Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
Warren Buffett once admitted a big investing mistake - "thumb sucking" with Walmart. He started a position, the stock price kept going up and he stopped buying.
Instead, he sat there sucking his thumb, waiting for it to come back down because he thought it was too expensive. It never did.
He ended up with a small position he eventually sold, and said that hesitation cost Berkshire shareholders billions of dollars.
I'm doing the exact same thing right now with three quality stocks: Costco (COST), Rollins (ROL), and TJX Companies (TJX). They're near all-time highs, and instead of buying them, I'm sitting here sucking my thumb waiting for a "better price" that may never come.
Motley Fool co-founder David Gardner thinks you should actually buy stocks at all-time highs because they're doing something right, and you're not waiting for a turnaround story.
So, here's what I did buy this week:
iShares 0-3 Month Treasury Bills (SGOV) aka my "THUMB SUCKING" POSITION
This is where I parked $1,900 while I sit here sucking my thumb.
I could have bought ROL, TJX, or COST, but I'm too scared of buying at or near all-time highs. So instead, it's sitting in what's basically a high-yield savings account paying 4%+ that lets me sell instantly when I finally get the courage to buy something.
SimplySafeDividends.com
At least my cash is working while I wrestle with my psychology.
I've been selling Realty Income to consolidate into ADC and VICI. ADC is laser focused on single-tenant retail properties with long-term leases and sticks to what it knows best. Unlike Realty Income's recent expansion into unfamiliar territories and questionable WACC accounting, ADC stays in its lane. Plus, being smaller means way more growth potential.
My "income factory" stock paying 8.5%+ yield. I'm building this position for steady income that I reinvest for compound growth, targeting 10%+ total returns (8.5% dividends + 1.5% price appreciation). More on possible ARCC dividend drama below...
My core dividend holding with about 100 quality dividend-paying companies. This is a big position in my Roth IRA, but it's maxed out for 2025, so I could only add a small amount with leftover cash.
I sold my $4,670 individual LMT position for a gain of 37.5%, not including dividends received, but still have about $615 of Lockheed exposure since it accounts for 3.69% of my SCHD holdings. It was a tiny 0.89% position of our total investment portfolio and is facing stiff headwinds. Lockheed's F-35 fighter jet program (25% of company sales) is under political pressure from the current administration, allies are reconsidering orders, and they're losing contracts to competitors.
I was deciding between selling Lockheed or McDonald's, but chose LMT because of these specific problems, slowing dividend growth and compressing margins.
The money is going toward taking my daughter to Las Vegas for her 18th birthday to see her favorite band, Panic at the Disco, perform at "When We Were Young" - they're coming out of retirement and she's never seen them live. Plus, she loves Vegas.
Yes, I'm losing dividend income from LMT, but I'm investing in a memory with my family. This is money from our overflow taxable account (money we've saved after maxing out retirement accounts, saving for kids college, emergency and travel), and eventually we'll pay ourselves back. We're investing in an experience.
Continuing to trim my position to consolidate into ADC and VICI. While Realty Income is about as steady of a dividend paying company as they come, it's gotten so big that it's moving outside its expertise into riskier investments.
The ARCC Dividend Drama
A Seeking Alpha analysis this week warned that ARCC might cut its dividend in early 2026. With falling interest rates and tighter lending margins, the company only earns about 2% more than it pays in dividends - a very thin safety margin.
But most in the comments disagreed, pointing to ARCC's $1.29 per share in "spillover" savings and strong management track record. Even if they cut the dividend 20%, I'd still get a 7%+ yield, which beats most alternatives. I bought more anyway - it's my income factory stock. [Link to full and free article - my gift to you]
Hit reply and tell me - do you buy stocks at all-time highs, or are you a fellow thumb sucker like me?
How do you handle that uncomfortable feeling of paying "too much" for quality companies? David Gardner says we should add to our winners and Peter Lynch warned against "watering the weeds and cutting the flowers."
I need some therapy on this psychological block - help me out!
Disclaimer: This is not investment advice, just one person's opinion that may be incorrect. Do your own research before making any investment decisions.
😁THANK YOU to all who responded to the last newsletter!!
Brian Feroldi is always a great listen and I especially loved the reminder that some companies earnings are MUCH more valuable and what he thinks of DCF models...
🎦If you missed it, another conversation with the always entertaining and informative SCHD Stan!
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Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
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