where inflation is 3.388% (above the number you used as a flat value for your calculations) and dividends drop by 2.9%? You have to either:

(1) Decrease lifestyle -- something that might not be possible (due to required spending) and invalidates the idea that you started with a safe-withdrawal rate; or

(2) Sell shares -- something that you claim never has to be done.

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63089 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 1:47 PM
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Dividend strategies have a gentle failure mechanism. A temporary loss of buying power no worse than 25% (or 20% if averaged over several years).

Liquidation strategies have a horrible, abrupt failure mechanism. Bankruptcy.

[The inflation rate for the last 10 and 20 years were 2.5% and 2.8% (I forget which corresponds to a single decade.) Inflation is now headed higher, but how much? Run sensitivity studies, as needed, to assess the effect.]

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63090 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 2:39 PM
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A temporary loss of buying power no worse than 25% (or 20% if averaged over several years).

First, I have shown previously how using REAL inflation numbers (instead of bogus constant 3% inflation) indicates that 40% or greater reductions can be required. But even if "only" 25% were required -- this IS NOT a "gentle failure mechanism."

Pick one of these for a person to give up if they retire based on your numbers and have to cut 25% out:

(1) Food
(2) Shelter
(3) Medicine



[The inflation rate for the last 10 and 20 years were 2.5% and 2.8% (I forget which corresponds to a single decade.) Inflation is now headed higher, but how much? Run sensitivity studies, as needed, to assess the effect.]

You continue to make a mockery out of this topic. You base things on the lowest inflation periods in many decades and ignore the prior decades. I guess the 70s and 80s never really happened...

I ran "sensitivity studies" like yours using traditional methods and using your bogus inflation numbers, I found that the safe-withdrawal rates were over 6%. Anyone in their right mind would say that's lunacy. But like everything else that shows your work to be a sham, you ignored those posts as well.



Liquidation strategies have a horrible, abrupt failure mechanism. Bankruptcy.

I have proven that your "gentle failure mechanism" is a ruse. I have also proven that your 6% numbers are completely bogus -- even using YOUR OWN RESEARCH calling the resulting safe-withdrawal rate 6% is a flat out fabrication. 5.7% *IS NOT* 6%.

I sincerely pray that there is not a single person on this planet following your investing advice.

Acme

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63091 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 2:50 PM
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Dividend strategies have a gentle failure mechanism. A temporary loss of buying power no worse than 25% (or 20% if averaged over several years).

You are hilarious. "temporary loss of buying power by 25%". Indeed.

You are aware about this run of jokes, right? "Other than that, Mrs. Lincoln, how was the play?" "Other than that, Mrs. Kennedy, how was the parade?"

"Other than that, Mr. Retiree, how is the Alpo?" Oh yeah, over the long run it's steaks & hamburgers, but with your technique it's short runs of Alpo and Kibbles-n-Bits.

And you post using the "wall of words" technique. Babble, duck, and run.

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63092 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 10:45 PM
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From the iShares data, DVY's dividend amount has grown by 7.5% per year, which is not too shabby. This compares favorably with the S&P500 index. The S&P500 (nominal) dividend amount grows steadily at 5% per year.

Have fun.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63093 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 10:52 PM
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This is getting to be tedious.

With a fixed allocation (rebalancing), the Safe Withdrawal Rates are:

20% stocks with rebalancing: 4.0%.
50% stocks with rebalancing: 3.8%.
80% stocks with rebalancing: 3.3%.
100% stocks (S&P500): 2.6%.

The failure mechanism is bankruptcy at Year 30.

Dividend strategies are far superior to this. Even worst case, the temporary withdrawal amount is HIGHER with a dividend strategy than with a liquidation strategy, which may end in bankruptcy.

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63094 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/1/2008 11:02 PM
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This is getting to be tedious.

This is the one accurate thing you have posted.



Even worst case, the temporary withdrawal amount is HIGHER with a dividend strategy than with a liquidation strategy, which may end in bankruptcy.

Only because you are comparing REAL numbers from the traditional studies to bogus numbers from your work. Use the same assumptions -- you know, reasonable inflation data, reasonable assumptions about worst case scenarios for dividends, etc. -- and the picture WILL change dramatically. In fact, I presented some of this and it showed that your dividend strategies actually provide a LOWER safe-withdrawal rate than traditional methods.

Naturally you ignore all work proving yours wrong. Sticking your head in the sand seems to be your preferred method of operation.

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63097 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 4:48 AM
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The appropriate mathematical analysis of a dividend strategy is cash management analysis.

