I’m currently on the longest work trip ever, a total of 16 days visiting 4 different countries. I was in Shenzhen China for a few days and now I’m in Hong Kong. I’ll be in Taipei later this week before making my way to Tokyo next Sunday. It’s tough to be away from home, especially when we have two little kids. I do feel that I’m missing out on the little ones’ developments. For example, just the other day when I was talking to Mrs. T on Skype, Baby T2.0 took her first steps!!!
Last time I was in Shenzhen was July 2016. When I arrived this time via the direct ferry from Hong Kong airport, I discovered there was a new ferry terminal. While on the taxi driving back and forth between hotel and office, I noticed even more constructions and new buildings than last time. I suppose all these developments have been driven by the booming high tech companies in Shenzhen.
I stayed at Shenzhen Marriott Hotel Nanshan like last time due to it being situated above a shopping mall called Coastal City. The hotel charged ~$100 CAD per person for dinner buffet, which I thought was absolutely ridiculous. I was a happy camper eating food that cost like $10-20 CAD. It didn’t make sense to me to spend that much money just because I was on a business trip.
I seemed to have gotten used to all the crazy driving in Shenzhen. I didn’t get fazed as much when tax drivers tried to turn left from the middle lane or cutting in and out of traffic. Weird.
While in Hong Kong, I managed to meet up with Jay from FI Fighter. Our schedule didn’t match up last July, so it was great to finally meet him in person this time.
Can you believe that we talked for like 4.5 hours on blogging, personal finance, FI, investing, real estate, traveling, and life? And we only parted ways because we had to catch the last train of the night. I am sure we could have talked for another couple of hours.
It was neat talking to Jay as he has already reached financial independence and living the nomadic lifestyle – the similar lifestyle that we are aiming to reach in about 9 years or so.
Funniest thing about meeting up with Jay? He asked me if I wanted to go to Hong Kong Disneyland on Monday because he was meeting up with a friend of his.
“Dude I’m here for work!”
“Oh yeah, I forgot!”
Although this is my 3rd time in Hong Kong, I have only seen very little of the city. The first time I literally saw my hotel room, the office, and Hong Kong airport. Last time I managed to see Victoria Harbour. So I decided that I would see more of Hong Kong this time.
On Sunday I went on a wild walking adventure. I walked as much as I could, wandered around, without knowing where I was going.
Many people recommended going up Victoria Peak with the peak tram. When I went there, the wait was 1.5 hours. I decided it wasn’t very time efficient to stand around like a dummie for 1.5 hours. Instead, I walked around Central, Hong Kong Park, and the surrounding area. It was interesting to see all these Indonesia & Philippine women sitting on the streets and elevated walkways with their friends and family, having a good time. Apparently Sunday was Maids Day Off in Hong Kong and they would gather around to enjoy time together (aka hygge).
Jay had told me that Mong Kok was super crowded. Originally I wasn’t planning to head there but changed my mind. Mong Kok was indeed very crowded but I thought there were lots of interesting things to see in the area. And I got to walk on the longest escalator walkways in Hong Kong. Neat!
One thing I wished I had? My Canon DSLR camera. There were so much great stuff in Hong Kong for street photography. A cellphone camera just wasn’t quite up to the job.
Thoughts on the Current State of Stock Market
During our lengthy discussions, both Jay and I agreed that stock evaluations are going through the roof. It’s harder and harder to find undervalued stocks. That’s why Jay shifted his focus from real estate and dividend stocks to mining stocks. For me, dividend growth investing will always be our core investment. But it doesn’t mean dividend stocks are the only investment that we own. Diversification is the key when it comes to investing. That’s why we have our house (real estate) and have been investing in non-dividend paying stocks. I just really don’t talk about it on this blog.
How come I don’t? To be honest, I don’t know. I just find it more interesting to write about dividend stocks. Perhaps readers will disagree?
With so many dividend stocks hovering at crazy high evaluation right now, does it make sense to sell now and buy back later? I have tried to answer this question many times in the last few months. Lately, it seemed that our investment portfolio value would reach an all-time-high whenever I checked. I’m still not convinced that liquidating everything is the right answer. However, after the recent crude oil crash and the slight recovery since, I have thought about reducing our exposure to oil producers.
Is that the right call?
I don’t have a crystal ball so I don’t know. However, looking at the bigger picture I think we will rely less and less on oil in the next 10+ years or so. The cost of clean energy is going down and soon we will reach the tipping point for clean energy sources like solar, wind, tidal, and geothermal to be main stream. We as humans need to utilize clean energy sources so we don’t destroy our beautiful planet.
