🏆 Dividend Growth vs Pure Dividends – Why chasing high yields is a trap and how focusing on growth-first companies creates sustainable income streams that won’t leave you high and dry
💰 The 80% Financial Independence Journey – Edgi breaks down his systematic approach to replacing active income with dividend payments, currently at 80% of his expense coverage goal
🎯 Euronext Deep Dive – A masterclass in analyzing European market consolidation opportunities, examining why this financial exchange operator could be positioned for continued growth
⚠️ Battle Scars and Lessons Learned – From General Electric’s accounting scandals to Tupperware’s false promises, hear about the costly mistakes that shaped a more disciplined investment approach
🧠 The Psychology of Passive Income – That “ka-ching” feeling when dividends hit your account and how owning shares transforms your relationship with the companies around you
💊 Novo Nordisk Risk Reality Check – Dissecting the $250 billion market cap swing and why single-product dependency makes even “boring” dividend stocks surprisingly risky
🛢️ Shell’s Contrarian Cash Machine – Why betting against peak oil during the energy transition might be the ultimate contrarian play, with 8% buyback yields and growing dividends
🎲 50-Stock Portfolio Strategy – The tier system for position sizing (4% max anchors down to 1% experiments) and why diversification lets you sleep at night even when individual picks implode
🚫 Overrated vs Underrated Lightning Round – Hot takes on REITs, share buybacks, ESG investing, and the Magnificent Seven from a European dividend perspective
📈 Why “Boring” Beats Exciting – Slow compounders, predictable cash flows, and the mental framework that turns McDonald’s visits into portfolio performance reviews
Segments:
00:00 Introduction and Dividend Talk Mission
05:47 The 80% Financial Independence Tracker
13:00 Growth vs Income: Different Investment Goals
21:41 Euronext Case Study: European Market Consolidation
32:52 Battle Scars: General Electric and Tupperware Disasters
43:40 Doubling Down: When to Buy the Dip vs Catching Falling Knives
49:14 Novo Nordisk Risk Analysis: $250B Lesson in Concentration Risk
57:02 Amazon’s Dividend Future and Cash-Rich Companies
1:01:36 The Psychology of Living Off Dividends
1:05:11 Lightning Round: Overrated vs Underrated
E95 – No Ads – Dividend Talk
Interview
[00:00:00] Edgi: I and I must say sometimes my worst investment
decisions was selling too early.
because I got spooked, for instance.
I bought McDonald’s at a certain moment,
[00:00:08] Luke: it’s like doubling down on stocks where the valuation is
cratering. If you’ve done the work and you have a good rationale for that,
that can be like a, an incredibly powerful tool.
[00:00:20] Kryz: All right. So we talked about some of your favorites
right now and your reasoning, but if you’re an investor, you don’t walk
out, without some limbs missing. And some, some battle. Battle scars
though.
[00:00:35] Edgi: it’s just smashing out cash. the cash is flushing against
the walls everywhere. So yeah, it’s, for me, a must, for me, a no brainer
investment. Would I now buy a lot? No, it’s, more in the high end of the
cycle
[00:00:52] Luke: Hello and welcome to the latest Wall Street Wildlife
with Christophe and Luke and our special guest this week from the
Dividend Talk podcast, edgy from Derek and Edy’s dividend talk chat,
Derek and edgy, have an incredible dividend Growth in oriented
podcast.
If you call our last week’s episode, we reposted the interview that
Christophe and I had on their pod, and now we’re bringing edgy back
over to Wall Street Wildlife to share some of his passion for dividend
growth investing. Explain what this thing actually is and get into the nitty
gritty about some of his own holdings.
Edgy, welcome to Wall Street Wildlife.
[00:01:32] Edgi: Yes.
[00:01:33] Kryz: Welcome to.
[00:01:34] Edgi: Thank you so much, and, yeah, I’ve been lately also
watching your videos. kudos guys. It’s always good to help retail
investors to, inspire them a bit, right? And hopefully for them to make
better investment decisions. I have to apologize, Derek. I know how
much he love to be here, but, I will not give the private reasons.
But effectively he is totally blocked for many engagement at this moment
in the weekends, which I know is a bit more, needed. so he sends, he
sends his greetings to us and he hopes that we have a great time.
[00:02:06] Luke: Perfect. why don’t we kick off and just in case our
listeners haven’t caught dividend talk before, why don’t you tell us a little
bit about who you guys are and the mission behind the Dividend Talk
podcast?
[00:02:17] Edgi: Yeah, definitely. being a European Yeah, that’s one
thing that’s really difficult and that’s building wealth. Yeah. We get
harvested everywhere by the governments and I was in my early thirties,
at a certain moment you, you have some money left in the end of the
month.
And I started to think what to do with this. I felt like I need to start doing
something because, at that time in the news I was reading again, like
pension system is again 0% re-indexing. What that means is your future,
the future money that the government would pay you when you turn 65
or 67.
Staying flat. inflation was two, 3%. Then I start to look up some data and
I saw whoa, this is in 10 years, I lost 20% of purchasing power. I fall like
I will be poor when I, by the time I reach retirement, which is another 30
years. So imagine that 10 years, 10 years, 10 years, all the time losing
20%.
So that got me really into, to keep a long story short into dividend
investing. Then COVID came in 2020 and, we were all bored sitting at
home and I was, hanging around a bit on x making, making, a bit of
memes, a bit of talking about dividend growth investing. And yeah, while
you’re bored you say you, there’s some friends on X that you’re building
up.
And we said Hey, why don’t we just, go on chem one time and we just.
Chat a bit with each other. And we started to talk for an hour and we
really enjoyed it and we said you know what? We should have recorded
this. and from one, one thing came another, we just, the next week we
recorded it and we just threw it on Spotify and actually people started
listening.
We had hundred, listeners or something like that. We called it a pilot
episode as a joke. And, yeah, from there it just started growing. Over the
last five years we have done our 260 episodes. The format is pretty
much still the same as, as then. but our vision really comes back to my
own need that I have.
we want to empower just ordinary Europeans really to take matter in
their own hands. We, so happen to have chosen the dividend growth,
strategy. there are other strategies as well, but we find it important to
wake up the people in Europe and not just rely on your house that you
can’t eat and on your pension obligations.
And I see it in my own family where people that just retired, it is really
not a lot. Yeah. I think honestly there’s a lot of poverty there for people
that have been working their whole life and honest job. we may be more
on high paying jobs, but there is a whole probably the majority of the
country in the Netherlands, for instance, probably earns less than two
and a half thousand euro or 3000 Euro.
And if you see what the cost level is of housing and everything, it’s hard
to, make ends need. So that really inspires us because without that
inspiration and the community that we’ve built around it, it would’ve been
very hard to do five seasons of dividend talk. and the community, I think,
keeps us going because we get on a weekly basis, some people
emailing or giving messages how much it means to them.
What is good to know, if you think about the podcast in the community,
it’s a bit probably incorrect to say that those are people that only do
dividend growth investing. There are people that have mixed portfolios,
typically, but they come to us, they listen to us for that dividend growth
part, typically.
[00:05:47] Kryz: can I ask you a quick follow up on your, website, which
is european dgi.com. You have right up front a short introduction to
yourself, but then a little bar graph that says where I am on my journey.
and currently you’re at 72%. Can you explain. that particular snap,
[00:06:10] Edgi: yeah, definitely. And I need to update it because I saw
this week that it’s 80%, so it’s a bit outdated. Effectively, this means for
me, the journey, how far I am when it comes to financial independence,
what this financial independence for me mean and what does the 80%,
identify It is the. Let’s say the dividend income that I get on the annual
basis divided by my annual expenses that I have.