The appropriate mathematical analysis of a liquidation strategy is examination of the extinction problem.

They are different.

Dividend strategies avoid the extinction problem.

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63099 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 8:26 AM
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Well, since you put it that way... Of course everything you have done is perfect. You are a god among fools. We cannot possibly be worthy of your presence. How could we be so stupid?

Everyone should use your methods because inflation will never be over 3%, dividends on DVY will never be cut (cough, 2005, cough), and a 25% (actually more) reduction in spending never hurt anyone (who needs food?).

Acme

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63106 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 11:38 AM
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DVY's dividend amount has grown by 7.5% per year, which is not too shabby.

You are still hilarious.

DVY Fund Inception Date: 3-Nov-03
Today's date: 2-Jul-08.

A 4 1/2 year history is not nearly long enough of a backtest.

Not to mention the teensy-weensy fact that you are wrong.

DVY has only had 4 complete years of dividends:
2004: $1.90
2005: $1.85
2006: $2.22
2007: $2.37

The percentage growth year-over-year is:
2005 vs. 2004: -2.9%
2006 vs. 2005: 20.2%
2007 vs. 2006: 6.4%

Yes, the average of these three numbers is 7.9%, but what the heck can you depend on with numbers that are so wildly varaiable?

You do see, don't you, that the 2005 dividend was LESS than the 2004 dividend? Not only did it fail to grow by 7%, it actually went down by 3%.

Looking closley at the actual dividend, the sole thing that make the stats look good is the jump in dividend from $0.46 (Q4 2005) to $0.57 (Q1 2006)---a jump of 22.4%.

JWR, what is your response to these facts?

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63110 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 12:32 PM
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Put the quarterly dividends into an Excel spreadsheet. [Excel allows you to copy the iShares table into it.]

Make a scatter graph.

Acknowledge that the first distribution (12/12/2003) is an outlier, with a return of capital.

Look at what remains.

Use Excel to draw a trendline or two.

The picture is clear enough. Dividend growth. Reasonably steady. (The first two years were similar followed by growth.)

If you include 2008 distributions, the growth rate is above 8% per year.

Do not be upset. The dividends do not fall exactly on a straight line. They come close.

Have fun.

John Walter Russell

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63114 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 8:04 PM
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JWR: "DVY's dividend amount has grown by 7.5% per year, which is not too shabby."

Rayvt: <<<You are still hilarious.

A 4 1/2 year history is not nearly long enough of a backtest.

Not to mention the teensy-weensy fact that you are wrong.

DVY has only had 4 complete years of dividends:
2004: $1.90
2005: $1.85
2006: $2.22
2007: $2.37

The percentage growth year-over-year is:
2005 vs. 2004: -2.9%
2006 vs. 2005: 20.2%
2007 vs. 2006: 6.4%

Yes, the mean [OCD average of these three numbers is 7.9%, but what the heck can you depend on with numbers that are so wildly varaiable?">>>

Sorry for the correction, but using mean average for a compound analysis is also incorrect. The proper number is more like 7.571%. If the growth had been 7.9% per year 2007 dividend would have been $2.39.

Otherwise, I agree with the balance of your (ray's) post.

Regards, JAFO

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63116 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/2/2008 10:56 PM
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I am still missing a lot!!!

JWR a few posts ago, you mentioned the failure for income retirement portfolios is "at worst a 25% reduction" or similar and that the failure of capital appreciation is "bankruptcy in 30 years."

Then you followed with a comment that has me confused

The appropriate mathematical analysis of a dividend strategy is cash management analysis.

The appropriate mathematical analysis of a liquidation strategy is examination of the extinction problem.


And here is my confusion - to make this more of an apples to apples comparison can't I use a cash management analysis of the capital appreciation strategy, and under that analysis if you allow for the same 25% reduction in withdrawl in that strategy, then there is no failure, no bankruptcy. So a question would be: shouldn't you use the same withdrawl criteria for both analysis to make a fair comparison?

*********************88

Another question I would have is: Given you need to have the dividends increase over time at some rate. How many stocks have there been that have met the criteria of this increasing dividends over a thirty year period. Followed with the probability of picking that stock. Because you strategy or should I say analysis appears to lack concern for the true mathematical "expected outcome." It is fairly easy in the 60/40 split of S&P and Treasuries to select such a mix. I would say the probability is upward of 90%, which may suggest that the capital appreciation strategy has a 90% chance of no failure. But the odds of picking the stocks that increase in dividends like the income approach needs is probably what??? 10 in a hundred. Which may give the income strategy a 90% chance of failure.

