December 2008 issue mailed on January 7 2009
1.Valuation is everything. "Safety and value are qualities conferred not by the nature of an asset but by the price at which it
was acquired" James Grant says. (I'm reading Grant's new book Mr Market Miscalculates.) Some ideas on valuation in
1998, when stocks were very expensive and now, when valuation are extremely low. When were investors buying?
Now, when valuations are very reasonable, people are putting their money in cash and bonds. 'Twas ever thus.
2. A series of ideas, from various sources, about what's going on. For instance, what happened in the fall of 2008 might
make investors cautious. This is understandable, but perhaps mistaken. Equities have reverted beyond the mean. Inflation
or deflation coming and a paragraph on dividends holding . . .
3.Our list with BCE in it for the last time. Revised dividend growth data to end of 2008: one year and five year. Four
increases so far in 2009. Interestingly, the top dozen stocks in the list are all financials. My comments on the list and a few
other matters.
4. Four yield charts including the chart of the yield of the list. Some thoughts on the question: Do we buy now?
October 2008 - mailed on October 22 from Kingston
1.fifteen positive ideas on various topics
2. Comparison table: our list prices down 17.7% in the last year versus various indexes eg: DJIA minus - 27
Professionals did not do better in the last year. Comment on diversification and the state of the market generally
The market may be down (from what?), but my own RRSP value is up (from what?)...some thoughts.
3. Our list of dividend growth stocks with quite different observations. For instance, the average of the G%D column is a
positive 1, six stocks have single digit P/Es. Two more 2008 dividend increases. Average now 9.9%
4. Projected dividend growth - first renewal notice - four yield charts: a bank, a food retailer, a life company and the yield
of the list chart
August 2008 - mailed on August 13 from Kingston
1. 1968 Income $4,815 *range-bound market* 1983 Income $31,398 was my headline. An example of how a Canadian
dividend growth investor who retired in 1967 did in the last range-bound market. I included data on the TSE 300 over the
period 1968 to 1982 for comparison. The market, in essence, went no where...the dividend investor did well.
2 'When to Buy' is my title for page two. Some ideas from different sources. The price you pay when you buy the stock
determines your future return.
Four yield charts: a bank, a low yield food retailer, a life company and a utility near the bottom of the list.
3. The list with 2008 dividend growth and five year average dividend growth. It is in order of yield difference this time.
Three in the top five are not banks. Average of list 3.47%. Under the list: ten recent dividend increases, some observations
on the list and recent quotations about the market from four important investors.
4. Some ideas on replacing BCE when the time comes...BCE is finally back over $40.
June 2008 - mailed on June 11th from Toronto
Page One : Dividends shine (like 90% of the return, folks) in range-bound markets, and there is P/E expansion too with
value-priced common stocks according to two sets of data from a book by V. Katsenelson on Active Value Investing (get an
idea of what the book is like at www.activevalueinvesting.com
Also on page one, half a page on Banks stocks and a couple of sentences from George Soros "...be concerned with wealth
preservation"
2. FLIGHTS my acronym for: fees, liquidity, income, growth, health, taxation, security: a brief comment about doing a
FLIGHTS test before you invest.
10 portfolio recommendations; a paragraph on bonds; and
comments on the four charts: average 'yield of the list', average Graham data values over the last three years, yields of three
life companies and a financial holding company's yield
3. The list in order of average yield difference with the usual columns of data on each stock, dividend increases since last
issue, and fifteen comments on the list
4. Which common stocks of ours, and a few others, have the best price stability
April 2008 - to be mailed Thursday April 17
Page One: three topics 1. A long transition period upon us - some thoughts. Be glad we don't own mutual funds or that we
are into indexing: in April of 1999 the S&P 500 was at 1362. Now it's at 1332: a range bound market. More on this next issue.
• dividend growth data on 12 stocks from my April 1988 report...twenty years ago - how dividends held up during this
period - there was some dividend growth and two reductions. These sixteen stocks were in my list twenty years ago in April
of 1988. They are no longer in the list. They are in order of 10 year dividend growth from 1977 to 1988: Pacific Northern
Gas, Alberta Natural Gas, Maritime Electric (PEI - now in Fortis), Noverco (Gaz), Intercity Gas, Newtel (NFLD), inflation
at 7.4% per annum, MT&T (now BA.UN), Island Tel, Quebec Tel, B.C. Tel (Telus perhaps now), Inland Nat. Gas, Nova,
Bruncor, Consumers Gas, Union Ent. (Gas), TransMountain.
