I own MO and a few other individual stocks but your "vent" sounds to me like more support for an index fund strategy. Better to be diversified and accept what the market gives you then take individual stock risk.
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This was not a vent, actually I was reading an article by John Maudlin where he compared stock investing to horse race handicapping. As a long time horse race lover his statement was very true which was it is more important what investments you don't make than what you do make. The first and most important starting point in horse race handicapping is to eliminate all the horses that don't have a chance by crossing them out on the program, I always do that and review to see if any of them won and why I eliminated and they still won, but over 95% of the time I can eliminate 10-20% of the horses in a race increasing the chance of actually winning.
Picking stocks is the same process, you need to review to see what you no longer believe to be a good value and thereby increase your chance of winning stock selections. While I believe that investing in index funds is fine, and is a great mechanism for avoiding serious investment mistakes I will continue to invest in individual stocks.
The 100 stocks in the S&P 100 make up 45% of the market capitalization of the total US stock market. I review the companies that make that list for sure all the time, try to avoid the underperformers and the ability to overperform the index is greatly magnified. These are stocks for a long time that I felt I could comfortably invest in the long term if the dividends were decent knowing dividend increases would exceed inflation. Right now some of the biggest names are suspect to me and as such I am avoiding them.
Another stock I have followed for a long time and that has been a very good dividend performer is
Sherwin Williams, now they are a fine compnay but for years they traded at a PE between 10 and 14 as the paint business is not all that glamourous. A 2-3 percent dividend growing at 10 percent a year was a solid company. But look at recent performance: Sales from 2007 per share have doubled but the stock price is up 400%. Furthermore actual sales are up only 50% as aggressive debt additions in this ZERP world has led to long term debt increasing to 1.1 billion from 300 million in a share buyback that has done little to improve the company from what it was in 2007 as shares outstanding are down by 25 percent. A Rising US dollar will hurt SHW as 18 percent of their sales are in Latin America alone.
But what is Sherwin Williams going to do at this point? It may seem that borrowing 600 million in the last 2 years in one year debt with 1.6 percent rate would be great as the 9.6 cents per share of interest expense is more than offset by an 22 cent increase in pershare earnings from the 3 percent share reduction and the 3 million dollars you save in dividend payments. But this debt is still owed and must be rolled and to maintain the same level of growth they need to borrow even more for the more expensive shares or risk a slowdown of growth.
A further 25% reduction in shares now would cost 6 billion dollars. With short term debt at 600 million dollars and 1.3 billion total in long term debt coming due in the next 5 years a rising interest rate increases will hit SHW hard, the per share gains from stock buybacks will disappear and you will be back to a 6-9 percent per year growth company, a company with a current dividend of 1 percent and a PE of 25 could fall 50 percent remarkably quick, this fine company is so overvalued it is mind blowing to me and this truly is a well run company that has become overvalued by management seeing how debt could be used in the ZERP enviroment to create the illusion of a growth company, but this company is a steady performing paint company expertly manipulating with financial manuevers and is gravely overvalued. Just my thoughts as I will avoid this stock.
This type of financial engineering is in many companies, SHW is just a master at it, however to value this engineering with a PE of 24 is unrealistic unless you think Zero interest rates are here to stay.