So I call that the expense crossover point. So I’m now at 80% of that,
and yeah, I still need to make 20%, and then I can technically call myself
financially independent. I’m on purpose not saying retire early, because
over the years I noticed that I’m not a person that can sit at home
watering the flowers. Yeah. So I’ll always do something, but it may not
be in the same capacity as I would do it today.
[00:07:03] Kryz: Like, badger, that’s all he does is sits at home and wa
whether his flowers and digs for eight months or whatever he does with,
[00:07:13] Edgi: but I’m jealous he’s doing a podcast and such and he
can do it during
[00:07:16] Kryz: Yeah, yeah. He’s more than just a pretty face, a furry
face, whatever. But hey, just a quick follow up to that, ratio,
[00:07:25] Edgi: Yeah.
[00:07:26] Kryz: just in, in plain English, just so everybody understands,
I wanna make sure I have this right. Everyone has expenses, that’s
some number and dividends are the, call it financial instrument that
companies, some companies offer in which they literally pay you money.
And you are saying that you have your expenses and the amount of
money you get from all your companies. When that is a one-to-one
ratio, that’s what a hundred percent would be. Is
[00:07:58] Edgi: exactly. The dividends are paying 80% of all my life
expenses. This is not, and then that’s very important to say, because
some people, I know they make. Mistakes there. It means for me also
budget reservations for replacing the roof in 20 years. Car reserva, car
payment reservations for if I wanna buy a new car in five, six years.
So all of this is included in what I call my budget and I’ll make sure that
before I, am at a hundred percent that I also have a bit of a margin of
safety. we will get maybe a little bit later to what a dividend cut could do,
for instance, to the income. But also, it also means like an emergency
fund of six months of, living expenses.
[00:08:40] Luke: That’s good. That’s really prudent and that’s like really
encapsulates, I guess the thought process of many investors who
pursue dividends as a core part of their strategy. I guess you guys aren’t
just about dividends and you course corrected us when we were
interviewed by you. ’cause I said, oh, dividend stocks are boring.
And you’re like, we are not dividends, Luke. We’re dividend growth.
So do you wanna expand on that aspect? What does, what’s it mean to
be a dividend growth investor?
[00:09:05] Edgi: it effectively, it is the recognition that a company needs
to grow first before we wanna get a share of their profits in the form of
dividends. Because if we would focus on the dividend first, we are very
likely to experience income loss, salary cuts, as I call it. So I see income
as a salary, to me, and that’s something that’s the ma most painful to
have because if you are, let’s say, living off that money, the last thing
you want is your money, to disappear.
Yeah. So for me, it is important therefore to always look at the growth
first of a company, because if a company is growing both top line and
bottom line, then I would say the probability is higher that they can
continue affording and pay, to pay a dividend. That’s very important. And
therefore it’s not just looking at a dividend yield and such.
We really need to study a business, to understand can it effectively pay
a dividend going forward, a growing dividend going forward.
[00:10:06] Kryz: to, maybe this would, might be an interesting moment
for me to talk a little bit about my own beginning journey in investing
Badger. I don’t know if I’ve ever told you this, when I was 17 years old
that first Motley Fool book that came out, God, it’s so long ago now, but
they had a, formula.
It was, like they took, it was some formula in which they calculated. call it
market cap, and then they had dividend yields and then some basic
ranking of you should purchase these four because these four have the
most reliable correlation between dividend and maybe beaten down by
the market or some such thing.
Foolish form, maybe it was called. And back in 1997, I guess before the
advent of all the computerization, I read that book as a 17-year-old, it
was like, oh yeah, this is, this makes sense by beating down companies
that pay you a lot of money and that’s a sure way to victory. and then not
long after that, it was debunked statistically that you, it’s too simple a
formula or the world got more complex or whatever.
So I’m glad I mentioned that, only because I think many dividend people
brand new to the game. Might say something as simple as why not just
invest in the companies that pay you the most? So make it as simple as
rank them by dividend yield, but it’s just way, trickier than that.
[00:11:40] Edgi: Yeah. And there’s a irony to it because many people
that call themselves a dividend growth investor are all in those yield max
ETFs trying to score a 12% yield, which is effectively what they’re getting
is option income. Yeah. From the ETF, and they call those dividends
because it’s distribution. And for me, that is really something that really
stands like 180 degrees from my own philosophy.
And yeah. Because that’s for me, yield seeking and, yield. See, seal
seeking typically lands. Yeah. How you, it ends up in crying.
[00:12:16] Luke: And you do own a bunch of dividend stocks and you
talk about on your own podcast
like stocks that pay actually quite a small dividend. And I guess there the
growth component is quite important. do you, how do you rank and stack
these things? let’s pare it back to, ’cause we’re pure growth investors
and it’s almost coincidental that Christophe and I sometimes own stocks
that pay a bit of a
dividend. But we are looking at earlier stage companies, like how would
like maybe try to persuade our listeners like, why is, why, is owning
dividend paying companies also a kind of profitable, beneficial strategy
as an investor?
[00:13:00] Edgi: Yeah, and, I think what we need to maybe land on first,
like what’s the ultimate goal of investing? Yeah, so for some people, the
ultimate goal of investing is to have the maximum total return out of their
money invested. For me, it’s not, for me, it’s, replacing my hard earned
income that I put a lot of sweat in by passive income, let’s call it like that.
For that you have multiple strategies. You can do dividend investing or
dividend growth investing. In my case, you can do real estate investing
and such. So it’s really important to know that I’m not focused on total
return, but I can tell you that total return is typically an outcome of, also,
of my, investing style or a good outcome.
And there are enough statistics actually about it when you think about
dividend growth investing. And I will share maybe a picture with you as
well where it’s clear that dividend growers and initiators. Are
outperforming by a wide margin. All other companies with, other,
dividend policies.
just dividend payers that if you think about, and I have a picture here in
front of me from 1973 to 2023 are maybe only 60% of, the total
performance compared to the dividend growers. And then you have the,
no change in dividend policy that effectively do nothing. They’re really
lower. I always say in this like it’s a, market of stocks.
It’s not a stock market. So we should not generalize on this, but I do
think that, dividend growth companies, they’re typically very cash rich.
So if you think about capital allocation, think about a Google, Microsoft,
Facebook, because for instance, meta and Google recently started to
pay a dividend. I think there are two reasons for it.
At a certain moment, you earn so much cash. That you may not be able
to reinvest it anymore in your business with a certain, amount of return
so that it’s better to just give it back to the shareholders so that they can
reinvest it elsewhere at a better rate of return. Or maybe in nets, case it
is much easier for Berg probably to get a dividend and to borrow money
against his, shares.
Yeah. So what I would like to say is, for me, it is much easier to predict if
a company can grow in the next few years for a little bit more. The
established companies, the blue chip companies, I often understand
their products. these are slow compounders and it’s really important. I’m
a big fan of slow compounders.
Slow compounders for me are companies that take 15, 10, 15, 20 years
to build. A business slowly because of the market dynamics, it’s really
hard to compete against them at a certain moment. Think about
Amazon. A perfect example of a slow compounder. It’s not easy to just.
Beat, Amazon, at their home turf, right?
And, start taking ma marketing market share from that. The same with
Microsoft, but the same with Unilever, the more classic, dividend growth
stocks that we’re talking about. So for me, they are much more
predictable. There are enough warning signs if these companies are
starting to turn south, and it makes it much more easier for me to
analyze, to understand the business and to predict a little bit, because
we’re all in the business of prediction here.
what is the likelihood of the company doing better, let’s say five to 10
years from now than where it is today? So that’s where my character
comes in, that I find it easier to, analyze and that’s why I’m not so much
in the early stage, but I guess the risk and reward is also different. I
think, making a 10 bagger with Microsoft is a bit hard at this stage of the
journey, though.