• Value Line comments on the Canadian banks and their expected dividend growth figures and projections on dividend
growth from Scotia McLeod.too.
2. Declining p/e ratios and how they affect returns + comments on commodities and gold. The answer to the test question
on this page is 6...you subtract the contracting P/E ratio. I used to teach this stuff, remember
3. Revised Graham data for all our stocks. Example: With the revision, Power's G%D falls from -29 to -20...it, along with
many other of our commons, is now safer. With the revisions and falling prices, the average G%D of our list is down to -9.
I show eight dividend increases this issue, one from our list and seven others, one at 100%.
Page 4 - Investment havens in a time of panic + a stock which has held up well in this turmoil
and two long term yield charts: a bank and an insurance company. I sorry. I forgot to increase the size of the text font in the
charts. The BMO chart is from 1985, The GWO chart from 1992.
February 2008 - was mailed Thursday February 21
1. Comments by Buffett*, Soros, Montier, Mauldin, Grantham, Jarislowsky and Gross about what's going on...
2. POINTS: Suppose in 2002, you sorted our stocks seven different ways (yield, yield difference, dividend growth rate,
G%D etc.) and assigned three points for the stocks in the top quartile, two for the next quartile down, one for the next and
none for the bottom quartile, then added up the points, would the stock with the highest number of points in 2002 turn out
to have been the best buy (highest capital appreciation) five years later? The most interesting results are on page two, along
with current list in order of quartile points too. The tops point getters are not all banks...a couple of low yielders are in there
too.
3. Our list with updated data for dividend growth over five years and dividend growth so far this year (eight changes) and
the revised G%D for the banks. I also have revisions for the five year price gain versus five year dividend growth
columns...big changes here, of course. Comments on changes to the list: IGM , for instance, has moved up because of
mutual funds redemptions. Can you imagine people selling when prices go down. Of course, unlike us, fund owners have
nothing to hold up the value of their stocks, so maybe they are, well, I better not say it in my outlound voice...
Yield + 5 year dividend growth is my extra column this time. Do you believe this is our total return? The average of the
column is 18%. If you sort on this column, the top two are not banks, notice, and the bottom stocks are quite similar to the
bottom ones on our usual sort on difference in yield.
4. I'm still working on page four: thoughts on nibbling, the yield charts, which stock have held up and which have bent are
listed. There are four yield charts with comments. One yield chart is from a stock at the bottom of our list: one can easily
see why it, and the others there, are not good buys. A 'yield of our list' chart will be there too along with a bank yield chart
and that of my recent purchase.
* I've been nibbling too... the ROB headline that he was sitting on his wallet was wrong.
December 2007 to be mailed right after Christmas
1. Ideas still in the formation stage - two yield charts, one is the yield of our list...most interesting at 3.15% now refer to my
June 04 report (page 556) and subtract .64 from those yields for a rough approximation.
My headline has changed three times: Pop Goes the Credit Bubble, to The Great Unwinding has Begun, to Be Disciplined.
Be very Cautious. Savour Cash ...but you get the drift. There's a few lines about the Dow Theory and my favourite current
sentence: "Certainty in response to questions does not exist." Capital Ideas Evolving p.64
2. Some thoughts about buying 'safe' stocks from near the bottom of the list - five stocks which have re-bounded from lows
to new 2007 highs and those that are close. Our list of stocks has proved resilent again.
3. The list and some current comments: the banks; average dividend growth data...
4. Richard Russell's interesting answer to a question about holding dividend paying stocks admist the turmoil with some
comments by 'himself'. I couldn't resist some comments...Mr. Russell is not quite right. Even though he's been writing his
letter since 1958, I don't think Richar Russell understands dividend growth investing. Few investors do.
Final renewal reminder for 2008. I do not send renewal notices, remember.
October 12 2007
1. A half page each about two studies on dividend stocks.
A) Stocks which do not pay dividends flounder in storms based on David Stanley's ideas in October's MoneySaver and
B) Valuation at the time of purchase matters a lot. 11% was the real average return for stocks purchased when the yield was
in the high range versus 4% forward average annual real return for those stocks in the expensive quintile. MESSAGE:
Don't buy expensive [popular] stocks: use valuation measures like yield and P/E.
