Happy Holidays! I thought I would let you all know where I am with the 2014 edition of Top 40 Dividend Growth Stocks: A Sensible Guide to Dividend Growth Investing.
First off, the eBook will have a fancy new cover this year, more professional looking. The cover design is thanks to my friends at Daily Trade Alert, for whom I wrote several articles this year.
Second, I have completed the first draft of the text, at least as much as I can at this time. I still need to write the 2013 review and 2014 preview chapter; fill in the tables of 2013 performance; and add any text necessitated by the stock picks for 2014. Before publication, I will complete those sections and reread the text at least twice. I review it once for content and sensibility, and a second time for form. The reviews add 2-3 days to the production schedule, but I think they are worth it for a polished result.
Most of my time recently has been devoted to selecting the Top 40 stocks. This is a multi-step process that began in October and really got rolling this month. I start with the CCC document (Dividend Champions, Challengers, and Contenders) which has about 470 names. I cull those stocks down by applying a few initial, quick tests. This year, I lowered my threshold for minimum yield down to 2%, because many readers have expressed interest in lower-yielding stocks of great companies that may have faster dividend growth rates. This meant that more stocks than normal passed my initial screens.
Then I went through a second and then a third winnowing, using metrics that I could get quickly from the CCC document and from the Quote page for each stock on Morningstar. In stages, I reduced the original 470 names down to about 100, then 65, and most recently to 47. These are not fully "scored" yet (and won't be until full-year 2013 data is available), but it allows me to concentrate my efforts on the stocks most likely to make the Final 40 and not waste time on clear non-contenders.
This week, I started writing the Stories for each remaining candidate. This is the most laborious part of the process, but it is necessary. I do not feel that someone should invest in a company unless they can briefly and coherently explain how the company makes money and why it should continue to do so.
Creating the Stories can be revealing. Every year, one or two otherwise strong companies fails on the basis of its Story. I eliminated one today: Digital Realty Trust (DLR). It won't be in the Top 40, so I'm letting you know about it here so you can check it out if you like. After about an hour's research, it became apparent that I would not be able to write a brief coherent Story that would not be based on outright speculation about the company's future.
I hope to get about 30 of the Stories done by the time we leave for Florida on Sunday. We will arrive on January 1 (we spend New Year's Eve un-glamorously on the road), and I will get the writing operation back in gear on January 1 or 2. If things go as they did last year, I should be able to publish the eBook around the middle of the month.
The 2013 launch was on January 15, and I hope to hit that date again this coming year. As last year, the eBook will initially be available only from this blog. I will put a "Buy Now" button in the upper right corner of this page for those who know that they want to purchase without reading all the details and promotional material.
After that launch, it will take me 2-3 days to update my Web site (SensibleStocks.com) to reflect information about the new edition. Then it will be available from both there and here.
Happy New Year to all! I will see you on the other side.
Dave