Clean energy was the key reason for purchasing Brookfield Renewable Energy Partners Ltd (BEP.UN). Maybe we need to look beyond the clean energy stocks that pay dividend.
Don’t get me wrong, we are still very much focused on receiving over $15,000 in dividend income for 2017. But having this goal shouldn’t cause us to lose sight on our long term goal – to be financially independent. There are many ways to become financial independent, you can have a portfolio of over $1M and do the standard 4% withdrawals, you can have a dividend portfolio that covers your expenses, you can own multiple rental properties, you can own businesses, or you can collect royalties (I’m sure there are others that I haven’t covered here).
For us, to be financially independent means that our dividend income is greater or equal to our expenses. That’s the main goal but it doesn’t mean we can’t look at utilizing other sources. For example we have our cookbook business that will generate larger passive income in the future. The key is multiple passive income stream. Maybe we need to investigate other options.
More Thoughts on Dividend Investing
The way I see it, there are 3 ways to get our dividend income generating sufficient amount to cover our expenses:
- Invest large amount of capital each year to increase dividend income
- Keep expenses low
- Utilize the power of dividend organic growth and DRIP
I think Mrs. T and I have gotten #2 down pretty well, spending a total of $44,138.77 in 2016. #3 is somewhat outside of our control. The tricky one is #1. Having high savings rate helps but it would certainly help if there’s a way to put money on hyper-drive. or example, having $10,000 saved grow to $20,000 or more in a relatively short time. That money can then be used to invest in dividend stocks that have good evaluations or undervalued.
The key with dividend investing, I think, is to purchase something with good growth potential and evaluation. Buying something that’s overvalued will only hurt you in the long term. As I mentioned in How to start investing in Dividend Stocks, there are two ways to make money with stocks.
- Price appreciation. This is where your sale price is higher than the purchase price.
- Dividends. Regular cash payments from the company.
The two aren’t mutually exclusive. You can certainly make money by having price appreciation and receiving dividends.
Unfortunately, we dividend growth investors are often too focus on the dividend income amount and receiving more of it, that we fail to look at price appreciation. I truly believe that the two must go hand in hand. It’s better to have 3% dividend yield and 5% annual price appreciation than 3% dividend yield alone.
What drives price appreciation? Growth. If a stock has no growth, the price probably won’t go up.
Stock price goes bananas when there’s a positive difference between analysts’ and the Street’s estimated earning and the actual earning. Because dividend stocks are more mature stocks, this kind of positive differences are less common but definitely possible…
I’m by no means ditching dividend growth investing. What am I doing? I’m examining alternatives to diversify and possibly accelerate our path to FI.
My Best Advice
Don’t follow blindly. Just because I appear to have a blog, it doesn’t mean you should follow everything I write and say. I write about my personal opinions and views. Take my advice with a grain of salt and definitely question whatever I write and say. If we all just agree with each other all the time, we will never be able to learn anything. Learning comes from healthy discussions. Be open minded. Be willing to learn. Be willing to defend your beliefs but also be willing to defend against your beliefs
Don’t ever just follow the masses (sometimes the m is silent).
Think for yourself.
I’ll end this post with a quote and video from Tool. Enjoy!
Think for yourself
Throughout human history, as our species has faced the frightening,
terrorizing fact that we do not know who we are, or where we are going in
this ocean of chaos, it has been the authorities, the political, the
religious, the educational authorities who attempted to comfort us by
giving us order, rules, regulations, informing, forming in our minds their
view of reality. To think for yourself you must question authority and
learn how to put yourself in a state of vulnerable, open-mindedness;
chaotic, confused, vulnerability to inform yourself.
Think for yourself.
44 thoughts on “Random Thoughts – Travels, Current State of Stock Market, Dividend Investing”
Well lemme just leave a comment on a 2-year-old post, mm-kay? Is that cool? Here ’tis: I loved the pics of Hong Kong! Makes me want to go back. We only had 3 days there, but it was a great stop. I came to the same conclusion you did about the Peak. Hordes of tourists and long lines = turn around and find something more unusual to do. Great Tool ref & vid too!
Thanks, HK is pretty cool. 🙂
Wow. Sounds like quite the trip. That’s really cool you got to meet up with a fellow blogger and someone that is living the dream/reality that most of us our striving for. The pictures from your trip look amazing as well. I always see them and think about how I want to start travelling too haha Definitely getting the travel itch.
