Apple $173.74 $1,000.74 1.45%
AbbVie Inc. $99.60 $998.99 2.83%
Automatic Data Processing $117.71 $1,000.54 2.12%
Aflac $90.66 $998.17 2.00%
Amphenol Corp $89.73 $1,000.49 0.84%
Activision Blizzard $66.60 $1,004.33 0.45%
Becton Dickinson $223.54 $1,001.46 1.32%
Badger Meter, Inc. $47.15 $1,004.30 1.10%
CBOE Holdings $132.40 $1,003.59 0.83%
Cognex $66.83 $1,001.78 0.27%
CME Group, Inc. $152.81 $999.38 1.73%
Canadian National Railway $81.50 $993.49 1.56%
Costco Wholesale $185.36 $1,000.94 1.07%
Carter’s $117.80 $1,001.30 1.27%
Cintas $159.89 $999.31 1.00%
Calavo Growers, Inc. $87.20 $1,002.80 1.07%
California Water Service Group $42.80 $1,001.95 1.65%
Dassault Systemes S.A. (ADR) $109.07 $1,003.40 0.38%
Walt Disney $109.25 $998.50 1.53%
Dunkin’ Brands Group, Inc. $63.06 $998.87 2.03%
Ecolab, Inc. $134.97 $1,001.48 1.20%
The Estee Lauder Companies, Inc. $130.07 $1,004.14 1.15%
Gilead Sciences $78.79 $1,000.63 2.66%
Hasbro $92.29 $996.73 2.43%
Hormel Foods Corp $35.39 $998.56 2.06%
Ingredion $138.12 $999.99 1.72%
KAR Auction Services $52.05 $1,000.40 2.70%
Lowe’s $94.09 $998.29 1.73%
MasterCard $159.50 $1,001.66 0.63%
McCormick $101.42 $1,001.02 2.02%
Microsoft $87.72 $1,001.73 1.90%
Vail Resorts $212.80 $1,000.16 1.97%
Nvidia $222.43 $998.71 0.27%
Piper Jaffray Companies $89.75 $997.12 1.42%
Rollins $47.14 $997.95 0.97%
RPM International $52.63 $997.86 2.39%
Starbucks $59.94 $1,001.51 2.03%
Sherwin-Williams $419.86 $999.27 0.80%
Target $70.73 $995.88 3.59%
Tootsie Roll Industries, Inc. $35.33 $998.28 1.01%
Texas Roadhouse $56.67 $1,000.79 1.49%
Verizon Communications $51.66 $1,000.56 4.57%
Waste Management $87.27 $1,000.11 1.94%
Williams-Sonoma $53.10 $999.34 2.92%
ExxonMobil Corp $86.11 $998.88 3.55%
So What? You Ask.
It has to do with a little experiment I’ve been working on and adjusting my portfolio towards a little safety as we get a little closer to not working for a paycheck. I thought I might as well throw the ideas out for your mockery and derision. As I write this, the S&P 500 index is at $2745 and the prices of my 45 stock index are all listed above. I don’t know how to make it public so i just copied and pasted. These are my numbers and they are not a net worth but they have value to me. I have been looking at dividend growers with plenty of coverage by cash flow and earnings. There are a couple of growth stocks in there like NVDA and ATVI but they have both boosted their dividends over the past 5 years and could stand to be future dividend aristocrats as they mature. Picture it like Apple and Microsoft who are on the list and the yield if you bought the shares when they first started paying out. Consider this the “effective yield.”
It’s a fun little thing but I do own a bunch of these names and want to track a bunch of others and will remove some and add some names as any changes may come up. I want to take a long at active picking versus an index over time. I have other growth stocks in my personal account but I wanted to watch this dividend type portfolio as a “safer” alternative with a little growth thrown in. There is a mythical $1000 invested in each name for a total of $45k and hopefully the site adds in the cash to the total return when the dividends are paid out. I intend to add 2% or so to the S&P for it’s yield at year’s end. This should be fun. Wooooo f’ing Hooooooo. Enjoy the ride.
We started this whole investing thing when I ended up with a windfall of about 15k in 2005, right before the huge market downturn. Sure, Mrs. Smidlap and I had 401k’s at our jobs. Mine was excellent with low fees on a bunch of index funds and a generous company match. Hers was a real ripoff for a small business with some of the fees nearing 2% with no match as the record and CD business was in the process of dying its slow and painful death. The one thing I miss about her plan from the thieving rotters at Principal was a Real Estate Separate Account. This thing was not a REIT as they owned physical properties around the country and collected rents on them and it used to return around 10% per year like clockwork, almost in a straight line from lower left to top right of the chart. The one thing about this fund was that during the financial crisis of ’08 and ’09 it was illiquid as they would not sell properties in order to return peoples’ funds. I respect that and they eventually went back to churning out these gains, but I digress. I just wanted to get that out there for all the REIT fans.
