In 2017, I concentrated mostly on talking about the stock price. I believe you should be buying stocks when the price is at least reasonable. I will continue to track this in my entries. However, I believe strongly in investing in stocks for the long term. By long term I am not talking about 5 years. I believe in the very long term. I have had the Bank for Montreal for some 36 years and I have no intention of selling it.
I keep stocks that I buy until they are bought out or get into trouble that they do not seem to be able to resolve. I had Loblaw Companies Ltd for 11 years but sold in 2007 because they did not seem to be able to solve the problems with their new supply chain program. (I do not believe they have even now solved the problems.)
For 2018 I want to consider long term total returns for the stocks that I cover. I have to date only looked at total returns for the past 5 and 10 years. However, for a lot of stocks I have a lot more data. So where I can I will look at total returns over the past 15 plus years.
Often commentaries look at the short term of the last year and some the very short term of only the last quarter. To me that is no basis to buy a stock. Of course the past does not tell you everything. But it can give you a feel for the company and the market it operates in. On the other hand sometimes a new CEO or Chairman changes things a lot, especially if the company has gotten into difficulties and needs new ideas to move forward.
Looking at the past can sometimes help with knowing how a company will react to certain situations. For example, when a company has difficulty in covering their dividends with EPS, the past actions might show you how they will handle the situation now. When a company cannot cover their dividends, they can continue to grow them, they can stop growing them, they can cut them or they can suspend them.
Companies do tend to do what they have done in the past. There are always going to be another recession and some company you own will have problems covering their dividends. When you know what they have done in the past is a good indicator on what they will do now.
I do not find recessions or the suspending or cutting of dividends a problem as I have companies in different sectors and different sectors often react to recessions differently. So in the bad times, I have companies that do stop growing dividends; that do cut them or do suspend them. However, since companies are often affected different, I also have companies that can continue to grow dividends in recessions. Overall I find that in bad times my dividend growth slows down.
I not only look at the past, but I also look at what people are currently saying about a company and what they think will happen in the short term. This short term is from 1 to 3 years.
On my other blog I wrote yesterday about Rogers Sugar Inc. (TSX-RSI, OTC-RSGUF)... learn more. Next, I will write about Calian Group Ltd. (TSX-CGY, OTC- CLNFF)... learn more on Wednesday, January 9, 2018 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.