2020-03 Dividend Income Report

 Here is the dividend income report for March, 2020.

The monthly dividend income came out to $1863.26. The yearly income total for 2020 through the end of the month was $2071.44.

The income for March, 2019 was $1143.33, and the yearly income for 2019 through the end of March was $1372.50.

Up until the coronavirus pandemic, it was looking like switching from individual stocks to ETFs was working out very well. I had sold my shares of RWR that I held in a taxable account, and even without those shares, I had the best March ever. (Granted, I still need my three-month moving average to be about triple what it is in order to live off dividend income.) I still have RWR in an IRA.

I sold my RWR shares in my taxable account and just about broke even. I made some money in dividends, but I had to pay taxes, and sold when the price was at $90. I know I am always saying that people put too much emphasis on price and capital gains, but if something goes to $0, then there are no dividends. Besides, I do not know what is going to happen, and I might need some cash at some point. I think selling after a 10% is not a bad rule to go by.

I am still not sure what all my rules should be for investing. There is a saying on Wall Street: Bears make money, bulls make money, pigs and sheep get slaughtered. I think this is another way of saying plan your work, and work your plan. Should I sell the ETFs in my tax-advantaged accounts? Or should I let them go as they are since I do not need to touch them for 10 or 20 years? (I assume things will be better in 10 or 20 years.) I was planning on making an investment policy statement as Ron DeLegge recommended. Perhaps I will put his podcast back into my MP3 player and see what he has to say. I will also see what Phil Ferguson has to say about what is happening. I knew at some point there would be a recession (there always is at some point). I know that stocks might go down. I did not think there would be 15% of the labor force filing for unemployment in a month.

I may even look into the ideas of “The Black Swan” author Nassim Taleb, although there are some issues with Taleb and his ideas. He may know what to do when the world is ending, but he sounds like an angry crank when talking about every other issue. When I was living in Chicago, I knew someone who worked on the floor of the NYSE on 9/11. He thought it was kind of funny that Guiliani got a reputation as a guy you want during a crisis. He said that if Guiliani did not have a crisis to handle, he was making one of his own.

The basic strategy of Taleb is “tail-risk hedge”. One firm had a 10x return in March using tail-risk hedge. Here is another page from the Felder Report explaining tail-risk hedging. CALPERS recently exited one of two tail-risk hedges that according to Bloomberg could have returned 3,600%, or about $1 BILLION dollars. They kept a second one that still had a positive return (see article here). One issue with CALPERS is that the Chief Investment Officer did not tell the board that he had exited one of the hedges at a March meeting (he exited the hedge in January). Maybe he is an Austin Powers fan: Why make billions when we can make millions?

I am not clear how these tail-risk hedges work. The article from The Felder Report talked about some of the options expiring, some not expiring. It all sounds complicated for someone who already has a job doing something else. I know they can lose money during the good times and make money during bad times. Frankly, that is one reason I am leery of them. I remember back in 2007 or maybe early 2008, when things were starting to look shaky, Bloomberg Markets magazine had an article about David Tice, who at the time managed the Prudent Bear fund. The next month, the magazine published a letter from a reader about the article that said something like: This guy lost money for five or six years; he makes money one year, and now he thinks he is a genius.

I am leery of stock market bears and the hyperinflationistas. They keep predicting disaster all the time, and when it finally happens they want everyone to think they are geniuses. Yet they never acknowledge they are wrong more often than they are right.

Can an individual investor like me even get a tail-risk hedge? Can I do it without getting taken to the cleaners? And who is the counterparty? Are there multiple counterparties? What if the world ends, and the counterparty doesn’t have the money to pay up? If CALPERS did not walk away from a $1 billion dollar payday, where was that money going to come from?

There is one ETF called Cambria Tail Risk ETF (page on ETFDB.com, page on ETF.com, page at Cambria Funds) which according to ETF.com, invests 1% of its holdings in “out of the money put options on the S&P 500 Index”. Ron DeLegge’s ETF Premium monthly income trade uses covered calls. TAIL appears to be the ONLY tail-risk ETF out there.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each March from 2012 through 2020:

Month YTD Amount 3MMA 12MMA
2020-03 $2071.44 $1863.26 $690.48 $931.10
2019-03 $1372.50 $1143.33 $457.50 $593.19
2018-03 $1226.01 $1099.99 $408.67 $606.06
2017-03 $1490.28 $805.35 $496.76 $517.88
2016-03 $1352.29 $732.13 $450.76 $470.38
2015-03 $1179.82 $612.48 $393.27 $390.27
2014-03 $934.15 $437.87 $311.38 $301.75
2013-03 $719.36 $360.85 $239.79 $292.68
2012-03 $792.26 $294.68 $264.09 $269.92

 

Here are the securities and the income amounts for March, 2020:

  • Vanguard Total Bond Market ETF: $167.25
  • Vanguard Total International Bond ETF: $9.50
  • Vanguard Utilities ETF: $186.77
  • RLI Corp: $23.62
  • SPDR S&P Dividend ETF: $682.41
  • SPDR Dow Jones REIT ETF: $179.94
  • SPDR S&P Global Dividend ETF: $596.84
  • Brokerage Money Market: $3.77
  • Brokerage Treasury Account: $13.16

Big Jim knows that he will need a plan that can work in good times and bad.

Ancient woman praying, painting in Catacomb of Callixtus, 2nd-4th century, file found on Wikimediaassumed allowed under Fair Use.

2020-02 Dividend Income Report

Here is the dividend income report for February, 2020.

The monthly dividend income came out to $208.18. The yearly income total for 2020 through the end of the month was $196.17.

The income for February, 2019 was $229.17, and the yearly income for 2019 through the end of February was $138.45.

