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Wednesday, April 16, 2014

Book Review – Strategic Dividend Investor

Posted by Dave on February 25, 2014

I saw this book at the library a few weeks ago, and decided to pick it up. The title drew me in, because really, who wouldn’t want to “Strategically” invest – maybe the alternative is an elaborate dart-board system, where you only purchase stocks on a full moon? Without reading this book, I think I would still have a strategy – it just wouldn’t perhaps be as organized as is laid out in the 163 pages.

With both personal finance and fitness/diet books, a significant amount of the book is spent selling the reader on why the author’s way of thinking is different or better than everyone elses, and why you should employ their way of thinking on your life. This book is no different – 92 of the previously mentioned 163 pages are spent going into the history of the stock market and how messed up it has become in the last couple of decades. The author builds his case on why dividend-producing stocks are the best investment vehicle available. Given the title of the book, I would think that if the reader has gotten to the point of actually picking up the book and leafing through it – they are probably already sold on dividend investing and just looking for insight.

The last third of the book is the reason why I will be purchasing an e-book for future reference in my investing “career” ($13.16 on Kindle, $19.50 on Kobo….not sure how Kobo can sell for 50% higher) . There is a possibility that I haven’t read enough books on investing, but the way the author provides insight on stock analysis both from a technical perspective as well as what should be looked for off of the financial statements made his message easy to understand.

For someone interested in investing for cash-flows as I am, the book provides a long-term, sustainable investment strategy. A useful screening process is provided, which will provide a good starting point at identifying potential investments. Also provided by the author is criteria that can be utilized when deciding on whether or not to sell the stock, outside of the price – which I also found very incitive.

So, that’s my sale on this book. The author – Daniel Peris has a second book out that I will be reading in the near future. The “Strategic Dividend Investor” isn’t huge, is written in an understandable manner and provides good information – all qualities I enjoy when looking at a technical non-fiction book.

I am a fairly voracious reader, always looking for book suggestions. Do you have a go-to investment book that you keep on your shelf?

Review: New Escapologist Magazine

Posted by Tim Stobbs on July 25, 2012

Mmm, I’m a bit unsure on how to best describe something that tends to be so far reaching, but I will make the attempt.  New Escapologist (NE) magazine, which by the way also has a blog, is best described by its introduction:

New Escapologist is a magazine for white-collar functionaries with escape on the brain.

Drawing from philosophy, literature and original humour; we discuss practical escape routes from the present-day predicaments of demeaning work, status anxiety and urban lethargy.

Each issue is a compendium of funny and practical essays on the subject of escape. We promote freedom, anarchy and the absurd.

So while the Canadian Dream blog tends to fall into the financial independence and early retirement bend, NE takes it a step further of getting out as soon as possible.  How?  Well in issue #3 which deals with the practical issues it suggests the following format as an option.

  1. Cut Expenses – Any going for FI would have already done this, but its good to start with stop buying crap that doesn’t make you happy and doesn’t serve a purpose.
  2. Save Like Mad – The more you save the sooner you can get out.
  3. Beef Up Your Skill Set – Use work as a training ground to learn as much as possible on different skills sets.
  4. After Developing a Escape Fund, Quit – Yes, rather than going for full FI, get a beefy escape fund and get out now.
  5. Enjoy your Escape – Consider it a sabbatical or long vacation rest and recharge from the horrors of work with up to half your escape fund.
  6. Seed Money – Use the remainder of your escape fund to start your own cottage industry or small business.  The idea is to have a business the covers your basic expenses leaving you time to actual enjoy living your life.

Overall I rather like the concept as it mirrors somewhat my current plan to some degree, but it just gets you out the door sooner.  It’s more of FI by starting your own business route, but that isn’t the only way ‘out’ and points out what others have done to escape the odd world of work in a cube.  I should note that they just released the entire back catalog as a PDF, so I got all six issues for $40 and highly enjoyed reading them.

Since the issues also look at the somewhat absurd things it is a fun read which I often felt was very well written.  Some examples include essays on the absurd things they teach us in school in the theory of getting a better job (which of course doesn’t get used at all), on the practical side a report card on someone’s escape just one year into their plan, and even a essay on the digital bohemian.

If you have any doubts on if you would enjoy it or not I would suggest reading the blog as you can get a good feel for the publication by the posts.  I personally enjoyed the entire back catalog and read all six issues in just a few days, but do keep in mind the publication isn’t serious all the time.  You have to laugh sometimes just to get through the day.

Book Review: The End of Growth

Posted by Tim Stobbs on July 19, 2012

Well during the summer I’ve got a little bit more reading done so expect a few more book reviews in the next few weeks.  First up is The End of Growth by Jeff Rubin.

Jeff points out that modern society is based on cheap energy and when oil breaks $100/barrel the cheap part vanishes quickly as prices keeps rising.  What is really interesting is just how dependent is the world on cheap energy to fuel growth, which Jeff demonstrates fairly well in the book.  So with huge sovereign debts all around the world Jeff is predicting the basic fundamental of economics endless growth might actually shift to a zero sum growth world.  Where China could grow, but perhaps at the expense of the US for example.

After this point Jeff pointed out an interesting idea that the current economic theory doesn’t include oil prices and thus keeping interest rates low won’t help stimulate growth like in previous times if oil prices are too high (big deficits aren’t helping the situation either).  The rules have changed, but the central bankers haven’t caught up to that yet.  The new rules of the central banks should be to keep inflation in check and accept the lower growth.  He also argues that in some countries that artificially keep energy prices low won’t help in the long run, people have to start adjusting now.

The bad news is your retirement planning projections of growth of your portfolio will need to shrink if Jeff is right.  This is a huge shift on the standard assumptions of growth since if you are truly in a zero sum game to get any growth in a portfolio is going to take more than just using index funds.

Rather that dwell on doom and gloom of this situation, he points out that prices of energy supply might even help society.  After all who needs a carbon tax when your basic price of power, gas and natural gas are high enough to shift energy patterns towards conservation like in the Netherlands where power is like $0.30/kwh or three times what I pay because of carbon taxes.  My bill is low now because I don’t waste power, but at those prices a lot of other people would get serious about conserving as well.

So how do you take such a huge macro issue and bring it down to personal situations?  Well on the personal side Jeff advises that you pay down your own debt ASAP.  He also suggests  that the new jobs will be in local manufacturing when it costs too much to ship things over seas and back.  You might want to have many streams of income from different gigs to support you better if you lose a job in an industry in a down swing.  Then at the end he suggests that perhaps less growth won’t be bad as we can have more time to slow down and breath again.

Of course in my mind all that advise sounds damn similar to what I’m trying to do while I’m going for financial independence.   It could be interesting if society as a whole starts to learn to live with less stuff,  smaller homes but more free time.

Regardless of if Jeff’s view of the world comes true or not, I did enjoy this book.  It was a quick read and pointed out several interesting ideas for me to ponder. Also I give him credit for taking fairly complex economic ideas and presenting them in a easy to understand fashion.