Detail on second study at http://investmentpostcards.wordpress.com/2007/06/05/us-equity-returns-what-to-expect
2.Some comments on BCE, Leon's and a few other stocks. Two yield charts...both banks well above their average
yield...the highest yield since 2000, actually. I have found, over the years, that yield valuation signals work.
3. The list with some comments and a new column for 'price to sales' ratio - this issue only
4. The recent price stability of our dividend stocks, with a table showing August low price and current price
To weather storms, the solution for me is not diviversification, it's concentration...in dividend stocks. "Our policy is to
concentrate holdings." Berkshire Hathaway 1978 Annual Report.
Are corporations tangible values?
August 10 2007
1. More Canadian data on how well Canadian dividend growth stocks do...better than the Yale endowment fund, it seems.
A few comments on Capital Ideas Evolving...Peter L. Bernstein's new book.
"A stock dividend is something tangible, it's not an earnings projection..." Richard Russell
two yield graphs of banks - neither has had a higher yield since 2000
2. P/E contraction since 2000 - it's effect on the price of a dividend growth stock...a short paper
3. The list and some comments on it - eight more dividend increase announcements.
#1 in the list this time was #2 last time; #5 last time is now #3 all banks. The other banks are much further down the list.
Positions four, five and six are life insurance companies.
The average dividend growth of stocks in our list in 2007 is 12.2%. How long will it take your capital to double at that rate?
4. A summary of a 42 page paper by my neighbour Dr. Peter Kirkham, titled: Are life insurance stocks good investments?
Some of my comments on life insurance stocks too...how I select the one we own;
two year average G%D data for 10 stocks near the top of our list; a comment on BCE and a market comment by Richard
Russell.
June 8 2007 issue
1. Average annual return of Canadian dividend growth stocks in the last decade: a)- 2.3%, b) 14.6%, c) 19.8%, d) 22.2%.
two yield charts of stocks near the top of the list - one a bank, one a life company - both have had recent dividend increases
and one has not had a higher yield since 2000
2. A FIRST for the Connolly Report - chart of Power's G%D from 2005...with some comments about our Graham figure.
Some data on two indicies: What would the DJIA be up to if dividends were included? Forget 13,000 plus, we're talking
hundreds of thousands. Why I don't index invest:-( Also on page 2..."The biggest mistake in investing is...
3. Our list of common stocks in order of difference from their own yield average - nine dividend increases this issue -
comment on BCEas well as a couple of stocks both at the top and the bottom of the list - two high yield banks briefly compared
4. Dividend increase announcements - some thoughts and calculations - one specific example - "Why don't I own this?"
was my proof reader's comment.
Original copies of this April report are still ( as of October 2007) available for a $10 bill
April 13 2007 issue
1. Our Risk Controls - After the Shanghai slide, some ideas on why we [dividend growth investors] do not have to worry
about market twitches or even gyrations. And also on page 1, a new chart of the average yield of our revised list going back
to 2003 with weekly plots and comments on zenith and nadir points. On Friday the 13th of April, the average of the
[revised] list was 2.76% - useless information unless you know the peak and trough points. On May 26, it was 2.69%
2. PG/DG - Price Gain vs Dividend Growth over the last five years. There's a new column in our table this issue: it's beside
the dividend growth data so we can compare price appreciation and dividend growth. This data provides further evidence
that as the dividend grows, so does the price. It's right some interesting data.. Rob Carrick liked it too [R.O.B. Saturday
April 7. Carrick's data was 10 years, mine five. They were quite similar.]
3 Our Table - stocks are moving up and down much more so than in our former in-order-of-yield list; Power, for instance.
A dividend increase announcement, realize, will often push a stock up 25 basis points. Two more tell-tale dividend
announcements are expected soon.
I was comparing G%D and P/E data: the stock with the lowest G%D is also the one with the lowest P/E.
If you have trouble understand all the data in the table, try this:
The first three numeric columns all deal with yield, the next three all price and the next three all growth.
4.Page four includes a few ideas on a dividend growth retirement distribution portfolio...will your money last as long as you
do? There are two yield charts also - one from #1 in the list, the other is the common stock which is #3.
