Let's track how Altria has responded this decade when the stock drops 20% and the dividend yield is at least 7%.Altria started this decade on January 1,2000 at 23.56 pre all the spinoffs that took plce with Kraft and Phillip Morris International
The first 20% drop was in February of 2000 at 18.84 ( 23.56 X.8).9 months later at the end of November the stock was 38.19 .That was a gain of 19.35 per share plus a 1.10 per share of dividends for a total gain of 108.55% .Very impressive for only 9 months.
In January 2003 Altria reached a high of 42.09 .In March of 2003 ( 42.09X.8) gave us a price of 33.67 .Altria had a 7.8% dividend yield at that price to fit our parameter. At the end of December of 2003 9 months later the price was 54.42 with a dividend earned of 1.96 . The 22.71 total gain individend and appreciation per share would give you a 67.45% gain
The rest of this decade the dividend yield was NOWHERE near 7%.After the high in May of 2008 of 23.02 a 20% drop whichgae you at least a 7% dividend is a stock price of 18.29 whch hit in October of 2008. 9 months laterwould be July of 2009. Will Altria raise this time like it did in 2000 and 2003? After the December 19 ,2008 close of 15.28, The dividend yield is not only over 7% but is 8.37%
Will history"repeat itself" and the stock rises 108.55% in 9 months like it did in 2000 and 67.45% like it did in 2003? No one knows for sure. But between the end of the year tax selling in 2008 which should subside in the past week and the federal and state governments dependency on tobacco taxes it is safe to assume Altria should be one of the first stocks to"recover".Time as it always does will tell.peace
Saturday, December 20, 2008
Thursday, December 18, 2008
Investment Planning
One of my first clients in January 2003 between he and his wife had 278,000 in their retirement accounts in "assorted" investments and funds.I am going to explain how we combined diversification ,safety, growth ,income and tax efficiency.They planned on retiring at age 65 by the end of 2006 and would need money for retirement for 2007 and on.
The ideal "portfolio" COMBINES Growth ,Dividend Income, Diversification,Safety and Tax efficiency
In the next article I will address all those individually
We took that ALL that money in 2003 and Bought Altria which consisted of Kraft foods Miller Beer and more than 76 different brands that did over 100 million in sales and more than a dozen that have a billion a year in worldwide sales.When looking over the top performing stocks from 1957-2003 with dividends reinvested we notice something interesting
10,000$ with reinvested dividends returned the following
TOP PERFORMING STOCKS 1957-2003
This assumes All dividends are reinvested
Rank
2003 Name
$10,000 grew to
Annual Return
1 Philip Morris $46,264,020 19.75%
2 Abbott Labs $12,813,350 16.51%
3 Bristol-Myers Squibb $12,094,450 16.36%
4 Tootsie Roll Industries $10,909,550 16.11%
5 Pfizer $10,548,230 16.03%
6 Coca-Cola $10,516,460 16.02%
7 Merck $10,034,100 15.90%
8 PepsiCo $8,660,680 15.54%
9 Colgate-Palmolive $7,611,630 15.22%
10 Crane $7,367,960 15.14%
11 H.J. Heinz $6,359,880 14.78%
12 Wrigley $6,038,770 14.65%
13 Fortune Brands $5,800,250 14.55%
14 Kroger $5,467,930 14.41%
15 Schering-Plough $5,370,500 14.36%
16 Procter & Gamble $5,137,520 14.26%
17 Hershey Foods $5,070,010 14.22%
18 Wyeth $4,611,860 13.99%
19 Royal Dutch Petroleum $3,988,370 13.64%
20 General Mills $3,884,250 13.58%
- S&P 500 $1,244,860 10.85%
Altria outperformed EVERY stock by at least 34 MILLION Dollars which I took to be significantly significant . Since 1925 Altria was also the best performer in the S&P in the 78 years prior. Ten thousand dollars with dividends reinvested turned into over 2.50 BILLION dollars which is around 17% compounded annually.In the same timeframe ,smoking in the US declined or stayed equal in all those 78 years.( sound familiar.lol)
The 278,000 dollars bought at a price of about 28.96 per share gave us 9596 shares of Altria.the 1.92 per share in dividends we collected in 3 quarters gave us (1.92X 9596) 18,424.32 which we had at the year end of 2003.In 2004 we collected 2 more divdends totaling 12,963.52 In September of 2004 invested the total dividends plus interest which was about $31900 into more shares of Altria around the price of 45.25 which gave us 705 more shares or 10301 total. The last 2 months of 2004 we had dividends of 1.41 per share which netted us 14524.41.
