Summary

  • Passive income for 2019 so far is 20735 NOK or $2400
  • Dividend growth portfolio return this year: 12.69%
  • Corporate bond portfolio returns this year: 10.60%
  • ETF & Index Portfolio return this year: 11.93%
  • Investment Guidelines
  • Working in Silicon Valley for FinTech firm
  • Guesting Pengepodden

Living While Saving

During the past months, I’ve been living in San Francisco and working for Bento for Business, which is a FinTech firm in Silicon Valley. It’s fun to be a part of a tremendous skilled team with work experience from top firms such as JPMorgan, Barclays, Facebook, Google… You name it. Before goint, to SF I though startup-people were young, wild and broke, but the reality is that most left a high paying job at a successful firm to join a promising venture.

My job at Bento consists of working with management accountability for the product launch of Bento Pay which Forbes wrote about here:

Bento for business goes after checks with bento pay

Aiming to bring the ease of peer-to-peer payments to the business class, Bento for Business announced the launch of Bento Pay, a payment service that eliminates the need for business owners to write checks – Forbes

Anyhow, living in SF is a dream and the pictures below show where I work. Each day, I get the chance to gloom over to HQ offices such as Google, Salesforce, Fitbit and so forth. A fun city for sure!

But what about investments?

Unfortunately, I don’t really have time to talk or read about investments at the moment other than the casual investor presentations.

I even deleted my twitter account to achieve more time. It’s so easy to get trapped in the whole social media game. Try to track how much time you spend and you’ll see. Because, in the end, I invest to get more time, not less.

Everyone’s main goal for investing should be to either get more time or be happier. Anything else is wasteful. Hence, I plan to become incrementally more and more wealthy from investing while focusing on living a life I find valuable.

Surely there are other ways to get rich, but one doesn’t want to be rich in money and poor on-time either!

The expenditure approach to DGI

I’ve called this concept the expenditure approach to dividend growth investing, and it’s all about finding the balance between getting rich and consuming for a better life. I’ll write and talk more about this later, but in essence, it’s about spending some cash flow while saving some too. By doing that, one stay present as well as in the distance –  Living a better life now, and a good life later too.

Pengepodden

In late October, I’ll be guesting Pengepodden, which is the largest financial podcast in Norway. That’s a tremendous step for me because only the most “important” financial people in Norway get invited to talk on this podcast.

I hope to give a profound understanding of the various aspects of my investment strategy, ranging from Venture Capital to Private Equity and naturally Dividend Growth Investment. Crossing my fingers for a good episode with a lot of fun talk.

My office!

Investment Performance

  • Dividend growth portfolio return this year: 12.69%
  • Corporate bond portfolio returns this year: 10.60%
  • ETF & Index Portfolio return this year: 11.93%

All portfolios had significantly lower volatility and drop during the mini market crash in December (the yellow line is Nasdaq, NYSE: QQQ)

The main objective for my DGI portfolio is to provide consistent growing cash flow while having lower volatility than the market. This means that’s it’s natural to underperforming, because of systematic risk, during bull markets, and outperform during bear markets.

So far, all portfolios are behaving as intended. Sharp Ratio for the DGI portfolio is around 1.6

Passive Income

  • Total passive income for 2019 so far is 20735 NOK or $2400
    • January: 1185 NOK or $137
    • February: 968 NOK or $113
    • March: 2699 NOK or $312
    • April: 5734 NOK or $664
    • May: 4676 NOK or $541
    • June: 4125 NOK or $477
    • July: 1340 or $155

Investment Guidelines

  • Hold between 20 and 60 stocks to reduce company-specific risk
  • Equal-weight each holding since it’s hard to predict winners and losers
  • Invest no more than 25% in any one sector
  • Aim for 50% defensive, 25% sensitive, 25 cyclical
  • Follow Next Man Up Concept
  • Add on beat on earnings & revenue + increased dividend growth
  • Do not add on missed earnings & revenue
  • Do not add on frozen dividend payments
  • Aim for American firms
  • Debt to capital ratio of no more than 50%
  • Healthy free cash flow generation
  • Investment-grade rating on most holdings
  • Target financially healthy companies with Safe or Very Safe Dividend Safety
    Scores
  • Equal weighting
  • Focus on Blue Chips

Further Investment Actions

Dividends will be invested once the accumulated amount + monthly saving is around 15000 NOK.  Only high-quality blue chips will be targeted, and what to buy depends on market behavior and prices. However, there’s a list of around 60 possible firms which I want to buy, and I look at other firms, neither screen for better bargains. I simply focus on my list, add if I can or make new purchases. 

Only High Quality

As we are approaching new market heights, I do not intend on selling shares. However, I do want to make sure I buy high-quality firms, and thus, only buy investment-grade firms operating with a sound business model. By looking at consistent double-digit returns on ROE/ROIC/ROI, one can find firms with long-term moats.

Don’t focus too much on ratios

I do not solely focus on short cut ratios such as P/E, and neither should you. Filtering by such ratios is easy, fast but not enough. A proper evaluation might include P/E, but it’s only a part of a grand evaluation. 

30 / 70 valuation

I recommend 30% quantitative valuation, and 70% qualitative valuation. This means asking questions about quality, business model, people, product, timelessness and so forth. You do not do this in 1 hour, but once you’ve done it, most of the job is done.  Naturally, you want to use the firm’s annual letters as your main information resource. 

Further reading can be found by checking the dividend income spreadsheet or finding the best books in the world,

Dividend Income

Reading List

This might be the only post this summer, so by that, I hope you all have a great summer and if you find yourself in San Francisco, feel free send an email and reach out

Best

Stockles


9 Comments

Ogellers · July 9, 2019 at 4:08 am

Bra du har det kjekt i SF. Jeg har tidligere tenkt at du ville vært en perfekt gjest hos pengepodden, så morsomt at du nevner det. Ser frem til intervjuet 🙂

European Dividend Blog · July 9, 2019 at 6:50 am

Love your blog! Understand the priorities and that you don’t have time for this blog – tough luck for us 🙂
Can you explain your Corporate BOnd Portfolio? I don’t see it under your portfolio. I’m very interested in this type of investment given the bull markets current level.

    Stockles · July 9, 2019 at 4:54 pm

    Hi,

    Sure. It’s basically what some people call Crowdfunding, but people working within that sector (which I do in Norway), prefer to call it growth financing. It’s basically a way for retail investors to invest in high yielding bonds with a low default rate. Due to company regulations, I can’t disclose which I work for, neither talk too much about how I invest, but search crowdfunding and you will find it. It’s huge in England and Finland and will continue to grow at a rapid pace for the next decade.

      European Dividend Blog · July 10, 2019 at 6:57 am

      Thanks, Carl! I’ll keep an eye out. I have started to invest a small amount in ETF with corporate bonds, but this sounds interesting as well.
      Have a great Summer!

        Stockles · July 10, 2019 at 4:17 pm

        My name is Arne though, but happy to help!

          European Dividend Blog · July 11, 2019 at 8:52 am

          Haha – Sorry Arne! I was writing on MoneyMow’s blog and he is Carl 🙂

          Stockles · July 11, 2019 at 4:31 pm

          No worries!

10 Year Target · July 10, 2019 at 9:05 pm

Great performance, and so fun to read about your new job.

swedendivin · July 18, 2019 at 9:09 pm

Sorry that u dont have so much time for the blog 😉 Iam always reading it whenever i can. Btw check out my dividends we are quite the same in the amout.

Greetings Swedish Dentist dividend hunter

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