February 9 2007
1. Low yields; abundance of liquidity; a financial-market wobble*? Yield charts from 1999 for two new stocks in list with
annual dividends added by hand along the bottom of each. One chart shows the dividend quadrupled from from 20¢ in
1999 and, of,course as we know, so did the capital quadruple. Dividend growth drives capital growth. Capital in this case
went from 100 shares bought for $3,800 in January 2000 to 300 shares (after two splits) valued at over $16,500 now. This
stock was added to the main list. As this stock, and others in our list were rising, people (I do not use the word investors as
they were most likely sold the mutual funds they hold) with mutual funds were afraid to open their statements: their funds
must have owned the wrong stocks...and 'they' say professionals outperform. By definition, 50 percent of professionals can't
outperform. Right?
2. Comment on forty other dividend growth stocks sorted: 1. into five year average annual dividend growth order, 2. into
Graham value order and 3. into yield order. Only one stock appeared near the top of all three lists. Three stocks from the
forty were added to the main list, two were close in dividend consistency and quality and might be added later.
3. Page three has the three sorted lists of forty dividend growth stocks plus four yield charts, again with dividend data hand
written in on the bottom. Two yield charts are of stocks that just about made it to the list, in case your choice is different
from mine. There's more comment on the sorted lists here and on the yield charts. A couple of yield charts show stocks well
above their average yield.
4. The revised main list (three common stocks added, three with poor dividend growth taken away) along with revised five
year and one year dividend growth data (12 dividend increases), updated earnings figures and payout ratios, and below the
list some comment on stocks in the list the list. Again, my list is in order of a stock's own difference from average yield.
Position in the list data is gone. Graham figures are updated to 2006 for the banks as their year-ends are in October.
*Treasury bills yield more than 10 year Canadas...be cautious!
Richard Russell February 12, 2007: "the inverted yield is saying that the bond market along with the PIMCO crowd
believes the economy is going to "soften" in coming months and as a consequence yields in general will be heading lower.
I wouldn't argue with that opinion or "forecast" at all. So let's just suppose that the economy does soften in the months
ahead. My first thought is that housing is going to get hit -- and hit probably harder than it has been hit so far. If this
happens, the Fed is going to "freak out," because a "hard landing" in housing is the one thing the Fed does not want to see.
What would be the Fed's reaction be to a softening economy and a further unraveling of the housing situation? The Fed's
reaction would be to bring rates down and keep the money spigots wide open."
December 29 2006
1. Comments by Martin Barnes (BCA), Carlyle Dunbar and Stephen Roach - two long term yield charts
BMO as an example of dividend growth...our yield now up to 18.8% on 1987 purchase price of $13.80
We are beating the market by just holding.
2. TransCanada now lowest in our list sorted by yield difference...and other comments about the list including:
if you had money to invest, and even though prices are frothy, what to do...how to work data in the list - two pertinent short
term yield charts
3. THE LIST - average yield now 3.04% - Ten dividend increase announcements...the largest up 33%
Since last issue and the income trust announcement of October 31, the average price of stock in the list has increased by
$3.97 (highest CM up $14.57) and the average percent increase was 9.3% (Fortis up the most percent wise 20%).
I'm glad I did not yield to the lure of income trusts and I am enjoying seeing the ones who did squirm!
"They say that more money has been lost chasing yield than in any other area of investing." Richard Russell Dec 26 2006
4. Single Best Investment by Lowell Miller - comment on the introduction to this fine revised book on dividend investing.
Behavioural Finance by James Montier another great book if you have an extra $150 and are good at Statistics.
Electrical utilities and BCE...half a page of comment.
Target prices set one year ahead at 22%: half-life of target prices10 weeks - ignore them
October 2006
1. A list of Canada's top dividend payers in order of the hundred of millions of dollars of annual dividends paid; to keep us
on track, another example of dividend growth: our Fortis now has a 12.3% yield; quotations and comment from a column
in the Sunday Times (not the American one) about behaviour control and investing
2.Telecoms - some thoughts about BCE's conversion to an income trust, BCE has moved way down the list; a few
sentences about Loblaw, Jarislowsky; two yield charts: both Power group companies
3. The list in order of difference from average yield, again - five companies all in the same sector are on the bottom
(expensive); four more dividend increases - two yield charts. The bank which was on the top of the bottom portion of the
list last time, is now way up in the top portion...its yield has not been higher in years.
4. "Determining if the price is reasonable" - some thoughts...using the common that was #5 in our list last time and which
would now be #1 if MBT were not in the list. Its yield graph, with some hand written detail is included. This stock's yield is
still very high and its four dividend increases over the last two year have amounted to 36%.