In 2005 we collected the dividendsof (3.06 X10301)of 31521 which added to the 14524.41 gave us about47,000 with interest. We bought 1086 shares of Anheuser Busch ,which controlled 50% of the beer market in the U.S along with the 2nd ranked Us beer Miller that we owned with our Altria purchase.
In 2005 our total dividends were (10301X 3.06) + (1086X1.03) and added in with our interest was about 33,400 at the end of 2005
In 2006 we didnt buy any stocks either and our total dividends and interest totaled about 72,000
In 2007 our formula found NO other stocks and our dividends and interest at the end of 2007 was 113,576- 33000 WIthdrawn by the clients who retired=80,576
In June of 2008 when the Bud deal was being discussed .They "cashed out too early" by my advice when the ImBev deal was announced and collected only 62 dollars per share.That 67332 dollars combined with the dividends and interst from the end of 2007 and 2008 Minus what was withdrawn as living expenses which totaled about 129,000, was invested into 7127 shares of Altria in October at 18.10 per share which is almost 25% More. than its current price 2 months later
Lets see what that 278,000 dollars turned into after about 58,000 has been withdrawn over the past 2 years:
Annual Dividend Income in 2009 Assuming all dividends stay the same even though the 2 largest companies increased their dividends more than 10%in 2008.
Phillip Morris 9596 shares X 2.16 per share= 20,727.36
Altria 16,723 shares X 1.28 per share= 21,405.44
Kraft 6670 sharesX 1.16 per share= 7737.2
Total Diviedend Income in 2009 if all stay the same 49,870 dollars per year
Total Portfolio Worth based on yesterday's close 828,869.69
Whats ironic is this has been done in a depressed market where over $100,000 was invested in something down almost 25% since it was bought. The overall market since the beginning of 2003 was at a higher level then it is now 5 years later.The total dividends should increase yearly and this portfolio is not only "safe" but tax efficient".The client decides how much they take out the retirement account NOT the government.Please feel freeto ask any question or make comments.peace
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The ideal "portfolio" COMBINES Growth ,Dividend Income, Diversification,Safety and Tax efficiency
In the next article I will address all those individually
We took that ALL that money in 2003 and Bought Altria which consisted of Kraft foods Miller Beer and more than 76 different brands that did over 100 million in sales and more than a dozen that have a billion a year in worldwide sales.When looking over the top performing stocks from 1957-2003 with dividends reinvested we notice something interesting
10,000$ with reinvested dividends returned the following
TOP PERFORMING STOCKS 1957-2003
This assumes All dividends are reinvested
Rank
2003 Name
$10,000 grew to
Annual Return
1 Philip Morris $46,264,020 19.75%
2 Abbott Labs $12,813,350 16.51%
3 Bristol-Myers Squibb $12,094,450 16.36%
4 Tootsie Roll Industries $10,909,550 16.11%
5 Pfizer $10,548,230 16.03%
6 Coca-Cola $10,516,460 16.02%
7 Merck $10,034,100 15.90%
8 PepsiCo $8,660,680 15.54%
9 Colgate-Palmolive $7,611,630 15.22%
10 Crane $7,367,960 15.14%
11 H.J. Heinz $6,359,880 14.78%
12 Wrigley $6,038,770 14.65%
13 Fortune Brands $5,800,250 14.55%
14 Kroger $5,467,930 14.41%
15 Schering-Plough $5,370,500 14.36%
16 Procter & Gamble $5,137,520 14.26%
17 Hershey Foods $5,070,010 14.22%
18 Wyeth $4,611,860 13.99%
19 Royal Dutch Petroleum $3,988,370 13.64%
20 General Mills $3,884,250 13.58%
- S&P 500 $1,244,860 10.85%
Altria outperformed EVERY stock by at least 34 MILLION Dollars which I took to be significantly significant . Since 1925 Altria was also the best performer in the S&P in the 78 years prior. Ten thousand dollars with dividends reinvested turned into over 2.50 BILLION dollars which is around 17% compounded annually.In the same timeframe ,smoking in the US declined or stayed equal in all those 78 years.( sound familiar.lol)
The 278,000 dollars bought at a price of about 28.96 per share gave us 9596 shares of Altria.the 1.92 per share in dividends we collected in 3 quarters gave us (1.92X 9596) 18,424.32 which we had at the year end of 2003.In 2004 we collected 2 more divdends totaling 12,963.52 In September of 2004 invested the total dividends plus interest which was about $31900 into more shares of Altria around the price of 45.25 which gave us 705 more shares or 10301 total. The last 2 months of 2004 we had dividends of 1.41 per share which netted us 14524.41.
