September Review / October Preview, 2015

Reviewer Gremlin here to talk about September.  It has been a busy month indeed with a lot of continued work travel and more writing on here than usual.  That of course is wedged in between everything else in my life.  Thankfully, the NFL has started and my fantasy teams are doing well, plus BPL is going on, but I've only been able to pay cursory attention to these. 

Naturally life threw a curve my way and my wife and I had to get another vehicle because her's was at the end of an illustrious 15 year life.  We downsized her car from large SUV to small / efficient SUV, but we will owe on her car for a few years still unlike the previously paid off one.  We both drive to work (and I sometimes for it), though there are long term plans to cut this mileage down by huge margins.  This brings me to excellent news though, my wife has started her new job.  A job that doubles her prior salary, and we are done with graduate school (without loans of which to speak)!  So going forward a lot more opportunities will be realized in investing and saving.  That plus we are consolidating our bank accounts, so debts will be paid and investments will grow faster.  Exciting times...

Investment wise I was able to put $429 to work in Loyal3 over the course of last month. 

September:

Last month I brought in a total of $79.91 in dividends ($62.20 taxable , $17.71 Roth), slightly more than expected.  This is a increase from last year ($62.87 total) by 27.1%.  That is pretty sweet.  

In terms of dividend increases, I realized two this month; Kellogg's (K) with a 2% increase and Target (TGT) with a 7.6% increase.  Of the two, TGT impacts me the most with holdings in both my Loyal3 and Roth accounts. Two new raises were reported, the standard Realty Income (O) increase by a small percentage and Microsoft (MSFT), who added a crushing 16.1% increase to their dividend.  That last one was delightful to read.

No new positions were added in any account, but I was able to put $429 to work in Loyal3 over the course of last month.  I have also been adding cash to my standard and Roth accounts, with the aim of making at least 1 more big move before years end.  I expect work will have me traveling more, so I will continue to use extra cash from that to fuel Loyal3 purchases and buff up my investment accounts.

Side note; over the last two months my 401K and investment balances are down.  Considering the market's volatility, it is not surprising nor disappointing.  All it signals to me is that future money will go the extra distance over time.

October:

Our only long term debts are our cars, which will continue though I plan to pay mine off as fast as possible.  I have already gotten ahead on my monthly payments and that will not stop.  My wife's car will receive this attention after mine is finished.  My work life looks to have me traveling a little bit again this month, but luckily I will be home the rest of the time.  I hope to have a review of a local  brewery sometime soon, as that has gotten sidetracked by my travels.  Though I still have 1 more review of beers from my last set of travels to post.

Next month should produce around $74 in dividends, which is a 5% year-over-year increase.  I expect to realize one raise next month from O.  On the Loyal3 side, I plan to attack some of my smaller positions with menace - and grow those dividend checks!

Hope everyone has a great October!
- Dividend Gremlin
- Long K, TGT, O, and MSFT

Loyal3 Buys, September 2015

Stacked Deck Gremlin here to talk about how I've been stacking my portfolio.  I decided last month that my Loyal3 buys need to see their own posts, so this is the first of them.  I plan to not do any description of the companies purchased, because frankly that would just take too damn long.  So below you will see purchases made this month and any necessary commentary.  Mind you these happened over the course of the month and the capital invested includes dividends received and put back to work.

Company	Ticker	$ Invested	Shares Purchased	Annual Income Added
Hershey's	HSY	$90	0.9686	$2.20
Wal-Mart	WMT	$93	1.4292	$2.80
Pepsico	PEP	$90	0.9824	$2.76
Unilever	UL	$78	1.9903	$2.60
Coca Cola	KO	$78	1.9908	$2.64
Totals		$429		$13.00

A total of $429 was put to work, adding $13.00 (it pleases me that these accidental round numbers happened) of annual income to my forward outlook.  All of the money found its home in the sector Consumer Staples, which is one of my Tier 1 Sectors.  A lot of my Loyal3 stocks are Consumer Staples or Discretionary, which is fine because it allows me not to concentrate on those in my Capital One Account.  I've found all of these valuations among others to be good or better and I will likely continue investing in a few of these plus some others next month.  The investment size was also driven up by some work travel.