MY DECEMBER ISSUE WILL BE LATE AGAIN - we're off to France in early December with the six cousins and their
spouses and leaving our 'kids' at home for Christmas. December's issue will be mailed in early January 2007.
August 2006
1. "buy a wonderful company at a fair price" - Are current prices fair? Some ideas and two yield charts of companies with
still high yields after the recent run-up in prices. Five stocks still have yields higher than they were inJune.
2. On the page opposite the list, a few comments about stock in our list including the banks. Two bank yield charts.
3. The list sorted in order of difference from average yield again. Fortis is on the bottom, Manitoba Telecom on the top. I
would not buy either. Six commonsannounced dividend increases, three in our list, three not. A paragraph and a yield chart
of a possibily for a stock to replace Aliant in the list...a Canadian retail chain which has paid a dividend since 1960 and has
had 41% five year dividend growth...but not before that, and, with another but, it's - 45%G%D. Some Graham values for
other stocks too.
4. Comment on a 19 page paper extolling the view that bank common shares could replace bonds in a protfolio. Bank of
Nova Scotia's average annual return since 1990, for instance, has been 31%.
NO COPIES LEFT
June 16 2006
1. A page of comment (with a yield chart) on one common stock which is currently above its yield average, has a decent
Graham valuation and recently increased its dividend by 17%. Yield charts on five more stocks which currently have yields
above their average yield are contained in this report. The signal is strong on these six stocks. What we don't know, of
course, is whether the signal will be stronger in the weeks and months ahead.
2. Explanation of the list on the opposite page, which, for the first time in 25 years, is in a different order. Included are a
few comments on the revised Graham numbers. Some of our stocks are more reasonably valued by Graham's square root
formula now.
3. The list in order of difference from average yield - 14 stocks have yields above their average yield. The last column in
the table showing the percent decline of each issue from its recent high price...all are down. Six of our commons have had
recent dividend increases. They vary from 2.5% to 26.5% - four are banks
4. "rejoice when markets decline" - current comment (the bear is returning...it's more than a correction) - some thoughts on
BCE's plan of arrangement for Aliant - proof that dividend growth stocks do better: 17% average annual return for
dividend-growing stocks vs 1.3% for non-dividend payers over the last ten years.
Libraries in Cobourg and North York s' main branch on Yonge Street carry the Connolly Report and, by law, I am required to send two copies to the
National Archives in Ottawa.
April 2006
1. An up-date (from Feb 2001) of my own little RRSP...how it has done since 1996...tripled in value during the period
when folks who owned mutual fund were afraid to open their statements. By investing on my own, I reckon I save $2,650 a
year in fees to the fund industry. I love it!
2. A most interesting list of our stocks and ten HDGs in order the sum of: their dividend growth over the last five years and
their yield now...with comment.
3. Two tables: our stocks and a couple others in order of their Graham value: unfortunately, all are negative but one...stocks
are expensive still. The other table is a list of our stocks, and the same few others few others, in order of the difference from
current yield to their average yield. Twelve stocks are currently above their average yield. I added a comment on each one
of them.
4. Our list in order of yield, as usual, with seven bolded. The small print under the table is slightly revised: my objectives
are changing.
February 17 2006
Page 1 will have some more information about the revised dividend tax credit; a few thoughts on the Tim Horton IPO +
2006 additions to Mergent's Canadian dividend achievers.
Page2 - some thoughts on holding dividend-paying stocks for a long, long time + yield chart of the 30 year Canada bond
with T-bills and yield of our list (it's low). Five stocks have yields higher than their own average yield ... the chart of one of
these in included (three were in last issue...the other is BCE.
page 3 - looking for stocks in an expensive market: a couple from my HDG list and more comment on Loblaw + an adroit
statement from Jeremy Grantham and from James Grant. A list of medium yield stocks with some thoughts about how the
bottom stock in the list could be the best buy + two charts: one an example of a "medium" yield common and one a
position in the list chart.
page 4 - the list: Dofasco is gone...updated data on dividend growth for the five year up to December 2005 ; all the Graham
percent difference numbers are negative now, but there are a few high ones + 13 recent dividend increases which "insulate
you against a cooling market" and a list of our stocks which are below their average yield...not to buy
December 30 2005
1. Value Investing - a brief book report ; then three reasons why our strategy is safe; How the enhanced Canadian dividend
tax credit could affect taxpayers in the $36,000 to $71,000 tax bracket; MBT's dividend?; yield chart summary: five stocks
have 'kind of' high yields and six are in the medium category...the rest are low and hence expensive.