I must say, I love your advice. Each person, each situation is different. Just because you do it one way, Lanny does it one way, or I do it another way, doesn’t mean that any of them are wrong. It is finding what is best for you and your situation and taking advantage of it.
Thanks for the amazing read today.
Yes it has been quite the trip so far but I’m ready to go home. You got it right, that’s why it’s called “personal” finance. It is a very personal topic.
Man, that’s a long business trip! What are you doing out there exactly? Meeting suppliers or speaking to clients?
I used to go out to Asia 2X a year for 11 years bringing clients to see companies. It was always nice due to the corporate card and entertainment events our planners planned, as well as other cool site seeing stuff we planned around investment conferences.
The ONLY thing I miss about HK are all the relatively inexpensive tailors who made my shirts, suits, and blazers. They are the best!
It’s a long trip indeed! Meeting two major clients of ours then meeting some other clients on the side. I used to go to Japan about 2x a year but haven’t been to Japan for business in a couple of years. A co-worker of mine was showing the tailored suit he got from Vietnam. It was very nice and only cost him $150. Now that’s cheap!
Awesome mentioned of BEP. Haven’t heard any mentioned of it, so had to do a bit of digging. This looks like a solid company, and definitely adding to my watch list. I’m also lessening my exposure to the oil market, as I was not keen on marketmaker and the volatility it represent. Crude oil seat as the leading energy market is waning as Renewable poised to take the top stop.
This article from the IEA, outlines it’s growth. https://www.iea.org/newsroom/news/2015/october/renewables-to-lead-world-power-market-growth-to-2020.html
Developing countries are one of the biggest driver of the growth, along with prices coming down as production cost decrease.
Also, started a position in CAFD, which is a REIT, joint venture between 2 companies between First Solar, Sun Power.
Awesome post, and again great insight on life/investing.
I’m trying to find the right balance between oil companies and renewable energy. While oil will continue to dominate, I think we will slowly shift toward clean/renewable energy. China has been investing a lot on clean energy and I believe Denmark will be totally on clean energy in terms of electricity generation in 5 or so years.
Wow, that’s quite the business trip! At least you got to see some cool things and meet up with Jay. I like all the pics. I’ve only been to Hong Kong and Macau over a decade ago, but really want to see other parts of Asia.
Great advice with “don’t follow blindly”! Following the masses can sometimes walk you right over a cliff (like the old video game, Lemmings).
Hope you had some good eats on your trip as well (other than the $100 buffet). 🙂
It’s quite the business trip indeed! I’d love to go see Macau one of these days. I have been getting some pretty good food during the trip, which is the nice part.
Awesome pics. I use to have a job that required long periods of travel. One year I was away from home the entire month of March, I got on a plane march 1 and I got off again on March 31. For better or worse my wife was pregnant with our first child at the time. He was born in late April. So I can sympathize with the difficulties of long business trips. Still it’s a great opportunity as you pointed out to see everything.
Wow that’s a long time to be away from home and leaving the wife at home while she’s pregnant. Luckily you got home in time for the birth. 🙂
Interesting post Bob. Sixteen days of travel must be tough…but I can imagine you’re racking up plenty of miles!
I find it ironic that you’re talking about investing in renewables while flying around the globe in a jet-fueled aircraft. I like the idea of 100% renewables, but that seems very optimistic.
The stats don’t lie. There is actually steady growth in the use of oil despite the recent surge in renewables. https://www.eia.gov/outlooks/steo/report/global_oil.cfm
Maybe many of those technologies actually require more non-renewable energy to produce than they save? Not sure, but it’s worth thinking about.
Interesting stat on oil. I’m just asking myself some questions on this post. We as investors always need to be both defend for and against our investments.
“One thing I wished I had? My Canon DSLR camera.”
Totally understand. the one time I was in Hong Kong for work, I made suer I could take it with me, together with a tripod. I planned the trip to have as much freetime as possible.
Great pics and great stories. Meeting bloggers is always fun and conversations can indeed go on for hours!
I didn’t bring my DSLR because I had 16 worth of stuff (including formal wear) in a carry on bag and my jacket is stuffed in my backpack. There’s just no room for my DSLR. Next time I guess.
Awesome pics and great that you were able to meet and chat with Jay. I recently met a pf blogger for the first time and chatted for a while as well. It’s great to talk with like minded folks. We went to Hong Kong a few years ago and had a great time…glad you were able to see more of the city this time around. As for dividend stocks, I see the appeal and have some myself but feel that companies that are growing and have much more potential for appreciation don’t offer dividends. Since I’m still relatively young…I’m looking for that growth rather than stability of dividend stocks.