Going forward I see this independent snowball growing rapidly.  Last year Loyal3 generated $73.88 in dividends for me, already this year has netted me $116.40.  That is a 57.5% increase, and the year still has one quarter left.  In addition, my Loyal3 portfolio accounts for approximately 45% of my taxable holdings, so I've really been pushing it up.  Still the long term goal remains to merge it with my main account when the time is ripe.

I'm loving the odd flexibility of Loyal3, where I feel I can find some attractive valuations and slash away at them without a minimum entrance point (I use $1000 as that minimum).  Also when things are overvalued, I can play using smaller amounts and play it slow.  This allows me to get money in the game when the market is up, but not too much so I can maintain cash in case a sale happens.  As I've stated before, timing the market is typically not a great idea, but it does not mean I will not take advantage of a solid opportunity.

Do you use Loyal3?

- Gremlin
- Long all stocks mentioned.
- Portfolio values and shares will be updated at the end of the month.

NY State 6 IPA Chase

Drinking Gremlin here to chat about the 'work' and experiences I had last week.  As some of you know I have been working on the road a lot more this year, and this current assignment requires a lot of time in upstate New York.  So I've decided to do some taste testing as a way to enjoy my time here a little bit without busting the bank.  This past week I decided to study India Pale Ales available at the grocery store.  The one caveat is that they must be from the state of New York.  So I acquired a mixed six pack; with one beer each.  This means everyone has one shot to impress me.  So here are the contenders, they are ranked in order of consumption, mind you they were enjoyed over the course of the week.  My scoring is on a 1 to 10 scale (10 being the best).  So here are the scores and reviews.  Brewery is in bold, beer in italics.


Ithaca Beer Co. - Cascazilla, Red IPA [7%].  A smooth beer that goes down quickly and has most of its hops and bitterness hitting your tongue in the after taste.  Not the most bitter beer out there, but it seems to be lacking a punch of flavor that an IPA usually has.  Might be a good day time beer.  Overall I usually am a big fan of Red IPAs so, this might need to get a bunch more tries.  5/10

Saranac - Legacy IPA [6.5%].  Wow, a beer that hits you tongue like a hammer made out of citrus.  The hoppy flavors follows, but its hard to not get past the strong and delicious citrus flavor.  I believe this beer is the kind you would love to drink on a hot day.  Soak up the sunshine and crack one open, then relax on the porch.  6.5/10

CB - Caged Alpha Monkey IPA [6.5%].  Having been to this brewery before I was interested in trying one I had not tried there, and it is their flagship brand.  It is easy to describe this beer; big hops and big taste.  However, it lacks some of the crispness that some IPAs really throw at me.  5/10

Brooklyn - East IPA [6.9%].  This is an IPA drinkers IPA.  It has the crispness, the citrus flavor, and the bitterness that follows.  However, it is not too much of any of the above.  The key is the balance between those qualities, these guys nailed it.  8/10

Southern Tier - IPA [7.3%].  Smooth is the best adjective here.  Overall I wish it had a little more citrus or exotic flavor that my favorite IPAs carry.  It feels like a good late night beer, pair it with some chips / dip and a good game on TV.  To be honest though, feels like so much was put into it, but the extra effort diminishes the finesse sometimes required.  6/10

Southern Tier - 2X IPA [8.2%].  I only had so many options in getting single regular sized bottles, so I ended up with two from Southern Tier.  Still this IPA attempt is excellent.  It has a ton of punch in its percentage, but it is smooth to a drop.  Its crispness goes along with a citrus set of notes that sits on the tongue the way I like.  I would recommend this beer with a steak, fish, pizza, or a hangout session anytime!  9/10

As I am editing this I am beginning another set, my individual write up was done last week.  My current 'work' is a new theme and its harder to keep with the theme due to the amount of variety that is available.  Note these, as with all other reviews, are my opinions.  I recommend you try these or as many types as possible to find out what you like.  Or if you are really awesome, make your own! 

