Quarterly Letter Database

Summaries of DCM Quarterly Letters (2000-2010)

2010

Q1 A Visit with the Investment Policy Committee: Our portfolio ship must be able to handle all kinds of weather and seas, and yet it must also be able to perform when the fair winds blow. Put another way: We want a ship with good, safe speed, but one that is also exceptionally seaworthy. To accomplish that goal, we divide the portfolio into three parts: 1. Growth, 2. Income, 3 Growth and Income. Download Quarterly Letter

2009

Q1 The Baker's Dozen:   As you've almost certainly seen from personal experience, the companies included in our Rising Dividend portfolios are quality companies focused on increasing the value of and customer base for their products year in and year out. Download Quarterly Letter

Q2  Q&A Could the Turn be Near:  During 2008, 27of the 31 companies  we held at one time or another in our Cornerstone model porfolio increased their dividends. The average increase was about 10%. And, so far in 2009, seven of our Cornerstone companies have increased their dividends by an average of more than 9%. Download Quarterly Letter

Q3  So Now What?:  The economy is on its way toward recovery but still has a lot of work to do. We expect economic growth, perhaps as early as the second half of this year. The stock market will anticipate this and move higher before most of the positive economic data appear. Download Quarterly Letter

Q4 Rising Dividends: Weathering The Crisis: We have come through the worst of it. What is critical to identify is the strategies that really worked and how best to continue to preserve capital and create generous investment income. As the trillions of investment dollars return to the stock market, albeit slowly, we believe the strong companies with increasing dividends and those with access to faster-growing global markets will provide solid long-term total returns. Download Quarterly Letter

2008

Q1 The Price is Not Always Right: The past year was a terrific year for dividend growth for our portfolios. Download Quarterly Letter

Q2 The Subprime Crisis: The banks not only kept much of the subprime loans in their own vaults, they then borrowed more money using them as collateral for even more transactions. Download Quarterly Letter

Q3 The Two Headed Dragon: Subprime Loan Losses, Our Real Estate Concerns. It has been all this negative news, repeated every 2-hour news cycle by the popular and financial press, that has created the current crisis of confidence in US financial institutions, especially retail and investment banks. Download Quarterly Letter

Q4  Assessing the Current Crisis: With the credit crisis behind us, the US economy will get back on track. The other major economies of the world will then have the means to pull themselves forward as well. Download Quarterly Letter

2007

Q1 The Barnyard Forecast: Quite simply: the economy appears to be slowing, but stocks are rising. Download Quarterly Letter

Q2 The Five V's: We're often asked how DCM values a stock for its investment strategy. This letter explains the filtering process that stocks go through before they end up in your portfolio. Download Quarterly Letter

Q3 A Visit with the Investment Policy Committee: As prices fall, the current oversupply of housing will find buyers and stability will return, but the fall in prices will create a class of negative worth homes throughout the US. Download Quarterly Letter

Q4 The Antidote to Worry: We believe the Fed is at an inflection point in their management of the economy. Download Quarterly Letter

2006

Q1 Barnyard Forecast: The Forecast is positive for stocks. We believe the fair value of the Dow Jones Industrials is near 12,000, but based on the outstanding profit growth we project, we believe the Dow might push toward 13,000. Download Quarterly Letter

Q2 Three Buckets of Retirement Income: We describe a simple three pronged approach to planning for secure and rising income in retirement. Download Quarterly Letter

Q3 Valuation, Valuation, Valuation: Stocks are too cheap. Stocks are too cheap. Stocks are too cheap, and here's why. Download Quarterly Letter

Q4  Where do we go from Here?: Forget the bad-news mongers, the stock market has great value, and if the Fed, is on the sidelines, stocks have a lot of room to go higher. Download Quarterly Letter

2005

Q1 Barnyard Forecast: The Forecast is positive for stocks. We currently peg the fair value of the Dow Jones Industrials at 11, 690, about 8.5% higher the current level. Download Quarterly Letter

Q2 A Brief History of DCM: The Donaldson Capital Management story. Download Quarterly Letter

Q3 Uncovering Hidden Values: The importance of the dividend in the total returns of most stocks is not well understood by most investors. We describe several techniques to uncover the hidden value of dividend investing. Download Quarterly Letter

