5-Bullet Sunday

5-Bullet Sunday #50

Wow, this is 5-Bullet Sunday number 50 already! Honestly, I would have given it a small chance if you would’ve asked me if I could keep up with a weekly post.

Usually I fall quickly back in old behavior, but your engagement has really motivated me to keep the discipline. It’s so tempting sometimes to just skip a day and especially those days last summer when I was on vacation.

But I didn’t do it and I’m very happy with it. I strongly believe that this consistency has brought this blog to life and I’m very grateful that I’ve truly found my passion in it.

Needless to say, I’m not the best writer grammatically. But I hope that my energy and passion slightly compensate for it .

Enjoy today’s 5-Bullet Sunday


Content published this week:


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

🌟 Will Facebook really break up?

The Federal Trade Commission (FTC) filed a complaint for injunctive and other equitable relief from Facebook in the US district court for the district of Columbia.

I own some FaceBook shares and I must say that I’m a bit surprised by this news. So far I thought that only the European Commission was worried about Facebook’s business practices. We also often heard complaints from politicians in the US about the EU being to picky on US companies.

Well, compared to the FTC the European Union is rather weak in its attack, because this is really a strong complaint.

What I would like to do now is to share with you some quotes out of the document to give you a feeling of what it all is about. Mark Zuckerberg should be worried πŸ˜₯

The core complaint

Profiting from users

An inside look at the Instagram Acquisition

I find these fragments very interesting and there are several more of those.

But to sum it up, Facebook is being prosecuted for the following reasons:

  • Buying out their competition, i.e. via the Instagram Acquisition & WhatsApp Acquisition
  • Anticompetitive Conditioning
  • Harm to Competition

So what does it mean for my position?

Nothing.

I think that Facebook is very attractively valued at the moment and the numerous litigation is already priced in. Besides that, I also think that Instagram and Facebook would do very well on their own and I would assume to get positions in both of the companies in case it would indeed need to break up.

Hence, this is the reason why I won’t do anything and rather watch the case play-out on the television with a nice bag of popcorn 🍿

PS: I would definitely recommend to read the complaint yourself in case you like these kind of stories. It’s just 53 pages long and it reads very easily.

🌟 The Comeback Kid for 2021

Every year or so there is a Blue Chip company which is able to make a tremendous turnaround and especially in it’s share price.

If I would name one company this year then it’s definitely Disney ($DIS). Not so long ago Disney’s share price was quite suppressed due to the subscriber losses in their ESPN, their main Cash Cow.

On top of that, Covid-19 broke out, Disney had to close it parks and it subsequently decided to suspend its dividend. No wonder that the stock price crashed like it did back in March.

However, the stay@home economy due to the lockdowns can really be seen as a gift. Their ability to launch Disney+ directly to customers and gaining millions of subscribers has blown every rational investor away.

This is the reason why the share price is currently sky-rocketing and I would argue that this could be a feel-good Disney movie all by itself.

But you know, that “was” 2020. It’s much more fun for me to figure out who will be the comeback kid next year. So I started to first check this with my followers on Twitter and the poll result really surprised me!

Slightly more than 60 people think that 2021 will be the return of Intel Corp as a Wall Street darling. I’m very surprised by that, because there’s really nothing in the company that gives me any faith that they are on to something.

7nm, 5nm, where art thou?

Let’s see. I’ve been wrong quite a bit before and I wish everyone their share of profits and luck. Although I do think that there might be some confirmation bias at play here πŸ˜‰

What would be my choice?

If I would bet on one of those 3, then I would place my bets on General Electric. It has quite some ingredients for a steep price increase when the world recovers from Covid-19.

Planes might start flying again, the Energy sector could recover and the I must confess that I very much like the current CEO.

The stock price has already increased around 100% since it’s recent low and I wouldn’t be surprised to see it back around 16 USD by mid next year.

Full disclosure: I own $GE and I have a significant loss in it. This is not a recommendation to buy as a dividend stock, because it sucks for such an investing style. However, it could be a nice speculation (like many others).

🌟 AT&T Dividend Announcement

AT&T just announced that they are not increasing their dividend this quarter. This is very interesting, because as Dividend Wave pointed out on Twitter, they just shared their confidence about further dividend growth back in August.

So what’s my take on this?

Well, first of all I’m disappointed again in a board of directors. Why aren’t they just transparent to us as investors. Do they really think that we’re stupid?

I truly think that most of us will understand perfectly well what good capital allocation means. If they have good reasons to freeze the dividends so that they can for instance pay down the debt or double down on HBO content, then most of us will really see this through the fingers.