- Gremlin
PS: many of these in various reviews will be hard to get outside of regional areas.  In this case Saranac, Brooklyn and Southern Tier are widely available in the Mid-Atlantic of the USA.

Sector Scoping

Portfolio Gremlin here to talk about sectors.  Currently I am in upstate NY for work and thinking about investing, a lot.  I'm also thinking about how I've been traveling a lot for work, and how it'd be nice to get a little bit of a slowdown.  After all, I don't want to miss important things at home!  But, enough of that talk, time to chat about sectors.  Ever since I've taken up Dividend Growth Investing (DGI), I've seen articles posted about how people view sectors.  Mind you I've seen that since before I started posting anything as well.

So now I will give you my take, and its a little different than others I've read because I view it in a very flexible way.  That way is based upon Tiers, with Tier 1 being the most important and Tier 3 being the least important.  The point of those is to recognize industries that distinguish themselves for always being needed versus those that are either niche / smaller markets or limited in their future growth.  However, it should be noted that sectors and industries are not nor should they ever be considered hard and fast rules.  No level is locked in, and change over time is expected.  Much like companies and stocks themselves, dynamics can change overtime for better or worse.  Even then, sectors are of lesser importance than the quality of the companies themselves.

Tier 1: The Core

Consumer Staples - There will always be a need here.  Until someone learns how to clone and or make food like the future version (of the good future) of Back to the Future II, this will be an important block in the world economy.  The same goes for soaps and other hygiene related products.  Examples: PG, UL, PEP, KO, etc.
Industrials - Much like their more edible cousin above, these are the backbone of the world of getting things done.  What do I mean?  I mean machinery, shipping, chemicals, transportation, and other such things they make.  Fact is they are here to stay, get used to it.  Only exception to this rule is if we can beam stuff places.  Examples: APD, UNP, CAT, GWW, etc.
Financials - Everything and person has a cost.  These guys prove this on a consistent basis and reinforce the fact that cash (whether electronic or in hand), is the grease that turns the wheels of the economy.  Examples: BNS, WFC, BEN, TROW, etc.

Tier 2: The Role Players

Consumer Discretionary - The younger, less cool brother of Consumer Staples, but still on the HS football team and in the popular crowd.  They make cool things; like fashionable clothes or other similar items belong here.  Really awesome super savers could even argue car companies belong here, and I disagree.  These are closer to the things that are truly luxuries no matter how much they are taken for granted, often including your vices and leisure money.  Examples: DIS, VFC, DEO, PM, etc.
Energy - Related in many ways to industrials, but different.  The mix of energy is changing, it could be argued rapidly, but only a fool would think that large players will not adapt.  Yet, at this very moment they are needed and the real change is decades away.  Examples: CVX, BP, KMI, XOM, etc.
Materials - A very similar to outlook to energy, but for a different reason - materials recovery.  In the short run they are fine, in the long run the future is much more fuzzy than energy.  New deposits for naturally occurring materials (gold, silver, copper, rare earths, etc.) are tough to find.  However, materials that are manufactured have a great future ahead.  Due to the cross-section the demotion is earned.  Examples: DOW, DD, BBL, etc.
REITs - These are the younger siblings of finance.  Some are super cool, some are total recluses that everyone avoids.  The field also has a massive variety, from those focused on industrial and commercial land, to those focused on purely healthcare places.  There is a general merit to the involvement with real estate, but it is important to find excellent management.  Examples: O, WPC, HCP, DLR, etc.
Healthcare - Here is a strange one.  On one hand they have a huge aging population to work with and a world in constant need of service.  Yet, they have an aging population, so will their market remain forever as strong?  I tend to think it will.  It is also a field dependent like Materials, Energy, and Industrials on science.  Sciences is never straightforward, direct, or easy to predict making a poor choice here a costly one.  If any sector in my mind has a chance to upgrade, its right here.  Examples: JNJ, BAX, BDX, PFE, etc.