I am skipping January since there was not much income. Just the money market funds. The bond funds do not pay out in January.

I am writing this from notes I took before the markets went haywire due to the Coronavirus. I will go into more detail in my post about my March income. So I might write something here that is contradicted by what I write later.

One of the blogs that I follow is Dividend Growth Investor. I consider this to be one of the better dividend growth investing blogs out there, but recently the author had a post that said some things that I disagree with (or more accurately, they recently sent an older post to their mailing list subscribers that I disagree with).

The author is generally against dividend ETFs. I am not sure I agree with that. Keeping track of individual stocks is a lot of work. The author says that dividend ETFs are “Good for beginning investors who are still learning and have less than $10,000.” I think you need a lot more than $10K to go into individual stocks. At least $100K. Maybe even a million. If you have less, you wind up buying very small amounts, and you have a lot to keep track of. For 3M (MMM), I had 10 shares, and each quarter I was getting 0.08 shares. It took seven years to buy two shares. One argument they give against dividend ETFs is “Investors have no say about which stocks the ETF holds.” Yes and no. You can look at the criteria of the index and then pick an index you like.

Granted, I have no idea how well the Dividend Aristocrats will hold up. We will see who is right. I think that companies that have been increasing dividends for 25 or more years will do pretty well. But these days, “pretty well” is relative.

One claim the author made that I do not agree with is that an S&P 500 Index fund could be a dividend growth fund. They recommend IVV by iShares. I might move some money into a broader index fund as a temporary refuge, but I think for dividend investing the broader indexes are a bad idea. Yes, general index funds (not targeted towards dividend investing) have increased their dividends over time based on the dividends from their constituent companies. But that is not their main focus, so I do not think they should be considered dividend funds. Cash flow is better than capital gains. The author says Amazon, Facebook and Google might pay a dividend someday. And maybe they won’t. A dollar in a stock that does not pay a dividend is a dollar wasted. Why put money in dead weight?

One fund the author recommends (with disclaimers) is Schwab US Dividend Equity ETF (SCHD) (ETFdb page here, Schwab page here)  It tracks the Dow Jones U.S. Dividend 100 Index. To be eligible, stocks must be in the Dow Jones U.S. Broad Market Index, and have paid a dividend for at least 10 years. Unlike the S&P Composite 1500, Dow Jones U.S. Broad Market Index does not filter out companies that are not profitable. (Here is the “Financial Viability” criteria from the methodology document for the S&P Composite 1500: “The sum of the most recent four consecutive quarters’ Generally Accepted Accounting Principles (GAAP) earnings (net income excluding discontinued operations) should be positive as should the most recent quarter.“) However, the Dow Jones U.S. Dividend 100 Index methodology document states the index ranks the stocks on four factors:

  • Cash flow to total debt
  • Return on equity
  • Indicated dividend yield
  • Five-year dividend growth rate

It ranks all eligible stocks, and then picks the top 100. If it looks at dividend growth rate, I guess maybe this is a dividend growth index. I will have to look into this one.

It does seem like even though Dow Jones bought S&P that there are some differences between the DJ indices and the S&P indices. The S&P indices (at least the domestic ones) seem to filter out companies that have not made a profit in the past year. This is probably why Tesla is not in the S&P 500. When it does make a profit, it seems to lose at least the same amount the next quarter. The S&P indices seem to combine automation and profit. We will see what happens to this index going forward.

Note: Not all S&P Indices look at financial metrics. Under “Financial Viability” for S&P Total Market Index, the methodology document states “There is no financial viability requirement for index eligibility.” According to ETFdb.com, the iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks the S&P Composite 1500,  but the prospectus available from the ITOT iShares page says ITOT tracks “the S&P Total Market Index™(TMI) (the “Underlying Index”), which is comprised of the common equities included in the S&P 500® and the S&P Completion Index.” Perhaps the fact that the index is called “TMI” is a warning. According to its page, the S&P Completion Index “comprises all members of the S&P TMI Index except for the current constituents of the S&P 500®.” So it looks like ITOT’s prospectus chose a wordy way to describe itself. The TMI page lists some iShare funds as the official funds, including ITOT. The S&P Composite 1500 Index (which does have financial viability criteria) is tracked by State Street’s SPDR® Portfolio S&P 1500® Composite Stock Market ETF (SPTM).  That fund’s page on ETFdb.com states it tracks the Russell 3000 Index. The S&P Composite 1500 page states the ETF is SPTM (although they simply list the fund by name and do not provide a link). I do not know why the pages at ETFdb.com are incorrect as to which funds track which indices. Perhaps S&P and Russell changed funds and ETFdb.com did not know about it.

It pays to know your index. Check the home pages for your funds and your indices on a regular basis. You should only invest in about half a dozen at a time. Granted, most dividend indices are based on other indices, so you might have to look at another index to understand the one you are investing in.

It was either Ron DeLegge on the Index Investing Show or one of his guests who pointed out that one trick a lot of active managers pull is to compare their funds to Russell indices, particularly the 1000, 2000 and 3000. Very few managers compare their performance to the S&P 500, 600, 400 or Composite 1500. Unlike those S&P indices, Russell indices just look at market capitalization, and do not consider any financial metrics.

