Aqua America: One Of The Last Stocks In The World Offering A 5% Reinvestment Discount

Back when DRIP programs were rolling out in the 1960s and 1970s, one of the advantages typically offered in such programs was a 5%, 10%, and in some rare cases of budding blue-chips, 15% discount on dividend reinvestment for those investors holding the stock.

The whole point of it was to encourage and incentivize people for thinking like long-term business owners. Also, it was a way to shift the accumulation of company stock away from the folks in New York that tended to want results now towards a more genteel and understanding owner base that would be patient with management when business conditions thwarted companies from achieving expected growth. This was a strategy pioneered by Richard Joshua Reynolds (the Emory graduate who owned the RJ Reynolds tobacco company) who hated Wall Street folks buying up bits of his company and used the promise of special cash payout structures for employees … Read the rest of this article!

Warren Buffett’s First and Best Investing Lesson

In the spring of 1942, Warren Buffett made his first investment in the stock market when he purchased three 3 shares of Cities Service stock, an Oklahoma natural gas company that Warren’s father, Howard, had frequently recommended to clients at the stock brokerage that he ran and operated.

By the fall of 1942, the stock quickly fell from $42 to $32, before coming back to $45 in short order. Warren Buffett did not like seeing his investment fall from $126 to $96, which in 1942 dollars is like seeing a $5,000 investment fall to the $4,000 range nowadays, and then he sold at $45 which is more like turning $5,000 to 5,200 in today’s dollars.

Shortly after this, the price of natural gas began to boom, and by 1943, the stock rose to $110. In today’s dollars, if Warren Buffett had held onto his Cities Service stock, it would have … Read the rest of this article!