Tier 3: Special Teams

Utilities - Depending on what they serve, they could be a bombshell.  Otherwise it might be a bumpy and dangerous ride.  As of right now, electric utility seems to be feeling the most heat due to renewables, but thinking they are the only ones who may feel pressure could be a future mistake.  Still I would be bullish on a few choice players and water / gas utilities.  Examples: SO, D, OGS, AWR, etc.
Telecommunications - Do they power your phone or internet?  Then they are probably found here, though there are many choices, there are few good ones.  Many smaller options have either been hammered or swallowed by the big players - making a near oligopoly.  Examples: T, VZ, etc.
Information Technology - This is an interesting sector.  Parts of Telecom could fit in here in the future, and it appears to be loaded with growth.  However, this is a very very speculative field filled with boom or bust.  A word of caution should be attached to a lot of stocks here, but there are some potential beasts patrolling the arena.  This sector has the most potential to be upgraded.  Examples: AAPL, MSFT, etc.

Important side note: this post was first drafted as I was doing research for my next post.  My next post is related to a taste test across NY State IPAs.  Though to be fair, I only had 2 during this post writing!

- Gremlin
- Long UL, PEP, KO, UNP, DIS, VFC, KMI, XOM, O, JNJ, T, AAPL, MSFT

Poker Face in the Rat Race

Poker Face Gremlin here.  Usually, I post articles about what is going on in my life; whether it be some sweet beers, investments made, sports, or something equally awesome.  However, this post is going to focus more on a train of thought.  It is an unusual one for me, typically I am all about sharing good news and ideas such as Dividend Growth Investing (DGI) with everyone I meet.  Today I am here to say that I am no longer doing that.  I will not be actively promoting DGI to people who do not care for the opportunity, no matter how awesome I know it to be.

For the past two years now whenever the chance presented itself I tried to see if people were interested in early retirement or passive income via investing.  Now to be fair I'm a fan of owning stocks directly, but if someone chooses to use ETFs or dividend oriented funds that is perfectly great.  Throughout that time I've come across a lot of flak and negative feed back.  Usually it is centered around the belief that such investments will never work to fund their lifestyle or that it will take so long to achieve something that it is not worth the time now.  Often there are also complaints about paychecks not being enough or costs that are too important to cut. It seems like they would fit so well into an article like this one: It's Called Work for a Reason that was posted by the New York Times - or many of the related articles.  Like the article, people who believe they are always going to work for the man exhibit deflections or elaborate defenses of lifestyle and necessity of their work.  Naturally, there is no shortage to the excuses available and its not worth airing that laundry.

The amount of people who simply see that road as the only road in life is astounding.  Luckily, my most of my friends and family at least attempt to be frugal in their lives.  Sure they are not all +30% savers or hardcore DGI investors, but they have their own merits.  Still not all of them do, and only my really good friends get to see up close and personal that this kind of change is possible.  However, those who are not in that circle will not get a second pass at the explanation.

Part of the reason I've found is its not worth it.  Folks will find any source possible to use to back up their case ~ some are very informed on finance, most are not.  In many ways this is difficult for me to comprehend, but in looking at it a different way its excellent.

Why is it so great that loads of people fail to see the plain genius of DGI or index investing?  The answer is found simply in the dividends we earn.  Listen, someone needs to work to produce those goods and services to create that profit.  All most everyone has done it, and there is no shame in being part of that group for a time.  Yet, there is something truly great about being in a different group that also sees an exit from the lifelong hamster wheel of work and misery. 

This train of thought has come around now that my work has me traveling a lot more too.  Now I do not mind traveling for work a few times are year or for fun (as often as I want).  Once you start getting on the move for extended periods of time, you will see your attitude towards that change.  I've already missed a few minor things in my personal life due to work mileage, and I do not intend on missing the great big ones.  Does that mean I am changing jobs or fields?  No not yet, perhaps, but the future will remain unknown as always.

I have a lot of plans for my life.  One day maybe I will retire to a life of traveling the world and doing fun stuff, or possibly to becoming a home-brewer.  There are so many amusing things in this world that it would be a shame not to experience as many of the good ones as I can.

- Gremlin
- Long live earning your freedom.