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DRiPs for Canadian Investors
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Date: 3/17/2009 8:55:18 PM
Frequently Asked Questions
Author: Rrusty1 Country Flag
Subject: 20553/38603 - Derek Foster on CBC about his new book
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Message:

tdot416 on 3/16/2009 7:57:52 PM

"Sell'n Out: Not so much retired anymore"

Check it out tonight as Derek explains it all.

http://www.cbc.ca/thehour/videos.html?id=733704352

drppingsoprano on 3/16/2009 8:17:08 PM

I don't see the video there. Is there some link we're supposed to click on?

tdot416 on 3/16/2009 8:35:09 PM

It's going to be live tonight at 11:00PM and will be broadcast on that link following the show. Should be good!


metestreus on 3/16/2009 10:45:43 PM

I found his interview to be quite vague and didn't really answer many questions many of us wanted answered. He seemed evasive and vague as to why he got out of the market. It almost sounded like he is trying to time the market by his mentioning that he will get back in when the dividends on the DOW are around 6 % and not the 4% currently that he was referring too. Also, what about the fact that many of his holdings were Canadian and are companies which are for the most part doing fine and making money? Personally, I think he got scared.....like most of us.....and is just trying to preserve his nest egg. If that is the case, he should just admit it.

onarock on 3/16/2009 11:50:55 PM

"Sell'n Out: Not so much retired anymore"

Check it out tonight as Derek explains it all.

http://www.cbc.ca/thehour/videos.html?id=733704352


not working for me....any suggestions, other than googling it and trying to find it elsewhere......cuz this did not help me either.....

k

onarock on 3/16/2009 11:54:29 PM

oh.........i just took my slepy pills, and dont' know if i will make it, but i will try............10 min, or more...........doesn't look goot........u can tell by my spelling and ai already corrected a ton of errors........lol

yep, nite nite........

k

onarock on 3/16/2009 11:55:41 PM

like someone with the government..........lol

k

drppingsoprano on 3/17/2009 2:31:52 PM

The interview is now online. I have to admit, when I read the books I thought he was quite brilliant, but after seeing the interview I have my doubts. My opinion could be influenced, however, because the lame interviewer didn't let DF finish any of his responses and kept on interrupting him with another question.

littledripper on 3/17/2009 5:53:17 PM

At least our government will be happy with the capital gains tax.

nic1 on 3/17/2009 6:22:49 PM

Unless he didn't tell the public about past capital losses.

Rrusty1 on 3/17/2009 7:06:16 PM

I agree with your comments and your stock selections but must wonder why you would not be putting more money in while the stock prices are so low?

Wouldn't this be a great time to be putting extra money in, provided you believe your selections are solid (I believe they are because I hold a similar portfolio) and will likely continue to pay a dividend in the near future.


Rrusty1 on 3/17/2009 7:55:18 PM

Thanks and good luck with your home repairs.

homesteaders on 3/17/2009 8:30:25 PM

Amusingly, I find it interesting, that a number of people are now:
questioning, and/or, criticizing, Derek Fosters' latest moves; when in reality, a great number of people are on this board, and involved in DRiP's because of what he wrote and/or said, and/or recommened, AT THAT TIME!!

Rascal on 3/17/2009 8:42:10 PM

Yes, what he wrote brought many of us here, and I'm thankful for that. It's too bad that he isn't following his own advice, which still remains sound. The fact is that his advice was borrowed from others and was not his own. He simply wrote about and pocketed the profits. Now, since the advice was not his own, thus he was not committed to it, he has turned tail and run with his cash. He should not be viewed as an expert on DRiP investing. His recent rather foolish actions would prove that.

quickvine on 3/17/2009 8:53:26 PM

My opinion of Foster has actually improved a bit with the interview. Great that he's making options work for him.

