FISH | Financial Independence Seeking Happiness: Schiller PE10

Financial Independence through Dividend Value Stock Investing

Contender 4 #financialindependence, Compound Interest, Dividends, downshifting, DRIP, Finance, financial independence, Inflation, Investing, Schiller PE10, stock screen 07:35

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#FinancialIndependence requires setting up multiple income streams to replace your income from your labour. 
 
#Downshifting may mean that you still work but rely on a smaller income from some work and possibly some investments. 
 
Today the focus is on dividend value stock investing to provide a passive income. 
 
Buying shares in a company has several advantages 
 
1. You have access to many companies in many different businesses 
2. Companies can grow their earnings and dividends rapidly 
3. Companies can be out of favour and cheap to buy 
4. Companies are strictly regulated and lots of information is available about them 
5. Companies can have a competitive advantage \ high barriers to entry 
<div style="text-align: center;">
<blockquote class="tr_bq">
"One of the biggest mistakes investors make 
is to focus on stock picking for 
capital gains. 
 
The reality is that if you're not looking at 
 
dividends when you buy a company... you're 
likely not going to make much 
AT ALL. 
 
Did you know that without dividends, stocks 
have actually 
UNDERPERFORMED bonds 
for the last 113 years? 
 
This is not hype, a 
study by the London Business 
School found that without dividends, stocks 
return 
a measly 1.9% per year... LESS than Treasuries!" Gains, Pains and Capital</blockquote>
</div>
To help identify companies that are of interest to invest in  I have been spending some time massively improving the stock screening tool  to find some cheap #dividend stocks out there. Here is a look at the new screen (The UK all share list as of the 6th April is available towards the end of the post): 
 
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdKG1J-p6L6SRJAhMxH3yBS6dQ3HQd0HFDsBsbGKKdlG11TbNHV0-NzXhOELzI9oWs4T2CX4jPGva84VYnLW65sjurZHqtF68rg-X5Ig_AUuVFilaJc00iwAerwZV9CrpnUfvC8cLgqnAN/s1600/10YrScreen.JPG" style="margin-left: auto; margin-right: auto;"><img border="0" height="86" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdKG1J-p6L6SRJAhMxH3yBS6dQ3HQd0HFDsBsbGKKdlG11TbNHV0-NzXhOELzI9oWs4T2CX4jPGva84VYnLW65sjurZHqtF68rg-X5Ig_AUuVFilaJc00iwAerwZV9CrpnUfvC8cLgqnAN/s280/10YrScreen.JPG" width="280"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Sample from a stock screener created with 10 years worth of data</td></tr>
</tbody></table>
It has been made very visual with its colour coded formatting. 10 years worth of financial data is used for graphs and calculations. More of the major indices have been added. It has been made easier to use. Easy to personalise with your own portfolio of stocks. Backed by a large powerful data set and statistical data analysis. 
<ul>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHX_XuYh9NK5qtOnhOJ7BocXylAjDT-zl3CYmSLkMtSSNH35I31GoG26urt84z1VI677QX1YiyWTDYFK3Nd3QAbpPUwSltlg-npDAfSsgLPQA947E04TNMw3vrP4PtneB0NKsQFcbPQrt4/s1600/PG.JPG" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="122" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHX_XuYh9NK5qtOnhOJ7BocXylAjDT-zl3CYmSLkMtSSNH35I31GoG26urt84z1VI677QX1YiyWTDYFK3Nd3QAbpPUwSltlg-npDAfSsgLPQA947E04TNMw3vrP4PtneB0NKsQFcbPQrt4/s280/PG.JPG" width="280"></a>
<li>Contains major market data (US, UK, EU) </li>
<li>Current data can be evaluated on the fly for the Value Screener and Dividend Value Screener by clicking the magic button</li>
<li>Stocks can be interrogated individually with 10 years worth of data in the graphical evaluation tool</li>
<li>10 years of financial performance is used to create the 10yr Value Dividend Screener to check the quality of the stock - has it made a regular growing profit and paid a regular increasing dividend?</li>
<li>"My Portfolio" can be setup to show the screener results for your stocks <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYIgQZ-EaJrZ7NJH1g0-aW4PDlIhsaiHrjFdZUnmXgD-CTQV0oWnDAVFvDoMqg7y-xDvuGxFB4GKB7SukMemE26DSlNCq0nYYwP0zvMbHeHO9PZu6FU_-O1vwDtpOX2AtvXQuNcZ4t0z6q/s1600/Portfolio.JPG" style="margin-left: auto; margin-right: auto;"><img border="0" height="101" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYIgQZ-EaJrZ7NJH1g0-aW4PDlIhsaiHrjFdZUnmXgD-CTQV0oWnDAVFvDoMqg7y-xDvuGxFB4GKB7SukMemE26DSlNCq0nYYwP0zvMbHeHO9PZu6FU_-O1vwDtpOX2AtvXQuNcZ4t0z6q/s280/Portfolio.JPG" width="280"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"> </td></tr>
</tbody></table>
</li>
</ul>
<div style="text-align: center;">
<blockquote class="tr_bq">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_Fe2TuX0Ec6bIb0Eytdx_T-yyKayX4tXgJq9x-XpES2vbkyBSiDs0zJMMrfqicwucnaN-JUD9bIGIkR5EaYaoqqa9j7DXyoEHtTozpMfC3rWVAu_AObPV2n7EN3gkzXl6vz1hUoC2LfIV/s1600/ValueStocks.JPG" imageanchor="1" style=""></a>Markets no longer perform true market functions. In markets today, the dead hands of the academic and the rentier have replaced the invisible hand of the merchant or the entrepreneur. James Rickards  </blockquote>
</div>
Why Look at History 
 