In 2005 we collected the dividendsof (3.06 X10301)of 31521 which added to the 14524.41 gave us about47,000 with interest. We bought 1086 shares of Anheuser Busch ,which controlled 50% of the beer market in the U.S along with the 2nd ranked Us beer Miller that we owned with our Altria purchase.
In 2005 our total dividends were (10301X 3.06) + (1086X1.03) and added in with our interest was about 33,400 at the end of 2005
In 2006 we didnt buy any stocks either and our total dividends and interest totaled about 72,000
In 2007 our formula found NO other stocks and our dividends and interest at the end of 2007 was 113,576- 33000 WIthdrawn by the clients who retired=80,576
In June of 2008 when the Bud deal was being discussed .They "cashed out too early" by my advice when the ImBev deal was announced and collected only 62 dollars per share.That 67332 dollars combined with the dividends and interst from the end of 2007 and 2008 Minus what was withdrawn as living expenses which totaled about 129,000, was invested into 7127 shares of Altria in October at 18.10 per share which is almost 25% More. than its current price 2 months later
Lets see what that 278,000 dollars turned into after about 58,000 has been withdrawn over the past 2 years:
Annual Dividend Income in 2009 Assuming all dividends stay the same even though the 2 largest companies increased their dividends more than 10%in 2008.
Phillip Morris 9596 shares X 2.16 per share= 20,727.36
Altria 16,723 shares X 1.28 per share= 21,405.44
Kraft 6670 sharesX 1.16 per share= 7737.2
Total Diviedend Income in 2009 if all stay the same 49,870 dollars per year
Total Portfolio Worth based on yesterday's close 828,869.69
Whats ironic is this has been done in a depressed market where over $100,000 was invested in something down almost 25% since it was bought. The overall market since the beginning of 2003 was at a higher level then it is now 5 years later.The total dividends should increase yearly and this portfolio is not only "safe" but tax efficient".The client decides how much they take out the retirement account NOT the government.Please feel freeto ask any question or make comments.peace
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Wednesday, December 17, 2008
Dividend Investor and Buy and hold :your Goal
The Buy and hold who is building a dividend machine is actually PLEASED when prices go down
The reinvested dividends and the ability to borrow money cheaper because of the FED lowering interest rates has made stocks like MO and PM "unusually inexpensive" relative to future earnings and dividends
If you read my book Consume Consume and Consume More the 2 stocks my formula selected 40 months ago Anheueser and Berkshire have risen over 70% and 22% respectively in that time time span despite todays"depressed market"
Remeber this great quote " BUy and Hold is great now if you have the stomach for it
9 years Altria helped me become financially independent .Trust me its worth it.I know because it happened to me
In later article you will see actual case studies
A portfolio that consists of Reynolds,Altria ,Phillip Morris. Coca Cola and Proctor Gamble ,Johnson and Johnson and Pfizer at today's prices is crucial
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The reinvested dividends and the ability to borrow money cheaper because of the FED lowering interest rates has made stocks like MO and PM "unusually inexpensive" relative to future earnings and dividends
If you read my book Consume Consume and Consume More the 2 stocks my formula selected 40 months ago Anheueser and Berkshire have risen over 70% and 22% respectively in that time time span despite todays"depressed market"
Remeber this great quote " BUy and Hold is great now if you have the stomach for it
9 years Altria helped me become financially independent .Trust me its worth it.I know because it happened to me
In later article you will see actual case studies
A portfolio that consists of Reynolds,Altria ,Phillip Morris. Coca Cola and Proctor Gamble ,Johnson and Johnson and Pfizer at today's prices is crucial
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Monday, December 15, 2008
Dividend Machine
Why is it so important to develop your own dividend machine? This multiple part article should help you come to the realization that few investors do until it is too late: The importance of building your own dividend machine
A 25 year old whose portfolio is only thirty thousand dollars, can buy a stock like Altria today with a dividend of about 8.5% .You will find out in the next installment why Altria is ideal for starting your own personal dividend machine.The twenty seven hundred dollars of annual dividends should double about every 9 years at least. With no further investment this particular dividend machine should return over eighty six thousand dollars annually at age seventy. Sound impressive? By reinvesting dividends the first fifteen years this amount should be well over two hundred thousand dollars annually at age seventy.How many of your friends do you think will have done that? Not bad for a one time investment.See the importance of a dividend machine now?
