Tuesday, March 29, 2016

Dividend Income: March

March has come and gone but the dividends go on! With the end of the month comes the collection of dividend payments and the compilation of purchases (2!) made this month. Let's get into it!

March 2016 Dividends:

ARII - American Railcar Industries Inc - $6.80
KSS - Kohls - $6.00
EMR - Emerson Electric - $7.60

Total dividend income for March: $20.40
Total dividend income for 2016: $56.92

Stock purchases for the month of March:

3/4/2016 - KSS - Kohls - 12 shares at $47.50/share
3/14/2016 - ARII - American Railcar Industries Inc - 17 shares at $41.77/share

March was a great month for investing. I came away with two new companies in portfolio and only had to give one of my old companies away (dividend cuts suck!). In addition, I also got to cash in on three dividend payments; two of those payments of course coming from the two newly acquired companies. Although it only totals out to $20.40 in payments for the month and this really just offsets the trade fees, it still ramps up the snowball for more and more payments to come.

With that being said, I've closed in on the amount that was accumulated over the entire year of 2015 in just three months. If you don't remember, in 2015, the total dividend payments were a "whooping" $62.25! I'm hoping that next month, I'll pass this amount and soar on forward! The plan then, going forward, is to add further diversification to the portfolio. I feel like it's a very healthy mix right now but I still feel that it has to gain much further growth outwards rather than upwards.

It's important to always remember to diversify. If there are great companies out there, one should have their hands deep in multiple cookie jars if you catch what I'm trying to throw. This also benefits my intelligence as to invest in any of them, I will have to understand what I'm investing in. This means that I'll have to expand my knowledge base of the industries I'll hope to get into.

That's the plan at least. We will have to see if the plan works out the way I hope it does. I've been keeping my eyes on Wells Fargo and I'm hoping and praying that I can grab a piece of the action while the going on it is good.

Monday, March 28, 2016

W. Buffett and Kinder Morgan Inc.

A lot of speculation has been thrown around lately about Buffett's bet on oil giant, Kinder Morgan (KMI). The bets have been about whether or not he has been profitable on it, whether or not this is one of his few losing bets that he's made, and even if this was some sort of outcome he didn't predict. After all, so many investors wait on his moves and simply follow him on his trades without a second thought. It leaves a lot for the movement of a stock. Therefore, today I want to discuss the bet the Buffett made on Kinder Morgan.

Buffett made his gamble on KMI back when the stock had supposedly hit rock bottom - when it was trading in the low twenties to high teens per share. With that being said, the stock now trades in the high $17 range for the day (currently as I write this article). This means that Buffett likely has yet to make a profit unless he was lucky enough to bag his two million plus shares of the company for a slash off the top. This being unlucky, it's more likely that he had to pay a premium to obtain them as such a large number would not come easy. Buffett then would be said to have to break the low twenties in order to become profitable on his stock pick this time around. If you do the math, that means that Buffett even just currently is down a massive percentage on today's market. Needless to say though, the amount were talking about is such a small blip on the radar of a company as big as Berkshire so the returns are negligible at best.

Saturday, March 26, 2016

Life: Gardening

I've spoken before about the unintended knowledge that we all gain by investing. It's important to expand your knowledge to all things around us to better understand the world as a whole. One of those important pieces of knowledge that I've obtained is knowing how to garden.

Prior to last year, I had no idea how to garden. My mother, my grandmother, and even her mother were fantastic at it. The green thumb was definitely there but I had not been taught by any one of them. I had moved away to a different state before any of the knowledge could be passed down to me.

This left me to dig for the knowledge myself. Sure, I could have called any one of them and tried to obtain the knowledge from square one with any one of them but that was just too easy. Sometimes you have to learn on your own and then reach out to your contacts afterwards to hone your skills.

After a quick trip to Walmart, I had everything I needed to start. I wanted to start from square one. Since square one was obviously seeds, that meant grabbing a seed starting kit rather than just buying the partially grown plants and transplanting them. I put the seed starter soil in the pods, dropped the seeds in, watered them a little, and waited. Within a few short weeks, they sprouted from each cell and became little starter plants. Everything looked like it was going according to plan.

Friday, March 25, 2016

Foolish Day Trader

Once upon a time, all of us were opening up our first investment accounts with dreams of making it big. No amount of money seemed to be insurmountable. This was even more so for the folks who had been lured into investing by stories of millionaire day traders. The idea seemed to be so attractive. Invest a little bit of money, multiply that by the amount it goes up every day or short it while it goes down, pull out your money and bam, you’re a millionaire!