The Value Stock Screener and Dividend Value Stock Screener allow the user to click a magic button to download the latest data from the web. The tool then allows individual stock evaluation. The screen looks for undervalued stocks based on the methodology of "The Little Book That Beats the Market". 
 
1. Stocks with a very high Return on Capital - are they a well run business? 
2. Stocks with  high earnings yield (i.e low PE) are they currently cheap 
 
Why a spreadsheet - there are loads of options on the web? So why use this tool instead of one of the numerous screeners out there? Well in my opinion spreadsheets are more personal with the data, you can add your own comments and keep them for reference. Websites have flexibility in the type of graphs and how the data is shown on the screen.  
 
This is great at looking at THE.PReSeNT but this is not the full picture. The stock may be cheap for a very good reason and can get cheaper. 
 
In order to avoid this trap further research is required. 
 
One part of the research is looking at THE.PaST and secondly can we be confident about THE.FuTuRe performance? How good is the stock really? Is the company solid, has solid earnings growth and good dividend cover? This needed to be added. 
 
Introducing 10 Year Dividend Value Screening 
 
Dividend champion investing is not new and numerous lists of stocks that have consistent dividend growth can be found across the web. What is more difficult to attain is weather you are paying too much for a champion share? 
 
<div style="text-align: center;">
We need to gain in capital and dividends overtime. That way buying lowly valued stocks that become expensive can be sold and re-invested to gain MORE income. </div>
 
 
The new screener has the ability to analyse 10 years worth of financial data for selected Markets (NASDAQ, NYSE, DJIA FTSE 100, FTSE 250, DAX, EURSTOX50). 
 