**********************88

Last point for today, watching a chart - excel spreadsheet with a trend line is great; but I would hardly call a four year history with a pretty trend line mathematical proof that income strategies are superior or would even work over a thirty year period. Especially a chart of DVY over the last four. Hell I could just pull up the Dow Jones Utility average and say using that average over the last four years I have a really nice withdraw rate.

:)

So- Question 1) Is it fair - relevant - to compare a strategy with no reduction in withdraw to one where cash flow can be adjusted?

Question 2) Shouldn't such an analysis really include and compare the expected outcomes fully weighting the probability of success?

Question 3) Does a four year trend predict 30 year success in the income strategy?



d(past performance is not an indicator of future returns)/dT

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63121 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/3/2008 7:31 AM
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So a question would be: shouldn't you use the same withdrawl criteria for both analysis to make a fair comparison?

I have asked this at least 3 times in the past. It has never been answered.



How many stocks have there been that have met the criteria of this increasing dividends over a thirty year period. Followed with the probability of picking that stock.

I have asked this at least 5 times. The only answer given is that it is easy to do better than the S&P500.

JWR is great as posting a lot of words. And he puts up a lot of numbers. Unfortunately, his words have little or no meaning and the numbers are incorrect more often than not. Other than that, everything he does is phenomenal!

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63122 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/3/2008 11:48 AM
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Then you followed with a comment that has me confused

The appropriate mathematical analysis of a dividend strategy is cash management analysis.

The appropriate mathematical analysis of a liquidation strategy is examination of the extinction problem.


And here is my confusion - to make this more of an apples to apples comparison can't I use a cash management analysis of the capital appreciation strategy, and under that analysis if you allow for the same 25% reduction in withdrawl in that strategy, then there is no failure, no bankruptcy. So a question would be: shouldn't you use the same withdrawl criteria for both analysis to make a fair comparison?

+++++++++++++++

For liquidation strategies, I have calculated withdrawal rates with Year 30 balances from zero to 100% of the initial balance (plus inflation). There is no need for an alternative procedure.

I do not know how to perform a cash management analysis of a liquidation strategy. The equations do not support it. There is a tremendous amount of randomness in PRICES.

Analyzing dividend strategies required the creation of a different approach. One important aspect about dividends, based on the S&P500, is that they grow consistently in NOMINAL dollars. The problem is to come up with something appropriate for today's market.

Have fun.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63123 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/3/2008 11:54 AM
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Last point for today, watching a chart - excel spreadsheet with a trend line is great; but I would hardly call a four year history with a pretty trend line mathematical proof that income strategies are superior or would even work over a thirty year period. Especially a chart of DVY over the last four. Hell I could just pull up the Dow Jones Utility average and say using that average over the last four years I have a really nice withdraw rate.

Exchange traded fund DVY was the first dividend oriented fund. It is an index fund.

Retirees need income streams. Capital appreciation is more appropriate for accumulators. Approaches that sell shares (liquidation strategies) can lead to bankruptcy. Approaches that avoid selling shares (except to improve the quality of a portfolio) avoid the extinction problem (in practical situations).

Have fun.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63124 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/3/2008 12:02 PM
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Another question I would have is: Given you need to have the dividends increase over time at some rate. How many stocks have there been that have met the criteria of this increasing dividends over a thirty year period.

Picking an individual stock that will raise dividends consistently over a long period of time is difficult.

[Mergent Dividend Achievers do this over a time frame of 10 years or longer. Good choices have included PG, JNJ and KO.]

Constructing a portfolio with good dividend growth is much easier than one with good capital appreciation. Dividends come out of earnings. Measuring dividend quality and earnings quality (smoothed over several years as recommended by Benjamin Graham) is much easier than estimating prices.

The S&P500 places a lower bound on dividends. It includes stocks that pay zero dividends. The income stream of the S&P500 dividend payers must be higher than that of the index while maintaining the same dividend growth rate. [Exceptions acknowledged for stocks moving in and out of the index and for stocks adding or deleting dividends.]

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63127 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/3/2008 9:56 PM
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The income stream of the S&P500 dividend payers must be higher than that of the index while maintaining the same dividend growth rate.

Not true.



[Exceptions acknowledged for stocks moving in and out of the index and for stocks adding or deleting dividends.]

And I am the best soccer player in the world. [Exceptions made for all players better than me.]

Acme

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63128 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 12:46 AM
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OK - Before I start answering these let me first emphasis one point!

