One year ago marked my first post to this blog. Along the way I’ve made new friends, shared ideas, and debated strategy (mostly on Seeking Alpha). And for this I thank you.
On occasion I run across posts that either beg for a rebuttal or leave me thinking. This week had three blogs; Dividend Diplomats, Div4Son and Roadmap2Retire filling the bill.First and probably most controversial was Div4Son’s post: Where to find DGI stocks? Follow the Herd… The premise being if all else fails research what others are doing. My rebuttal follows:
The resources cited provide little to support this thesis. In fact, AFFJ’s article states, “From the buys collected, DGI investors picked up a stock that was not purchased by others 75.0% of the time. Last month, the difference was 68.6%.” I doubt the traditional definition of “herd mentality” has such a low threshold.
There are times where a leading blogger’s moves are ‘copied’ – in fact someone created a portfolio on Motif to track Dividend Mantra‘s moves. Other times using compilations of data can – as you point out – be insightful (I would also include DivGro‘s). It boils down to performing sufficient due diligence (also addressed by you). If you choose to follow someone down a rabbit hole, understand the risks (i.e., BBL, VER, now KMI).
Next up on the ‘What were they thinking’ list is Lanny’s purchase over at the Dividend Diplomats.
Lanny wrote, “So it is time for the Final Push in December to see if we can buy the best opportunity stock to hit our yearly goals …”
My initial reaction was Huh? I have no issue with the purchase … good company. The problem I had was to meet a dividend goal you better get the purchase completed before December (at least in my view of the world). Since NWFL doesn’t pay until February I was scratching my head until I went through his goals and found they use a forward rolling view … essentially an accrual system of sorts. Personally I don’t like counting the chickens before they’re hatched as the road is littered with carcasses (SDRL, VER, KMI, BBL) but at least the question is answered.
Finally we come to this weeks’ champion. Roadmap2Retire’s post, The Changing Landscape of the Energy Sector. Similar to – but much more articulate than – my post on cord cutting. The similarities? Neither can provide a definitive answer, but R2R’s is much more thought provoking.