 Its purpose is to ask the following questions: 
<ol>
<li>Is the current PE ratio expensive for the share in comparison to its historical PE10 (10 year average PE      PE10 = 10 year average share price / 10 years average EPS </li>
<li>Is the company growing its EPS (Earnings per share) consistently?      What is the average EPS growth rate over 10 years?      How many years has the company made a profit?</li>
<li>Is the company growing its dividend?     What is the average dividend growth rate over 10 years?     How many years has a dividend been paid?</li>
<li>How much debt does the company currently have?</li>
<li>What overall score is the company on Quality, Income and Value? </li>
</ol>
All of this information is used to create a score and rank versus other companies. 
<ol></ol>
10yr Data Screen Benefits 
 
The screen can be looked at stand alone via Google spreadsheets however the excel spreadsheet has some distinct advantages 
<ol>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_9YEXBHqCTE9KtBxO-njGNrubmKJMA3F27OeD2ZoCm3jwf1j93FMnKamE5DFmPzs-6bWwEfZ_8m52kBJNY3vJvGfldpheVj39_1a8uwvv52XGuC_UZdcWGiIAl8C-FosQM6ZKHhjt7WzG/s1600/PG.JPG" imageanchor="1" style=""></a>
<li>Enter your portfolio and watch stocks to see what the screen results are. Here is a screen shot with some well known companies:<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYIgQZ-EaJrZ7NJH1g0-aW4PDlIhsaiHrjFdZUnmXgD-CTQV0oWnDAVFvDoMqg7y-xDvuGxFB4GKB7SukMemE26DSlNCq0nYYwP0zvMbHeHO9PZu6FU_-O1vwDtpOX2AtvXQuNcZ4t0z6q/s1600/Portfolio.JPG" imageanchor="1" style=""><img border="0" height="102" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYIgQZ-EaJrZ7NJH1g0-aW4PDlIhsaiHrjFdZUnmXgD-CTQV0oWnDAVFvDoMqg7y-xDvuGxFB4GKB7SukMemE26DSlNCq0nYYwP0zvMbHeHO9PZu6FU_-O1vwDtpOX2AtvXQuNcZ4t0z6q/s280/Portfolio.JPG" width="280"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">A manually entered portfolio showing 10YR data quality results and current value result</td></tr>
</tbody></table>
</li>
<li>Query the data by bringing up a graphical interface. Here is a screenshot of Proctor and Gamble: <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_9YEXBHqCTE9KtBxO-njGNrubmKJMA3F27OeD2ZoCm3jwf1j93FMnKamE5DFmPzs-6bWwEfZ_8m52kBJNY3vJvGfldpheVj39_1a8uwvv52XGuC_UZdcWGiIAl8C-FosQM6ZKHhjt7WzG/s1600/PG.JPG" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="122" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_9YEXBHqCTE9KtBxO-njGNrubmKJMA3F27OeD2ZoCm3jwf1j93FMnKamE5DFmPzs-6bWwEfZ_8m52kBJNY3vJvGfldpheVj39_1a8uwvv52XGuC_UZdcWGiIAl8C-FosQM6ZKHhjt7WzG/s280/PG.JPG" width="280"></a></li>
<li>Record reasons for investing in the stock in the spreadsheet for future use <div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0Lq_hdZnY86jba5V6cMynqSfgWClSeoxuHyKTYBCy9WsKevQjjIft9HBXp2Dkdd7GwuEvZ-jBFRfpv9iQYJeudR6wFuQWwbkJkWjy7DN5q_GO00zvyM4bdFKi1HgPaJDy9tXvrugXDb_7/s1600/Comment.JPG" imageanchor="1" style=""><img border="0" height="18" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0Lq_hdZnY86jba5V6cMynqSfgWClSeoxuHyKTYBCy9WsKevQjjIft9HBXp2Dkdd7GwuEvZ-jBFRfpv9iQYJeudR6wFuQWwbkJkWjy7DN5q_GO00zvyM4bdFKi1HgPaJDy9tXvrugXDb_7/s280/Comment.JPG" width="280"></a></div>
</li>
</ol>
<ul>
</ul>
Please read on for the 10 Yr Data Screen for the United Kingdoms FTSE All Share index (Yahoo! ^FTAS):

Financial Independence through Dividend Value Stock Investing

#FinancialIndependence requires setting up multiple income streams to replace your income from your labour. #Downshifting may mean that...