Granted, in my work 401(k) I really have few choices about where my money goes. But they put the money into an S&P 500 index fund. We should automate, but not run on auto-pilot.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each February from 2012 through 2020:

Month YTD Amount 3MMA 12MMA
2020-02 $208.18 $196.17 $1259.50 $871.11
2019-02 $229.17 $138.45 $847.72 $589.58
2018-02 $126.02 $66.43 $654.60 $581.51
2017-02 $684.93 $466.05 $570.90 $511.78
2016-02 $620.16 $383.08 $524.89 $460.41
2015-02 $567.34 $353.85 $492.40 $375.72
2014-02 $496.28 $336.61 $363.62 $295.33
2013-02 $358.51 $248.39 $348.20 $287.16
2012-02 $497.58 $308.90 $337.51 $264.48

Here are the securities and the income amounts for February, 2020:

  • Vanguard Total Bond Market ETF: $176.31
  • Vanguard Total International Bond ETF: $9.71
  • Brokerage Money Market: $3.39
  • Brokerage Treasury Account: $6.76

Big Jim does not think automating something in your life means you should give up control.

Angel of the Last Judgement, 11th century, abbey of Sant’Angelo in Formis, assumed allowed under Fair Use.

 

Thoughts On A New Star Trek Series

I have not seen any episodes of “Star Trek: Picard” just yet. I wanted to get some thoughts I had about my own ideas for a Star Trek series (not that I have any illusions that this series would ever get made).

One reason I want to write about this before watching “Picard” is that I have seen the previews for “Picard”, and there is a slight possibility that a few of my ideas overlap with theirs. (Or all, or none; I won’t know until I watch it).

About ten years ago, someone set some clips from the original series to the song “Tik Tok” (as the contributor pointed out that “Working on the Enterprise is pretty much a non-stop party as far as I’m concerned”). I thought that there should be a new “Star Trek” series. Watching the clip made me realize that there was a lot of visual diversity in the original series. Traveling to other planets and exploring strange, new worlds lets you go to places and build sets that you cannot do in other series.

I kicked around a few ideas in my head on occasion, and I came back to it when I needed some topics for the idea list.

I was in college during “ST:TNG” and the first few years of “ST:DS9”. “ST:V” ended in 2001. I thought a new series should take place 20 years after “Voyager”, as “Picard” is doing. It would avoid any problems of possibly stomping on canon. I like “Enterprise” and “Discovery”, but I think that new shows should take place after prior shows and try to do their own thing unencumbered. Granted, I have no idea what will happen in the third season of “Discovery” or “Picard”, so all future Treks will be further constrained.

Part of my idea what that while there were a lot of episodes (and even movies) about time travel, there has never been a series about time travel. (I started this line of thought before I had heard news of “Discovery”.) More specifically, there has never been home-grown time travel. Alternate Janeway used a time travel device invented by an in-universe contemporary Klingon scientist, but (20 YEARS POST-FACTO SPOILER ALERT), that timeline, and therefore that device, no longer exist.

There is the Red Angel suit in Discovery, but I am guessing that knowledge was buried, just like the spore drive.

Every other time in the first four series and movies when the crews have traveled through time, they have either used alien technology (the Guardian of Forever, the Devidians in “Time’s Arrow” or the Bajoran Orb of time), natural phenomena like sling-shotting around the sun (which in “Star Trek IV” somehow got them to go both backward and forward in time) or the Nexus in “Generations”, Q going through time with Picard in “All Good Things…”, severe equipment malfunctions (“Past Tense” and “Little Green Men” in “DS9”) or future Starfleet personnel bringing a series’ crew forward or visiting a series’ crew in their own time (“Future’s End”, pretty much all time travel in “Enterprise”).

I thought that perhaps the series could be about the crew that is developing the first home-grown time-travel device for Starfleet. They could also be doing other research, combining what they are doing with both the technology that Voyager brought back from both the Borg and the future.

I thought that it would be a combination research vessel and perhaps also going on regular missions. Or perhaps they stay in stealth mode (I use that term the way startups do, not referring to invisibility). I like the Nova class ships we saw in “Voyager”. Maybe they would be a combination of research and a smaller version of Section 31, although Section 31 might be an occasional adversary of our crew. The ship would have a combination of conventional and experimental systems, for propulsion, weapons, transporter, sensors, life support, medical, etc.

I thought the captain would be someone about my age (who wouldn’t want to be the captain on “Star Trek”?). He got a degree in warp engineering, enlisted during the Dominion War, or perhaps during the Federation-Klingon War that preceded it. He was convinced to stay in Starfleet and become an officer by his captain, and rose through the ranks. He spent a lot of time in research and on engines, since energy is the key to everything else. His crew is not only conducting their own research, they are combining it with future and Borg technology. Their ship was based on various planets, and they have had to keep moving to prevent detection, although the captain and his CO suspect there may be leaks.

In the pilot, they had energy dampeners around the system to prevent any radiation or signals from being detected, but these were destroyed one by one, and the ship manages to escape. Barely.

There would need to be a good reason why a research vessel is moving throughout Federation territory, and not stationed on one planet. I guess it could be like DS9, where they make side trips. I don’t want it to be like the pilot of “Voyager”, where they do a smart thing for a dumb reason. A ship in the Delta Quadrant was a good concept, but having Janeway blow up the array was a stupid idea. Why not have the Kazon blow it up to trap Voyager in the Delta Quadrant?

In one of the early episodes, their ship would be attacked by mercenaries and they would have to escape and go to warp to a star base. The captain and admiral would somehow come to the decision to launch permanently, and there would be a military contingent on board. The captain has not had to be in battle since the Dominion War, and while the ship has made journeys of up to a few months, they would need someone with more field experience and battle training.

I thought the second-in-command should be a black woman. (This was before “Discovery”.) I know the show-runners of DS9 liked to dismantle the idealism of ST. I do think “DS9” was probably the strongest series to date, I don’t really agree with that idea. I think one of the appeals of ST is that it represents our ideal selves. Sisko was in the end one of the good guys. And it just bugged me that we have seen more Starfleet captains who were aliens than women of color.