Unfortunately, this was not the case for almost everyone who decided to continue to go down the road of day trading. In fact, studies consistently show that a very small minority (some claim less than 1%) are actually successful over the long term. This is due to a multitude of factors that drive the market every day and even more so due to the way the human brain functions. First off, there are big risks around every corner, especially if you’re in the business of shorting. If the profits are big, you usually bet bigger, and therefore can lose that much more on your next bet. Secondly, even when you do win, taxes and commission charges are always knocking on your door to pay up. Because the day trader is taxed at a higher rate because they trade on short term investments, they constantly get hit much harder than those of us who hold our stocks long.

Wednesday, March 23, 2016

Collateral Learning

Once in awhile when you're evaluating a stock for purchase, you find something that reminds you that investing is not just about numbers. When you invest, if you do the research that you should be doing, you learn more about the world and various sides of business that without researching you would never have run into without luck. This is because when you start to research a company, you have to really research it. You have to look into the various sides of the business, how they make their money, what affects that income, and if that income will continue. This means you have to understand every side of their business and in that way understand another side of life that you wouldn't normally.

This happened to me just last night when I was digging into ARLP (Alliance Resource Partners L.P.). Their insanely high dividend yield caught my eye and I saw that they were very much on discount. The thing that I liked even more was that their income just kept rising, year after year, without fail. When I normally run into that sort of thing, it means good things for the future. Even though the payout ratio was way over 100% which would normally turn me the other way and running at full speed, it was hard to think about not throwing some money at it because it almost seemed like a sure bet with their income constantly on the rise that they would eventually level that out.

Monday, March 21, 2016

Portfolio Performance

Measuring your portfolio's performance is an important step of being a dividend growth investor. Our portfolios can be affected continuously by surges in the market, economic downturns, upturns, or even buying and selling if not done carefully. This causes the need to consistently take a look at your portfolio to bench mark the progress - a step missed a lot by the DGI community because of the thought that the dividend payments reign supreme and the portfolio as a whole can be ignored. It is important however to always be checking your portfolio to make sure that none of your assets are looking to strip you of more than your dividend payments could ever make up for.

Friday, March 18, 2016

The Importance of Watching

Watching the market can be a giant and a lot of the time stressful task. Investors who have been at the game for many years who have become dulled to the ups and downs of the market can even be tricked by it a few times even though they've seen it so many times before. For an untrained eye however, it becomes all that much more important to watch the fluctuations of the market almost daily.

I was having a chat with one of my buds over our weekly work outs and I found myself giving him a piece of advice that I shouldn't have. Being a new investor, he has been digging his heels in and absorbing as much information as possible from me and other trained sources. This means that he is even more susceptible to listening to all that I have to say since I have been in the market for a little over two years now and I've gotten a pretty

Wednesday, March 16, 2016

Life: Candle Making

Every now and then, the wife and I come up with ideas that we both feel are brilliant. Being plagued with endless allergy attacks in the spring months in Nebraska, we always reach towards endless the search engines to provide us with new and innovative ideas to conquer the season. This year, an idea popped up that recommended the creation of a beeswax candle and it provided a few ideas of what to mix into it to provide an even sweeter aroma.

The recipe called for a bag of beeswax, a pot of boiling water, an empty can of fruit, and a bag of coffee beans/grounds. We poured over the recipe and grabbed all of the ingredients over the weekend. Once in hand, we boiled a pot of water, cleaned out the can of pears that we bought, and loaded the pellets of beeswax into the can (double broil basically). In no time at all, the wax melted down and become a liquid. I grabbed the can out of the pot and poured the newly formed liquid beeswax into the candle holder. The wife then grabbed the bag of the coffee grounds and poured it into it. We then realized that we only filled a quarter of the candle and it looked more awkward than we could have ever imagined.

Monday, March 14, 2016

Recent Buy: American Railcar Inds Inc.

Look at all the deals on the market this morning, right?! I was happy to see when I woke up this morning that a lot of stocks had gone on discount (as they typically do on Mondays). With a coffee in one hand and my other hand on my TD application, I grabbed up a stake in ARII. If you don't know or aren't as familiar as you'd want to be of American Railcar, I urge you to read my previous post that contained a full review on the company.

With this purchase I was able to grab 17 shares at $41.77/share. I'll admit that it's not the best price of the day because I jumped at it right when the price started dropped instead of raising but I still feel very comfortable with the purchase. Like a kid running down the stairs to see that Santa had brought me a brand new choo choo train, I leaped on it like a spider monkey. 