Screener Updated

Contender 0 Investing, Oil, Schiller PE10, Silver, stock screen, Wheat 14:12

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The Stock Screener and Market analysis spreadsheet has been updated and a few more analysis graphs have been added. 
<ul>
<li>PE10 and Real Commodity Prices have been updated</li>
<li>Historical Debt to GDP and population growth analysis has been added for the US and the UK</li>
<li>All sources of information are included in the spreadsheet </li>
</ul>
Future improvements will be made to give a bigger picture of asset class valuations e.g. supply and demand of a commodity which can then be looked at further. Further long term trend analysis is another interest 
 
<a href="https://sites.google.com/site/lifeplanltd/home/StockScreener.xlsm?attredirects=0&d=1" target="_blank">Click here</a> to download* - its introduction post can be <a href="http://getintheringwithme.blogspot.com/2013/11/screener-for-value-and-dividend-stocks.html" target="_blank">found here </a> 
 
Peace, prosperity and happiness 
 
THE.CONTENDER 
 
Welcome New CONTENDER Readers! Please take a look around. 
 
<a href="http://getintheringwithme.blogspot.co.uk/p/about-me.html" target="_blank">Here you can find out about </a><a href="http://www.blogger.com/null" target="_blank">THE.CONTENDER</a> and the purpose of the blog is or perhaps browse the <a href="http://getintheringwithme.blogspot.co.uk/p/all-posts-get-in-ring.html" target="_blank">all posts list</a>, have a <a href="http://pinterest.com/gitrwm/contender-vs-the-future/" target="_blank">look at the pictures on the notice board</a><a href="http://getintheringwithme.blogspot.co.uk/p/about-me.html#random" rel="13"></a>. Please feel free to play with the <a href="http://getintheringwithme.blogspot.co.uk/p/muff-tools-and-check-lists.html" target="_blank">planning tools and checklists</a>. 
 
Keep in Touch:  <a href="http://feeds.feedburner.com/MuffFreeLifeAndExtremeFinancialFreedomPlanningTools" target="_new">RSS Feed</a>, follow THE.CONTENDER on <a href="https://twitter.com/The__Contender" target="_blank">Twitter</a> or <a href="https://www.facebook.com/pages/The-Contender/368729006562792" target="_blank">Facebook </a>or subscribe to posts by email: 
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* Like everything on this website the tools 
have been created for personal use / entertainment purposes. The 
information is as accurate as far as the author is aware (unfortunately 
he is human and is prone to mistakes from time to time - **** happens). THE.CoNTeNDeR
 is not a financial adviser just a guy who is on the cusp of financial 
independence for his little tribe through frugality and investing for THE.FuTuRe.  
 
Please read the disclaimer that comes with 
this website and always do your own due diligence and research. Seek 
professional advice as required.

Screener Updated

The Stock Screener and Market analysis spreadsheet has been updated and a few more analysis graphs have been added. PE10 an...

Get Real

Contender 0 Compound Interest, Early Retirement, financial freedom, financial independence, Gold, Investing, Oil, Schiller PE10, Silver, Wheat 14:40

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<tr><td class="tr-caption" style="text-align: center;">Real Stuff (munkee.com)</td></tr>
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 PLAN.AHEAD: "Where have you been CONTENDER we need to get on with your training?" 
 THE.CONTENDER: "THE FUTURE caught our little tribe out with the evil flu but we are back in the game now" 
PLAN.AHEAD: "Right C your NEW training program is called LEARN.SOMETHING.USEFUL" 
THE.CONTENDER: "Is it going to help me defeat THE FUTURE?" 
PLAN.AHEAD: "Now don't get carried away. One step at a time. I have so many things you need to learn. What I need from you is Focus, Listen and Actually Understand, Take your time and let it all sink in" 
THE.CONTENDER: "Yes master tell me tell me I want to know the secrets of the FINANCIAL.INDEPENDENCE.SHIELD and the HAPPINESS.PUNCH (hopefully it is alcoholic ;) 
 
In this post a thesis that the next 30 years are going to be very different than the last 30 years (à la <a href="http://www.peakprosperity.com/" target="_blank">Chris Martinson</a>). In particular considering investing in REAL NECESSITIES instead of passive INDEX investing. 
 