One consequence of the secrecy is that the entire crew of the ship would be human, which many people will regard as unusual for Starfleet. I go back and forth as to whether or not they would stay in stealth mode. If they do, then they would be taking our promising first officer out of circulation. This would also cause people to talk. You might get a few plots out of the need to hide their affiliation/identity.

A third main character would be a hologram. I will be interested to see how “Picard” integrates holographic characters. It has been 20 years since Voyager. What use will they have in Starfleet? Are there special missions/duties that only holographic characters can have? I thought this character’s appearance was based on the captain’s son who died as an infant. Perhaps some of the experimental medical technology was used to infer his appearance as an adult.

I thought I heard Michio Kaku state that time travel would only be possible to the future, and that the point that time travel becomes possible would be the earliest anyone could go to. (I cannot find anything saying that after a few minutes of googling; I did find a file of him stating that time travel is possible if you have LOTS and LOTS of energy). So at first they could only go forward.

When I was using this series idea as a “feedstock” for the daily idea list, I recall that I spent several days on ways the Star Trek universe could have changed since “Voyager” and “Nemesis”. I did not keep any of these notes, so I will have to reconstruct from memory and possibly make some stuff up on the spot. One reason I did this is that I have heard/read that the best sci-fi takes place in worlds/universes that are well-developed. You don’t just need great characters and cool technology, you need a firm context for all of this to be happening in. In addition, Gene Roddenberry said one of the reasons he created “Star Trek” was so that he could talk about contemporary issues and still get things past cagey network executives.

I think that one scenario is that the Romulans found out about the time travel experiments, and they are trying to get it. And some Romulan groups are also funding the Cardassians to cause trouble in what used to be the DMZ. The Original Series made it look like the galaxy was involved in a Cold War between the Federation and the Klingons, which was analagous to the USA and the USSR. I think we are entering a multi-polar world (the USA and China are dominant, but there are plenty of countries doing their own thing, like Iran and Russia, and China’s control over North Korea seems lacking). I always thought the Romulans were the most interesting aliens in Star Trek. I think JJ Abrams made a mistake blowing up their planet. Or perhaps they see the time travel machine as a way to stop it. Or perhaps just as there are always “patriotic Russians” willing to do what Russia wants, there are patriotic Romulans.

There might be a Romulan villain, and he/she and the captain are constantly running into each other. Every good hero needs a good villain. I think that is one of the things that made “DS9” good: It had a lot of interesting recurring characters, and some of them were the bad guys.

The series could be like “Discovery”, with a new story arc every season. One could be about the Borg. I saw a shot of a Borg cube in one of the “Picard” trailers. What happened to them after (ANOTHER SPOILER FROM THE YEAR 2001) Future Janeway infected them with a pathogen? I thought they could break up. Some are still the same old Borg. Some ask people to assimilate voluntarily (long life and infinite knowledge is not a bad deal if you choose it). Some are mercenaries for hire (fuel and bodies being the price). Some are Borg xenophobes who destroy other planets. Some are hard-core Borg purists who destroy other Borg who have strayed from the way. These factions would not be equal in size.

Another season could deal with members of Voyager’s crew. Some decided to stay in Starfleet, some went into the private sector. But perhaps some became guns for hire, working for the highest bidder. Their experiences in the Delta Quadrant as well as their determination to get back to the Alpha Quadrant might give them some unique advantages. Perhaps they found 24th century suburban life too boring. Perhaps some tried to get back to the Delta Quadrant. Perhaps Starfleet regards some of them as knowing too much to be out in the wild. I know Seven of Nine is in “Picard”. We shall see how she fits in. I thought of the Voyager crew angle before I saw the previews. I have a sad that she does not seem to be wearing the catsuit.

Now that I have that out, I can go watch “Picard”.

Big Jim wonders: Do all women look good in Starfleet uniforms, or is Jeri Ryan beautiful no matter what she is in?

Images from Memory Alpha, copyright owned by CBS, assumed allowed under Fair Use. I will admit, I have no idea how much we will see Seven of Nine in “Picard”. It’s just an excuse to add a few pictures of Jeri Ryan.

 

Thoughts On Recent Political Events

If the Republicans are so upset about corruption in the Biden family, why didn’t they make a big deal about this at the time? They made a lot of noise about tan suits, feet on the desk, misleadingly edited videos, and Marines holding umbrellas. They had time to make up lies about “death panels” and to conduct multiple investigations into Hillary Clinton (for the same things over and over) only to come up empty-handed. Hunter Biden was on the board of Burisma for several years. Why did this not come up until Joe Biden’s campaign started picking up steam?

For something even stupider, Iowa Senator Joni Ernst said that if Biden becomes president, the GOP will impeach him over his son’s board membership. I am not a lawyer, but I think you can only impeach an officeholder for their activities while in the office. I do not think you can impeach retroactively. Again, Senator Ernst, you took office in 2015. You had plenty of time to look into it. Perhaps, like HRC, the Bidens did not do anything illegal.

If Ukraine is so corrupt, why is it that no Republicans are talking about any other instances aside from one involving Trump’s potential opponent in this year’s election? Again, Hunter Biden joined Burisma in 2014. Has everybody else in this country that is a cesspool of corruption been clean this entire time? Or are they afraid that Manafort will point the finger at them?

If they are so concerned with corruption, I assume that the USA will be suspending all aid to Israel now that Prime Minister Netanyahu is under indictment. See this article, and this article.

If Republicans really think nepotism is bad, why not look into Trump’s kids?

If Trump was so concerned about a four-year-old instance of corruption in Ukraine, was it absolutely necessary to tie it to aid? Should fighting corruption be done as a “favor”?