Q4 After the Storms: Katrina and her sibling hurricanes will not have significant impact on the US economy. A cloud of uncertainty will, certainly, shroud the true strength of the economy, but there are key indicators that will help us chart our course. Download Quarterly Letter

2004

Q1 Drilling Down: One of the longest bear markets in history has been slain. Is there enough ammo left to re-take the old market highs? Download Quarterly Letter

Q2 Bees for Their Honey: An introduction to the dividend theories of John Burr Williams. A cow for her milk, A hen for her eggs, And stocks. . . for their dividends. Download Quarterly Letter

Q3 Investing vs. Speculating: John Burr Williams explains the difference between investing and speculating. Download Quarterly Letter

Q4 Seeing Through the Storm: The main stream media is completely wrong on the strength of the economy. This is not a jobless recovery. Such things don't exit. We explain here where to look see the true strength of the economy. Download Quarterly Letter

2003

Q1 Investor Class: People who own securities are now in the majority in this country. Increasingly they will need for these investments to fund their retirement. Because of this, we believe dividend-paying stocks will be the investment of choice among the investor class. Download Quarterly Letter

Q2 The Case for Optimism: We believe there is a lot of truth in the old saying, "What doesn't kill you will only make you stronger." Our country has had to endure seven major shocks since 9/11, and although it may not feel like it yet, things are getting better, a lot better. Download Quarterly Letter

Q3 Charting the Market: The market has turned and it is real. The charts are making a big call here. Download Quarterly Letter

Q4 Able Willing and Ready: A brief explanation and history of our Rising Dividend Investment Style, and how it differs from typical dividend investment strategies. Download Quarterly Letter

2002

Q1 The Three Eyes: The main reason the current recession will be short and shallow is because the banking system has remained in good shape and will not experience the gut-wrenching clean up of bad loans that is so often present in recessions. Download Quarterly Letter

Q2 Hot News, Cold Facts: E+I+E+I = O. The Barnyard Forecast is positive for stocks in the coming year. Download Quarterly Letter

Q3 Brown Bag University: A series of observations written by Donaldson Capital employees about the state of our country and the future. Download Quarterly Letter

Q4 A Letter from the Heartland: Stocks are very undervalued, but the markets need a heavy dose of non-partisan politics and straight-talking business leaders to break the psychological damage caused by 9/11 and the corporate scandals. Download Quarterly Letter

Special Report - The Rising Dividend Story: The heart of who we are and what we believe. Download Quarterly Letter

2001

Q1 Temporary Slowdown: Corporate America is on sale, but this is not a going out of business sale. It is an inventory reduction sale, and at today's prices, we believe the risks of owning the greatest companies in the world are lower than they have been in many years. Download Quarterly Letter

Q2 False Bear: The Fed has begun to cut rates, but the market appears to be betting that the rate cuts won't help the economy. We think the market is wrong just like it was when it bet that the Fed's rate hikes in 1999 would not slow the economy. Download Quarterly Letter

Q3 Hardwired: In spite of the negative economic and corporate news, the average stock on the New York Stocks Exchange has actually been moving higher for the past six months. Download Quarterly Letter

Special Report - A Change in the Winds: We remain optimistic that the Fed's rate cuts will turn both the economy and stocks. The average stock, indeed, already appears to have turned. Download Quarterly Letter

Special Report -- September 11, 2001: "You can believe that as terrible a day as this is for us, we will get through it because we are a strong nation, a nation that believes in itself." Download Quarterly Letter

Q4 The American Spirit: The American people have exhibited a spirit and unity that could only have been imagined a few weeks ago. To borrow from Chevrolet and Timex: The heartbeat of America has taken a licking and kept on ticking. Download Quarterly Letter

2000

Q1 Surprise, Surprise, Surprise: Stocks in 1999 showed big gains, but a closer look shows it was all technology, and we think they have run their course. Download Quarterly Letter

Q2 Unwinding 1999: Do not assume that every Tech stock is worth what it is selling for, and do not assume that the old economy is dead. Download Quarterly Letter

Q3 Attention Span: The Fed is back in control, and slowing the economy is a violent act. It is just not possible to slow the economy without hurting some companies and individuals. Download Quarterly Letter

Q4 Heavy Weather: If you think it is normal for Tech stocks, or any investment to go up everyday like the Techs did in 1999; you have not spent much time looking at the history of booms and busts. Download Quarterly Letter