A One Stock Millionaire – Russ Gremel
A One Stock Millionaire. I like to periodically write about Secret Dividend Millionaires. These are everyday people and investors who built wealth through saving, investing in dividend paying stocks, and reinvesting the dividends. For the most part these people had ordinary jobs and lived unassuming lives. Their occupations include janitors, secretaries, authors, IRS auditor, nurse, insurance agent, real estate, recycling bottles, billing clerk, and so on. My last article was on Sylvia Bloom, who was worth over $9 million when she died. She achieved as a secretary and being a shrewd investor. This article is on Russ Gremel who is unique because his wealth was based on one stock making him a one stock millionaire.
To date, I have written about 11 Secret Dividend Millionaires. These people are often discovered only after they died since they had no children, outlived their spouse, and typically left their wealth to charity. I have also posted five Millionaire Interviews, which are about retail investors who blog and are focused on investing and dividends. In general, both groups have let time work to their advantage and relied on the power of compounding to build wealth.
Some Other One Stock Millionaires
This brings me to one interesting factoid about a few of the Secret Dividend Millionaires. Three were one stock millionaires. They invested in one stock when the company was young and then held that stock for decades. Grace Groner bought three shares of Abbot Laboratories (ABT) for $180 in total and held it for 75 years until it was worth about $7.2 million. Agnes Plumb owned only Kellogg (K), which she inherited from her father. At the time of her death, she owned 1.3 million shares worth about $98 million. Phyllis Stone bought Mobil shares many years ago that eventually became Exxon Mobil (XOM) and her shares were worth about $6 million at the time of her death.
I am not suggesting or advocating that the one stock millionaire route is the way to go. But it did work whether on purpose or accidently for a few people. Even today there are stories in the news about Tesla (TSLA) stock millionaires. In many cases they believed in Elon Musk, Tesla, and electric vehicles and took the risk. That said, the approach is not for everyone. However, another one stock millionaire that I recently found out about was Russ Gremel.
Russ Gremel Owned One Stock and was Millionaire
Russ Gremel led a simple life, and few knew that he was a millionaire. He lived in the same brick house for almost 95 years. He drove a Dodge Omni that was more than 25 years old. Russ Gremel ate inexpensive meals such as oatmeal and stew. When talking about himself he stated, “I’m a simple man.” And “I never let anybody know that I had that kind of money.” Reportedly, he grew up poor since his family lost everything after the 1929 stock market crash. He never married and did not have children. He first worked as a lawyer and retired at age 45. He was scoutmaster for the rest of his life. He died at the age of 99 in 2018.
How did Russ Gremel become wealthy considering the fact that he retired so early? I guess he can be considered a very early follower of the FIRE movement. I like to think that he achieved FIRE at age 45 for his simple lifestyle. Russ Gremel took a risk and bought about $1,007 of Walgreens (WBA) stock roughly 70 years before he died. His brother was said to have advised him that people would always need medicine and women would buy makeup making Walgreens a wise investment. As we are all aware, Walgreens grew into the one the largest pharmacy chains in the U.S. Walgreens eventually merged with Boots expanding its reach globally. Walgreens market capitalization is a little over $45 billion right now.
Russ Gremel never sold his shares. Before he died in 2018, he donated his wealth to charity. Since he liked wildlife, he donated ~28,000 shares or $2 million to the Illinois Audubon Society which created the 395-acre Gremel Wildlife Sanctuary.
Final Thoughts on a One Stock Millionaire – Russ Gremel
The most common thing about the Secret Dividend Millionaires is that they are frugal and knew how to save money. Most lived well below their means allowing them to build wealth. For the most part, they lived in one home or apartment for decades and drove their car for many years or took public transportation. But savings money alone will not make you a dividend stock millionaire. The Secret Dividend Millionaires also all learned how to invest to varying degrees of success. Indeed, most were compulsive savers and investors. Pretty much you need to earn more than you spend, maximize your savings, and invest to build wealth. You can read more about that in my This is The Way article. I am an advocate of investing in dividend growth stocks to generate passive income. Many of the Secret Dividend Millionaires believed in the stock market or real estate. today, there are many other options for generating passive income or literally making money while you sleep.
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Chart or Table of the Week
Today I highlight Walgreens Boots Alliance (WBA). Walgreens Boots has struggled since the merger. At the depths of the COVID-19 pandemic market downturn the dividend yield went over 5%. In hindsight that was a good time to buy. But the dividend yield is still above the trailing 5-year average at the moment. Dividend safety is decent, and the payout ratio is conservative at 39%. Walgreens is a Dividend Aristocrat and Dividend Champion with 45 years of consecutive annual dividend growth. The screenshot below is from Stock Rover*.