The total purchase was as follows:

17 shares of ARII at $41.77/share, total purchase price: $720.08
**Commission fee of $9.99

This means that with this acquisition, I have added $1.60/share per year in dividend payouts or 3.83% dividend yield. This totals an added $27.20/year in dividends to my dividend harvest and I'll be able to capitalize on it immediately as the ex-dividend date hits this week. All in all, not bad for a days work. 

Let me know what you think. Do you currently hold ARII? Why or why not?

Sunday, March 13, 2016

Watch List: American Railcar Industries Inc.

American Railcar Industries Inc. (ARII) is one of the leading North American manufacturers of rail cars. More specifically, they manufacture and service hoppers and tankers. Hoppers are generally designed for transporting coal, grains, and other goods that could have an open top and draining bottom for easy load and leave. Tankers on the other hand are designed for transporting various liquids. The company both produces, services, and leases the rail cars.

PEG Ratio?

I'm not stupid enough to think that I know everything. Investing is one large process of learning more and more each day if you're doing what you're supposed to be doing. With this being said, I personally have never been one to use a PEG ratio as a unit of measure for the evaluation of a stock. Why you ask? It's because I didn't know what it was, what it was for, and didn't yet know how to use it to my advantage. Being a young investor, I've got lots to learn so I have to take it day by day and subject by subject. As this is the case, let's learn about PEG ratios.

Saturday, March 12, 2016

Name Change: Dividend Monster to Dividend Reaper

By now, the site has updated to the new name: Dividend Reaper. This was not a drunk accident or a prank. I know you were all worried but I assure you that it was done with the best intentions. This sudden change has been coming for quite some time but I would like to share the main reasons why.

First off, when I first started this blog back on the 1st of January of the year, I wasn't quite sure where this blog was going to go. When I first started, I was unsure if I would be able to keep with it. I really enjoyed investing. I really enjoyed talking about investing. And most of all, I enjoyed sharing my life with others. I'm very much a talker and it apparently needed an even bigger outlet than simply sharing with my friends in person. With this being said, when I first created it, I rushed to place any name that I could immediately think of into my blogger account to just get the process started. That's where Dividend Monster came from. Little did I know where the blog would be heading to from there.

Unfortunately and fortunately, the blog has really taken off in my life. It has provided a very nice outlet for me to share about my life, my portfolio, and of course my various money making ideas. This means that lots of my time has been dedicated to moving it forward and this only further grew the site. Eventually I reached a point where I knew the site would be something I'd want to continue on with for a long time. My eyes shifted towards grabbing the domain name and that's when reality hit.

I couldn't own the domain name. It's already taken and I can't have it.

Much like a kid in a candy store that couldn't have his way, I had to stomp my feet for a few minutes (months...) and be upset that the name that I chose would not be able to move forward. I've since been looking for another way to grab the name but nothing came up. Since that was the case, I had to look towards changing the name to one that I could actually obtaining the domain name for. This is how I ended up with:


Catchy, right? Anyways, I hope that I have set the website forwarding from the old blogspot address up correctly. Otherwise I may lose a few readers and I sure as heck hope that hasn't happened. I hope that many of you will continue onward with me to reap the next dividends that can be cut our way.

-Dividend Reaper

When Discounts Dry Up

Going hand and hand with my last article, I wanted to take a deeper look into what one should be doing when the market isn't showing many deals. In addition to spending that time looking and waiting at new opportunities in the market, one should also bring saving to the forefront of their minds. This ensures that when that deal hits, you'll be prepared for it.

Friday, March 11, 2016

Stock Hunting

The budget has been finalized, the funds are sitting in the account, and I’m ready to start throwing hundreds at the Stock Market Club like I’m going to die tomorrow. The feeling is common to so many investors just like me. When you’ve got money that you’ve moved to your investing account or had deposited from your last hard earned paycheck, you feel like the hunt is on. Where you were once a calm and collected individual with a tight hold on your stocks and your money, you now find yourself salivating at the mouth just waiting for a good discount stock to throw your money at to start making it work for you.

Thursday, March 10, 2016

Make Money: Rent-A-Language

Do you speak another language other than the national language of your country? If so then you might just be sitting on some extra cash flow that you have yet to tap into. It’s becoming more and more common for citizens to pick up another language to further diversify more than just their portfolios. Learning a new language comes with many benefits. It can allow you to relate easier to another culture, help to immerse yourself into another world if you travel, and it can make you marketable to employers that originally did not have their doors open to you. With this need comes a need for those who can teach the language to others who want to learn but don’t have the current time to make it to a typical institution to obtain the workings of the language.