It’s definitely very cool that us PF bloggers all share many similarities. A mix between growth and stability is a good mix.
Valuations *** dang auto correct
Tough to be away from family but sounds like a fun trip and that’s awesome you got to meet up with Jay.
Obviously validations keep going up but what makes finding value difficult is weighing the impact of potential tax reform. Lots of unknowns, but there are a number of things coming out of Washington that could support continued growth. I’m a long term investor, but I don’t want to risk missing out on a continued climb.
It’ll be interesting how it plays out.
I guess we’ll have to wait and see. 🙂
Very cool you got to see Jay! I’d love to meet him in person too – def. seems like a cool guy.
I told him that he should come to FinCon. 😀
I enjoyed this post immensely Bob. I’ve sometimes felt a little out of place commenting on DGI blogs as I tend to invest from a value/margin of safety perspective such that it took me a long time to interact more (there is a great benefit to reading DGI blogs I’ll always read them). I would enjoy reading about your non-dividend share purchases, and how you evaluate them if you’re interested in blogging about that. Maybe there could be a good benefit to many with a more holistic discussion.
Thanks wealthfromthirty. Will have to think about whether to write about my non-dividend purchases.
Looks you had a great time in HK, Tawcan. I would have recommended going to see the ‘Big Buddha’ in Lan Tau – don’t think the queues are as bad as the Peak. Funny, I went to that same Din Tai Fung place for the first time on my recent trip! Glad that you experienced the longest escalator in Mid Levels – some members of my family live close by so I know them well, although maybe not that well as I didn’t know at first that in the mornings, they only went down (for the people heading to work and to the underground train) and I wanted to go up!
Yeah I didn’t go to Lan Tau as I didn’t have enough time. Next time!
We had a blast in Hong Kong when we visited — glad you did, as well. And I remember FI Fighter from a few years ago. Should have connected with him when we were there. Next time. 🙂
I only had very little time to check out Hong Kong. Need to check out the city more next time.
By the way,you guys look like you ciicked and had a lot of fun ( you and Jay)
Come for the FIRE and stay for the Tool! Love it.
I bought some a solar ETF (TAN) a few months ago. I can’t predict which clean energy companies are going to be the winner, but at least I’ve got a stake in the game in a lot of the biggest solar players (including the equipment makers).
I think it makes more sense than shooting for a dividend. It seems to me that the industry would be better suited for growth.
Glad you like the Tool reference. 😀
Solar seems to have quite a bit of growth in the future.
Well, Dividend Growth Investing is total returns investing. You can get both a dividend and capital appreciation potential. Of course, each company and industry are different and unique with their own yield/growth characteristics. But as you know, nothing is certain in life ( except for death and taxes).
To have a dividend growth stock, a company needs to have raised dividends for a certain number of years. To have that dividend growth streak continue, that company should increase earnings over time.
This is where the fun part really is – do you think your companies will grow earnings in the future or not? And can you get it at a good enough price? And best of all, can you maintain your judgment and hold your position, no matter what noise you hear out there?
Good points. Like I said, I dividend and capital appreciation need to go hand to hand. It’s just getting harder and harder finding dividend stocks with good evaluation to purchase.
Great Post! Honest thoughts enjoyed reading. Thanks a lot!
Wow that is some work road trip. I’m sure the family is looking forward to your return. Glad to see you enjoying some sightseeing and personal finance talk. Thanks for sharing the great photos.
Yeah it’s a long road trip. Looking forward to go back home.
Great post, Tawcan. Great to see that you and Jay met up and chatted for hours.
Those seem like really nice pics and looks like you are trying to make the most of being away on business.
Take care and keep sharing these great stories
It was great to finally meet up with Jay as we missed each other last time I was in HK.
Looks like an awesome trip! I have never been to that part of the world – but it is on my bucket list. I think I want to visit it so bad because it is culture that seems so foreign to America (and Europe).
I always find it interesting to visit Asia countries. It’s quite different than US/Canada.
Awesome pics man! Haha, thanks for sharing and for the shout out. Turns out I DIDN’T end up going to Disneyland anyway, as my friend elected to go with her bf instead… See, I coulda used u man.. 😉
Good times, will have to catch up with u again in the future, either in HK or Vancouver!
Thanks Jay. Would have nice to check out Disneyland… oh well next time.