Of course, I got into drips long before I'd ever heard about Foster or before he even had a book out - so I don't really associate Dripping with Foster at all. I could care less if he drips or changes his strategy!

nic1 on 3/17/2009 8:53:43 PM

A good post on the topic at Four-Pillars blog.

www.four-pillars.ca/2009/03/17/is-dividend-investing-dead/

onarock on 3/17/2009 9:23:08 PM

His recent rather foolish actions would prove that.

ahhh, but no one knows if his actions are foolish.......many people have reached their threshold, as silent one mentioned, and only time will tell.......

k

metestreus on 3/17/2009 10:03:31 PM

While the interview was a bit of a downer since it really didn't answer much, it helped to solidify my thoughts. I am full steam ahead on my dripping. I haven't been doing it for long but now is the time to get in IMHO and not wait it out.

toolsntoys4u on 3/17/2009 11:13:08 PM

Rrusty1,

I agree with your comments and your stock selections but must wonder why you would not be putting more money in while the stock prices are so low?

Wouldn't this be a great time to be putting extra money in, provided you believe your selections are solid (I believe they are because I hold a similar portfolio) and will likely continue to pay a dividend in the near future.


the answer if fairly simple: NO FREE MONEY ;) That's why people usually don't buy homes when it's down


Vulstock on 3/18/2009 4:04:57 AM

DF new book -

"The Art of Selling"

or

"The Art of Selling Out"

DRIPPing is fine to start off but Selling at the right time is priceless.


Learning how to sell is a one of the keys.

Garnet on 3/18/2009 5:43:07 AM

I believe he is going the next step.

In the bad interview he said that 10% was possible with his new book and you do need capital.

So $500,000 is his stake and when the economy stabilizes he should be back X amount of high paying div. stocks by following his book.

No better test than have your money in.

Garnet

Wayneman on 3/18/2009 7:11:46 AM

If a book was called "The Art of Selling" and a bookstore sold all of their copies then they may have a sign up that says, The Art of Selling-out of stock!
which could be taken 2 ways. LOL

tdot416 on 3/18/2009 8:13:04 AM

The interview was just plain bad, dude needs some media relations training.

It's also too bad that they (CBC) was proping him up still as Canada's Youngest Retiree and a investing genius.

The only advice I heard from him was everyone should buy colgate because even in recessions, people still have to brush their teeth. I also just took out a line of credit against my condo, and put that money into colgate, one of his suggested investing strategies in the book (taking out LOC's and putting it into stocks).

George S. could of taken him to town for some of his advice, for example in his last book he made a big investment in Bank of America, i think he may even mentioned somewhere he wrote naked puts??? Wonder how that worked out for him.




StoneDRiP on 3/18/2009 8:53:27 AM

Kudos to someone who's gotten to where he wants to in life...that's what comes across with Derek.

In a ten minute interview, hard to get in depth details but for those of us that have followed him, we know that he's 'sold out'.

He made over $200,000 I understand with his books. He states in his books he didn't write them for the money but I personally find that hard to believe.

He has taken strategies from others and repackaged them in his books. Again, good for him but he's not following what he's written. What happened to holding forever ;)

Here's some of what he's done or doing
-when he was younger he borrowed to invest and sold for a huge gain. He says that was a mistake and he got lucky...no kidding. He could just as easily lost everything.
-reducing debt, any debt including mortgage, of course means that money being used for that can be used for other things like investing or not needed altogether.
-from this board and Cdn Mnysvr, he became a dripper. Now, he's sold everything so he's abandoned that strategy, which is the premise for one of his books.
-because he has 4 kids, and soon to be 5 he says, he gets an income from the gov't. He's substituting employment income with gov't program income. He subsidized this with dividend income...and book sales!

Derek mentioned the 1929 crash and how it's going to get worse..based on what happened after that.

Could very well be true..who knows...but if you're a long term investor...you don't need to sell...and div yields right now are quite high...we're getting paid to wait

Interesting that if you're with Tom Connolly, in up or down markets, his strategy doesn't change. Buy dividend paying stocks with an eye to value. Over the long term, your dividend yield increases.

Interesting to see what 'new' strategies Derek comes up with next...I'm sure we'll all be watching.


