I've attached the print and Kindle versions of the second edition of my book, "Dividend Growth Machine." It's still in draft format, so if you have any feedback, please let me know!

I have for some time followed the British super investor Terry Smith. A funny thing about his presentations is, that he presents key metrics for his entire portfolio (averages). All though my main focus is on selecting and holding individual stocks, I thought it could be fun to take a portfolio view. Here is a snapshot of my current US-stocks portfolio (avg of 24 holdings with weigths between 7,32 % to 2,58 %): Its quite expensive: P/E: 28,5 , EV/EBITDA: 20,9 , P/FCF: 24,8 But highly profitable: Profit margin: 62,4% , FCF Margin: 15,4% , ROCE: 18,3% And with a solid (but not impressive) outlook: Revenue FWD: 7,35% , EBITDA FWD: 9,99% , EPS FWD: 10,56% I was a bit surprised, especially by the relatively modest growth outlook - not sure I would invest in a company or ETF with these numbers;-). Made me reflect that I may be biased towards mature companies and that I should look to add a little more growth with my next investment. Do you use these kind of Portfolio averages? Which metrics do you follow and do you use it in your process?

Hi - In all the news and hype it can be a good idea to take a step back and evaluate if what you are looking at, is in fact a long term compounder, or if it is something else. Here is a small "tip" on how I do a first 30 sec. check when I encounter a new idea. Example: I have noticed Nathan mention RLI in several posts. I dont know the company but before i dive into it, what I do is go to seekingalpha and type RLI in the search bar. A graph appears. Press "advanced" on the graph. Now press "All" on period and press "Log" to get a logarithmic view. You now get an idea about the consistency and long term development of the company. For RLI it looks like this (first picture). Compare with a few much more unreliable companies like Big pharma (PFE) or one of the large banks (C):

There are a myriad of reasons to avoid covered call and income funds and many of these reasons are covered in detail here in "The High Yield Scam: Wall Street's Hottest Grift" and "Options Pricing: The Futility of Beating the Quants". However, there is one niche scenario where these funds might make sense for an investor seeking income. In this short reading, we will cover this scenario and some alternatives to consider for those in this unique scenario. None of this is financial advice. Consult with a professional such as Nathan Winklepleck,CFA before making any financial decisions. Many investors seek income in the stock market in hopes of replacing their jobs fully or partially supplementing their income to cover expenses. This is a great goal to have and it is completely possible with index, dividend/value, or factor investing in a globally diversified portfolio. Covered calls and high-yield funds are not the fast way to do this and will likely underperform just selling shares (creating a synthetic/manufactured dividend) of their benchmarks or indexes. Despite the underperformance, high expense ratios, potentially higher tax bills, and other challenges with these funds. There is one specific scenario that might make sense to own these funds if there is no other option. This scenario is if the investor needs to prove income. Such as if you needed to prove income to a bank for a mortgage, car loan, and other loans or if you rent somewhere. Investors who are in this niche situation with a small portfolio without a job or are unable to work may need to use these high-yielding funds for income proof. Unfortunately trading gains, selling shares, and that $50 dividend from KO can't help you in this scenario. If you have a 5-6 figure portfolio and you lose your job this can be a potential temporary option that doesn't involve draining the portfolio to $0 or selling shares to live in an expensive motel room because you can't prove income until you get back on your feet. This scenario is very niche because there are better alternatives to handle this unfortunate scenario. If no other alternatives exist for you, then covered call/income funds might make sense. If you do have to use these funds then put in the bare minimum required to survive and put the rest in quality dividend, value, or factor ETFs and businesses in a globally diversified portfolio.

I know very little about investing. I inherited an actively managed account that provides a fair amount of dividends from covered call ETF's, but the account is fairly diversified with other types of stock (like Google, Apple, etc.), in my uneducated opinion. I've researched a lot about covered calls, and I don't think they are a good idea long-term, but I do depend on the income. I'm not sure what to do since I don't completely understand them and don't want to generate taxable income by selling them and paying capital gains. I also need the income. I feel like I'm in a catch-22.