I think people would’ve said the same in 2014, when I bought the stock
at 40 and now it’s a 10 bagger, so you never know how a stock still
evolves. But I can tell you it was not in my predictions at all with
Microsoft at that moment in time. It’s just one of those companies that
blows up in your portfolio that you think okay, I sound smarter now than I
was in reality at that time.
[00:17:12] Kryz: Yeah. edgy. I loved a couple of definitions. You just
threw out that what the business that we’re in is the predictions
business. That’s an interesting frame, which is true, especially when you
correlate it with risk. I wanna ask you one follow up about this broader
question of what is investing. I think.
Luke and I always talk about investing as something that is a personal
journey. And it sounds cliched every time I say It, it sounds almost like a
Hallmark card, but I think it’s a cliche for a reason because there’s so
many variables in each and every individual person’s lifestyle and
makeup and where they live and who they are.
all these things that there is simply no such thing as an algorithmic one
size fits all. And the question I wanna put to you is, specifically relating to
call it lifecycle stage, would you say that dividend growth investing or
your style investing is more or less loosely applicable across different life
cycles life?
[00:18:26] Edgi: Yeah. I find that hard to answer, Christoph, because I,
don’t like to stereotype a little bit. Like, when is a, some people say, oh,
when you’re young, you should take more risk. You need to be a growth
investor. I much more resonate with your first comment. It’s that it’s
personal. So if I go personal here, yeah.
I come from a poor family. I had no money. My mother was broke in
poverty, social welfare. we were hammered with debt, out of a marriage.
We, literally were on the Dutch equivalent of food stamps. So I went, if I
went to study only because I got a scholarship from the government, if I
had to pay like nowadays students for study, I wouldn’t have paid for it
because I was debt averse.
So for me, naturally a conservative style that is focused on maybe, let’s
say boring predictability, cash flow. It’s just much more ingrained in me.
I’m just more averse to risk from that point of view, to make a few bets
like Bitcoin and such, because you could say from a total return
investment, if you wanna get the best total return and you look back over
the last 10 years, you should throw all your money today in Bitcoin.
Yeah. if you think like that, but that’s not me. So it’s very personal, what
people choose. And I know people that are my age that are just throwing
everything in specs, biotech, and everything, because they just like the
gambling part, a little bit of it. But they also don’t wanna wait 10, 12, 10,
15 years for slow compounding portfolio.
So I, I resonate more with our character styles and what I always say,
don’t take dividend growth investing because you hear Derek or me
talking about it. Find something that fits your character the most because
you’ll probably do the best naturally. Yeah. You, are not fighting against
yourself with such an investment style.
[00:20:22] Luke: And there are so many benefits from doing that. Like
you essentially get all your research for free because it’s something you
actually, it’s a subject you’re interested in.
[00:20:31] Edgi: Exactly. and if you really Not, I’m gonna use the word
like believe in, I don’t mean like a sort of religious belief, but if you really
support the mission of the company, if the company’s executing but the
stock is struggling, that could be a good opportunity to add as
[00:20:46] Luke: opposed to panicking and selling.
And if you’re really behind the mission of the company, it’s gonna help
you stay the course when things become
scary when your stock prices are down.
[00:20:55] Edgi: Yeah. What we always say in dividend token, we’re we
are famous for two quotes. One is you can’t borrow conviction. Yeah. In
the end, it’s your money and you are alone with it, and it is very lonely.
And the second one is bankers are wankers, but that’s another story.
[00:21:10] Luke: It’s teasing me. He’s teasing me. ’cause I’m an ex-
banker.
[00:21:15] Kryz: you redeemed yourself though. Badge. you’re on the
other, side of pendants. so we’re, okay, we’re, we’ve done our intros.
Let’s talk specifics. it’s, some of these stuff is, it’s harder, until you get to
the nitty gritty. Can you walk us through one of your highest dividend
growth investment conviction picks?
[00:21:41] Edgi: Yes. And I was thinking like, highest conviction if I
would buy today. Yeah. So my portfolio is already 10 years old, so I, just
wanna talk about a company that I just initiated a position in this week.
And that’s Euro next. Are you, known with this name both? No.
[00:21:58] Luke: know the name, but I couldn’t tell you what they do.
[00:21:59] Edgi: so Euro next is effectively operating in most of Europe,
most countries of Europe, the financial market in terms of brokerage and
everything.
So they’re really doing the clearing for the brokers. So if you use
interactive brokers, the hero, and you wanna buy stocks in the
Netherlands or France, it’s all being processed and cleared via Euro next
now. I did a deep dive on this business not too long ago, and I really
started to see why this company has been growing with a 15% CAGR
over the last five to 10 years.
reason for that is that the, there’s a lot of consolidation opportunity in
Europe, so when you look at it at the moment, they own the stock
exchanges in, Paris, Ireland, Netherlands, Belgium, Italy, and Portugal,
and a little bit of Spain, but not yet of Frankfurt, right where we have
Deutsche Bur not yet of Warsaw.
The NASDAQ is owning a few in Stockholm and Helsinki. And if you
think about what’s going on also in the European Union at the moment
with the policies, there is more of a trend, specifically after the wake up
that America gave us the wake up call to start being more investor
friendly. there’s also the faster procedure that will come in 2027, which
makes dividends, reclaim and folding tax reclaim much more easier in
Europe.
So there’s a lot of favorable policies at the moment that allows Euronext
to continue, acquire companies, let’s say, and consolidate. They have
been also, in the past, they weren’t doing much of the clearing. They had
a few deals with clearing houses and now they’re in Europe. owning
almost all the clearing in, in, in the countries that they operate.
So there’s, a very fragmented, market. I can share also a picture of how
that looks like, and they’ve been consolidating over the last 10 years
since its IPO and I expected to continue consolidating. So there’s a lot of
growth in this company, which I really, so if you think about it, in 2014,
they had 500 million in revenue.
Now they have 1.7 billion in revenue. that’s in top line. That’s quite a
decent run, right? For, for the companies that are available to us, in
Europe, and they still get 34% of, money from trading revenue. but they
are more and more, expanding the services, like I mentioned, clearing
and such, and fixed income to.
How is it to make less dependency on that? Actually at this moment in
time, I think if there will be a global crisis or economic crisis in Europe,
it’ll do the company well because I expect more trading to happen. So it’s
also a bit of a hedge, at that time. But then if you look at the net profit
margin that the gross margin stands at 48% and 38% at the moment.
So we’re not talking here about a thin margin business. EPS has grown
from 1 69 in 2014 to five, 63 and 2024. So it shows you the growth,
cashflow wise per share as well from two Euro five to 6 66 right now.
And the dividend has been growing in lockstep with that about 12,
percent. So for me, this is an example of a business that is growing
really nicely.
And if you didn’t ask me what do I look for in such a company, what
boxes does it need to tick? Because I think that’s important because for
me it is. Mostly about the dividend safety and the valuation of a
company. When I, want to invest, because I’m a bit of a crouch, I don’t
like overpaying. Yeah.
So when you think about it, I first need to see that the company is
growing. I think clearly Euro Next is doing this. Secondly, can it continue
to grow? Yes, I think so. There’s a lot of consolidation opportunity. Does
it have a healthy balance sheet? Yes, it has. However, it is becoming a
little bit less because with the form of acquisitions, more and more
goodwill comes on the balance sheet.
So the return on capital E employed has been decreasing a bit. But if
you look at the investments, the return on invested capital is still
outweighing the weighted average cost of capital. And management also
wants to see that when they buy a business, acquire a business, and
they just acquired the stock exchange of Athens from Greece.