What we don’t like though is being treated like children and this is something that those high-paid fools should really stop doing.

Having said that, at the moment I will do nothing. I am not a person whom straight away sells his position after a dividend freeze or a dividend cut. I always want to do my own homework first and in this case I haven’t done it yet.

I neither know yet whether we should expect a real dividend freeze. More often have companies paid the same dividend for 7 quarters in a row to quickly increase the dividend with just 1 cent in the 8th quarter. This would prevent them from losing their Dividend Aristocrat status and this means that AT&T has still 3 more quarters to make up their mind.

To be continued….

Disclosure: I own AT&T although it is a very small position in my portfolio. I have no plans to further increase it, because it’s already a full position.

🌟 Recommended Reads

With the holidays coming up I would for sure recommend to read one of the 5 books which I recommended earlier last week πŸ˜‰

But how about reading a few articles from other bloggers? Yesterday I asked fellow-bloggers about their blogpost that they’re most proud of and the following are some of their suggestions:

Cheesy Finance shared with me an article which really nicely explains the relation between dividend yield versus dividend growth. What I like about this posts that he has done his own data crunching to draw some conclusions. A good to-the-point article and the topic is something that every dividend growth investor should be aware of.

Wolf of Harcourt Street shared with me his recent article about how to interpret financial statements with Microsoft as an example. Again, a good article and he describes the basics about the 3 financial statements. If you are new to this topic, then it’s definitely worth a read!

Dividend Growth Investing and Retirement shared a few articles with me. His readers appreciate his post about 7 Dividend Growth Investing resources he can’t live without the most. I would agree with his readers, because it is a very useful post. A good article in case you are still looking for some investment resources to strengthen your research. His other suggestions can be found in his reply to my tweet.

Last but definitely not least, Young Hamilton shared his analysis about Tyler Technologies ($TYL) with me. I understand why he’s proud on it, because it is a well written analysis about an often under-covered company. This software company is very focused on the public sector. It doesn’t pay a dividend yet, but it might be an interesting option for the growth investors under it.

🌟 Recommended Video

Nothing about investing today, but definitely something for the analytical mind!

On the 3rd of December few guys (i.e. David Oranchak) were able to to crack the Zodiac 340 code πŸ’ͺ

The Zodiac Killer is an American serial killer who operated in Northern California from at least the late 1960s to the early 1970s. The serial killer got famous for his encrypted letters and this particular letter has never been deciphered until a week ago!

The video below doesn’t take too long, but it does very nicely describe the whole process of deciphering the 340 letter.

Enjoy the watch!

PS: the killer has never been found, so keep watching your back. You never know!


That’s it for the week. I hope that you enjoyed this week’s 5-Bullet Sunday πŸ™

As always, have a lovely week ahead!

PS: don’t forget that every comment = 1 Euro to Kiva.

Yours Truly,

European Dividend Growth Investor


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Disclaimer

I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

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It's my desire to retire early via Dividend Growth Investing as a passive income stream. This is not easy and especially when living in Europe. That's why I started this blog and share my journey: to give you a European perspective.

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Richard Whitehead
Richard Whitehead
2 months ago

Oooooh true crime and dividends, sounds like my sort of Sunday!

Gabe
Gabe
2 months ago

Hello EDGI,

Are there any positions in the UK you have on your shopping list should the current Brexit Negotiations go south? Tomorrow could be interesting if nothing is agreed, let’s see if Unilever hits 45 πŸ™‚

Regards,

Lluis
Lluis
2 months ago

Hello my friend, Thank you for all the content, it’s great!! About $T i’m thinking to increase my position in it, but now, i will not do it. There are a lot of great companies, like Unilver at good price, but similar to $T , like $VZ seems more safe. This week i bought few $AMT because i want to start my position in this 5G companies. In other words, now i can see there are good prices in defense sector. Companies like $LMT or $HII are near 3% YD. I lke very much this compaies and his numbers. Thanks… Read more »

Lluis
Lluis
Reply to  European DGI
2 months ago

Hi, Now i’m in process to change the broker account (again πŸ™ !!). For this reason it was cheap to sell than transfer my positons. And i think market is very hight and could be a good chance to take some profits and then I sold most of them. Now i’m waiting to buy them on deep or a good prices. I think gold and silver will rise a lot and for this reason i bought more mines ETF and stocks. TOP 5: 1.- CK HUTCHISON HOLDINGS LTD $0001 2.- $BMY 3.- VanEck VECT.JUNIOR GOLD MIN.U.ETF $G2XJ 4.- VANECK VECTORS… Read more »

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