If the withdrawl rate must be allowed to decrease to facilitate survivability of the portfolio then it is not really the SWR - this is TRUE for both the income and the appreciation methods. The definition of Safe Withdrawl Rate is the amount that can be withdraw (inflation adjusted) over the target time horizon without shortfall. PERIOD - if you have to reduce the withdraw - it is something other than SWR. BY DEFINITION We will call it the psuedo-safe rate.

**********************************
For 63127 -

For liquidation strategies, I have calculated withdrawal rates with Year 30 balances from zero to 100% of the initial balance (plus inflation). There is no need for an alternative procedure.

There is a need - if you are allowing the cashflow (withdrawl rate) to vary in one scenario (income allows 25% decline in psuedo-SWR) you must allow it to vary in the other scenario (capital appreciation) to make a fair comparison. The need is rally brought to light if you are looking at the retirment portfolio in a dynamic environment.

Say for example using the capital appreciation I have a psuedo-safe withdrawl rate of X.XX% and I know that the worst scenario is a decline in years T(x) to T(y) (typically depending on inflation.) As time marches on the retiree monitors the withdrawl rate to the portfolio growth and as we approach X, if times are bad, the retiree can reduce his/her withdrawl rate 25%, which is allowable in the income scenario so the same should be allowable in the capital appreciation. That ability would allow for a greater initial rate. So any valid comparison must account for this!

Or - to determine the true SWR, you must run the scenario with the constraint that is implied - no demanded by the definition. NO decrease


***********************
I do not know how to perform a cash management analysis of a liquidation strategy. The equations do not support it. There is a tremendous amount of randomness in PRICES.

And there is no randomness in the yields???

And Acme answered point 3



d(T(x))/dT

Who thinks -basically there is also a need for this to make your point valid!

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63129 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 1:06 AM
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For 63128 -

Exchange traded fund DVY was the first dividend oriented fund. It is an index fund.

Yes, and a researcher can pull up an index/mutual fund on the utilities. Say JXI/VUAIX, A nice Vanguard fund which since inception has returned 16.76% (inception was about the same time as DVY) So, if we just throw that into an excel spreadsheet you can damn well bet we have a higher SWR.

Retirees need income streams. YES

Capital appreciation is more appropriate for accumulators. A Profound statement but you will have to define who is an accumulator - some one who needs more capital - in my book this could be a retiree!

Approaches that sell shares (liquidation strategies) can lead to bankruptcy. YES


Approaches that avoid selling shares (except to improve the quality of a portfolio) avoid the extinction problem (in practical situations).

Yes, if you can avoid selling shares, but this is the caveat where the income strategy has a point of potential failure. If the income is not there, you end up in liquidation.... and no research I have seen other than theoretical - if you get return X.XX% has stopped that. Which is to the point. Any reasearcher can show theoretically in a liquidation strategy if the return is Y.YY% then all is well. But is the Y.YY% or the X.XX% a reasonable expectation.

Your strategy requires a certain percent return and growth in dividends, has that ever happened over the time horizon we need in the history of public equity?

d(E(x))/dt

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Author: MarinBMWZ4 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63131 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 1:37 AM
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Why stop accumulating capital? If you accumulate more capital you by default accumulate more dividend paying stocks, or shares of the same stocks, and, by fuzzy math, have more money, more dividends, more money, more dividends.

Just find the stock that pays a dividend of 5% and grows by the inflation amount. There, you now have a SWR stock. Works done, go have a beer.

MZ4

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63132 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 1:57 AM
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Picking an individual stock that will raise dividends consistently over a long period of time is difficult.

Yes, and that difficulty increases the likelihood of failure that is not accounted for in your research. If it is, please show / explain where?

Good choices have included PG, JNJ and KO

Yes, and if I fall into that trap I could easily list three stocks that have had capital appreciation which makes the same point for the SWR side. But this is all behind us- a look in the review mirror.

Constructing a portfolio with good dividend growth is much easier than one with good capital appreciation. Dividends come out of earnings. Measuring dividend quality and earnings quality (smoothed over several years as recommended by Benjamin Graham) is much easier than estimating prices

The point here is that to construct the portfolio under the SWR methodology the investor has to pick an index fund/bonds (similar to the research.) So, if the research say S&P/UST - The investor buys S&P/UST. There is no estimating prices.....no estimating!!! Again, you estimate dividends but do not account for the probability of failure in your research. You just assume you can make the yield growth.

So, here are the areas I see weakness in your attempt at proof:

1) No accounting for the probability of constructing a portfolio that meets the yield growth.