2. ATCO - an example of a stock with a historically low yield; nervous about 2006 - an idea; The Investment Zoo pages 45,
46 and 47; Dofasco, and also on page 2...
The only six Canadian stocks S&P rates as A+ are...drum roll. We follow five of them and only one is a bank. I'll do a yield
chart on the sixth for February; in the mean time - two yield charts from S&P's top six Canadian stocks list.
3. What about a portfolio with 100% common stocks - Stephen Jarislowsky's comments from an interview with him;
Asset Allocation in retirement: our way is not the way 'life-cycle' mutual funds recommend. Two more charts: one a yield
chart of a stock near the top of our list that has a high yield...I parked money in it last month. The other chart is a 'position
in the list chart' of a bank which has moved up the list smartly...but it's yield is not really all that high
4 The list - quite a few changes in position this time- final reminder about renewals - five more dividend increases, one of
them up 37%.
October 14 2005 - no copies to non-subscribers - page two is premium content
1. Stocks are expensive, a quotation from Unexpected Returns; telecoms after VoIP; list of six stocks with high current
yields; comments by Bill Gross, Richard Russell and David Dreman; there are a couple of stocks with little conflicting data
2. An illustration of the relationship between rising dividends and higher prices - HDGs - premium content
3. Four yield graphs - three with yields higher than average - Why I'm considering certain HDGs now.
4. The list with two new additions, more dividend increases and first notice about renewals for 2006
August 12 2005 -
Sorry. Copies of August issue are not available to non-subscribers. (Libraries in Cobourg and North York ' main branch on Yonge Street'
carry the Connolly Report.)
On the front page of August: 18 HDGs are listed in 3 orders with lots of data and some comment - one has a positive G%D.
Page 2 has a tall, thin table: the combined list of page one HDGs and the page four regular dividend stocks, in order of their
DG+YLD figure, with comment.
Page 3 is a review of The Investment Zoo, different than the one linked on this site.
Page 4's table has three new stocks in the list. Two overvalued common stocks, and Terasen, have been replaced.
June 17 2005
Page one contains a four column table with our higher yield stocks listed in the order of : yield, Graham percent difference,
price to book and price earnings. It's interesting to see where the same stock is in each list. There are five stocks (including
two banks) at the bottom of at least three lists...certainly overvalued.
2. Berkshire Hathaway buying an electrical utility, Tweedy Browne with 21% cash in its $12 billion portfolios, bond yields
down (chart of 10 year Canada...yield below 4%) and a chart of highest yielding bank's position in our list.
Stephen Jarislowsky's book: The Investment Zoo - a few snippits - buy it for your children
3. TransAlta (high yield, no dividend growth) versus Sun Life Financial (lower yield but high dividend growth) a full page
discussion with interesting data.
4. Our prices are up even more - only one stock with a positive Graham number - lots more dividend increases
April 15 2005
Page 1 begins with a one sentence quotation from James Grant about holding cash and a few sentences from Warren's
Buffet's most recent Letter to Shareholders of Berkshire Hathaway. There is a paragraph with ideas from The Future for
Investors by Jeremy Siegel on dividend investing and a paragraph about how Siegel's work applies to what we do. Certain
stocks are preferred over others. Interestingly, ten years ago, in my April 1995 issue I reviewed Siegel's first book: Stocks
for the Long Run.
2.There are six short term, weekly plot, yield graphs with comment. Most yields are low; but of the stocks I follow, three
have yields which are 'kind of' high. One in particular stands out as in high range.
3. Page three offers some calculations as 'proof' that return = yield plus dividend growth and some thoughts on the low
yield of TSX and what might happen next. There is a summary of the top five common stocks in my HDG lower yield list
too in order of their Graham number.
4. The table of data now has two columns with updated Graham figures using 2004 earnings and dropping 2001 numbers.
There are substantial changes: three stocks have positive numbers, and four, all in the same industry, are close behind with
only single digit negatives. The most undervalued stock in the list, and it's moving up the list fast, according to both
Graham data and P/E is . . .
February 18 2005
1. My front page has four yield graphs. The two at the top of the page represent stocks with very low yields...do not buy,
maybe sell. Two charts, representing the common stocks with relatively higher yields, are at the bottom. I divided all the
stocks in the list into these two groups, but most are in-between in mid-February 2005, neither buys, or sells. Interesting
one of the banks has a relatively higher yield: the other banks are somewhat higher in yield than usual.