They wanna see that within three years the return on invested capital is
far away outweighing the, way that average cost of capital. And they do
that via synergies and all these kinds of things. And so far they have a
good track record. A fourth, element for me is are the payouts ratios
reasonable?
I don’t like really companies paying more than 60% of their earnings or
free cash flow in dividends because then they’re not, so then they don’t
have money to invest for growth in their business, typically at that stage
of the life cycle. And then the last question that I ask myself, is the
management com committed to the dividend?
Because in Europe we have a lot of companies that pay a 50%, payout
out of earnings policies, which I think is better maybe than the equivalent
in, in, in the United States where it’s sometimes about growth, dividend
growth at all costs. Yeah. We can maybe come in later to that back. and,
Euro next takes tick all the boxes here.
just maybe on the valuation. It’s a bit on the rich side for me. So what I
mean, I, anchor it at a certain level. I think it’s in, it’s 10%. Overvalued
now, but for me, it’s the range that I typically want to initiate, a position if
it’s a good business, because sometimes I’m too con, I’m too
conservative with my discount rates or something like that, and I see that
companies just outperform my own thinking.
So Euro Next is one of those companies that I really, have a lot of
conviction building lately, but it’s still initiating position. So for me it now
means like studying their quality reports a little bit more, let it grow on
me. I never go full into a position from day one.
[00:27:52] Luke: what is a full position for you? Like how, have you, said
you’ve just added portfolio
[00:27:57] Edgi: it comes a bit to portfolio allocation strategy. I have
about 50 stocks in my portfolio and I have four tiers. So tier one are my
anchor stocks, and then you go all the time, a little bit down, and I’m not
using the efficient portfolio frontier. It’s too complicated for most of us,
here to, really be like a quant modeling your portfolio.
So I, started to think totally backwards. I started to think okay, let’s
assume a company goes out of business or cuts the dividend entirely to
zero. What do I feel comfortable with? I said, maximum 4%, because if I,
my dividend grows on average 6% to 10%. If one company goes bust,
the rest will lift it up.
So that’s my thinking. So tier one, maximum 4%, and then I thought like
tier two. Probably a little bit less of an anchor. Still high quality
businesses, 3% tier three, two, 1%. So for me, Euro next is now on the
tier three. I never put it straight away into a tier 2 0 1. I need to learn
about the company more, because I may be wrong and I’ve been wrong
before with such kinds of bias.
[00:29:09] Kryz: edgy since this is strange to say, but we’re all
Europeans here.
[00:29:15] Edgi: Yeah. But I know, I think you live in the US so I don’t
know if you’re familiar with the businesses here.
[00:29:21] Kryz: If, if, most of our listeners are in the United States is a,
stock like your next easily,
[00:29:29] Edgi: CME Group, a little bit of s and p Global potentially, but
they don’t, I don’t know if they own a stock exchange. I don’t think so. So
it’s probably CME group and MSCI. I think that are the, those are the
equivalents. Those are typically the stock exchanges that you’re looking
at. In London or in England.
It’s the Long London Stock Exchange Group. yeah, effectively if you buy
stocks at, New York Stock Exchange. Yeah. Who owns that? Is it CME
Group or MSCI? I don’t, I dunno, exactly. Nasdaq. Oh. NASDAQ is also
such a company
[00:30:03] Kryz: so what’s the ticker that you, you,
[00:30:08] Edgi: for your next,
ENX pa if you go to Yahoo Finance.
[00:30:15] Luke: And you said that’s coming at like tier threes ’cause it’s
a newer
investment. Can you just give us a flavor of your, like your anchor
stocks, which
are your highest
[00:30:24] Edgi: let, let me quickly pull it up.
[00:30:26] Luke: Yeah.
[00:30:27] Edgi: so obviously it’s things like Microsoft, in there. I think
this company is simply brilliant and how it’s operating. then we, I have
Johnson in there, L’Oreal, insurance company like Munich. it’s a German
one. They’re the global reinsurer of insurers.
So it’s an easy business, I would say. I’ve got a SR Netherlands in there.
It’s a Dutch insurer. so those are some of those in the tier one. then if
you go to tier two, I’ve got things in there like eola, snap on, Texas
Instruments, LVMH, apple, yeah. and then downwards.
[00:31:19] Luke: and I had a look at a bunch of companies you guys
have been talking about in recent podcasts.
I did. Did take a look at Eola ’cause you both
seem quite positive of yourself and Derek. They own Scottish Power in
the UK and everywhere. Scottish Power has a really terrible reputation in
the uk.
That put me off.
[00:31:36] Edgi: yeah. So they’re well diversified enough, but I think it’s
a hydrogen play, based on cap on, climate change. But that’s the funny
thing, right? Because. There are, like, someone told me the other day
about PS where a French company, I hate it as an end user. Like SAP
who likes to work with SAP, but then you look at the company, everyone
hates it, but try to compete with SAP, that’s, nearly impossible.
They’re so ingrained in the corporate, companies and, there are
companies that try to move away from SAP and they, were like
hoovering around bankruptcy. Yeah. Because suddenly all the, invoices,
stopped and the cashflow stopped rolling in. So yeah, there are
companies sometimes that we all hate, but may still be very good
investments.
[00:32:25] Kryz: Okay. All right. So we talked about some of your
favorites right now and your reasoning, but if you’re an investor, you
don’t walk out, without some limbs missing. And some, some battle.
Battle scars though. My, my suspicion is that my battle scars as a growth
investor and, badgers, maybe not to the same extent as me, are less
than what you, have, however,
tell us about, yeah, tell us about something that really exploded and that
backfired on you, and what
[00:33:01] Edgi: or, that never exploded. Yeah. That’s, more of it. So
there are two that straightaway come to mind, general Electric and
Tupperware. And maybe it’s the most interesting to first talk about the
second one because, we know Tupperware specifically when you’re a
German, everyone knows that Tupperware parties, the, plastic boxes
effect.
And and of course, my generation, the millennial generation doesn’t buy
that crap. But then you watch CNBC. Suddenly you see a CEO there,
Ricky GOs. I will. And by the way, there’s something with names of
CEOs and the comp companies they operate, right? So Ricky GOs
goings. he’s the one on a cocktail party that will sell you his mother-in-
law.
Yeah. So he was talking about oh, we are going to empower the, women
in Indonesia. They’re like, it’s a country with, I dunno, 300 million people.
Indonesians are not, Indonesian ladies. It’s, hard on the job market, but
they can become a freelancer by selling Tupperware. And I felt yeah,
company is, very, poorly valued.
and that’s a good value for me. But this was a valued trip in all sense.
And there were no Indonesian women throwing massive ware parties,
but the dividend was like four to 5%. So I felt I’ve got a safety net there. I
sold on time. So I did, actually, I didn’t, I, maybe I made on a 50 year,
$50, I made a $5 loss.
But for me, the whole learning in that was so rich. Now, if we go in terms
of dollar value, then I need to move to General Electric. Another
charlatan, was it Jeff Emmelt, the CEO there? My God, what a person. If
you heard him talking also on CNBC, he was like, he, the only, I, he, I
think the only thing, when he left the company, even he got a whole
contribution from Harvard Business Review to write a full article as a
captain of industry to share all his learnings and legacy.
the, company went literally to shine on as leadership. They were cooking
the books. if you read by any, coincidence, the book, the Lights Out, it is
a kind of a documentary on General Electric and. Effectively what they
were doing, these guys. And, it’s, it shows so much about management
every quarter that they were just quickly selling a business of a hundred
million to cook up the books so that the earnings were predictable and
everything.