2) Violating the constraint or definition of SWR.

3a Measuring portfolio strategy X w/ model AAAA = output in English
3b Measuring portfolio strategy Y w/ model BBBB = output in Greek
........And then making a comparison - ya sou phile mou!

4) The construct of the portfolio is abstract. You only say what is required and that this requirement can be met - and then suggest that by simply following Ben Graham advice it is sophmoric. NOT!!!!!

And the weakness in your advice of betting a retirement on this strategy.

1) The individual investor (Joe SixPack) can not replicate your portfolio. Points 1&4

2) The individual investor can not predetermine retirement income and may have to decrease expenses. Point 2

3) Your model does not allow the investor insight into the dynamic nature of a retirement portfolio.


Now, I have some concerns with supposed SWR based on historical data as well as other concerns about advice on that side as well. So, I am certainly not just picking on you and your attempts to solve such a great problem. I just see what to me are flaws in the logic. Maybe I don't understand cause I am just a 10 minute expert. But I got to think, there seems to be enough 10 minute experts around here who have the same concerns (and others) that maybe you have not answered the question in the real world!!!

What can a retiree do that will ensure a (time horizon) year retirement portfolio will meet a set of expenses adjusted for inflation?

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63133 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 2:01 AM
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There, you now have a SWR stock. Works done, go have a beer.

If it were that easy - Beer Stock would be the best bet!!!!!

Crack-Splooooooooge!

Gulp-Gulp

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63135 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 4:10 AM
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The numbers he posts on his web site (Have Fun!) require at a minimum an 8% annual growth rate in the dividends. This is to get his 6% SWR, which is really 5.59% from his own calculations. Evidently, he rounds 5.59% up to 6%; when posting a synopsis, he conveniently neglects to mention this.

And this 5.59% is really 3.73% at most (this was the case starting in 1970 with his overambitious dividend growth assumption) when the true safe-withdrawal rate definition is applied and real inflation data is used. Of course, dividends were actually REDUCED through the first half of the 70s, so assuming a constant 8% growth rate for that period is folly. But even then, his method could not do better than 3.75%.



Your strategy requires a certain percent return and growth in dividends, has that ever happened over the time horizon we need in the history of public equity?

Even since the inception of his glorious fund, DVY -- you know the one that he hangs his hat on as proof of great dividend growth rates -- over the great time period he loves to use as proof of concept (4 years!), the fund has returned less than the 8% required in his calculations.

And using the *arithmetic mean* as he likes to do gives inflated values for SWR. And ignoring volatility gives inflated values for SWR. And using a fixed inflation rate gives inflated values for SWR. And choosing that fixed rate to be less than 2/3 of the average inflation rate since 1970 gives inflated values for SWR. And changing the definition of SWR to allow temporary reductions in spending gives inflated values for SWR.

All of this, yet he thinks it is an apples-to-apples comparison to put his numbers next to the worthy studies that have been performed. Truly mind-boggling.

Acme
(Who once previously posted SWR calculations with traditional methods using JWR's faulty assumptions. They were well above his SWR calculations, even without the temporary 25% reduction required to pull off his phantom calculations.)

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63140 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 3:09 PM
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JWR,

I see you posted "the wrong lesson" since my note concerning the weakness in your analysis. Are you going to simply avoid the criticism. Don't be upset, I am not bias against you. Heck, I even criticize and abuse intercst. I beleive positive cofrontation and constructive criticism makes you and I better. And would help your analysis - maybe make it meaningful.

Right now, your strategy could do more harm than good to a retiree. That is dangerous - not to me, but to the little old lady who ends up eating cat food because she thought DVY was the retirement savior. Oh, she will survice, she only had to reduce her withdraw by 25%. Or a more likely results is, the income did not appear and she ends up in a liquidation strategy living under the 7th street overpass because there was no capital appreciation. Really not a bad place. I use to play there as a kid. Kinda cold in the winter though. So don't worry about her - keep posting how simple it is to get 8% yield growth over 30-40 years. How it is easier to construct a portfolio of high yield, than one that is 60%S&P/40UST. How, when on fixed income you can easily reduce your spending 25% because every American retires with 20 times their expenses in a portfolio.

If you want to make yourself better, if you want to help assist retirees, if you want your work to have meaning and not be folly for amusement of Fools. Listen to the posts that are made and either answer the questions, mend the weakness OR if you can't then maybe consider - stop posting! because if that little old lady listens - how are you going to feel????????

d(</soapbox>)/dT

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63141 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 3:43 PM
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Are you going to simply avoid the criticism.

