SHARPE INCOME … Yes … Another ‘Raise’ in Income

Posted on May 18 2015 - 12:40pm by Sharpe Trade

The original Sharpe Income post can be found here.

The Sharpe Income category be found by clicking on that red ‘Sharpe Income’ tag next to this post title, or by clicking here.

We continue the discussion from the last entry.

A couple of weeks ago, we mentioned that we had received an 18% ‘increase in income’ so to speak.  IBM enjoyed a very nice, low, dividend payout ratio.  And sure enough, they raised their dividend.

And as of last week, we find out that we are to receive yet another ‘raise’ in income.  American Express (AXP) is increasing their dividend by 11.54%.  But at the same time, the dividend payout ratio for American Express (AXP) is still below 20%!  

Not bad.  Two new raises and the project isn’t even 35 weeks old yet. But remember, the dividend payout ratio, is not the ‘one panacea metric’ to use and look at, because no such metric exists, as we discuss in this weeks video entry ...

‘Sharpe Income’ Actions This Week

For the purpose of this project, we now have $239.30 available, that is ‘segmented’ into a few different categories.  Here is what we are concentrating on this week …

Capital Gains Strategy: Of the capital contribution this week, 24% of the contribution was placed towards this category.  We have stated for some time that we wish to ‘beef up’ this section of the project so we can make our initial purchase into the strategy.  

Of course, before we can do that, we have to make sure there is enough cash to make an ‘income purchase’ if the opportunity arises, so …. 

Remaining Cash after Reservations: This is the section of our cash that we will use for the usual purchases. As you know, at least at this stage in the game … our approximate size of a purchase for the project runs about $300.00. This week, we placed $19 out of our $25.00 weekly deposit (or 76%) into this category .

The link to the Google Drive Spreadsheet that you can view, that we will edit, build upon and refer to over time can be found at this link.

We continue the Sharpe Income project with this next entry.

The Sharpe Income PDF breakdown for Week 25 can be found here …

3 Comments so far. Feel free to join this conversation.

  1. 3w Investor May 18, 2015 at 1:27 pm - Reply

    So for drawdown in you income account… do you have a percentage “kill switch” or do you base all your decisions on fundamentals purely?

    • Dan Shy May 18, 2015 at 3:03 pm - Reply

      That’s actually a really good question, and touches on a number of different concepts.

      This project has capital contributions.

      That changes the entire playing field.

      I know that within another 52 weeks?

      There is another $1,300 in capital that the account has access to.

      52 weeks after that? Another $1,300. On top of the dividends. On top of the dividends growing year after year. On top of stock splits multiplying the entire process. Which means I can always average in if the fundamentals look sound on the company. Which means that my drawdown has an automatic ‘cushion’ … every single week. My maneuverability on an Income account is just … incredible (incidentally, this is why Firms pay people a LOT of money to drum up money for them. As long as the firm has money coming in, it becomes DRASTICALLY easier)


  2. 3w Investor May 18, 2015 at 3:13 pm - Reply

    Thanks… Really eye opening learning from you this strategic way of approaching the capital markets (since amb) instead of swinging for the fences with every move which obviously does not work.

    When you have time I would like you to explain how stock splits benefit share holder. To my newbie eyes it stills looks like a zero sum move.

    Thanks again.

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