2. Page 2 has two life insurance company yield graphs going back to when they went public in either February of 2000 in
MFC's case or in November in Sun's case. Which of the three (GWO too is mentioned also) is closest to its 'buy' yield.
3. Portfolio Review: a case study of six common stocks purchases a few years ago and how, with dividend growth, their
'yield on cost' has increased. Two now have double digit yields. Our dividend strategy can produce increasing annual
returns.
4 Our list of common stocks with updated 2005 dividend increase data...quite a few this time.
My February issue will be the first issue in VOLUME XXV - starting into twenty five years...WOW!
February's issue will include a lot of yield charts (four on the front page alone)...most yields are low...not a good time to
buy. However, there are a few financial stocks and a couple of others with yields which are not low: they are not high
either. As usual, you can decide what to do when you see the charts.
Inside I have a page on portfolio review ideas with yield on cost (YOC) and other data on six stocks I purchased a few years
ago. It's rather interesting. Some double digit yields in just a few years (not counting appreciation, though I show the tens of
thousands of dollar in gains in the table too). I might also include, if I have room, yield charts on two life insurance
companies. The big table on page four will include updated 2005 dividend data and five year dividend growth data.
Nevertheless, the overriding feature of any investment decision right now is still the same: "Any way you look at it, stocks are expensive." Richard Russell, January 2005
December 28, 2004
thoughts in early December 2004
1. our prices are up handsomely since early summer lows, thus little value is available - Americans are eating their seed
corn - also half a page on: TransAlta's dividend - Manitoba Telecom' yield - BCE's dividend
2. higher dividend growth stocks - a double list of these other 25 common stocks with higher dividend growth; one list in
order of Graham's percent difference, the other in order of yield - dividend growth data for each of these 25 in 2004
Russell Metals - comment including stock screening ideas and bar chart of RUS's dividend since 1985
3. Enbridge's yield chart for 2003 and 2004 with comments about ENB's 'buy' yield - Time to sell? two stocks
4. the list with 2004 and five year dividend data, updated Graham values for each - seven recent dividend increases - some
stocks have moved way down the list, others have moved noticeably up into more value slots
October 15, 2004 "the market is not cheap"
1. Banks - Chart of BMO's dividend since 1987 (up 25% this year alone) and position charts for NA and BMO since
January 2000. Comments on 'yield on cost" and: Are banks stocks a good buy now?
2. Barron's interview with Martin Barnes - "the market isn't cheap" and other quotations
The New, Emerging Oil Paradigm - summary of a recent paper by Peter Kirkham
3. Five rear returns - our stocks up 72% since October 1999 - other returns in this bear market are negative - eg: S&P 500 is
down 4.5% over last five years
Bull's Eye Investing - a new book - some quotations about secular bear markets
4. the list in order of yield with up dated dividend growth data and Graham's value prices
Leon's - I discovered part of the reason, perhaps, why Leon's can increase its dividends at double digit rates. We were
looking at LCD televisions (fall of 2005) at a Leon's store along the 401. The price tag on the model we fancied was
$1,269. I might have purchased the 20" LCD at that price, but Louise had done her homework. The price on the Leon's web
site for the same LCD was $969. Louise showed the salesperson the web site printout. He retreated. A few minutes later, he
returned with an interesting explanation for the $300 price differential. We did not buy the explanation, but we bought the
LCD in the store at the internet price. I was impressed by the Leon's operation...polished.
As an aside, we checked LCD television prices at a few other places including Future Shop. Future Shop still has a sign
saying they are Canadian. They are, as I remember from the business press, now owned by the American multi-national
Best Buy: not Canadian. I much prefer to buy Canadian, to keep the profits in Canada and to have the company listed on the
TSE. Needless to say, we did not go for a Starbucks afterwards. We do not shop at Wal-Mart either. The store closing in
Jonquiere, Quebec, shows they do not want to pay their employees decent wages and benefits. I suppose they reckon it's
better to keep the Waltons on the list of the world's richest people. (S. Robson Walton at $18.3 billion is the world's ten
richest person, Jim Walton at $18.2 billion, John Walton at $18.2 also and Alice and Helen Walton in position 13 at $18
billion each. Ken Thompson and family was estimated (past tense now) to be worth $17.9 billion by Forbes as so is placed
in position #15.)