Yes, he is.



Don't be upset, I am not bias against you.

Nobody here is biased against him. He simply refuses to acknowledge any criticism and he insults the intelligence of those who do not agree with his work implicitly.



Right now, your strategy could do more harm than good to a retiree.

This is the only reason I bother with his drivel. I have stated over and over that I will not let his error-filled work be passed here as worthy research for this very reason.



d(</soapbox>)/dT

Please stay on that bully pulpit!

Acme

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63142 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 4:45 PM
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So don't worry about her - keep posting how simple it is to get 8% yield growth over 30-40 years.

Typical. It is time to start paying attention.

I did not say 8% yield growth. I said 8% per year growth in the dividend amount.

Have fun.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63143 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 4:55 PM
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How it is easier to construct a portfolio of high yield, than one that is 60%S&P/40UST.

Because prices have fallen, a 60% stock (S&P500) - 40% TIPS at 2% interest portfolio has a 30-year Safe Withdrawal Rate of 3.9%. It has a 50% chance of making it to Year 30 at a withdrawal rate of 4.8%.

A dividend strategy, worst case, does better than this.

If you had paid attention, you would remember that dividend investors NEVER sell shares (except to improve the quality of their holdings). They never face the problem of zero income.

If you had paid attention, you would know that the retiree NEVER cuts the income stream. Inflation can rob as much as 25% of the buying power temporarily (worst case). But that assumes hyperinflation. To see what you can do from the get go (assuming that you are worried about hyperinflation), you can cut the withdrawal amount to INFLATION PROOF YOUR PORTFOLIO. The retiree is far, far ahead living on dividends.

Have fun.

John Walter Russell

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63144 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 5:16 PM
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JWR,

You just keep repeating the same things over and over but that does not make them true.

Here is the dividend stock (MRK) that you recommended purchasing back in Feb 2004, as compared to the S&P index over the same period, depicting total return of a $10,000 investment.

S&P = $16,000 = 60% Gain
JWR dividend stock pick = $8,000 = -20% Loss

http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl?nu...

IMHO, someone crazy enough to apply 30 years of your variety of loosey-goosey stock-picking, market-timing, and performance-chasing medicine could (likely will) lose it all.

Please, stop with your idle financial malpractice. Take up horseshoes or something instead that is less likely to cause harm to others.

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63146 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 5:56 PM
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You're right I should pay attention.

8% yield growth = 8% per year growth in the dividend amount.


I thought in tlaking about income strategy this was clear!

8% = 8%
yield = dividend amount
growth = per year growth


Sorry for the confusion!


So lets focus on this one little point. We need 8% per year growth in the dividend amount. Lets go through the analysis. First we should verify the reasonablness of the assumptions. Put on our hindsight glasses and list a few stocks that have met this criteria.

You mention: KO, jnj, PG, have these stocks provided that kind of per year growth in dividends?

d(Analyzing)/dT

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63147 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 5:59 PM
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Here is the dividend stock (MRK) that you recommended purchasing back in Feb 2004, as compared to the S&P index over the same period, depicting total return of a $10,000 investment.

Too bad that you don't have your facts right.

I made a bundle on Merck. I loaded up on it after the price fell (using limit orders). I sold when Merck got ahead of itself.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63148 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 6:06 PM
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You're right I should pay attention.

The yield equals the dividend amount divided by the price.

Yields vary with price as well as with dividend amounts.

Many stocks grow dividend amounts at 10% to 20% per year for periods of 5 to 10 years.

A dividend growth objective of 8% to 10% per year is reasonable. DVY's growth rate is well within norms.

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63149 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 6:20 PM
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I did not say 8% yield growth. I said 8% per year growth in the dividend amount.

Typical. It's time to start paying attention.

Your golden child, DVY, has not achieved that even during the timeframe you herald as proof of concept.

Acme

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63150 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 6:24 PM
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So lets focus on this one little point. We need 8% per year growth in the dividend amount. Lets go through the analysis. First we should verify the reasonablness of the assumptions. Put on our hindsight glasses and list a few stocks that have met this criteria.

Don't forget that we have to have that 8% on a consistent basis. We cannot allow for variability because his studies use a fixed 8% growth rate. If we have lower growth rates for a while (i.e. 2005 when DVY had a reduction in dividends), then we would have to get MORE than that 8% to actually achieve the stated "SWR" of well under 6%.

Acme

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63151 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 6:27 PM
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A dividend growth objective of 8% to 10% per year is reasonable. DVY's growth rate is well within norms.

