Earnings Season and more …

Earnings season is in full force with its peak next week.  I’m always a little amused by the commentary as the bulk is based against analyst estimates.  My preference is to view the results against prior actuals. Estimates can be fudged or modified more easily than actuals.  One reason Factset was a recent addition to my portfolio was for their analytics in this regard. Their recent report noted that the Y/Y revenue growth is about 2.8% which if held would, “mark the lowest revenue growth rate for the index since Q3 2016 (2.7%)”.  Which would indicate many companies are relying on cost cutting – and perhaps efficiencies – to boost their profits – which without corresponding capex may not be sustainable. This being one of many indicators I keep my eye on. I do agree with Stalflare’s view, “I am not sure about (a) recession to be honest … but I am pretty sure that the downturn has already started.”

The Blog Directory is still undergoing its review for dead or inactive blogs.  As I will be rotating some of my prime blogs – ones I consider my ‘regular reads’, I figured a grocery list of needs, wants and desires was in order, so following are my criteria.

  • Regular (at least monthly) posts
  • Content in addition to status reports
  • Minimal/Irregular guest posts (I want to read the author’s views, not an interlopers’)
  • Minimal advertising (I know the rage is about ‘monetizing blogs’ but the sheer volume of some detracts and is annoying).
  • Thought provoking (I don’t have to agree with the message, only that it spurs analysis)
  • Has posts that invite comments and interaction along with thoughtful discourse

Just some of the things I look for when elevating to (or demoting from) the dozen highlighted on my Blogroll (not to be confused with the couple hundred in the directory).  Once the review is complete, I’ll do a post on my decisions. Blog posts that engaged me this week include:

My Journey to MillionsReviewing my Dividend Investment Account for Sell Opportunities

Pollies DividendWhat is my Yield on Cost (YOC)? – 2019

I’m still contemplating the first, while my comment on the second awaits moderation.

For the first time in awhile, I was a little flummoxed on how to report a payment.  My broker obviously was as well as there was a two day delay on the credit to the account.  Spirit MTA REIT (SMTA) is undergoing a voluntary liquidation in two (perhaps more) phases. The regular quarterly dividend payment wound up being an $8.00 per share initial liquidation return.  My broker ultimately classified it as an ‘Account Credit’. Now I don’t have that level of sophistication in the tools I use, so this payment went into the dividend bucket. The shares will be cancelled, delisted and transferred to a liquidating trust.  I will classify the further payment(s) as sale proceeds. My dividend calendar will retain SMTA solely as a memory jogger. I am now slightly positive on this investment (gamble?) with the profits coming with the subsequent payments.

With my granddaughter’s portfolio replication in full swing (her final stock (PG) was sold post ex-div last week), I’ve recreated about two thirds within one of my brokers.  Although feeling a little like a market timer in this exercise (which I find a little stressful), it will illustrate one of the issues I have with other DGI reports – namely isolating pure portfolio performance versus additional capital.  For example, Stockles says, “Naturally, before the compounding effect has really done its thing, most of the increase is due to increased portfolio value (i.o. additions to portfolio in terms of investments).”  In my view (which could be too literal) his claim of a year to year return of 19.53% could be distorted by cash additions.  In my case, I’m purchasing thousands of dollars of new stock holdings from cash that was previously reported on my monthly reports.  So, should accumulated, non-reinvested dividends or previously reported cash received in M&A activity be treated differently than “new cash” is the quandary I’m dealing with.  Perhaps just footnote the daylights out of it …

So goes my thought processes for the week. Any ideas on the reporting?