Why not release the actual recording and/or transcript of the “perfect” call? Why is it locked away?

Come to think of it, why hasn’t Trump released his tax returns, as every president and nearly every major candidate has done for almost 50 years? If he has nothing to hide, then everyone who says he is will look stupid. Why is Trump not taking advantage of what could be an excellent way to embarrass his political opponents? Instead of a using what he says is a sure-fire way to make every one of them look bad, he is fighting tooth and nail to keep it hidden. I think the kompromat has to do with money laundering, or something that would show he is not as wealthy as he claims.

I have started following a twitter account TomJChicago  who claims that Trump has dementia, and it is irreversible. Between his ego, his unimpressive intellect, his crimes and his dementia, I think Trump will implode. It may happen before the election. If it happens after the election, then I think things will get even more chaotic in the White House. All the corrupt people he has working for him who couldn’t manage a one-car funeral will starting fighting each other tooth and nail.

I think the political end-game for Trump is irrelevance, at best (if not jail time). Everything he touches dies. Everyone will see how toxic he is. I think he will be ignored and forgotten, as are most conservative heroes. As Jonathan Chait pointed out, the only GOP president who really met their ideals was W, and they never talk about him. Reagan would not win a primary today, yet they revere him. More accurately, they revere their myth of Reagan.

Nixon won in an electoral landslide, but a year after he resigned, you couldn’t find anyone who voted for him. Conservatives loved GWBush, but as his lying, stupidity and incompetence became too hard to ignore, they all dropped him. The Tea Party people insisted they protested GWB as much as they protested Obama, but that is a lie. A lot of people would not admit they ever voted Republican. “I’m not a Republican, I’m a conservative”. Suddenly, there were a lot of self-identified Libertarians in this country. More than there are now. All the consistent, revealed-truth-believing, delusional faux-deductive-reasoning Republicans thought Sarah Palin was their new savior, and she would keep the GOP in the White House for decades. Now none of them care about her. Steve Bannon was a master strategist. Has anybody seen him lately? He made a film about Palin. I never want anyone else to write about Bannon as some sort of genius or having any sort of intelligence or trying to understand his worldview. When it comes to picking good presidents, he is 0-2.

I am not saying they will stop being crazy. But when they can no longer deny reality, they get quiet. Until the next carnival barker comes along. Then the cycle repeats. “Conservatism cannot fail, it can only be failed.” Yet they never see the pattern.

I predict that Trump will be part of this pattern. The lies, the corrupt cabinet, the money laundering,the haphazard foreign policy, the dementia: It will all bite them in the rear. I will even predict that not only will they deny supporting him, someone will make a video saying they never supported him while wearing a MAGA hat.

Republicans love to claim they are consistent in their beliefs, and liberals love to point out their hypocrisy. The thing is, Republicans ARE consistent in their beliefs, they just lie about what those consistent beliefs are. It’s not freedom, it’s not religion, it’s not capitalism, it sure isn’t science or rule of law. They love power and control, and they will do and say anything to keep it. They will change stance mid-sentence. We have always been at war with EastAsia, at least until we weren’t.

During the 2016 campaign, Cruz, Graham, Paul and many other Republicans said Trump would be a disaster. Almost all the Republicans in Congress refused to say his name. On Election Day 2016, Paul Ryan would only say he voted for “our candidate.” News flash guys: You were right the first time.

And I supposed after Trump implodes and you change your minds again, you will be right again.

Big Jim knows being honest with others starts with being honest with yourself.

Image from Wikipedia, assumed allowed under Fair Use. Illustration of Theophilus of Adana making a deal with the devil to attain power, from the Maastricht Hours, early 14th century.

2019-12 Dividend Income Report

Here is the dividend income report for December, 2019.

The monthly dividend income came out to $3,611.13. The yearly income total for 2019 through the end of the month was $10,515.13. I finally broke the 10K barrier.

The income for December, 2018 was $2,313.99, and the yearly income for 2018 through the end of December was $6,971.76.

One of the reasons I got more income is that I increased my stake in BND in my IRA. I also got shares of RWR in a taxable account.

I might get a premium account at ETFGuide.com. It is a site run by Ron DeLegge, the guy who runs the Index Investing Show. They do a monthly income trade using covered calls on some ETFs. He always gives the amounts based on investing $100,000. I will be investing less than that. I will email and see if it is worth it if I invest less money. I would no longer be a purely dividend investor, but it might be an extra $3,000 a year.

Maybe I will get a membership and see how the trades pan out. I can track the ETF prices without buying options. I still need to hold on to RWR for a while to avoid captial gains tax.

I am going to need more money soon. My rent will be going up by about $50/month (which is more than 20%). I am almost 50, and I will be eligible for catch-up contributions in my Roth IRA and Roth 401K. Right now I could put all the extra into my Roth 401K, but then I would have nothing left for my IRA. I will need about $7K a year.

There is an option to put my Roth 401K in a brokerage account, but the trading costs are pretty high. I can only rollover to an IRA when I leave the company. A lot of places do not offer 401Ks, so for now I am staying. I wish I could leave for a day, roll my money over and then come back.

I need a better job in general. I am not too thrilled with the technology at the job I am at, but not too many people use the technology I am interested in.

I started qigong recently. A few people have said it has changed their lives, and a few said they got better jobs. We shall see.

One thing I also did recently is I converted a small part of my traditional IRA to a Roth. I want to see how much I will pay in tax. Ron DeLegge says that now is the time to convert since tax rates will go up in a few years. The problem is I do not want to use up all my savings paying for the taxes on a conversion. He says to keep a margin of safety. Maybe he would disagree with this, but I consider my emergency savings to be my margin of safety.

