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Giving Away $32K, Was Never So Difficult
In what we hoped would be an annual tradition for our site, we gave away books that we thought were valuable to the understanding of the stock market and investing. Little did we know that one book would become an instant “classic” with a price that now seems staggering.
On July 16, 2010 (found here), we announced that we were going to give away a single copy of Dow Theory Unplugged: Charles Dow’s Original Editorials & Their Relevance Today. Because we had 5 copies of the book, we later decided to give away two copies instead. However, after contacting the first two winners and getting no response, we settled with giving away only one copy of the book as announced on August 29, 2010 (found here).
Fast forward to the present and we find that the books we were having such a hard time giving away has skyrocketed in price since August 2010 (found here). It appears that the lowest priced copy of the book is priced at $889.99 while the highest price rings in at $16,026.74. Our suspicion is that these prices, the minimum and maximum, will nudge much higher in spite of what already seems like an outrageous amount. Who is going to pay these prices, we can’t imagine.
Suffice to say, after the 2nd annual giveaway, we decided to give up on purging our book collection. However, we strongly encourage reviewing and reading the books found on the book list that we’ve compiled based on the references and recommendations of the great Dow Theorist Richard Russell over the last 55 years (found here).
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Posted in book, Book giveaway, book list
U.S. Dividend Watch List: September 27, 2013
Below are the 17 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Sell in May? No Way!
On March 29, 2013, we published a review of the one-year performance of our March Dividend Watch Lists for the prior 3 years to see if the old adage of “Sell in May and Go Away” had any merit. Our conclusion was as follows:
“Even with the view of ‘Sell in May and Go Away,’ the top five stocks on our U.S. Dividend Watch List have performed quite well. The average gain over the three periods [2010, 2011 & 2012] reviewed was +15.72% compared to average gain of the Dow Industrials at +10.20%.”
In closing our piece on the topic of the one year performance of our U.S. Dividend Watch List, we said the following:
“…we recommend considering the top five stocks from our latest dividend watch list for potential investment, even if the mantra is ‘Sell in May.’”
The latest watch list was our March 22, 2013 posting (found here) and had the following companies and the subsequent performance:
It is not every day that you could expect dividend increasing stocks to perform better than the leading high tech stock index in the form of the Nasdaq 100 (NDX). However, that is exactly what happened with 61% of the listed stocks. In addition, 72% of the stocks listed managed to exceed our preferred benchmark, the Dow Jones Industrial Average.
Among the three stocks of particular interest to us (CATO, FDS, MYE), Myers Industries has been the top performer with a gain of +42% in the last six months. The average gain for the entire watch list was +16.47% as compared to the Nasdaq 100 index gain of +14.63%. The average gain for the top five stocks on our watch list (CATO, FDS, CTWS, EXPD & BCR) was +17.06%.
Is the six month period since our March 22, 2013 watch list a meaningful measure of performance? For investors with an understanding of Charles H. Dow’s goal of “seeking fair profits” (more here), within a tax-deferred or tax-free retirement account, it is everything. Gains of +10% or more in a six month period require careful consideration of selling the principal. Additionally, gains in stocks that have exceeded the performance of the Nasdaq 100 (NDX) index in the same period of time should be sold (principal only for the purposes of compounding) as exceptional gains of this kind are proven not to be sustainable over extended periods of time.
The concept of selling in May could be correct, for those seeking average performance of their portfolio. However, since 2010, our late March U.S. Dividend Watch Lists have provided above average returns one year later. Because it is our nature to take these gains with a grain of salt, we’re expecting that the one-year performance has to be far less than the six-month above average performance so far. We will reassess the actual one-year performance to see if, in fact, the March 22, 2013 list can retain such a “wide” margin of performance against the Dow Jones Industrial Average.
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Posted in NLO Dividend Watch List, Performance Review
Canadian Dividend Watch List: September 20, 2013
This is a list of Canadian dividend stocks that currently, or in the past, had a history of consecutive dividend increases. For those wishing to find the most complete fundamental information on these companies, we recommend visiting one of Canada’s leading financial websites, the Financial Post (found here). However, Yahoo!Finance probably has the better long-term charts and historical dividend data. Continue reading
Dow Theory: Buying in Scales
Reader J.P. asks:
“What is your recommendation for taking a position. All in, or 1/2 in and average up or down. I can't find anything on this on the website.”
Our Response:
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Posted in Dow Theory, Scales, Value Investing, values
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Review: Carbo Ceramics Meets Upside Target
On January 14, 2013, we did a technical review of Carbo Ceramics (CRR) when it was selling at $79.64 (found here). At the time, we gave our assessment of the downside risk for Carbo Ceramics with the following comments:
“Carbo Ceramics would have to fall to $70.20 in order to be considered a buy using the Altimeter above. However, as has been the case in the past, seldom does the Altimeter decline to the buy level and then immediately reverse to the upside. therefore we’d expect a push below the $70.20 level for good measure. Edson Gould’s Speed Resistance Lines have $65 as the downside support level.”
On July 1, 2013, Carbo Ceramics (CRR) had a closing price of $65.41. This was within 1% of the expected downside target. However, on June 24, 2013, CRR fell as low as $62.11 on an intra-day basis and closed at $65.99. The intra-day low of $62.11 was fairly close to the Dow Theory downside target of $61.34, within 2% of the estimated target.
Finally, we offered up our take on the upside prospects with the following commentary from our January 14, 2013 posting:
“According to Value Line Investment Survey, the fair value for CRR is 14 times 2012 cash flow of $6.50, or a stock price of $91, a gain of +14% above the current price of $79.64. As an alternative, if the estimates by Value Line are correct, the 2013 fair value figure is $100.10, a potential gain of +25.69%.”
On September 16, 2013, Carbo Ceramics (CRR) achieved a price of $101 per share. This meets the fair value target set by Value Line Investment Survey and hits the resistance level of the ascending $86.59 line on Edson Gould’s Speed Resistance Lines [SRL].
It would be luck if Carbo Ceramics manages to exceed the current fair value level by a substantial margin. We see a move to $109 as the next upside target. However, keep in mind that when purchasing a stock well below fair value, the only expectation is that the stock may only go to fair value and should decline shortly thereafter. Our tentative upside target is $109.00 and our downside target is $68.00, as noted in the SRL above.
We will continue to hold our risk-free shares of CRR as they were acquired substantially below the current price as part of our long-term compounding/diversification strategy.
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Posted in CRR, Edson Gould, SRL
U.S. Dividend Watch List: September 13, 2013
Below are the 19 companies on our U.S. Dividend Watch List that are within 11% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.