Now next CEOs come in stock keeps on dropping, dropping, dropping. I
think two or three years ago, I, really like the new CEO. He came from
Danaher. I forgot quickly his name. but I felt no, this company’s beyond
repair. So I sell it at, in December, for tax harvesting, literally p first
January one, rocket up, general Electric.
I think it went five to 10 fold. Since then, I could have made a profit on
General Electric. I hold it for four, five years, a dividend sucker, a
dividend cut, everything. And then at the moment I sell it, I get loss of my
position. It goes five, six times. And I must say sometimes my worst
investment decisions was selling too early.
because I got spooked, for instance. I bought McDonald’s at a certain
moment, at $19 5% yield. I went to under $20. I thought it was
overvalued. Everyone started to hate around me these kinds of menus.
It was not healthy. This and this. Look at it now. Every time when I walk
into a McDonald’s with my kids, we don’t find a place to sit and it every
time makes me grumpy because it reminds me that I sold it for $120 at
the time.
So these are the kinds of investment, and I didn’t even start about buyer
that bought Monsanto for 60 billion. The worst deal ever. They, buyer is
now less worth than 60 billion, maybe 30 billion or something like that.
And they still have, I don’t know. 10 to 20 billion of litigation ahead of it.
it’s be out because of Monsanto in the Roundup cases.
So there you go. I’ve got my, yeah, I’ve got my track record, here, but
what I do say is over time, and I think that applies to hopefully many of
us, and this is what also Warren Buffet’s said, over time, you need to
figure out how you can make less of those mistakes. And I think then
you will start to compound more and more.
And I, I have a feeling that, improving my strategy to even more and
more steady and focus on dividend safety and, going not so fast into
stocks has been helping me avoiding costly mistakes. So I still make
them from time to time, but it’s getting less and less.
[00:37:51] Luke: It’s a tough one, like managing your emotions when
you sell outta the position and then the stock goes bananas. Oh boy.
happens to all of us. it’s, it’s a weird one because you haven’t lost
anything, but you’ve missed out on a gain. So it’s you’re emotionally
torturing
[00:38:06] Edgi: a fear of missing out. yeah, yeah, yeah.
[00:38:09] Luke: But you, I try not to torture myself if I try and make what
I call no regrets decisions. If I
decide to sell something, I sell it full of the knowledge. It might go on
to, multibagger and so it, I made the, right decision at that point in time.
But if you keep going back and like picking at that scab, like it’s never
gonna hit No, and then once it’s out of my portfolio, I don’t look at that
anymore, but it comes back in these kinds of conversations and I’m not a
psycho, so I do have my emotions. Yeah,
[00:38:41] Kryz: The ghosts of companies past. Yeah. I mean that one
hack is you actually delete, the company you sold from all your tracking
software and whatever, but No, but there’s no, you can’t not drive past
the McDonald’s. you could actually, if you, could take outta the way
[00:39:00] Edgi: But you know as well, if you run a podcast, how often
do you get this question about your losers? So also the community
continues to remind me about this.
[00:39:08] Kryz: Speaking of losers, when we went on your show, we
thought you have a great idea, community portfolio, and you ask your
guests. To kick out a company, and to explain why. And I show up
banging my, I’m like, shell, what a piece of shit old dinosaur ruining the
planet. And, you’re like, oh, that’s my second largest position. but we
never had a chance to follow up and for you to educate us on why, we’re
wrong to suggest that’s a loser. what’s going on with she.
[00:39:47] Edgi: it’s probably good to know I’m long oil, first of all. I think
that society is underestimating the impact and the reliability that we have
on oil. Even if you, is it the EIAI think the, this oil agency that writes
these reports about peak oil, they have been more wrong, them. And I
just see this misconception. I think there’s a desire for us as a society to
move away from oil. And I think that influences our thinking also when it
comes to investment decisions. But what I just, continue to see is
massive profits coming out the oil business. And I don’t see them to go
anytime soon.
If you also, guys, because you just drive a Tesla, doesn’t mean suddenly
that we don’t need oil anymore. Oil is everywhere in life. and.
Commuting is still a low part of that. And let’s not even forget about the
site pro site products of a barrel of oil. your Tesla is still going over
asphalt.
Yeah. So your Tesla still is built based out of oil products. So taking that
into consideration, you get oil stocks being very lowly valued in terms of
multiples. There’s a catch there because it’s cyclical. So sometimes you
can be misled by the multiple, here as well. But what I think is good to
know, first of all, I don’t know it exactly, but Shell’s probably trading at in
between 30 and 35 euros.
my average cost is around 19 euros, I think. And I’ve been buying after
to cut the dividend, which is also maybe very interesting to speak about.
In 2020, I’ve been actually doubling down and I’ve been buying stocks at
12 euro per share. So I’ve got a lot of profit in this, first of all. So a lot of
capital appreciation as well. There’s a new CEO in town, very aggressive
on buybacks. They’re having a buyback yield at the moment of 8%
already for three or four years. They’ve been growing the dividend the
last year for 4%. So actually, we haven’t spoken about buybacks at all as
a capital allocation decision here, but I’m a big fan of buybacks.
Done well. So in this case, you get an 8% buyback yield at this point in
the cycle. effectively they, I would say they are break even, somewhere
between 40 and $50 of oil going below that. That happened for a few
months during COVID. They had to cut the dividend there and I was very
supportive to cut the dividend there because they didn’t cut the dividend
since the second World War. They, in 2016, what people often don’t
know, there was a major oil crisis, an oil glut in, in, in, the industry, but
that was only particular to that industry at that moment in time. And it
came because America became oil independent and the OPEC lost its
mojo, let’s say. So when you, it was already struggling since 2016, we
saw that it was not sustainable.
We wanted to be cut at least now. Okay, maybe that’s a bit overreacting.
It’s easier to say later, but at least I was expecting it to be cut sometime
2020 just came too early for them to clean up the balance sheet. That’s
why there was a, and then I would double down because. For me, the
bull case was still there.
So yeah, now a few years forward, five years forward, it’s just smashing
out cash. the cash is flushing against the walls everywhere. So yeah, it’s,
for me, a must, for me, a no brainer investment. Would I now buy a lot?
No, it’s more in the high end of the cycle. So you need to invest anti-
cyclical when it comes these, to these oil and gas stocks.
But I don’t see a reason why it can’t continue growing a dividend by 4%.
That’s their portfolio, that’s their policy over the next 20 years. all, else
being equal.
[00:43:40] Luke: That’s and you like, there’s something really interesting
there because it’s like doubling down on stocks where the valuation is
cratering. If you’ve done the work and you have a good rationale for that,
that can be like a, an incredibly powerful tool. But if, you double down on
a losing stock just because the value’s gone down and you haven’t done
the homework, like often, that’s an easy trap to fall
[00:44:06] Edgi: Yeah, it’s a
[00:44:07] Luke: that’s a mistake. Exactly. Exactly. But, and the, nuance
is like your rationale. So maybe coming outta stocks and talking about
like your methodology and your thinking, that’s a common one. Doubling
down on your losers and, really we wanna be adding to our winners. But
as a dividend growth investor, are there particular mistakes or value
traps that it say, a lesser experience, dividend growth investor might be
prone to?
[00:44:33] Edgi: yeah, and I think they’re similar to the growth investing
style as well. so for instance, simply not understanding the business that
you’re investing in and buying stocks because you see them mentioned
on social media not knowing how to read the three financial statements.
and you must, of course, specifically to dividend investing.
I’m particularly saying not growth in this is yield cha yield chasing. I think
we’ve all been, victim to that. Actually sometimes I even do it still, but
that’s more influenced by the high income factory, the income factory
book. So yeah. But still, I tend to look at dividend safety. there, so yield
chasing for me is that you go for seven plus percent dividend stocks
there, and that, for instance, is a really nice picture from AG Bell, I think
is, that a bank in the UK AG Bell?
