10-09-2016, 10:42 AM
Yep, this is indeed one of the central conundrums.
For me, it helps to think in terms of both DG investing and Value investing. What you're describing is a blend of the two, which IF YOU CAN DO IT RIGHT will give you the best of both wolds. Most all DG investors would agree that a core principle is to buy the best DG companies when they are fairly valued or undervalued, often with the intention of holding forever while the dividends grow. An accomplished value investor buys undervalued companies and sells them when they revert to fair value or become overvalued.
The reason I love DG investing is that it is an easier and much more forgiving strategy than most of the others, including value investing. But pure value investing, or a blend of the two, again if executed properly, will certainly outperform straight DG.
So, the question is, are you confident enough about the sell decision? If you can part with the income stream that this holding provides, and upgrade to a higher-yielding company of equal or better quality, it would make sense to do so. But I think Cav makes a great point that CL may not be as significantly overvalued as it might look, which makes it less of a no-brainer to sell.
Best of luck, and keep us posted about what you decide!
For me, it helps to think in terms of both DG investing and Value investing. What you're describing is a blend of the two, which IF YOU CAN DO IT RIGHT will give you the best of both wolds. Most all DG investors would agree that a core principle is to buy the best DG companies when they are fairly valued or undervalued, often with the intention of holding forever while the dividends grow. An accomplished value investor buys undervalued companies and sells them when they revert to fair value or become overvalued.
The reason I love DG investing is that it is an easier and much more forgiving strategy than most of the others, including value investing. But pure value investing, or a blend of the two, again if executed properly, will certainly outperform straight DG.
So, the question is, are you confident enough about the sell decision? If you can part with the income stream that this holding provides, and upgrade to a higher-yielding company of equal or better quality, it would make sense to do so. But I think Cav makes a great point that CL may not be as significantly overvalued as it might look, which makes it less of a no-brainer to sell.
Best of luck, and keep us posted about what you decide!