So, this windfall hits and we never spent a penny of it as we had plenty of cash flow from jobs that funded our modest lifestyle. Instead of blowing it on a car or big vacation I started some research on the internet about different account types and how to invest this cheddar. I had a job at the time working a swing shift in a chemical plant and a decent amount of time on my hands to read all about finance. The best free resource I found at that time was Motley Fool where I spent months and months reading all I could about the best way to invest and how to value stocks and the like. I have read enough in the Personal Finance blogosphere to know that for some reason people have some aversion to the Fool. I can only speak to my experience that the free materials had me end up with a couple of fully funded Roth IRA’s and an after tax brokerage account.
My Equivalent of MBA Training (hint: the tuition was paid to the school of hard knocks in the form of some underperfoming assets)
So, here I am with 3 brand spanking new account with funds in them. I started researching what to buy and ended up with about 8 stocks with positions of a couple of thousand bucks each. Some of these worked out well and a couple worked out not so well but the biggest lesson I learned was to never stop learning. I watched them religiously on my Yahoo screen and made watch lists and all that bullshit. This went on through The Crisis and I kept devouring more and more financial education wherever I could find it. I read the big Peter Lynch book and The Intelligent Investor and even a Jim Cramer book, which was full of shit, although entertaining. At one point, on my own, I uncovered TSLA, FSLR, and TREE. FSLR was gangbusters when oil was over a hundred bucks a barrel and then came back to earth with oil. I also owned too large a percentage of the portfolio in a refiner MLP called CLMT. The things I learned in the period from 2005 to 2013 were to have a good reason if you’re going to buy or sell and not to chase dividend yield. You see, CLMT ran upon hard times with too much debt and ended up putting the dividend on hold while they restructured. The selling too early mistake without reason hurts a little more for some reason. I must have owned TSLA around 25 or 30 bucks when they first came public and Lending Tree I know I owned at 17 bucks a share. I found that one from a screen of PEG ratios for profitable companies. Have you ever heard about TREE stock? You’ll never hear it mentioned on CNBC or your favorite business channel yet it’s only risen to about 20something times it’s value in about 8 years and TSLA about 10x. I know hindsight is 20/20, but Jeeziz. Even with the wounds and the “tuition” I love stock investing. I don’t have many hobbies outside of staying kinda fit in order to counteract the fine wine habit, but knowing more about stocks if a productive one.
I Decided to Get Some Help in the Form of a Stock Newsletter
Despite what you may be thinking, I am not on the Fool.com payroll or anything. Hell, I’m just some chucklehead on the internet amusing himself with this writing, so for chissake, don’t listen to me! Really, though, I had some extra bucks a couple of years ago when Mrs. Smidlap was still wringing the last juices from the record industry and I was working my nuts off on all kinds of mandatory overtime in the lab. Mostly I saved these dollars but this time I took the plunge. Here is why: 4-5 years prior I read a Special Report on the Fool that was like pulling teeth to finally get to read with all the marketing crap to wade through (the really do try to sell the Bejeeziz out of their services). The report was on the future of Media Stocks and the thesis was that “content is king.” At the time they recommended Disney, Discovery Network, and Scripps Network. The 2 small networks were the interesting ones with those trashy DIY and cooking shows and the like that many of us watch with guilty pleasure. The thing is: they’re dirt cheap to produce and we can’t stop watching them so you end up with very profitable content. Well, those 3 went gangbusters over that time period and I had this extra money that would have bought a pretty good case of wine on vacation but I was sold that I should buy the Stock Adviser service for 360 clams/ 3 year subscription. It’s been 2 years and I could not be happier with the investment.
At first they were a pain in the ass as bothering me in my inbox with trying to up-sell me to the next level of subscription, but them Mrs. Me taught me to “use the unsubscribe link instead of just being enraged, you Big Dummy.” She was right, as is often the case. Other than being bombarded with “spam-like” marketing materials, the service has been fantastic for me. They put me onto winners like NVDA at 25 bucks and MTCH at 13. There were some mediocre duds in there but the huge winners have more than made up for those and I have sold those small losers like CMG and TRIP. Now I want you to know I don’t just blindly go and buy any and all recommendations but carefully consider the upsides and downsides in the articles for the picks. I would never try and convince anybody to follow this approach but I did want to say what has worked for me. That’s for the cult of Vanguard index fund bootlickers who thinks that anybody buying individual stock is either a Rube or a Philistine and probably a little of both.
What Else is Going On?
I’ve been making stocks, soups, and rendering fat from ducks, chickens, and beef. Animal fat is delicious, you see, and it’s very satisfying to render your own and clarify it to a nice pale yellow that will keep a long time in your fridge. We’re still purging our things on Ebay and I am back at the Work Gym treadmill, which is right across from my building. Big Brother wants to pay me to work out at lunch each day? Who the hell am I to say no?