Jon-o on 3/18/2009 11:41:26 AM

DF continues to answer questions here:
[Website Address]

metestreus on 3/18/2009 12:57:10 PM

Jon-o,
thank you for this web address.

toolsntoys4u on 3/18/2009 11:09:40 PM

Dose anyone remember the "Doww 100,000" book written by Kadlec. Or how about "Timing the Stock Market" by Alexander. "What works on Wall Street"by O'Shaugnessy.... or maybe "The Golden Fleece"by Stewart...

i believe there was a book written around 1998 about baby-boomers who were about to retire and downsize, therefore forcing housing market into a tail spin since they all need to sell their houses. look what happen in 2001-2007 :)

well worded SilentOneCanada. i agree with you, we should just leave the guy alone. i don't think anyone on this board lived through 1929, how can we judge. even 1987, how many held or new about drips. DF had a strategy, made some $ by selling it and now took the money off the table. there is nothing wrong with making a little profit

onarock on 3/19/2009 12:20:16 AM

he put himself out there.........

i never made fun of him, and always stuck up for him......

until this time that is........

k

Garnet on 3/19/2009 5:19:36 AM

I see a 4th book, and those that can't see it didn't read book 1,2,3 with much comprehension.

The strategies in book 1 and 2 are still good solid advice.

Book 3 is a little bit more involved and is not for the faint hearted.

What is necessary is large amount of capital $500,000 whats at risk is a family lifestyle going back to work..........and going to work.

Derck Foster could have used the book money but to test book 3 he took the risk. He needs to make 10 % every year selling puts and when the market gets better end up with the same amount or more of div. income in book 1 type stock.

I admire me for the risk and can't wait for book 4. This is better than Harry Potter.

Garnet

Wayneman on 3/19/2009 7:04:45 AM

can't wait for book 4. This is better than Harry Potter.

Yeah but will the movies be as good?


StoneDRiP on 3/19/2009 10:11:45 AM

For sure...again kudos to him...he seems to lead the family life he wants to lead using book sales, gov't programs, investment income, etc to do it...good for him. I enjoy reading his books and I'm sure he'll be out with a fourth in the near future.

steamboy on 3/19/2009 11:47:38 AM

Everyone has their own 'style' and Derek is entitled to his. However, I don't intend to drop my current style and start selling puts. That is my criticism of him - that he is advocating this strategy for everyone when it is clearly not suitable for most.
Read, read, and read some more and don't take anyone as a 'guru' and follow them.

doclobster on 3/19/2009 3:16:34 PM

I admire me for the risk

insert own joke here.

lightninggirl on 3/20/2009 10:48:44 AM

I think that part of the problem here is the Derek Foster sold HIMSELF as a brand. He's "Canada's Youngest Retiree. He did it and now you can, too."

And now he's changed his mind, changed his philosophy and his brand is destroyed. Who is going to take him seriously now that he's working...and yes, it's working...for those options.

He always said that he wasn't an economist. We get it. There's a risk. He decided that it was too great, so he jumped ship. Everyone's entitled to their own investment philosophy. However, when you SELL that philosophy to others by selling your books, you make your philosophy fair game for comments.

OperaBob on 3/20/2009 12:23:50 PM

Canada's Youngest Retiree

The way I look at it I think the goal should be to become:

Canada's Oldest Retiree

OB

onarock on 3/20/2009 12:30:00 PM

here here.....this seems much more attainable........and to be able to eat the premium dog food...............lol

k

tanstaafl on 3/23/2009 8:45:54 AM

Derek just reached his limit and couldn't take it. No shame in it, a lot of people are in the same boat. Of course he sells out just before a rally and leaves a bunch on the table.

garylowe on 4/12/2009 9:29:44 AM

Hi and thanks OB for the links....I have been away and out of touch for 3 months so all this is fresh breaking news to me re:DF
DF is only 38 and has time to take risks and recover. I am holding firm for 10 years and expect a good outcome.

Currently my DRIP portfolio of dividend achievers is only 50% of my cash commitment. Like Tom Connelly says....the decline in share price is of no concern...it is the dividend cut or lack of growth that is important. I'm rather glad that yields are so high because I get more free shares to reinvest over the next ten years(my horizon)before taking them in cash.

I am really hoping the TSX continues to fall over the next couple of years because I intend to purchase 50% more DRIPS as the market declines. I will use this buy-down strategy, putting more in as the market goes deeper.

If we are at or near the bottom then it's a matter of patience in order to buy on the dips as things stabilize.

I plan not to sell my choices unless a companies fundamentals are REALLY haywire. Maybe I am out of touch with the fear, but I feel rather comfortable with this strategy so far.



Thanks again for clueing me in on this DF hypocrisy....I was already forming suspicions about him.

Gary
 
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