Next post will provide a new stock screening tool that analyses up to 3000 stocks at a time AND an update to CERP - financial planning tool to incorporate an individual stock analysis dashboard as well as a 10x boost to the speed of the tool! 
 
 
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 <td align="LEFT" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE" width="86"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixsW1tSr0uN17TLT7YiYcKtYe85tEElmonx8j-4pxdjhZBPdm5DPx8ZODkvNJsvmxcy6TCDMaBhezwmRd-h6LIRb-woGDrLm2FGQnyI-Wt9Xlkf89JmH7h9Bkd2xTE8kcJ5k5Fnc87RZsh/s1600/Stock+Screener.JPG" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="90" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixsW1tSr0uN17TLT7YiYcKtYe85tEElmonx8j-4pxdjhZBPdm5DPx8ZODkvNJsvmxcy6TCDMaBhezwmRd-h6LIRb-woGDrLm2FGQnyI-Wt9Xlkf89JmH7h9Bkd2xTE8kcJ5k5Fnc87RZsh/s200/Stock+Screener.JPG" width="200"></a></td>
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 <td align="LEFT" height="19" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE">Stock analysis of debt, dividend sustainability and the dividend discount model for intrinsic value evaluation</td>
 <td align="LEFT" style="border-bottom: 1px solid #000000; border-left: 1px solid #000000; border-right: 1px solid #000000; border-top: 1px solid #000000;" valign="MIDDLE">Stock screener for company quality and return on capital</td>
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Return of Capital 
<blockquote class="tr_bq">
"It not the return on capital but the return of capital" - Jim Rodgers 
 
 "The first rule of investing has always been don't lose money!" - Warren Buffet</blockquote>
 
For those seeking very early financial independence we need to to grow money faster than inflation and build up a passive income. 
 
In order to do this THE.CONTENDER has looked to first understand what is money and investing (after making a few mistakes) before taking the plunge into the stock market. 
 
Ever since our Tribe started to invest in precious metals in 2005 (a very small amount after talking to an investment banker at a party and being inspired by his outlook on investment) we have been interested in what is money? Why is it valuable? Why does it lose its value over time? 
 
We want our savings to AT LEAST buy comparative goods in the future. $10 for a bag of potatoes today + bank account interest should cost $10 in five years time. 
 
If we are growing our money what is the REAL return after inflation? 
 
10 years ago you could get a loaf of bread for 0.5 monetary units,  now it costs 1.5 monetary units in only 10 years! Supposedly technology has improved so the cost of my loaf of bread should be coming down right??!!!: 
<ol>
<li>Transport is more efficient (we mix truck loads to get max fill / weight ratios with complex computer programs and collaboration across multiple companies)  </li>
<li>Energy is captured and recycled in the baking process  </li>
<li>Agriculture productivity is up - better machines, fertilizers and weather prediction systems....  </li>
<li>Waste is down due to efficient inventory management and improved sales forecasting.  </li>
<li>Competition is rife and profit margins are being reduced  </li>
<li>The USA is going to be energy independent and oil and gas prices are going to plummet!</li>
</ol>
Why Why Why has the cost of my loaf of bread trebled after all of these cost saving improvements? Why is THE.CONTENDER paying so much more for the basics of life compared to 10 years ago. Inflation has been reported as very low.....????

Get Real

Real Stuff (munkee.com) PLAN.AHEAD: "Where have you been CONTENDER we need to get on with your training?" THE.CONTENDER: ...