We truly have a crazy week behind us! America has chosen their next president, at least according to one half of the country. Also Pfizer published a press release about their covid-19 vaccine trial. And many countries are entering a state of lockdown again.
Never a dull moment!
But like always, we keep on humming.
This week I was very busy at work, but it didn’t stop me from releasing a new blog post and the latest podcast. I hope you enjoyed those and if you didn’t have the time yet, then I off course highly recommend both of them 😉
10 best dividend stocks to buy and hold for decades
How to invest in uncertain times – Dividend Talk Podcasts – Episode 22 (YouTube | Spotify | Anchor.fm)
Enjoy this article and afterwards the remainder of your weekend!
5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be found here
🦠 Reflection on the Pfizer news
Wow, what a week it was for my portfolio! It grew with about 7% in just a single week and my portfolio is finally close to reaching the green side again.
No, it was not the outcome of the US presidential election 😉
The reason why we saw such a strong rotation from Growth stocks into Value stocks was the news that Pfizer had a 90% effectiveness as part of their preliminary phase 3 trial.
This is indeed very great news, because it gives us and the stock market hope that we will be out of this sh*t any time soon again.
It is also good for myself, because it gives me an early indication that the companies in my portfolio have a strong chance to significantly improve once we get back to “the new” normal. Hence, my investments in dividend growing value stocks seem to play out 👌
This doesn’t mean however that I am just as optimistic as the stock market. This is mainly due to the logistical problem ahead of us, because we simply need to produce billions of doses to get this virus under control.
In this case everyone would need to get 2 shots and the vaccine needs to be kept at a temperature of -80 degrees Celsius. This is very complex from a logistical point of view and it could even become a logistical nightmare due to its scale.
And then we haven’t even spoken about the political impact yet where nationalism will likely decide about who gets it first and who gets it much later (sorry Africa 😮).
Anyway, I don’t want to go into politics here, but I have the following personal take-away:
I’ll likely stay in a social distance mode for at least another year, because I don’t live in one of the richest countries in the world. I also think that the first doses of vaccines will be supplied to the elderly and the weakest in society and I am not part of that group.
Another year will psychologically be very hard for me, but we have to do what we’ve got to do. Stay strong everyone!
🌍 Increased savings due to climate change
Let’s talk about another optimistic bullet today 😉
It’s 8 AM in the morning right now and it’s 8 degree Celsius outside. This is warm for this time of the year and from a personal finance point of view it’s great. I don’t need to pay increased gas bills right now, because my heating is hardly turned on.
Actually, I’m saving now about 100 Euro a month compared to the typical November frost weather from few years ago. 100 Euro invested in the stock market at a CAGR of 7.2% gives me 800 Euro by the time I’m approaching 80.
Nice isn’t it?
Well, to be honest, I’m missing the cold winter weather and I’m also missing the occasional snow at this time of the year. Especially because it’s due to climate change.
Just have a look at the below overview.
It’s not just Europe with increased temperatures. It’s all over the place!
This makes me sad and I feel a bit powerless to fix it. Yes, we’ve done our part with the knowledge that we have, because we’ve significantly lowered our carbon foot print over the last few years. But I also know that it’s not enough.
The next stage of improvement would be about leaving our comfort zone and taking more drastic measures (i.e. selling our car and taking kids to school by bike). I do however feel like the idiot in the room when nobody else around me is considering it.
Having said that, I’m just not ready for that. Especially because I feel that it doesn’t really matter in the grand scheme of things.
And this is where leadership comes in. I strongly hope that the next US president starts to take climate change serious again.
We are all together in this.
🏰 Has Disney become a growth stock?
Earlier this year Disney suspended its dividend due to the early impact of Covid-19 to the world. The company reacted quickly by preserving its cash, because their business heavily depends on a “normal” world where people get together to be entertained.
Nevertheless, I lost my confidence in the company as being a dividend growth company so I decided to sell my position. I also replaced it with Chubb at the time so it allowed me to retain my level of dividend income and this is more important to me than potential price appreciation.
Actually, both companies have done well since then, so either choice played out well from a price appreciation point of view. With Chubb I just still get to keep my quarterly dividends.
I’m sharing this, because I know that there are some readers out here that might feel regrets when looking at Disney’s current share price. If you are such reader and if you are a dividend growth investor, then please don’t regret.
Disney decided also to suspend it’s second dividend payment this year, so it really doesn’t fit in a pure dividend growth portfolio. You simply can’t count on their dividends.
Having said that, Disney reported its first loss in over 40 years, but to be honest, everyone saw that coming already!
The real highlight in their press release was the fact that Disney has already more than 73 million Disney+ subscribers. This is really huge, because Netflix currently spots around 200 million subscribers and its 4 years ahead of their own schedule.
To me it just tells me that Disney+ has enormous potential over the upcoming decade to become the biggest direct-to-consumer content provider.
Just think about the potential of getting even ESPN live sports streamed directly to your TV. I’m not talking about college-football, I’m talking about Premier League (real) football and such.
This is the reason why I believe that Disney deserves a different P/E multiple which would be more in line with the typical growth stock.
Don’t count on their dividends, although they mentioned that they might reinstate them again next year.
Count on their rapid growth in Disney+ subscribers and their future pricing power for such service.
Content is King
📖 Recommended Reads
Just two recommended reads today, because I’m lacking a bit of inspiration today. It was a very busy week in which I didn’t have too much time to keep up on all the great stuff other bloggers are posting. Having said that, see my 2 recommendations below:
Wolf of Hartcourt Street recently started his blog via Substack. He’s an investor from the UK and his investing style is 60% growth and 40% dividends. I find his content on Twitter always very interesting and besides that he’s just a very good person. Feel free to sign-up here in case would like to join his blogging journey from the early beginning.
I would also like to recommend this SeekingAlpha article about the Veolia / Suez acquisition. I personally don’t own a position in those companies, but I know that some of you do. It’s also a very interesting acquisition which might define how this market looks like in the upcoming few years.
📺 Recommended Video
Nothing investment related today, at least not directly. Today I just want to share something health related, because Health allows us to actually enjoy our Wealth 💪
Therefore I want to share with you my favorite YouTube channel: Yoga with Adriene.
Adriene is very popular on YouTube and her videos have helped me a lot to get rid of back pains and later to actually prevent it.
Sitting in my chair all day long due to back-2-back meetings at work is just not healthy. Being able to do a quick 20 minutes yoga from time to time has really done me well this year.
I hope you enjoy it as much as I do!
That’s it for the week. I hope that you enjoyed this week’s 5-Bullet Sunday 🙏
As always, have a lovely week ahead!
PS: don’t forget that every comment = 1 Euro to Kiva.
European Dividend Growth Investor