What happens if you don't have the thirty thousand dollars to get started ?Borrowing the money from a loved one or relative is a great alternative.Many parents grandparents and loved ones loan money to a child for an automobile or school which may or may not have a future tangible value. Giving your loved one their "inheritence" early may create a permanent dividend machine that can be transferred for many generations to come
Wharton School of Business professor Jeremy Siegel said that about 97% of the gain of the Dow since 1900 has been from reinvested dividends . Only 3% wwas caused by capital gains. Yet Mmany"gamblers" ,disguised as value investors ,have lost hundreds of thousands of dollars, investing in financials like AIG ,Bear Stearns and others. Their mistake is concentrating ONLY on capital gains and not dividends. In the next installment a step by step blueprint will help you to explain how to build your own personal dividend machine
After each article there will be some business links that I would like feedback with
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A 25 year old whose portfolio is only thirty thousand dollars, can buy a stock like Altria today with a dividend of about 8.5% .You will find out in the next installment why Altria is ideal for starting your own personal dividend machine.The twenty seven hundred dollars of annual dividends should double about every 9 years at least. With no further investment this particular dividend machine should return over eighty six thousand dollars annually at age seventy. Sound impressive? By reinvesting dividends the first fifteen years this amount should be well over two hundred thousand dollars annually at age seventy.How many of your friends do you think will have done that? Not bad for a one time investment.See the importance of a dividend machine now?
What happens if you don't have the thirty thousand dollars to get started ?Borrowing the money from a loved one or relative is a great alternative.Many parents grandparents and loved ones loan money to a child for an automobile or school which may or may not have a future tangible value. Giving your loved one their "inheritence" early may create a permanent dividend machine that can be transferred for many generations to come
Wharton School of Business professor Jeremy Siegel said that about 97% of the gain of the Dow since 1900 has been from reinvested dividends . Only 3% wwas caused by capital gains. Yet Mmany"gamblers" ,disguised as value investors ,have lost hundreds of thousands of dollars, investing in financials like AIG ,Bear Stearns and others. Their mistake is concentrating ONLY on capital gains and not dividends. In the next installment a step by step blueprint will help you to explain how to build your own personal dividend machine
After each article there will be some business links that I would like feedback with
Click Here!
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Has anyone ever subscribed to any stock programs
As the author of Consume Consume and Consume More, a Book dedicated to helping the reader go from zero to millionaire status by following a simple plan I have met many investors worldwide
Please share your experiences in investing books or programs you have found beneficial
One of the goals of this BLOG is to WRITE reviews of my book and the thousands of programs out there in the massive market of"Investment information"
If you have any information on these programs Click Here!
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In the event you ever intend to purchase or have purchased any of these your feedback is wanted
Personally I do NOT particpate in the"buying information" market but many readers who have more faith and money that I do are more open minded and less cynical than I am.
Of course I think my book is all one needs.lol
Please share your experiences in investing books or programs you have found beneficial
One of the goals of this BLOG is to WRITE reviews of my book and the thousands of programs out there in the massive market of"Investment information"
If you have any information on these programs Click Here!
Click Here!
Click Here!
In the event you ever intend to purchase or have purchased any of these your feedback is wanted
Personally I do NOT particpate in the"buying information" market but many readers who have more faith and money that I do are more open minded and less cynical than I am.
Of course I think my book is all one needs.lol
WELCOME
I Billytickets am in the process of "launching" my first new business venture in over 9 years since my"retirement". This will cause a slight"strain" on my time and his blog is part of my "first step" . Many of our worldwide group of readers will"hopefully" profit FINANCIALLY from this new venture
Todays upgrade of Altria after 2 "fast Money" members Jeff Macke and Karen Finerman recommended it as the final trade is helping to establish a pattern
The stock rose on the open as many who bought it last week at 14.80-15 dollars quickly sold into the rally
With quadruple witching options expiration this week my guessis this stock will be "bought" around 15 and will be"run up" to the high 15s where the "traders" will again cash in.