I also plan on taking Ron DeLegge’s advice and come up with a written investment plan.

I still sometimes wonder if what I am doing will be enough. On one hand, if I was investing my Roth 401K from work the same way I invest the rest of my money, my totals would be higher. But I have been doing this for a while, and I am still not seeing the wild compounding I was expecting. I started going all-in on dividend growth investing in 2010. (I do not include 2010 numbers in my monthly posts because I started partway through the year.) In the nine years I have been doing this, I have made $52,389.49. I still think going for capital gains is just the Greater Fool Theory, and I have no interest in that. We will see what happens.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each December from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-12 $10515.13 $3611.13 $1343.15 $876.26
2018-12 $6971.76 $2313.99 $1165.08 $580.98
2017-12 $7536.98 $1837.78 $913.40 $628.08
2016-12 $6076.53 $1027.76 $605.28 $506.38
2015-12 $5472.07 $954.52 $575.86 $456.01
2014-12 $4438.02 $909.86 $481.67 $369.80
2013-12 $3406.20 $594.59 $344.05 $283.85
2012-12 $3585.01 $686.10 $386.41 $298.75
2011-12 $3091.99 $514.94 $323.40 $253.92

Here are the securities and the income amounts for December, 2019:

  • Vanguard Total Bond Market ETF: $173.12
  • Vanguard Total International Bond ETF: $10.51
  • Vanguard Utilities ETF    VPU    ETF: $216.67
  • RLI Corp: $101.33
  • RLI Corp: $23.31
  • SPDR S&P Dividend ETF: $802.33
  • SPDR Dow Jones REIT ETF (second account): $572.57
  • Vanguard Total Bond Market ETF: $180.53
  • Vanguard Total International Bond ETF: $284.98
  • SPDR Dow Jones REIT ETF: $349.50
  • SPDR S&P Global Dividend ETF: $884.40
  • Brokerage Money Market: $4.33
  • Brokerage Treasury Account: $7.55

Big Jim wonders if the first thing Olivia de Havilland thinks when she wakes up is: “Suck it, Kirk Douglas.”

Image from Wikimedia, assumed allowed under Fair Use. Painting of the Transfiguration by Duccio di Buoninsegna (c. 1255–1260 – c. 1318–1319), aka “The Duce”.

2019-11 Dividend Income Report

Here is the dividend income report for November, 2019.

The monthly dividend income came out to $126.48. The yearly income total for 2019 through the end of the month was $6904.00.

The income for November, 2018 was $50.86, and the yearly income for 2018 through the end of November was $4657.77.

There is not a lot to report for the past month. I deployed some of my cash and bought more BND, so the income from that fund is a lot higher this month.

In other news, the Trump administration tightened the work requirements for SNAP benefits. (SNAP is basically food stamps.) While I think Trump is the worst president ever, I do not disagree with this move. At least not entirely. See news articles here at NBC News and here at USA Today. The economy is doing well, so on one hand it makes sense to tighten requirements. But what will they do if the economy slows down? Of course, that is assuming that we have a GOP president when that happens. Hopefully we will not. (I work for a company that makes and manages the benefits management server for a few US states.)

I think this might be another indicator a recession will be coming very soon. Back towards the end of the last expansion, people were talking about putting the Social Security trust fund into the stock market. Right at the worst possible time to do so.

Humans are good at contra-indicators. If/when the next recession hits, I bet a lot of states will do what they did the last two times: Cut services when people have a greater need for them, and raise taxes when people have less capacity to pay. We should have higher taxes and fewer services during the good times, and use the reserve in the bad times. When would the bad times happen? When everybody says, “Why don’t we just spend the money now?”

In other news: Trump was impeached by the House. Best day ever.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each November from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-11 $6904.00 $126.48 $843.65 $768.17
2018-11 $4657.77 $50.86 $562.56 $541.30
2017-11 $5699.20 $560.60 $559.31 $560.58
2016-11 $5048.77 $506.98 $502.98 $500.27
2015-11 $4517.55 $460.83 $477.55 $452.28
2014-11 $3528.16 $291.27 $357.30 $343.53
2013-11 $2811.61 $252.75 $277.74 $291.48
2012-11 $2898.91 $247.99 $262.78 $284.49
2011-11 $2577.05 $246.37 $232.84 $240.81

Here are the securities and the income amounts for November, 2019:

  • Vanguard Total Bond Market ETF: $103.89
  • Vanguard Total International Bond ETF: $10.86
  • Brokerage Money Market: $4.32
  • Brokerage Treasury Account: $7.41

Big Jim says this is the best day ever.

Painting of Rejection of Joachim’s Sacrifice by Giotto di Bondone (1267 – 1337), at his website. I actually got the image file from somewhere else, but his site has a page about it. Assumed allowed under Fair Use.

Notes On Idea Lists

I have been doing the idea list again, since about May. I really do not feel any different, or that my life is about to change.

Overall, it has been going well, but I have been losing some momentum in the past couple of weeks. Coming up with topics is still pretty hard. I kind of feel I am at the same place I was the last two times I tried it, it just took me longer to get here.

The main issue is topics for the idea list. JA never mentions that is the hardest part. In one post he does give tips (reading a lot, see here) and I have to admit I have not followed all of them.

Some of the idea lists that I come up with are kind of dumb, like I’m a bad comedy writer. But sometimes when I get to number 9 I come up with something interesting. (And when I do, I agonize over whether or not I can quit, or if I should do a tenth).

I make idea lists about why to do something, and sometimes why not to do something. Sometimes coming with reasons not to do something might be a good way to anticipate counterarguments to a suggestion at work, or a way to anticipate obstacles.
Sometimes I will see someone doing something, or who just looks interesting, or something that irritates me, and I will come up with ten or so ideas about that person’s history, or why they are doing whatever they are doing.