I'm only a Ph.D. chemical engineer with several focus areas including mathematics and statistics. And after working as an engineering consultant for 7 years, now I only teach high school math. So forgive me if I missed something during my education, but...

Since when is 7.5% somewhere between 8% and 10%? Because that's the dividend growth rate DVY has given since its inception. And that includes a horrible start that would derail EVERYTHING you claim in your work.

Acme

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63162 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/4/2008 11:40 PM
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You are a liar. Goahead and FA me, if you like, but there is no other way to say it.

You claimed you purchased in Feb 2004. When did you sell, and please provide a real-time historical post indicating that you did so, and I will gladly retract the above. Otherwise it stands.

JWR said: "Too bad that you don't have your facts right.

I made a bundle on Merck. I loaded up on it after the price fell (using limit orders). I sold when Merck got ahead of itself.

John Walter Russell "


John, the oldest and most hated 'trick' in the book is market-timers and stock-pickers coming to the 'net and claiming that IN THE PAST they traded some stock and made a killing with their 'system'.

As you must know, the only antidote for such unsupported braggadocio is to clearly state when you buy either ahead of time, or at least REAL TIME, and when you sell, and of course, quantities. That is the only way to establish credibility. Anyone espousing a trading scheme for others, and homing to retain a modicum of believability needs to do so. If you have, and I somehow missed it, I apologize profusely in advance, no matter what else we may continue to disagree on. But, otherwise, sir, I say again: "You are a liar.", and I consider this a huge point of honor.

Please reply promptly and in full.

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Author: DrTarr Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63164 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 2:22 AM
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>>The yield equals the dividend amount divided by the price.

>>Yields vary with price as well as with dividend amounts.


OK - you are right you got me on that one - I did not specifically state cetris paribus! - holding price constant, I thought that was understood as the price actually paid for the stock does not change!
Once you have purchased the stock the only variable in the investors yield is change in dividends. Let me clarify - yield is only refering to the yield from dividends and not from stock price appreciation.

Growing dividends by 10-20% is not a big deal. Yes that happens quite frequently. But that growth has to be on a meaningful amount - an initial yield where the growth can overcome the increase in expenses caused by inflation. As the KO example shows - KO had growth of >10% average for over 30 years but that growth alone was not enough.

Perhaps if you could solve for the intital yield required on purchase of the stock. You indicate GE is a valid candidate. Is starting out with 4.6% yield enough given the variability in GE dividend growth rate. Which around 1974 was actually a negative growth for the ten year average. And the 20 year was only around 5% growth. Seems that if you start out at 4.6% yield and have a decade of no growth, while you start of with 6% withdraw and a decade of inflation you end up in liquidation!

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63171 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 12:02 PM
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I made a bundle on Merck. I loaded up on it after the price fell (using limit orders). I sold when Merck got ahead of itself.

I thought you don't sell stocks in your dividend strategy. It appears you don't follow your own strategy.

PSU

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63173 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 12:33 PM
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I have come up with 4 outstanding strategies plus a powerful baseline.

Have fun.

John Walter Russell

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Author: AcmeFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63174 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 1:23 PM
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I am compiling a dictionary of terms used by JWR and the only definition that makes them work:

Entry 1: Safe Withdrawal Rate
-- A rate of withdrawal from a portfolio that can be decreased on a whim to make numbers look dramatically better than they really are.

Entry 2: outstanding strategy
-- A retirement strategy that has only been proven effective using faulty assumptions, bad math, and consistently ignoring the criticism of experts.

I'm sure we can put together many more entries.

Acme

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63175 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 1:53 PM
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JWR1945a boasts,

I have come up with 4 outstanding strategies plus a powerful baseline.

Have fun.

John Walter Russell


Does anyone besides hocus agree with you? Maybe you should follow hocus's example and pay somebody to write a positive review of your work?

intercst

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63176 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 2:08 PM
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Does anyone besides hocus agree with you?

YES.

John Walter Russell

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63179 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/5/2008 3:17 PM
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You never answer, JWR:

1) MRK: How much and when did you purchase and when did you sell, and where are the links to you saying that before hand or at the time?

2) Who, besides Hocus, gives any credence to your schemes?

3) Who do you know that has applied your "strategies" (such as they are)?

You? No.
Bennett? No.
Who else? No one.

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Author: hrse Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63213 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/7/2008 2:07 AM
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Does anyone besides hocus agree with you?

YES.

