| Moderated By: sense -- (Moderated) -- Started: 1/5/2012 1:19:40 AM Revision History |
News for Dividend Stock Investors
Related Site Links:
Harry Domash's Dividend Detective
Dividend investing for retirement(SI)
Investing for Income (seekingalpha.com)
Trading Strategy: 2012 Dogs of the Dow(Fool.com)
The Yield Hunter
Wall Street News Network
Investors maximize total return by picking stocks that are approaching their lows, and applying technical trading skills and tools to enable buying them at or near the lows. Buying low requires picking price targets and hitting them... neither paying too much, nor missing the trade because you underbid at the bottom.
Investors maximize total return by holding stocks that provide larger than typical rewards through a combination of price appreciation and growth in the dividend yield over time. Buying under-priced stocks of solid companies at their lows, and watching them amplify returns as both price and dividends grow, is what it's all about.
That occasionally is made easily possible as a function of market declines and sector rotations that enable solid performers to be unreasonably under-priced, as was true of natural gas pipeline stocks, as a group, three to four years ago. That recent example is our "touchstone"... where an entire sector could be purchased "on sale" with most the stocks sporting an 8% or better yield. Given the right picks, the last three years have delivered a "five bagger" in price appreciation, while the yields have largely held up, too... so that, by the time you were ready to sell at the peak, most of your original investment has been paid back in dividends, while the change in share price has given you a 500% bonus...
Unfortunately, the market doesn't always provide you with that sort of a massive opportunity.
Therefore, two other methods become necessary to extend the concept...
First, and the primary focus here... is that over dependence on the need to wait for major market corrections and the rotation of sectors to provide opportunities is a problem that can be overcome by "stock picking"... You might recognize that approach as major modification of a "Dogs of the Dow" strategy... where the same logic as the "Dogs of the Dow" is applied, only, with a much less limited universe of stocks from which to choose. A wider range of stocks to choose from also opens many more opportunities in terms of a diversity of industries.
Second, given a general focus on the fundamentals in out of favor high yield stocks, a close parallel is available in finding stocks that are not only out of favor, but that have never been in favor, holding well below the markets radar, or those that are at major risk of failure, that might be turned around to again become powerful earners.
What's better than picking a "five bagger" that sports an 8% yield at its peak ? How about a penny stock that succeeds well enough to run from the pinks and pennies to Nasdaq and dollars... before it implements a dividend ?
My leading formerly penny pick candidates in that camp currently... are QCOR, and MILL...
Pennies that might make it, eventually: SRSR, GVCM, EVTN
This is not a risk averse focus... rather than a focus that embraces risks and addresses them with awareness of market realities that most are unable or unwilling to make work for them... by doing a lot of hard work in DD and fundamental analysis... and pairing that effort with solid technical ability in timing trades and markets.
Yeah, OK... its ambitious...
What else ? House Rules, expandable to address problems as required: No Personal Attacks, No Repetitive Posts, No Flogging of Stock Picks without DD and Discussion. This is not a penny stock technical trading or promotion focused board. Posts should have substance, and be relevant to illuminating the topics above.
Penny picks allowed here are only those with solid work done in DD... only companies with real businesses, real assets, and real management, that have been vetted by the poster using my own "the world's smallest DD quiz":
1. Can you trust management ?
2. Are the assets attached to the shares ?
3. Do the assets have value ?