The Most Uncomfortable Topic In Investing
For those of you who follow sports as well as investing, you probably crossed path with the news item last week that Denver Broncos owner Pat Bowlen is stepping down after the revelation that he has been battling Alzheimer’s for the past several years. That naturally triggers a discussion of the most uncomfortable topic in investing: What is a self-directed investor to do upon receiving notice that he will be gradually losing his cognitive functions, and must plan accordingly? It’s a complex discussion, and often the investment portfolio gets put […]
LOYAL3: The Current Savior Of Long-Term Investors
Even though I cannot attest to a lot of the criticism that the transfer agent computershare.com receives on a regular basis as a forum for buying stocks, I know a lot of people have written me, saying, “They’ve gotten a lot of bad online reviews. I’m not comfortable going there, are there any other options worth looking at?” Normally, I’ve pointed to something like Sharebuilder if your goal is to keep costs low because they have a special plan that lends itself to dollar-cost-averaging into whatever you want (pretty much) […]
Why Warren Buffett Built A Perpetual Income Machine
When studying what made Warren Buffett such a successful investor, it would be naïve to conclude that he was simply some guy who had extraordinary skill at stock-picking, and then climbed to the top of the investing mountain thereafter due to sustainable excellence in the stock-picking realm. But that only tells half the story. It would be like only discussing a famous self-help public speaker’s days and nights spent working on his public speaking without acknowledging the countless hours spent reading books acquiring the knowledge to provide the right message […]
Yes, You Should Be Worried About Amazon’s Stock
I recently wrote to you about how the drop earlier this week GlaxoSmithKline wasn’t a big deal in the slightest, and how a hypothetical family in 2019 reviewing their reinvested GlaxoSmithKline dividends may actually look back fondly on the share price drop in the middle of Summer 2014 as it provided an opportunity to get a lower price, and thus a higher ownership position in the form of additional shares due to the decline. Now, I want to discuss a company that does not share GlaxoSmithKline’s outlook. If you follow […]
GlaxoSmithKline Fell 6%, The World Is Ending, Etc.
One of the advantages of holding a stock for a long time and reinvesting the dividends into the same company that paid out the dividends is that you become very receptive to the idea of falling stock prices. In fact, sometimes I think that only affluent or aspiring affluent private investors that are reinvesting the dividends are the only ones who truly appreciate how falling dividends can aid the income production process. I want to use GlaxoSmithKline as an example because they are in the news today. The management has […]
How You Start A Dividend Stock Portfolio
Far and away the most common question I receive through e-mail from readers could be paraphrased as this, “Okay, I’ve finally reached a point in my life where I got a little money set aside, and I want to start putting together a collection of individual dividend stocks. Where should I begin?” Because I do not know the future, there’s no right way to answer that. And plus, there are so many different answers that would to you putting together something that will result in permanent wealth down the road. […]
What If You Bought Visa, Mastercard, and Discover During The Financial Crisis?
Perhaps more than anything else, the theme here on this site is that great things can happen to your financial life if you can separate the headlines and stock prices from the actual business performance of the company, and then methodically strike when an opportunity arrives for you to take advantage of the low prices in the moment. I’m not just interested in this stuff in the abstract; I like to focus on real, specific companies and discuss what it means to be a value investor in real time. Over […]
Mocking Warren Buffett in 1999
I’m currently working on some articles that talk about how intelligent decisions that you are making correctly at the time may not necessarily show up in the stock price for a bit (think IBM growing profits 9% annually while being universally mocked or someone buying Citigroup stock today getting mocked despite the company making $14 billion in profits over the course of 2014). It happens to value investors all the time. They find something that has higher current profits than the stock price might indicate, or profits are on the verge […]
Life Advice: Remove The “Reply All” Button From Your Toolbar
Somehow, I ended up on the mailing list for ABA Journal and receive weekly e-mails of lawyer shenanigans and mistakes that prove costly. Here’s what ABA Journal sent out today: A prosecutor in the Atlanta schools cheating scandal has been suspended for three days without pay after she mistakenly hit “reply all” when commenting about a defendant’s Stage IV breast cancer. Assistant District Attorney Lori Canfield of Fulton County mistakenly sent a two-word comment to dozens of lawyers and others associated with the schools case, report the Daily Report, WABE and the Atlanta Journal-Constitution. […]
Do You Need To Own Canadian Dividend Stocks?
That depends: What do you know about Canadian dividend stocks? Earlier this summer, I wrote an article about how, for the right type of investor, a mortgage REIT like Annaly Capital could be a useful investment if you understand the risk/reward trade-offs and are willing to deal with substantial volatility: in terms of share price, profits generated by the company, and dividends returned to you as the investor. The implicit assumption in all of that is this: you truly understand the business of Annaly Capital. My guess is that for […]