[00:45:26] Luke: Yeah, like a, broker.
[00:45:28] Edgi: Yeah, exactly. I’ll share the report with you, but for
instance, they say many dividend yields compare well to Gilds. Yeah.
And they show a picture of 10 stocks there from the uk. Only four out of
them didn’t have a dividend cut in the last decade. Yeah. But these are
all high yields. So legal in general, 8%, 8.6%, yield, but never a dividend
cut in the last decade.
Then you have Phoenix Group 8.5%, but it cut the dividend twice. So
yield chasing is a very clear one that I think many, starters in the
dividend investment community get there because one of, if you have a
strong desire to become financially independent. Then, yeah, my
portfolio yield is 3.8%.
I could stop working today if I start buy buying high Yielders tomorrow,
and my portfolio would yield five or 6%. I can stop working, but I, don’t
like the risk element of that. And yield chasing is one of those, parts of
that, but for the rest it’s just like value traps. yeah. I, think that’s a big
one.
[00:46:35] Kryz: Edgy. Could I ask you to let me try to translate that into
maybe like a moral of the story and the on the growth side of things.
When I say if something is too good to be true, it probably is. I’ve learned
from experience that’s not the case because, when you get companies
that are 10 x or a hundred x from, and you start on the journey early, you
have to have this almost optimistic, overly optimistic vision of what could
be, whether they make it or not.
that’s life and there’s lots of things that, that’s not a good moral. But on
the is, is, am I hearing you correctly that when an investor who’s new to
the dividend style investing, if they simply look at the highest number,
highest dividend yield, that if it’s too good to be true, it probably is.
Is that a reasonable
[00:47:30] Edgi: yeah. I would say anything nearing a 10% yield, you
need to do so much due diligence because, let’s face it, what are we
talking about when we say 10% yield? Then we are saying that the
multiple of the company, if you inverse, it can’t be more than 10 times
the profit. Yeah. the market capital to profit cannot be more than 10
times because, and then because it inversely you get them at 10%. Let’s
say dividend yields, I guess I’m talking more about shareholder yields,
which probably suggests that they are paying out more than they are
earning. Yeah. So you really wanna stay away from those companies.
Those are very red flags. it can, that’s, why I mentioned just before with
Shell cyclical stock, they will look totally different at the bottom of a cycle
that looks like it’s horrible to invest in.
Yeah. But in the top of the cycle they look undervalued, but generally
speaking, yeah, you’re right. When it’s a 10% yield, all your alarm be
bells should be ringing and you should really understand what’s, what
the hell’s going on there.
[00:48:34] Kryz: So edgy, I, I love, I’ve been waiting for this part, during
this whole conversation, I listened to an episode of yours, I think, a
debrief that you guys had after Luke and I were on your show. And this
is a paraphrasing, because I don’t remember exactly what you said, but
it was something like, how the hell does Christophe sleep at night?
That lunatic,
[00:49:00] Edgi: Yeah.
[00:49:05] Kryz: and I found it so interesting because of course there
we’re talking about risk. it’s really a conversation of risk, and I think risk
is such a fascinating. Phenomena that all investors have to look square
eye, dead in the eye at some point or another. And you think you
understand it, but you really don’t.
What’s fascinating to me is that in that timeframe, Badger brought Novo
Nordisk to our community, and we were discussing it. I did some
technical analysis over it, like outside of fundamentals. I painted pictures
with crayons showing the chart going straight down. And at some point,
it was just fascinating to me when I looked at the chart, it was at one
point something like a $450 billion company.
Then it dropped to something. I don’t know what the recent low was, 200
sub 200. But, so that was a loss of something like $250 billion in market
cap. And I thought to myself, oh, who’s the risk taker now? Huh? I don’t
go around losing $250 billion overnight. And I’ll turn it over to you, how
do you, from your vantage of dividend growth investing, think about risk
in the context of owning something like Novo Nordisk.
[00:50:28] Edgi: So first of all, there have been a lot of people crying
there and, which is, we shouldn’t laugh about, of course, but, and I
always get reminded about Warren Buffet. I think he said it like the stock
market is, what do you say that they, that where wealth transfers from
the inpatient to the patients.
So for me, Novo Nordisk has always been very much overvalued. It was
not worth buying it at 450 billion. because you’re right, there’s a lot of risk
involved because. Ozempic and wegovy together are like 60 to 65% of
their revenue. Yeah. So effectively you have a, single product risk in this
company, which is huge.
so actually we agree there. Novo Nordisk is, a darling in the dividend
growth community, but there’s a lot of home bias there. We have a lot of
people from Denmark, the national pride. So I, take it much more in that
corner. I never bought it so far because of that risk associated, but when
it came down all the way, I started to nibble in, and I mentioned already
before my portfolio system, how I deal with it, the, these stocks are not
more than 1% of my portfolio if you own 50 stocks.
So I think the difference between. What we felt, what you are mentioning
is that if you own a few stocks and you lose one stock on everything.
Yeah. I wouldn’t sleep well at night, but I’ve got 50, if Novo Nordisk goes
to zero in my portfolio now, I will have it in my, it will live rent free in my
head.
Like how could have, I could have been so stupid, but I will still pop open
this LVMH, champagne bottle that I have standing here at the same time
because of the dividends coming in. So I think it’s, that’s where it comes
down to now why I started in, a small investment into Novo Nordisk
because I felt that the market started overreacting. To some extent, a
little bit overshooting and, but I have also not full conviction because
management has proven to be really stupid, over the last two years. But
they replaced the CEO if I’m not mistaken. They forgot to file for the
patent in Canada. oh my God, you, must have really, a plate of steel in
front of your head.
then they had supply issues. Yeah, their drug was too popular. Due to
their own marketing as well, that they had to, that there had to be an
emergency policy in the US to allow compounds, generics, so let’s say,
copycats to, allow them to produce and sell it to the market, undercut
their pricing.
They come back in May, and then, it comes down to what we always say
in Europe, right? If you’re a European company in America, forget about
the government supporting you. Yeah. So now they’re, now, they’re
suing all those copycats and everything to make sure that this, that they
can’t sell that drug anymore.
And that’s very important for me because if patents are not protected
anymore, it puts a bump under the whole market. The good news that is
now coming out in the last few days is that they’re suing a lot of
companies already. 44 copycats, have stopped, selling. So Novo
Nordisk is doing now the right things.
But this whole story tells you already how much risk is associated to it.
And anyone who tells you that they can predict here what’s going on. I
take them with a grain of salt. if you read on social media, there are all
those people that predict it, but you need to be an insider specifically in
pharma companies and everything.
that’s really hard. But, this is what is for you. Maybe, I don’t know. the
hottest new startup for me, Novo nor Disk, is spicing up my portfolio
now.
[00:54:22] Luke: I’ve owned this one for, since this year, and I added to
it quite recently, just a week or two ago. and then disclosed that on our
Patreon trades channel for, fact, all the reasons you described. Plus
also, like Eli, Lilly and Novo have both got oral weight loss
drugs in the pipeline coming out soon.
they’re in like final tr phases of trials. So instead of having to inject
yourself with these things, you just take a tablet every day and that’s
gonna cause the market to explode. Like I’ve got personal friends who
are on Ozempic, and there’s this, such untapped demand for the, these
drugs.
And As the costs come down. Like they’ve recently, agreed to deal with
good RX in the US I think that’s why I
added, cause they’ve cut the price of ozempic materially. It’s down by
50%. there’s a huge untapped market and they’ve made these mistakes
with the patents, like you said, and now they’re aware,
so clearly aware about how important these drugs are,
they’re not gonna make those mistakes again.