I mean making 5% a few times in a week goes a long way in helping one's rate of return
The question is "if and when" that trading will stop
The minute you think you have the traders pattern "figured out" the stock "runs without you
Me personally Im just buying on the dips under 15.05 And IM going to hold on.
Todays ruling by the US supreme court that Altria can be sued in state courts in my opinion is just "symbolic".
Any judgment won in an individual state will JUST REDUCE the amount of the settlement that state will RECEIVE.
Do you really think a state appelate court will REDUCE their states share of the master settlement when reviewing the cases with EVERY state facing MASSIVE budget cuts?
Today's ruling just gives everyone a better entry price and has caused a short term dip
Long term this has no effect
MO is not a trading vehicle for me BUT is in my opinion the finest company in America
Many intelligent people have told me there is no growth ( while ignoring MASSIVE free cash flow which fuel BUYBACKS)
In the supposed "lost decade" of the 21st century My original purchase of Mo at 23 in January of 2000 which dropped aslow as 18 ( at which point I sold my car and bought more) was 40 6 months later
Today those shares equal 1 Mo 1 Pm and .7 Kraft shares and MAKE sure you add in all the DIVIDENDS that were paid over the past 9 years
Building a DIVIDEND MACHINE for retirement has never been more important since this years bear market
What if you were 64 and retired and needed to sell stocks for "income".You would have sold at the WORST time possible. Solution :Build your dividend mchine to "create an income" at retirement that is INDEPENDENT of a stocks price.This will 1) give you a certain income and 2) NEVER require you to HAVE TO sell your stocks at an inopportune time
Also the Goose that FUELS the DIVIDEND MACHINE will NEVER HAVE to be liquidated
Sound good?peace
Click Here!
Click Here!
Todays upgrade of Altria after 2 "fast Money" members Jeff Macke and Karen Finerman recommended it as the final trade is helping to establish a pattern
The stock rose on the open as many who bought it last week at 14.80-15 dollars quickly sold into the rally
With quadruple witching options expiration this week my guessis this stock will be "bought" around 15 and will be"run up" to the high 15s where the "traders" will again cash in.
I mean making 5% a few times in a week goes a long way in helping one's rate of return
The question is "if and when" that trading will stop
The minute you think you have the traders pattern "figured out" the stock "runs without you
Me personally Im just buying on the dips under 15.05 And IM going to hold on.
Todays ruling by the US supreme court that Altria can be sued in state courts in my opinion is just "symbolic".
Any judgment won in an individual state will JUST REDUCE the amount of the settlement that state will RECEIVE.
Do you really think a state appelate court will REDUCE their states share of the master settlement when reviewing the cases with EVERY state facing MASSIVE budget cuts?
Today's ruling just gives everyone a better entry price and has caused a short term dip
Long term this has no effect
MO is not a trading vehicle for me BUT is in my opinion the finest company in America
Many intelligent people have told me there is no growth ( while ignoring MASSIVE free cash flow which fuel BUYBACKS)
In the supposed "lost decade" of the 21st century My original purchase of Mo at 23 in January of 2000 which dropped aslow as 18 ( at which point I sold my car and bought more) was 40 6 months later
Today those shares equal 1 Mo 1 Pm and .7 Kraft shares and MAKE sure you add in all the DIVIDENDS that were paid over the past 9 years
Building a DIVIDEND MACHINE for retirement has never been more important since this years bear market
What if you were 64 and retired and needed to sell stocks for "income".You would have sold at the WORST time possible. Solution :Build your dividend mchine to "create an income" at retirement that is INDEPENDENT of a stocks price.This will 1) give you a certain income and 2) NEVER require you to HAVE TO sell your stocks at an inopportune time
Also the Goose that FUELS the DIVIDEND MACHINE will NEVER HAVE to be liquidated
Sound good?peace
Click Here!
Click Here!
Introduction
Well Billytickets is finally in the 21 century now.lol .Today at noon eastern time my first blog post will "offically" available thanks for everyone who has been part of Investors Brainstorming
Please give me feedback on these following businesses
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Please give me feedback on these following businesses
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