This week, I began the annual review of my blogroll and noticed something perplexing. Some Australian sites have gone dark. Frankie’s is offline and Australian Dividend Investor’s final post cryptically reads:, “As the old saying goes, all good things are eventually brought to end by the firms risk and compliance division.” Just scratching my head a little and wondering if the hammer was dropped by the authorities down under as I know they can be a little more restrictive there …
Meanwhile, I’ll look to shake up the Top Sites a little to at least replace the broken links.
As part of this review, I ran across a great analysis by Mr Free at 33 illustrating the differences between total return and appreciation through capital gains in one case. The one hole in the analysis (in my opinion) was the potential role of tax strategies – which was promptly brushed aside by Jason. Curious as to why, I found the answer in another comment thread where he states, “Writing about bureaucracy and stuff like that (including taxes) isn’t very interesting for me, so I just don’t.”. So yes the current tax law is structured advantageously to his benefit – however if this changes – or he grows his portfolio enough to exceed current thresholds – tax strategies could play a role in improving overall performance.
A second anomaly in his work becomes evident when his statement, “The stock that can produce the most possible dividend income on the smallest possible investment is, for me, the best stock of all.” appears in his post. In his case this is certainly a plausible theory. Yet in a prior post, he defines his top holdings in terms of portfolio value rather than dividend income. It could be claimed this is a minor point, however allow me to illustrate some differences based on the top holdings in my portfolio.
Obviously I have a mix of the AT&T and Visa scenarios as well. The point being, 70% of my top ten are the same on each side of the ledger, it’s the 30% that is interesting – particularly Disney. Legacy Texas could be an aberration due to a pending merger (scheduled to complete November 1st (pending shareholder approval)).
And yes, I do have a slight imbalance that I’ve been trying to correct for awhile now.
Finally, the data in the Dividend CAGR column was extracted from a cool tool that Dividend Dozer created. It’s one of those things that kind of grows on you particularly when you can identify additional ways to use it. I would encourage you to look at his Dashboard!
I guess that’s all musings I have for this week, so onward and upward as we see how the market digests the landmark – kinda sorta – trade deal in three phases …