Sometimes I will combine things. Or I will get words from a passphrase generator, and come up with how they are related. That is not always very fruitful.

I try to keep a list of possible topics. I try to work on it once a week. Sometimes a possible topic will occur to me and I will write it down. It may be changing how I observe things, but I don’t feel like my list is on the cusp of a big change.

A couple of months back, I was thinking about giving up. I went to Whataburger for lunch, and I saw a car that had been painted over several times. In the layer under the top, someone spray-painted “Elvis” several times all over the car. The top layer was gold. And there was a mannequin in the backseat. I thought, “I can use this.”

If I lived in Florida, I could just follow Florida Man.

I know James wrote that his idea lists have gotten him invites to speak from companies, but I have found that sometimes people do not want suggestions. People do not want things to change. I work on a large Java app for a state government. The base application is about ten years old. Java has changed a lot in ten years. It is less verbose and less painful to work with. At least, that is what I have heard. Would re-writing the app be a pain? Yes, but then it is a pain to use. What does this have to do with idea list? Management is not open to the best solution (and I am not the only one who thinks starting over might be the best solution). But writing more, smaller apps, tools, and utilities to manage the main application they are okay with. The problem is this adds more complexity. They are okay with adding more apps and processes to what we do than actually change what we are doing. The sunk cost fallacy is a stronger force than compound interest.

While it is frustrating, on another level I can understand it. People generally do not like someone dropping out of the sky and giving unsolicited advice. It makes you look like a jerk, not an enlightened person.

Maybe I should spend more time on actual issues in my life. Unless that leads to frustration.

I took a creative writing course when I was at WIU. She once mentioned that in one of her classes, she had to make links between different topics in her life. If she had learned something in a physics class, and she was in love with “someone” (her word, not mine), she had to think of a way they related to one another.

Another issue is that I think in order to have new ideas, you need to expose yourself to new things. But I want more control over my life, and the way I see it, that means more discipline, more routine.

Big Jim’s idea machine might be running out of steam.

Painting of the Nativity by Guido of Siena (13th Century), assumed allowed under Fair Use.

2019-10 Dividend Income Report

Here is the dividend income report for October, 2019.

The monthly dividend income came out to $291.83. The yearly income total for 2019 through the end of the month was $6777.52.

The income for October, 2018 was $1130.39, and the yearly income for 2018 through the end of October was $4606.91.

The Vanguard Utilities ETF (VPU) paid out in October instead of September. Other than that, no real news on my front.

I might make some adjustments to my 401(k) at work, like taking some money out of stocks and putting it into bonds. Stocks have been going up for ten years. That will not go on forever.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each October from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-10 $6777.52 $291.83 $822.53 $761.86
2018-10 $4606.91 $1130.39 $561.66 $583.77
2017-10 $5138.63 $341.83 $566.34 $556.11
2016-10 $4541.79 $281.09 $508.05 $496.43
2015-10 $4056.72 $312.23 $459.42 $438.15
2014-10 $3236.89 $243.87 $368.19 $340.32
2013-10 $2558.86 $184.81 $295.19 $291.08
2012-10 $2650.92 $225.14 $285.46 $284.35
2011-10 $2330.68 $208.90 $258.17 $238.44

Here are the securities and the income amounts for October, 2019:

  • Vanguard Utilities ETF: $228.96
  • Vanguard Total Bond Market ETF: $38.18
  • Vanguard Total International Bond ETF: $10.91
  • Brokerage Money Market: $4.95
  • Brokerage Treasury Account: $8.83

Big Jim does not have much news this month.

Painting by Meister der Legende der Heiligen Cecilia, circa 1300. Image from Wikimedia, assumed allowed under Fair Use.

2019-09 Dividend Income Report

Here is the dividend income report for September, 2019.

The monthly dividend income came out to $2112.65. The yearly income total for 2019 through the end of the month was $6485.69.

The income for September, 2018 was $506.44, and the yearly income for 2018 through the end of September was $3476.52.

The international stock dividend fund did not pay as much this quarter as last quarter.

The Vanguard Utilities ETF (VPU) did not pay this month. It paid a dividend on October 1. I know it’s a first-world problem, but I am thinking of replacing it with State Street’s Utilities Select Sector SPDR Fund (XLU). XLU is State Street’s only utility ETF, and BlackRock’s  iShares U.S. Utilities ETF (IDU) has a much higher expense ratio. VPU has the most holdings. I think for the time being I will stick with it.

I am a bit surprised that State Street does not have a broader utility ETF in addition to XLU. XLU has the dividend stocks that are in the S&P500.

Fidelity has the Fidelity MSCI Utilities Index ETF, FUTY. It has the lowest expense ratio, almost as many holdings as VPU, and a nice dividend. But as I stated, I think for now I will stay put. As Buffett has stated, returns decrease and trading increases. Or maybe it was Jack Bogle.

My brokerage money market account paid $6.03 in August, and $4.86 in September. Interest rates are low and getting lower. The only reason Dolt 45 wants lower interest rates is because he owes a LOT of money. I don’t think the economy really needs it. Granted, things are not great, but I don’t think the economy is slowing down yet. I don’t think the next recession will be as bad as the one we say in 2008-2011 (depending on what country we are talking about), but cutting rates at this stage is a bad idea. Rates are historically speaking low right now. In 2006, the federal funds rate (what the Fed says banks can charge each other) was 5.25%, and the discount rate (what the Fed charges banks) was 6.25%. Right now, those rates are 1.75% and 2.75%.