[00:55:23] Edgi: I think this company has no experience with scaling a
business, and that’s what happened. They want the jackpot, they didn’t
expect it, and suddenly they needed to be like a startup. Yeah. and, they
are not. and that’s why I think they made failure over failure in the, last
year.
[00:55:39] Luke: Yeah. Good observation. I wonder if we could, I
wonder if we could use that thinking a bit because like you said, they’re
almost like an income stock and they had to go back to a growth mindset
And I wonder, so like Novo Nordic is one of the few income paying
stocks in my own investment portfolio, even though Christoph
thinks it’s risky as hell, I think it’s like super low risk.
are there, you’ve talked about some of the legacy tech companies like
Microsoft that you own. I, Is there anything on your radar where it’s not
an income paying stock, but you really like the company? It’s, more in
like
our world where you think it might be something you’ll be adding to your
income stocks in the future.
[00:56:20] Edgi: there’s one company that I could imagine that starts
paying a dividend in the next five years, and that’s Amazon.
So we’ve, there was the same with meta a few years ago, was clearly
on, on their website, investor related. We will not start paying a dividend
and I felt like. Yeah, but you need to do something with your cash.
Suddenly they started paying a dividend. I could imagine the same with
Amazon as well, but I still think it needs a bit of time because they’re too
much de dependent on AWS for the real bottom line profit. So maybe
the logistics business. I saw a really nice picture where it’s predicted to
out, to, earn more in, in terms of sales than UPS in a few years from
now, which is very interesting.
Yeah. to, again, another industry that they’re disrupting. But I think
Amazon could become an, a dividend grower in a few years. All these
companies, at a certain moment, they become too cash rich and then
they need to ask themselves the question, what are we going to do with
that cash that we have left over that we can’t get a reasonable rate of
return, on?
And I think Amazon will come there soon. Not early growth. these are, I
would say, already in the cycle for dividend growers.
[00:57:33] Luke: certainly not, a boring company, which, is, how we
characterize some of your guys’ stocks like Amazon.
Incredibly exciting story, and I guess it’s no longer. Bezos, it’s now Andy
Jassy.
I dunno if they’re still saying it’s still day one. Maybe it is day two now,
but like it’s still a world
[00:57:51] Edgi: But if I may ask, what’s wrong about boring?
[00:57:55] Luke: No. Yeah, Yeah,
yeah,
[00:57:57] Kryz: I, I have an, I have a, clinical answer to that, which is
not, from what, it’s intended to, to prickle feathers, but, I could think of
two things. One, as we talked about, one reason people learn to invest
and stay in the game is because they learn about the world, and it’s just
like a. And if I’m investing in, I don’t know, 3M in bandages, you know
what was true a hundred years ago is true a hundred years later. And it’s
just about the dividends of money. And that’s
doesn’t no, I, disagree. Sorry. Three MI mean, look at their patents and
everything that
[00:58:37] Edgi: they’re inventing. bad example. picks
[00:58:41] Kryz: like
[00:58:41] Edgi: go on, gimme
[00:58:42] Kryz: Coca-Cola a bottle, right? but I
[00:58:47] Edgi: cap now in the year in the, eu. That is stuck there,
right? So another
[00:58:52] Kryz: yeah, but I think the other potential trap. Has to do with
company lifecycle and that you only get to dividends after you’ve in this,
in essence, become a mature company. But in the age of ai, things are
being disrupted so quickly and readily that I fear that a boring, quotes
approach might lead to a kind of complacency.
And before you know it, you’re the next Kodak where things are fine and
then all of a sudden you don’t exist. so more fun, less fun, you learn less.
And then, death all of a sudden.
[00:59:34] Edgi: I, yeah, maybe, but that’s interesting that you say that
because you suggested, because I was looking at this, chaat, Paul
something, right? He is announcing another spec again, and I saw the
performance of his last seven specs. Only Sophie is in the plus all early
stage companies, and the rest is like 50 to 80% down.
So talking about, companies not existing anymore a few years later, I
think there’s a higher likelihood for slow compounder to still exist in 20
years than the early growth stocks.
[01:00:10] Luke: Yeah, that wasn’t the kind of fun christophe’s hoping for
when he holds these, companies the fun of jumping out a window. Yeah.
[01:00:18] Kryz: Yeah,
[01:00:19] Luke: should we, let’s turn it onto psychology a little
bit because, when we came on your podcast, os extensively, I came on
to talk about how I managed to fund my lifestyle.
And I do
that by having a cash allocation. You’ve told us at the top of the
conversation, Yeah. you live off
the income and you’re tracking it. I love the idea of your like 80% tracker
and we’re looking forward to hearing when you get to a hundred percent,
what is the psychology though of living off of income and replacing your
active income with passive income?
[01:00:53] Edgi: The psychology, just this kind of feeling when a
dividend comes in.
I wish I could configure it in my broker. That is says catching. Just when
you’re working and you hear on the background, kach, you can’t
describe it, but it gives me goosebumps already. Yeah. Thi this is a
feeling.
and then I went to America in, June, I went on stock safari. I went with a
friend. We went for two hours just walking through the targets, like kits in
a candy store. We were like, oh, look at this here, look at this. And why
have they everything behind the class, how stupid they are. I’m a
shareholder.
We should talk to the boss here. So the stockier as well. And I think we
were also chatting a bit with Greg,
[01:01:45] Luke: Yeah.
[01:01:46] Edgi: Yeah. It’s hard to describe that. But you become, and I
think that’s what you, alluded to, just of you become more aware of the
world. You learn around the world, but just this thought that there are like
millions of people on a day, daily basis just working for me to make me
wealthier. That’s how I feel. it’s just an, it’s just an income machine at
this moment, my portfolio, and to see that coming in, knowing that I’m
buying freedom back with this is just, yeah, it’s just a dream.
[01:02:17] Kryz: Yeah. And just to round out this conversation, I think,
people get in trouble when they solidify too much around the particular
identity, in which case here we’re talking ideas, right? So we’re
workshopping things. In all transparency. I think if, to, make your point, I
think if quote unquote boring works for you and it feels satisfying and it
makes you money, and you could find, generate excitement within that
world, by all means.
If it’s, I’m learning a lot in this conversation because, at some point I
might say, okay, let me throw in one dividend, investment and let me
examine how boring it actually is to own it. I’m guessing ahead of time
that won’t be boring at all. it’s just such a contrast to typical styles.
Typical. So my, my invitation to all our listeners would be examine your
own inherent biases and assume that they’re, they’re incomplete,
whether wearing or exciting or whatever.
[01:03:27] Edgi: it’s very interesting because what is for you boring may
be for me very exciting and vice versa. And that’s why society is so
diverse. Otherwise we would all like the same football team. We would
all like the same sport. We would all like the same brands and we don’t.
And that’s why there’s so much diversity.
and I think that’s what it is. Some people like collecting post stamps,
otherwise like sitting be others like to sit behind the slot machine. Other
one, others like to, invest in their wife. Yeah. there’s so many ways you
can spend your money and, get joy out of things, so
[01:03:59] Luke: that brings us onto nice kind of lightning round we’d like
to do with you before we close out our conversation today. ’cause you’re
right, some people like some things, some people like other things. So
we’ve got a overrated or underrated lightning round for you. we’re gonna
hit you with a couple of investing topics.
Give us your dividend investing,
perspective. I’m not into these, I don’t know too much about them, but
overrated or underrated REITs, real estate investment trusts.
[01:04:29] Edgi: I would lean What’s overrated? You wanna know why?
[01:04:36] Luke: Sure.
