IBM or Microsoft?


IBM or Microsoft? Sounds like one of those classic “old school” versus “new school” investment questions. Taking a quick look at some key metrics, however, the answer does appear to tilt quite heavily in favor of the “new school”, so let’s quickly run through a few metrics and let you decide for yourselves which one may have a home in your portfolio!

Other than consistent stock buyback efforts, IBM is struggling, and struggling quite significantly. Fastgraphs shows change/year: EPS for 2014 down 3%, EPS for 2015 down 10%, and next years EPS estimate is for growth of only 1%. We think IBM is ~1% off the 52 week low for a multitude of reasons, none of which are easily solved for the tech behemoth. Hewlett Packard struggles with many of the same issues…

Not that I would suggest that anyone buy it up here ~3% off the 52 week high, but to contrast IBM with Microsoft: Mister Softy’s EPS estimate for this year is flat, +5% for 2016, and a whopping +12% for 2017. However, as we all know, the latter of the estimates are just that, estimates – but Microsoft appears to have FINALLY figured out that it can make much more money by forcing users of its higher margin products to pay on a preset subscription-based model, as opposed to just getting a sale on a product every so many years. For example, why make a sale on a retail box of Microsoft Office to a user every 5 years or so when you can get a regular stream of revenue every month or annually as they are doing with the Office 365 product suites? Regular and predictable revenue streams are what most of the I.T. industry has been transitioning to for years – so it’s nice to see Microsoft getting on the bandwagon. Obviously, it’s working for them when you look at the stock charts going back the past couple of years.

Some may call $IBM a “value” at this price point, but its current price is BELOW where it was 5 years ago, so to us, that’s not much of a value. On the contrary, MSFT is up over 110% from where it was 5 years ago. Just some food for thought…

In closing, I’ll leave you with a couple FastGraph shots that may help inform the readers. Frankly, we’re all looking for “value” and to protect our investing capital at almost any cost. Maybe IBM can turn the battleship around, maybe not. Happy Investing!



DGI Portfolio Update – 11-10-15

Greetings Investors! This DGI Portfolio Update – 11-10-15, highlights a handful of new purchases that have been made over the past month or so.

After selling-off a handful of lesser quality higher risk holdings earlier this year, the dry powder pile has been a bit taller than I’d normally have, but the writing was on the wall that better buying opportunities were going to come to those with patience.

So with the “investing for income” and diversification practices at the forefront of my mind, here is a listing of new positions that were initiated (click on each one for additional information):






With these additions, the total portfolio holdings swells to about 52 names. These (5) buys are scattered across (4) different S&P sectors. When planting seeds (building your portfolio), one should expect better yield on the crop by scattering the seeds around as opposed to just dumping them all in one pile.

With so much focus on what the Fed will do, I’d expect the markets to remain extremely dynamic, trading wildly on the news bulletin of the hour. Please do yourself a favor, just breathe deep and relax. Panic selling usually benefits nobody but the day traders and patience for us DGI’s is usually rewarded with better prices and higher yields.

Furthermore, remember that we’re in the midst of tax-loss selling season and with so many investors still holding energy names with big losses on the books – things in the market may take a while to stabilize.

In the world of real estate, it’s all about location, location, location. In our DGI world, it’s all about patience, patience, patience.

Final thought: I recently tweeted that 2015 dividend income should easily surpass 2014’s, and I should top the $20K goal, easily. Passive income… You gotta’ love it!

Happy Investing!

New “Dividend King” Added

New “Dividend King” Added – The 17th Dividend King has been crowned!

Hear ye, Hear ye – Notice is given to all throughout the Dividend Growth Investor kingdoms – It shall be known that there’s been crowned, a new Dividend King.

Farmers & Merchants Bancorp – ticker symbol FMCB, has successfully achieved 50 consecutive years of dividend increases to shareholders. This newly crowned King offers a current yield of 2.52% and sports a 5 year DGR of 2.9%.

To review my latest article on 3 of the most famous Dividend Kings, please check it out here: CL, JNJ, & PG

Farmers & Merchants Bancorp operates as the bank holding company for Farmers & Merchants Bank of Central California that provides banking products and services primarily in the mid Central Valley of California. It accepts various deposit products, including checking, savings, money market, time certificates of deposit, and individual retirement accounts. The company also offers loan products comprising commercial products, such as term loans, lines of credit, working capital financing, and letters of credit; automobile financing, residential real estate loans, home improvement loans, and home equity lines of credit to individuals; and real estate construction, agribusiness, consumer, credit card, and real estate loans, as well as equipment leases. It also offers various services consisting of credit card programs for merchants, lockbox and other collection services, account reconciliation, investment sweep, on-line account access, and electronic funds transfers by way of domestic and international wire and automated clearinghouse. In addition, the company provides investment products to customers, including mutual funds and annuities; and online banking services for business and personal accounts. As of June 4, 2015, it operated 25 branches. The company was founded in 1916 and is headquartered in Lodi, California.

CL, JNJ, & PG – Dividend King Comparison

CL, JNJ, & PG – Dividend King Comparison

Hello Everyone!

I just authored a new article, comparing 3 of the most popular Dividend Kings. If you have a few minutes, please check it out over at Here is the URL:

Happy Investing!

Should You Be Shorting the Dow and S&P500?

ID-100239185Should You Be Shorting the DOW and S&P500?

With the nauseating market volatility we’ve all been witness to in recent months, you just might be asking yourself this very same question. You might also be asking yourself if this type of behavior is one that a Dividend Growth Investor (DGI) would or should engage in or does it partially or completely violate your own personal investing plans or investing philosophy/rules.