A lot of people think interest rates are too high right now. Perhaps things are a lot worse than they seem. Or perhaps the whole Rethuglican Party is abandoning its supposed rock-solid principles, and just following Dolt 45’s lead. When conservatives seem inconsistent, they are really not. They are lying (whether to themselves as well as others I do not know) about what they are consistent about. It’s not about freedom, or balanced budgets. It’s about being in charge and staying in charge.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each September from 2011 through 2019:

Month YTD Amount 3MMA 12MMA
2019-09 $6485.69 $2112.65 $744.85 $831.74
2018-09 $3476.52 $506.44 $430.49 $518.06
2017-09 $4796.80 $775.50 $562.76 $551.05
2016-09 $4260.70 $720.86 $505.47 $499.02
2015-09 $3744.49 $659.59 $443.06 $432.46
2014-09 $2993.02 $536.75 $353.04 $335.39
2013-09 $2374.05 $395.65 $293.78 $294.44
2012-09 $2425.78 $315.21 $283.66 $283.00
2011-09 $2121.78 $243.26 $256.81 $233.01

Here are the securities and the income amounts for September, 2019:

  • Vanguard Total Bond Market ETF: $39.47
  • Vanguard Total International Bond ETF: $11.22
  • RLI Corp: $23.25
  • SPDR S&P Dividend ETF: $694.60
  • SPDR Dow Jones REIT ETF: $264.32
  • SPDR Dow Jones REIT ETF (second account): $436.67
  • SPDR S&P Global Dividend ETF: $630.07
  • Brokerage Money Market: $4.86
  • Brokerage Treasury Account: $8.19

Big Jim pays attention to details and remembers the big picture.

German painting from about 1518 in a museum in Austria. Image from Wikimedia, assumed allowed under Fair Use.

Thoughts On Startups And Cisco

I know a couple of guys at Cisco who were brought in as part of an acquisition. They are members of a couple of meetups I attend. Their ranting about corporate culture sparked some thoughts about corporations and startups. I think there are a lot of things about the world that are the result of choices that were made before us, and not immutable laws of nature. Innovation can only happen in startups and corporations must be inflexible behemoths are two of those ideas.

This made me think of an article on Wolf Street: Cisco Buys 45th Company in 5 Years, Revenues Still Stagnate.  The title gives the basic idea of the article. From 2012 to 2017, Cisco bought 45 companies. Cisco has not disclosed the prices for all of those acquisitions. For 19 of them, it spent $18.2 billion.

We do not have an alternative reality to compare to ours. Perhaps the acquisitions are the only thing that prevented Cisco’s revenue from declining. Nevertheless, here is a table with revenue and income from 2010 to 2019 (in millions):

FY Revenue Net Income
2019 51,904 11,621
2018 49,330 110
2017 48,005 9,609
2016 49,247 10,739
2015 49,161 8,981
2014 47,142 7,853
2013 48,607 9,983
2012 46,061 8,041
2011 43,218 6,490
2010 40,040 7,767

I don’t know why income took a dive in 2018. It has gone up over the decade. But as the Wolf man says, it does not look like they got a great rate of return on their investments in acquisitions. Cisco spent billions on startups, and really has nothing to show for it.

Why not just hire people to expand? It might have cost less.

In my understanding of the VC world, not every investment makes a profit. An exit must cover the cost of the failed startups as well as cost of successful startups, in addition to a profit. And a new car or boat for the jackass VCs. Maybe the cost of the failed companies is not a line item in an acquisition agreement or IPO prospectus, but those costs are still embedded in an exit.

Instead of a big corporation acquiring one profitable startup from a VC that also has to make up for nine failed startups, why can’t big corporations start a dozen or so project teams, and shift people into the ones that are successful? When a corporation acquires a startup or a startup has an IPO, a lot of the upside has already happened. Why not keep some for yourself? Where does this idea that innovation can only happen at startups come from?

I think that like needing a car outside of a big city in the USA (and even in some big cities), a lot of people think that this is some immutable law of nature. I think this is the result of many, many choices, even some that were made for us that we do not know about. Maybe changing it would be next to impossible. Maybe Texas will never get mass transit. (Because nothing says “freedom!!” like spending an hour every day going 10 MPH when the speed limit is 60.) Just because things are this way does not mean things have to be this way. I think this is an example of the Is-ought fallacy.

My Meetup acquaintance have said things like, “Cisco would not have let us do this in language X or with library Y if the project started there.” If that were true, then that would be a choice. There is no reason that an internal team cannot try something in a new programming language. There might be people in the company who would like to try new technology. If a corporation is willing to buy a team that uses a new language, they should be willing to let internal teams have the same freedom.

Except Scala. It really is vile.

Some big corporations used to have research labs: PARC is still a part of Xerox. It may not be much now, but Xerox was one of the biggest companies in the world. (Carl Icahn got a hold of Xerox, so things are not going too well.)  Bell Labs is now part of Nokia. A lot of groundbreaking technology came out of those organizations. Real innovation, not the bogus innovation we get from Silicon Valley today, like Uber (combining taxis, phones and indentured servitude) or WeWork (“We are the middleman, and do NOT pass the saving on to you, because frankly we are losing money”). All Silicon Valley has given us in the past decade is advertising, mass surveillance, and more ways of losing money.

And who pushes the line that innovation can only come from startups and VCs? People in the startup/VC ecosystem. Ecosystem and “echo chamber” are synonymous here.

Big Jim wants us to make great things again.

Image from Wikimedia, assumed allowed under Fair Use. Painting of the Annunciation by Duccio di Buoninsegna (c. 1255–1260 – c. 1318–1319), aka “The Duce”. Finally, this site takes a Duce.