TJ Terwilliger -Compounding Dividends

Writing about 💸 Dividend Growth Investing and 🧠 no-brainers.
Teaching people about investing. Also @tj_terwilliger

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

"Dividends are dumb!" Ever heard that?

The 'Total Return' crowd loves to bash them, saying they're taxed, bad capital allocation, and that you should just sell shares for income.

But are they right?

Let’s break it down with real numbers and facts.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

Which step do you think people spend the least amount of time optimizing?

1️⃣ Income
2️⃣ Expenses
3️⃣ Savings
4️⃣ Investments

Most investors obsess over finding the next great stock.

Most should be focusing on growing how much they can invest.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The company gets better.

The market doesn't notice.

The best investors buy.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

FIS might be one of the most boring businesses in the market.

That’s exactly what I like about it.

Here’s why I’m interested in $FIS 🧵👇

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

FIS used to own Worldpay, a massive merchant payments business.

After spinning Worldpay off, FIS is now focused on something much simpler:

Providing the software that banks use to run their businesses.

Think core banking systems, payment technology, and other financial.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

Before buying a dividend stock, ask:

1. How difficult is it to replicate the company's assets?
2. How essential is its product or service?
3. How strong is its cash flow?

Those 3 questions can tell you a lot about the safety of the dividend.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

What if you had to buy 10 stocks today but couldn't sell them for 20 years?

No trading. No panic selling. No rebalancing.

Just pick 10 businesses and let them run.

Here are the 10 I'd choose, and why they'll still be minting cash two decades from now:

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

10. W.W. Grainger $GWW

🔧 They sell maintenance and repair supplies to millions of businesses.

Their massive distribution network keeps costs low and carries the largest product selection in the industry.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The market looks calm.

But the stocks inside aren't.

VIX measures S&P volatility (dark line).
VIXEQ measures volatility of the average stock (green line).

That gap just keeps getting bigger and bigger.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

Warren Buffett has spent 70+ years watching everyday investors make the exact same mistakes over and over again.

Most of them are completely avoidable.

Here are his 7 Deadly Sins of Investing (and how to fix them) 🧵👇

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

1/ Treating the stock market like a casino 🎰

People get addicted to flashing red and green tickers and forget they are buying real businesses with real products and real cash flow.

Buffett says the market has "never had more people in a gambling mood than now."

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

AI is changing the stock market.

Investors are pouring money into AI companies and the infrastructure they need.

But there's another trend worth watching:
HALO companies.

Heavy Assets. Low Obsolescence.

Here's what that means 🧵

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The idea is simple.

Buy businesses that own physical assets that are difficult to replicate...

And provide essential products or services that are unlikely to be disrupted by AI or the next new technology.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

Job creates income.

Income builds a portfolio.

Portfolio creates freedom.

That's the progression.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

Boring companies with a lot of physical assets are beating the S&P 500 so far this year.

There's more than one investing style that works.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

You can score almost any company on 3 questions:

Can competitors easily replicate its assets?

Will customers still need its product in a recession or technological shift?

Does it generate enough cash to fund the business and dividend?

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The price tells you what people think.

The fundamentals tell you what's actually happening.

The time to buy is when they diverge.

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

US Margin Debt: $1.5 Trillion
US Credit Card Debt: $1.2 Trillion

What do you make of this?

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The stock market is a lot like the Tour de France.

It looks like everyone is competing in the same race.

They aren't.

And understanding that can make you a much better investor.
🧵

[TJ Terwilliger -Compounding Dividends @tjterwilliger_]

The Tour de France is actually several different competitions happening at the same time.

Some riders are trying to win individual stages.

Some are chasing the Green Jersey.
The King of the Mountains.
The White Jersey.