What Separates Excellent Investors from Good Investors

From June of 1990, American States Water has been an excellent investment by just about any metric you could identify. The California utility is perhaps one of the most understandable businesses in the world: it is a water utility. It sells a product that customers will die without. The dividend has been going up for 50+ years. Those are wonderful, wonderful, characteristic traits. Since 1990, every $5,000 invested into American States Water would have turned into $69,000, for a total return of 12.35% annually.

The product (water) is basic and stable, it is easy to understand, you keep getting more and more cash, and you even have built wealth in excess of the S&P 500 over that time frame, which is nice. If you have been a holder of the stock, or anticipate becoming a holder of the stock, I anticipate that American States Water will continue to be a … Read the rest of this article!

Life Is About More Than Investing

A professor stood before his philosophy class and had some items in front of him. When the class began, wordlessly, he picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.

So the professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full. The students responded with a unanimous “yes.”

The professor then produced two cups of coffee from under the

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Should You Buy High Dividend Stocks?

According to the search engine terms that drive people to this site, one of the most common questions is about whether someone should purchase the common stocks of companies with a high dividend yield. It’s a good question: buying, holding, and reinvesting the dividends from high-yielders like BP and Royal Dutch Shell has been one of the best ways to build long-term wealth over the past twenty, thirty, and forty years, and studies of what happens when dividends are allowed to build on themselves undisturbed for long periods of time is the reason why people like Wharton Professor Jeremy Siegel point out that the old Philip Morris was the absolute best investment you could have made over the course of 1926 to 2006 (among your options that existed in 1926).

But the question is incomplete without considering the company that is paying out the dividends. High-yield dividend investing is only … Read the rest of this article!

How To Find Long-Term Dividend Stock Ideas

Sometimes, I hear from investors that are interested in investing, and don’t mind spending a few years per week thinking about stocks, but don’t necessarily have the time or inclination to elevate that commitment to 20+ hours per week. As a result, they want to perform quick screens of stock ideas without actually having to sift through the entirety of the 15,000 publicly available stocks in existence.

If you are interested in companies that will be paying out dividends for years and years to come, and will build significant wealth over time as well, here’s the quick two-step screen I would perform.

First, you gather a list of companies that have been paying dividends for extraordinarily long times, and then you also making a list of companies that have been growing their companies for very long times.

Among the companies that have been paying dividends for very long times, you … Read the rest of this article!

Charlie Munger’s 2007 USC Commencement Address Speech

Charlie Munger’s 2007 commencement address to the Gould School of Law at USC is obviously one of my favorite commencement addresses and I have uploaded the video and the transcript for your review. I’d comment, but Munger speaks for himself and needs no further clarification.

Well no doubt many of you are wondering why the speaker is so old.

Well the answer is obvious: he hasn’t died yet.

And why was the speaker chosen?

Well I don’t know that either. I like to think that the development department had nothing to do with it.

Whatever the reason I think it’s very fitting that I’m sitting here because I see one crowd of faces in the rear not wearing robes, and I know, from having educated an army of descendants, who really deserves a lot of the honors that are being given to the people here upfront. The sacrifice and the … Read the rest of this article!