Thanks for writing about this.
If you don't mind, I would appreciate reading a little about how you select your stocks. I gather dividends are your most crucial metric, but I gather you look deeper than just the current APR of he dividend?
Outside of stocks, I am more of a real asset, real returns kind of guy. However, the stock market AND US TAX LAW, in general, hasn't rewarded companies for paying dividends in the last 30–40 years (http://www.forbes.com/sites/greatspeculations/2012/12/07/tax-code-rewards-debt-penalizes-dividends/).
Actually, it is worse than that: Most companies which pay dividends are punished mercilessly. Dividends are not considered as COST of attracting investment capital (as interest on a bond or bank borrowing is treated) but as a SQUANDERING...a stupidity. It is a NON_EXPENSABLE *LOSS*. Just think about that.... The Congress wanted to encourage speculation (gambling). It didn't want stocks to be a legitimate, predictable asset anymore. (I expect it was to help aid and provide cover for the wtfhappenedin1971.com heist).
http://mavenroundtable.io/theintellectualist/news/stock-buybacks-were-once-illegal-why-are-they-legal-now
What is not recognized GENERALLY, in the stock-buying public (and sometimes not by me, I confess), is: partial ownership (so you have no control) in an "asset" which does not pay you in predicable cashflows of dividends, interest, or salary to is technically worth ZERO. (Except for gambling thrills in a rigged market)
I mean, if I said, "if you give me money (which I can stick in my pocket) I give you NOTHING in return...forever!!!!" ;-> All for me; nothing for thee!
How many people would be stupid enough to buy my "asset"? Would the government even allow it? And, yet, US tax law and Central Cranking have foisted this stupidity off on the American public as "investing in stocks". And it is seldom to never questioned by normal citizens.
In finance, and still in residential real estate and hard business investing, the VALUE of an asset is the discounted value of future cash flows. Period. http://www.investopedia.com/terms/p/presentvalue.asp. So, anything which is does not cash flow TO ANYONE BUT INSIDERS is worth zero.
I'm sure you know that, Zim, and I admire your discipline in buying dividend paying stocks even during a long period (40+ years) when dividends have been belittled while speculation has been rewarded.
But, getting back on topic, how do you select for your companies?
"Experience keeps a dear school, but a fool will learn in no other." - Franklin
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