tag:blogger.com,1999:blog-2800029095243726187.post664773674548761426..comments2024-02-10T04:36:02.792-05:00Comments on Dividend Growth Machine: Book Review: The Little Book That Still Beats the MarketDividend Growth Machinehttp://www.blogger.com/profile/13304571550687216360noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2800029095243726187.post-5918961997395354912013-05-09T22:40:38.192-04:002013-05-09T22:40:38.192-04:00Ken: Good comment. As I noted in my review, I thin...Ken: Good comment. As I noted in my review, I think the magic formula (or a similar mechanistic approach) could be a useful supplement to one's investing strategy. Once you run a screen and find the stocks that meet your quantitative criteria, then I think some additional due diligence focused on qualitative criteria can help narrow the output to a select group of stocks that may represent good investments.Dividend Growth Machinehttps://www.blogger.com/profile/13304571550687216360noreply@blogger.comtag:blogger.com,1999:blog-2800029095243726187.post-4909859188533198202013-05-09T18:27:43.979-04:002013-05-09T18:27:43.979-04:00DGM,
I wonder whether individual investors overan...DGM,<br /><br />I wonder whether individual investors overanalyze stocks and have too few companies. Individual investors will never have the same knowledge as the the professionals, so it will be difficult to beat them on individual picks.<br /><br />I find the formula approach to be an interesting middle ground between index investing and having a few select stocks.<br /><br />Invest in as many companies as possible within select parameters to reduce risk though diversification. I wouldn't have the same parameters as Greenblatt, since I am more interested in dividends than capital gains. <br /><br />Buy the companies with the lowest price to estimated value at any given time which don't already exceed the desired weighting. I estimate the value based on dividends. Using this ratio, you buy the cheapest stocks possible while getting the dividends that are desired.<br /><br />KenAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2800029095243726187.post-91653334956622785772013-05-09T08:48:30.233-04:002013-05-09T08:48:30.233-04:00MG: Earnings yield is typically defined as the rec...MG: Earnings yield is typically defined as the reciprocal of the P/E ratio (in other words, Earnings/Price). Thus, a high earnings yield would correspond to a low P/E ratio. Greenblatt uses a different definition to account for various accounting issues that may differ between companies: Earnings Yield = EBIT / Enterprise ValueDividend Growth Machinehttps://www.blogger.com/profile/13304571550687216360noreply@blogger.comtag:blogger.com,1999:blog-2800029095243726187.post-14835891308808938722013-05-08T23:06:23.134-04:002013-05-08T23:06:23.134-04:00Hello DGM!
Enjoy your blog. Could you please clar...Hello DGM!<br />Enjoy your blog. Could you please clarify what is meant by earnings yield?<br /><br />Many thanks,<br />MGAnonymousnoreply@blogger.com