Dividend Increases and Reinstatements
J.B. Hunt Transport Services (JBHT) increased the dividend 11.1% to $0.30 from $0.27 per share quarterly. Forward yield 0.7%. This is the 7th yearly increase in a row. J.B Hunt is a Dividend Challenger.
Advance Auto Parts raised the dividend 300% to $1.00 from $0.25 per share quarterly. Forward yield 2.1%.
Travelers Companies (TRV) increased the dividend 3.5% to $0.88 from $0.95 per share quarterly. This is the 15thannual increase in a row. Travelers is a Dividend Contender.
Dividend Cuts and Suspensions List
I updated my dividend cuts and suspensions list at end of March. The number of companies on the list has risen to 518. We are well over 10% of companies that pay dividends having cut or suspended them since the start of the COVID-19 pandemic.
There were no new companies to add to the list this past month (March 2020).
Dow Jones Industrial Averages (DJIA): 34,043 (-0.46%)
NASDAQ: 14,017 (-0.25%)
S&P 500: 4,180 (-0.13%)
The S&P 500 is trading at a price-to-earnings ratio of 42.6X and the Schiller P/E Ratio is at about 37.6X. These two metrics are flat with last week. Note that the long-term means of these two ratios are 15.9X and 16.8X, respectively.
I continue to believe that the market is overvalued at this point. I personally view anything over 30X as overvalued based on historical data. Note that we are near or over 40X and valuation levels near the top of the dot-com era.
S&P 500 PE Ratio
Shiller PE Ratio
Stock Market Volatility – CBOE VIX
The CBOE VIX measuring volatility was up a bit this past week to 17.33. The long-term average is approximately 19 to 20. The first time since the pandemic started that the CBOE VIX went below the long-term average was three weeks ago.
Fear & Greed Index
I also track the Fear & Greed Index. The index is now in Neutral at a value of 59. This is down 1 point this past week.
There are seven indicators in the index. They are Put and Call Options, Junk Bond Demand, Market Momentum, Market Volatility, Stock Price Strength, Stock Price Breadth, and Safe Haven Demand.
Safe Haven Demand is in Extreme Greed. Stocks have outperformed bonds by 6.76% over the past 20 trading days. This is close to the strongest performance over the past 2-years as investor rotate back into stocks after a period of weakness.
Junk Bond Demand is indicating Extreme Greed. Investors are accepting 2.00% yield over investment grade corporate bonds. The spread is down further from recent levels indicating that investors are taking on more risk.
Market Momentum is indicating Extreme Greed. The S&P 500 is 10.19% over its 125-day average. This is further above the average than normal over the past 2-years.
Stock Price Strength is signaling Greed. The number of stocks hitting 52-week highs compared to those hitting 52-week lows is at the upper end of its range.
Market Volatility is set at Neutral. The CBOE VIX reading of 17.33 is a neutral reading.
Put and Call Options are signaling Fear. In the last five trading days, put option volume has lagged call option volume by 53.72%. This is amongst the highest level iof put buying in the past two years.
Stock Price Breadth is indicating Extreme Fear as advancing volume is 11.05% more than declining volume on the NYSE. Market breadth is improving but it is still near the lower end of its range.
The Weekly Petroleum Status Report showed U.S. crude oil refinery inputs averaged 14.8M barrels per day during the week ending April 16, 2021, a 286,000 barrels per day drop over the previous week’s average. Refineries operated at 85.0% of their operable capacity. Gasoline production decreased, averaging 9.4M barrels per day. Total gasoline inventories are about 3% below the five-year average for this time of year. U.S. crude oil inventories are about 1% above the five-year average for this time of year.
The Department of Labor reported that for the week ending April 17, the advance figure for seasonally adjusted initial jobless claims was 547,000, a decrease of 39,000 from the previous week’s revised level. The 4-week moving average decreased to 651,000, a 27,750 drop from the previous week’s revised average. The seasonally adjusted initial claims figures are at their lowest since March 14, 2020. The number of people receiving benefits after an initial week of aid decreased 34,000 to 3.674M for the week ended April 10, this is the lowest level since March 21, 2020, when it was 3.094M.
The Conference Board Leading Economic Index® U.S. (LEI) which measures U.S. business cycles increased 1.3% in March to 111.6 (2016 = 100), following a 0.1% decrease in February, which was preceded by nine consecutive months of increases. The March measure is the highest since August 2020. All ten components of the LEI contributing positively. The LEI is based on initial jobless claims, manufacturers’ new orders, building permits of new private housing units, stock prices, credit conditions, interest rate spread, and average consumer expectations.
Thanks for reading A One Stock Dividend Millionaire – Dividend Power Week in Review!
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