Thursday, August 14, 2014

Me, Mantra and the Mantraziliers

I recently posted an answer to a post over at superstar blogger Dividend Mantra. That guy is so hot right now (must be the hairdo). 

He posts something and there there's like a zillion people answering. Mantraziliers? And he answers each and everybody. (ubiquity? or does he have a ghost writer? some sort of a Dividend Mango?)

He's like the Céline Dion of the personal finances... Well, you know what I mean. He's a nice chap anyway.

That guy is unique and original in some many ways. Take for instance his recent move : Instead of retiring to sunny Florida where he lived, he moved upstate to cold Michigan in order to eventually retire before 40. How about applying the saying « being greedy when people are wary...» in a whole different circumstance! Didn't I say superstar?

Jokes aside, I reacted to a post where he was saying he had recently bought it's shares in its 49th company!

Call it the Michigan forty niners! 49!

The number shocked me (still on heavy dose of Xanax). I had to react even it meant hurting the feelings of hundreds of Mantraziliers. I run fast.

You'll fin my answer below. But, for copyright purposes (and since I know jack as to how these things work), I suggest you go visit his blog to read his answer. As always, he answered like the gentleman he his (arghh!). Yes, he's hot.

Here's my answer below.

In my next post I will discuss the very exciting topic as how many companies should one have in its portfolio. 5, 10, 20, 30, 49 or more?

Meanwhile, I want to hear you Financial Freaks. How many do you own?

***

Hello Financial Freak Mantra!

Well, gotta say, you got yourself a very loyal fan base. I’m jealous. Whenever someone leaves a comment on my blog, I wear my unmoved look in front of family and friends and hurry to my computer (when the visit is gone!).

It’s like a little party! Pop the wine, let’s celebrate. (5 minutes top)

Anyway, about John Deere. Love those green mowers. How about Richard Farnsworth in the Straight Story? He finally made it to see his brother, didn’t he?

I have to say, props to you for turning your personal finances upside-down (mostly Up).

Just one worry and I will share it with you for what its worth. (after all who am I but a pathetic bloger who flees its family to read a post…)

My concern : the amount of companies you own. 49 ! Oochie Mama!
I’m thinking, up to this point, why not buy a low fee ETF; you’ll get as many (and more)? Indexing might me your path. You would save on commission. And only buy when the market is down. No?

It seems to me that the diversification you are trying to get is more or less becoming « diworsification », as Peter Lynch would put it. Studies have shown that versatility and stability is obtained with 20 blue chips companies (some argue it’s 12 to 15). Above that, it’s useless and kills the leverage you could get out of a portfolio.

There is no way (unless you are a Freak, which you may be since I suppose I should not like you!) (I do!) one can follow closely all those 49 companies. Even though they are great, you are bound to miss out on some important information.

Anyway, just a thought. Props to you for getting there




2 comments:

  1. A great question for anyone investing in stocks. And quite frankly, I think you'll get many different answers. Currently, I own 39 individual stocks. Prior to this month I owned 36 and was questioning myself about adding new companies to my portfolio or simply continue investing in what I already have. Since I only owned one bank WFC, I decided to add 3 new Canadian banks, TD, BNS and RY. Of the original 36 stocks I only bought 33 as 3 new companies were added to my portfolio as a result of stock spin offs (ALLE, ABBV & MDLZ). So those three I never actually bought but since they all pay dividends I kept them all. I feel comfortable staying in the range of 30 - 39 individual stocks.

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Thanks a lot for your comment.