[01:04:37] Edgi: Very lightning? Yeah. I think, too many people are
solely in it for the dividends, but this is one of those industries where
dividends really quickly get cut, because of leverage. I think for realty
income, I own a lot of that, but I’m much more fan of agree realty.
And I would really suggest to just read one of the reports of the CEO. for
instance, he, that’s really nice. he’s actually having pictures in there.
How he started to move away from having Walgreens as a customer
and being, taking very much pride in his calls about saying, this was a
dying business.
I saw it. I got away from my tenant. Yeah. But generally I would say
REITs are more on the overrated, I think generally to too much risk in
there.
[01:05:25] Kryz: Okay. How about share buybacks first dividends?
[01:05:28] Edgi: yeah, I would go for dividends. Dividends have over
history proven to be more reliable than buybacks, and also buybacks are
typically done at the top, which I really dislike.
[01:05:39] Luke: How about, ESG investing, environmental, social, and
governance investing?
[01:05:46] Edgi: My God, that’s overrated. have you read once such a
social report from a company of 200 pages. Try it. it’s horrible. And, you
know what? It does, it creates friction for people that really want to live in
a better planet. For me, it’s a lot of window dressing only to satisfy the
activists and to keep them quiet.
I do care about the planet. I do want a better planet. Yes, I have a lot of
oil. Why not get some cash flow for it so they can buy solar panels.
Yeah. But ESG investing, when you stop with that, for me, a company
really, I would love at least companies to go back to people, planet profit.
Yeah. Something like that.
Having that a little bit. But I’m so tired of companies mostly
communicating towards activists and every, and forgetting about
shareholders. I, really am pissed off with that. It’s my money. You work
for me, not for an activist. An activist is just a flee in your skin that you
wanna get rid of.
[01:06:45] Kryz: Oh, we’re quoing. that’s going viral. That one. how
about, you mentioned meta earlier in this conversation. I’m very curious.
max seven stocks, where you at with those?
[01:06:56] Edgi: oh, that’s a difficult one. May I say it Instead of over
eight under rate, may I say overhyped on the short term, under hyped in
the long term?
[01:07:04] Kryz: Sensible answer. Sweet. Would meta be something
you’re currently in,
[01:07:09] Edgi: No, I sold, I bought at 150. I sold them at 500 because I
allocate 10,000 euros in my portfolio for a bit of growth. More in my circle
of competence of it. And, met, I had, it went too far ahead of itself. I
think. I’m, I mean they’re at revenue I think is a little bit at risk, with
people starting to disengage.
They’re farming a lot of engagement. I wouldn’t be happy with an
advertiser, I think at times. yeah,
so not a business that I have a lot of conviction in.
[01:07:42] Luke: That’s fair. and yeah, we are, we’re a bit on the fence
about the Mag seven, but I’m gonna close us out with the big one
because we are in, we are both in the US right now. I’m visiting Boston
and we are US investors. Overrated or underrated US stocks.
[01:07:59] Edgi: I have 55 to 60% of my portfolio in US dividend stocks
and the others are in Europe. let’s face it, I would never bet against
America even with their debt pile. I think there is a certain level of greed
in there and their world dominant power, they will make sure that the
money flows into that country and to their companies.
It will be, I think, unwise to bet against that.
[01:08:28] Luke: I like your, stock safari comment. ’cause I’m out on
safari this afternoon. I’m going out with a buddy. I wanna go and check
out a carver. I wanna go and check
out like a Sweet res. There’s a whole bunch of retail brands I wanna go
and look in the window or from see, see can they really justify their crazy
valuations?
[01:08:45] Edgi: Exactly and talk with some people that work there. Very
enlightening. Nice. Nice. Yeah, I would recommend everyone to do that.
The risk is that you fall in love with a stock and that you get blind,
because of it. to, for me, when you’re in Europe and not that much in
America, and you hear the stories about goofing and everything in, in, in
California, it is good to go yourself into a retail that you own and, just
check out how bad it really is.
[01:09:17] Kryz: Gentlemen, I love this conversation and I think there’s
many more follow ups. there’s so many. threads that we could go much
deeper on. I’m in the moment though, I’m thinking an interesting
challenge for myself, I don’t know if you are on board Badger, is what
would it take, what would happen if we did a portfolio, not switcheroo
exactly, best argument for swapping one of my growth stocks for one of
your favorite dividend stocks and vice versa.
what would it take to convince, to make the, swap? And maybe we
explore something like that on a future
[01:10:02] Edgi: yeah, let’s do it. in the last podcast episode, Derek was
roasting my portfolio, which was also interesting. So he discovered, as a,
as already a sneak preview that I still have some Alibaba in my portfolio.
and I think it reminded me that probably it’s a good time to sell it. and
then it will go five ti five, five x,
[01:10:26] Luke: No regrets. No
[01:10:27] Edgi: exactly.
But it may also be a bi signal for one of your listeners.
[01:10:31] Luke: Hey, Great stuff. this has been a fantastic conversation
yet again, and I’d love to do a part three at some time on either
your portal or out on, or someone else’s. But, before we close out,
remind our listeners where they can find you guys on social media and
on
the
[01:10:47] Edgi: Yeah. So I think the easiest is to go to my, Twitter
profile. It’s European dgi. You will find me there. other than that, we have
a Facebook group. We have recently opened also Discord Group. I can
share the links with you. yeah. And then on my block, european dgi.com
where there’s a lot of content, I mostly try to inspire people just about the
journey of investing, but also, a lot of.
stock examples that you feel, find there. I’m mostly known, I would say
for the Noble 30, which is an index of 30 European dividend growers that
I compiled because such a thing didn’t exist. So I did my, I, when I
started in 2020, I analyzed 200 companies and 30 came out of that with,
growing dividends.
So the, but not so much assessing the quality, but more the history of
the dividends. So yeah, that’s what people can, where people can find
me and, yeah, just shoot me a, direct message or something if you
wanna learn more.
[01:11:45] Luke: Chris, we’ll drop link to all of that and I’ll show Notice
for today.
[01:11:49] Edgi: Awesome. Thank you. it was a pleasure from my side
as well. I think, people feel it, but there’s a bit of chemistry here. I think
we all have this kind of distance to investing as well, that we can have
fun about it and also kind have fun about ourselves a little bit. And I
really love that, sometimes, the stuff on the internet is way too serious
boring.
[01:12:11] Luke: And we do, we do have to have our listeners come on
and pick our scabs and remind us about our mistakes of the past. you
just gotta face it. Yeah.
[01:12:19] Edgi: Yeah. Yeah. That’s what those listeners do to us. How
bad.
[01:12:25] Kryz: And, while we have you here, edgy, one thing you may
wish to do is perhaps take a look at our Patreon page,
patreon.com/wallstreet Wildlife. we have pinned at the top our, portfolio
tracker, the, stocks that badger and monkey. Run transparently with
each trade. And I wonder what would happen if you took our mutual
portfolios and workshoped them on your podcast and what kind of
flaming?
[01:12:55] Edgi: I think I first all need to go to the library to discover what
those companies actually do.
[01:13:02] Luke: It won’t be the library for Christ’s one. You’ll be looking
at like the kids section in the bookstore.
[01:13:07] Edgi: Yeah, I know, but I think that’s a nice topic for our next
time. So when Derek has some time maybe, towards the Christmas or
something like that, why don’t we just do what I did with Derek
yesterday, we roast each other’s portfolio and swap some stocks out.
Yeah. Then we have four portfolios to go through.
[01:13:21] Luke: Fantastic. Great stuff. thanks again for coming on the
part, Really educational interesting for Wall Street Wildlife Listeners,
[01:13:28] Edgi: Thank you so much guys, and keep on going. I love it.
[01:13:31] Kryz: awesome.