Personally, I don’t think there is a simple yes or no answer to the question – nor do I think that there is anything wrong with even entertaining the idea. We read, we study, we analyze, and we may write about our journeys on the road to Financial Independence (FI). However, one of the most important aspects of investing is to be diversified, right? I think we can all agree on that point.

So no matter what your investing preferences, style, rules, or methodologies – I’ve written an article that was published over at, which can be found here:

In the article, I discuss some “how’s and why’s”, and detail two ProShares funds that may be of interest to investors. I hope you’ll head over and checkout the article, and if nothing else, come away with some additional knowledge about a few investable options that you may have not known, existed.

My next article will certainly right up the alley of any hardcore DGI – as it deals with the might Dividends Kings, so please be on the lookout for to be published this week.

In closing, I’d like to recommend that you check my Portfolio page, as there have been a few changes recently – such as the addition of AAPL, AMGN, and TROW – along with the severing of ties with my investment in UNP. I know that UNP has been on the buying list of many DGI’s, however, I still feel that with the lessening of coal shipment volumes and the economic slowdown presenting itself and looming larger for our future – there are potentially safer places to place my bets (but the best of luck to you if you are holding UNP and plan to continue to do so).

Comments are always welcome, and Happy Investing!

Photo Credit: FreeDigitalPhotos.Net

DGI News, Views, and Moves – For The Week Ending 08/01/15

Introduction – DGI News, Views, and Moves – For The Week Ending 08/01/15:

Wow! Another busy week behind us and with the majority of the Greek tensions and volatility behind us, no reprieve was enjoyed – as the Chinese stock market continue to wildly thrash around, and now Puerto Rico has thrown its proverbial debt hat into the ring. We scooted past another Fed meeting recently and emerged with no changes to the Feds fund rate – so the kicking of the can down the road, continues.

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Revisited: Are You REALLY Sure BDC’s Are Still The Place To Be Investing Large Amounts Of Capital?

Revisited: Are You REALLY Sure BDC’s Are Still The Place To Be Investing Large Amounts Of Capital?  While not being one who particularly likes the saying, “I told you so!”, please allow me to be a bit kinder and simply say that earlier this year, I sounded the alarm on conditions in the markets, setting-up to bring a lot of long-term pain for those who chose to remain invested in certain BDC’s.

Roughly 5 months (2/2/15) after making that call, it was a good one, as demonstrated by this updated chart:

(click to enlarge)
The only BDC mentioned in my original posting that bucked the downtrend was MAIN, however, over the past 1 year it has delivered an astounding 0.09% gains, dividends not included.

Will the next 5-6 months bring about even more pain and losses? You’ll have to stay tuned and see. Happy Investing!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


Investing Blog and Portfolio Update

snapshotThis post will discuss my newly revised (and still in the process of being rolled-out) Investing Blog and provide a quick portfolio update. Before going any further, I do hope that everyone has had a safe and happy holiday weekend, thus far. So let’s get down to business, shall we?

If you scroll down the list of blog postings, there is a summary of last weeks activity. In addition to the views and moves made to protect some capital, build some dry powder, and increase the dividends received – it is also time for an end of quarter and end of the first 1/2 of the year – portfolio update. In future posts. the portfolio will be revealed and the choice of investments, explained. So without further ado, here are a few of my thoughts – as I look forward to hearing yours: Continue reading  

KMI – Buy The Common Stock Or The Warrants?


  • Shares of Kinder Morgan (KMI) are on sale and have dropped rapidly over the past month.
  • When buying Kinder Morgan, you have various ways to procure the shares.
  • Kinder Morgan warrants (KMI-WT) offer various possibilities you may have not considered or known about.

Let me start by saying that I have a lot of faith in the machine that is Kinder Morgan, most visibly represented by the Executive Chairman – Richard D. Kinder. KMI is a mid-stream of monstrous size and superb quality and I’ve been happily rewarded with my investments in both KMI and KMP – throughout the past few years. As expected, some present/past investors like KMI and Richard Kinder and some don’t. I posted a Seeking Alpha STOCKTALK comment yesterday that went something like this: Just because Richard Kinder and Ken Lay used to share office space, that cat didn’t pickup any fleas. Richard Kinder is not of the Ken Lay ilk, and consistently puts his proverbial money where his mouth is with regards to KMI, and again, he recently just scooped-up another large lot of KMI stock in this current downward slide of the stock price. Kinder has faith in the KMI machine, and his investments demonstrate it.

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S&P 500 – Nearly Flat For The Year

Hard to make money when facing this statistic: Earlier this week, the S&P 500’s performance over the past six months was up less than 3%. The YTD number is even worse with gains reporting in at less than 1%. So what can one do?

Take comfort in dividends that are reinvesting, dollar cost averaging, and buying on the dips!

One alternative is to do as Lipper continues to highlight, and that’s pull money out of the markets – but with that move, you’re losing money the second that you make that move because of inflation chipping away at your idle money hoard and you’re not able to enjoy the aforementioned comforts. Still, there is nothing wrong with taking some profits and building up some cash (often referred to as dry powder) to make some keen purchases on a dip or major correction.

It’s a choice of picking your poison as much of the “easy money” or “low hanging fruit” has been picked and we’re seeing that in many different sectors. So where can you run and hide to ride out the storm? Try the Dividend Aristocrats (JNJ, XOM, PG, KO, T) that will pay you to wait and have demonstrated, some of them anyway, that if they can survive conditions such as (2) World War’s, the Great Depression, the 1987 stock market crash, the 2000 dotcom bust, the 2008 financial/market meltdown, and still keep pumping out cash. Count me in on that last one!  Happy Investing!