John Walter Russell



http://boards.fool.com/Profile.asp?uid=415186207

Total Posts: 168
Total Recommendations: 79

How Many Love JWR1945a: 1

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Author: MarinBMWZ4 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63214 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/7/2008 9:47 PM
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Does anyone besides hocus agree with you?

YES.

John Walter Russell


http://boards.fool.com/Profile.asp?uid=415186207

Total Posts: 168
Total Recommendations: 79

How Many Love JWR1945a: 1
--------------------------------------
Total post: 2875
Total recommendations: 3262

How many love MZ4: 41
Registered fool since 2/1999
---------------------
Who cares, you concepts still don't make sense.
The real question is: who is that 1 person?

MZ4

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63215 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/8/2008 12:29 AM
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MarinBMWZ4 asks,

<<<Does anyone besides hocus agree with you?

YES.

John Walter Russell


http://boards.fool.com/Profile.asp?uid=415186207

Total Posts: 168
Total Recommendations: 79

How Many Love JWR1945a: 1 >>>>

Who cares, you concepts still don't make sense.
The real question is: who is that 1 person?


I think TMF gives you a "1" when you sign up. I've never seen anyone with "0" Fools who love them.

intercst

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63216 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/8/2008 8:47 AM
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I think TMF gives you a "1" when you sign up. I've never seen anyone with "0" Fools who love them.

JWR probably made himself a Favorite Fool. There are Fools with zero lovers. For example, Jumpy http://boards.fool.com/Profile.asp?uid=2760405

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63266 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 9:17 PM
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JWR -- You win.

I'm gonna buy GM tomorrow in order to secure the dividend.

I would buy up only a portion of my portfolio, but since you also say diversification is for the birds as well, I'm going 100% GM stock.

Thanks for the guidance.

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63267 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 9:29 PM
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Well, I have to admit had a moment of indecision before I placed the simultaneous sell orders for all my diversified low cost index holdings, and the buy order for all GM, but then I checked the dividend history, and heck, they have been pumping out the dividend continuously for the around 25 years that the record went back, so what the hey, I am putting in an after hours, market order based on JWR's teachings.

Thanks JWR!

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63268 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 9:50 PM
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JWR -- You win.

I'm gonna buy GM tomorrow in order to secure the dividend.


You need to read my article about Dividend Quality. It should keep you away from GM.

It begins:

Dividend investors should pay attention to the quality of dividends. Here are several factors to consider:

1) Smoothed earnings,
2) Earnings growth,
3) Payout ratio,
4) Credit rating and
5) Dividend history.

http://www.early-retirement-planning-insights.com/dividend-q...

Have fun.

John Walter Russell

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Author: JWR1945a One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63269 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 9:54 PM
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I am putting in an after hours, market order based on JWR's teachings.

You have not been reading my material closely.

I routinely recommend limit orders, not market orders.

Limit orders are worth about 1% per year (annualized), which compounds to a huge advantage.

Have fun.

John Walter Russell

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63270 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 10:15 PM
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JWR1945a writes,

Have fun.

I'm having loads of fun with the idea that JWR thinks LoundonSage was serious about the GM purchase. <LOL>

intercst

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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63272 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/14/2008 11:57 PM
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Dividend investors should pay attention to the quality of dividends. Here are several factors to consider:

This "advice" is, of course, absurd and useless. It is not actionable. It doesn't tell you what to do or what to look for, just vague references to factors to "consider".

Money Magazine has more meat in their articles than what you give.

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63273 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/15/2008 6:30 AM
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The company will probably suspend dividend payments as part of the announcement, analyst John Casesa, managing partner of Casesa Shapiro Advisors, said in a Bloomberg radio interview yesterday.

``I don't see how the company can keep paying a dividend given the loss it's racking up,'' he said.

GM spent $576 million on its dividend last year, according to data compiled by Bloomberg. GM cut its quarterly payout to 25 cents a share from 50 cents in February 2006 after posting its first annual loss in 13 years.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aIVjFNoD...

OH, Man - JWR told me those divie-thingies were the cat's meow.


And I just bought last night, too. Dang, I guess that didn't work out too well...

Oh well, I can always eat Alpo, and greet at Walmart...

JWR, ya got a calculator in your Yahoo briefcase to help me figure that one out?

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Author: LoudounSage Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 63274 of 75340
Subject: Re: Dividend Strategy failing this year Date: 7/15/2008 1:17 PM
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Ouch ouch ouch....

I know JWR and his partner recommend timing the market, but listening to them did not turn out so good for me this time...


GM to Cut Salaried Workers, Production, Dividend

http://www.washingtonpost.com/wp-dyn/content/article/2008/07...

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