Wednesday, March 9, 2016

Transaction Cost Meltdown

Imagine that you've just hit pay day and your budget looks great. You've got some funds left over for the month that you can use to invest with. In no time at all, you've uploaded those funds into your investing account and you're already scouring the market for a good deal. The problem however is that even though you may have a large amount of money to invest in stocks, you question whether or not you should buy some of stock A and some of stock B or if you should invest it all into stock A. We've then reached a turning point that will decide what kind of investor we will be. 

Monday, March 7, 2016

Watch List: Hanover Insurance Group

Hanover Insurance Group (THG) works as one of the many insurance carriers in the USA. They work to insure others by a process of finding clients, underwriting to see if they could be bound for coverage, and ultimately, if approved, bound for coverage by their company for property and casualty insurance. It was founded in 1844 and is based out of their headquarters in Worcester, Massachusetts.

Watch List: Cisco Systems

Cisco Systems - the tech company that would love to sell you your next piece of network equipment. If you've ever dealt with the task of obtaining your own router/modem or other tech piece, you've probably heard of their company. They design, manufacture, and of course sell equipment for our networking needs. The company was founded in 84' out of San Jose, California and they operate for in segments for home and business.

Sunday, March 6, 2016

Life: Wine Bar

Last night, my wife and I made our way out for date night. We decided that we would try a place that we had been meaning to try for quite some time but just hadn't gotten the chance to make our way to yet. The sad part is that this place was literally one block away from the last apartment we used to live at but we just continued to make excuses over the years to not go (I'll take the blame for that one...). The good part however is that we finally stopped procrastinating and made our way over.

The place is a small little wine and bistro. It's exactly what you picture when you think of a small, family run, wine getaway. The place is covered from head to toe in brick and wood structures and mountains of wine. When you first walk in, the hostess greets you and then leads you to a small wooden table in front of the wall of wine bottles. In minutes you're settled into your place with a nice full glass of wine. There were no cheap pours at this place! I ordered the red Pino and the wife ordered her favorite Moscato. When I say the pours weren't cheap, I meant it. My glass was poured all the way to the top of where it should be to be able to still gain the perfect aeration of the wine.

Saturday, March 5, 2016

Recent Buy: Kohl's

Kohl’s, Kohl’s, Kohl’s – the United States dividend department store currently on discount. Kohl’s, if you haven’t heard of it, is a company that owns and operates numerous stores throughout the USA. They offer clothes and other household items for men, women, and children and they are a common household name that many people recognize. They operate through brick and mortar stores but they also have a growing online business as well to reach those who don’t wish to actually walk around their smooth color toned stores.

Friday, March 4, 2016

Sold: GAP Inc

I hate to sell any part of the Cookie Jar portfolio. I really, really do. Sometimes however, it has to be done. The name of the game is dividends and GPS recently announced their next dividend payment. Unfortunately, that new payment is the same as it has been for the last year. This means that they decided not to raise the dividend for the next year and therefore in my mind, it stops being a dividend growth stock.

Thursday, March 3, 2016

Finance for Kids

If you read my last article, you know how important it is to me that we assume our role as leaders to the younger generation. I've already spoken about how we should set our long term goal for our dividend growth portfolios to be legacy portfolios but that seems to be the last step rather than the first couple that need to first be bridged. If a child has no financial background whatsoever, learning to run a portfolio is going to be like reading an alien language. Where do we start then?

Wednesday, March 2, 2016

Creating a Legacy Portfolio

As a dividend growth investor, my primary focus is on analyzing and selecting solid companies that pay raising dividends over time. By doing so, the hope is to ensure that the portfolio rolls downhill in the same manner as a small snow ball. Over time, the snow ball collects more and more dividend payments (snow) and therefore becomes bigger and bigger. Eventually, the snowball then becomes big enough where the payments made by it are so big that it covers living expenses and allows one to retire on them. I feel like this is the eventual dream of every dividend growth investor. But what happens after the snow ball reaches that point? Yes, your retirement appears very solid but what happens after you kick the bucket?

Tuesday, March 1, 2016

Watch List: Wells Fargo

Wells Fargo is the owner of a large series of multinational banks. They also offer multitudes of financial services to bring in other income. Their services cover basic banking, loans, retirement, and investment options. As one of the big four banks in the USA, they hold a strong national recognition and they will likely withstand the test of time that many banks topple over when faced with adversity.