Where Should A Dividend Investor Begin?

poorcharlie

The best accidental side effect of running a website and writing articles for Seeking Alpha is that it occasionally allows me to stumble into friends I haven’t to in a while—the kind of people that you enjoyed being around, but then life happens, and for whatever reasons, things happen and you fall out of touch. Long story short, I recently got in touch with one of my best friends from my Freshman year at Washington & Lee, and he asked me a question about starting a long-term investing strategy and the kind of books that will send you in the right direction. Because the question was broad enough to be useful to a general audience, I thought I’d share my response with you all. I would mention his first name, but since he is the only person I’ve ever met in my life with that name, it might give too much privacy away. Anyway, he knows who he is, and without further delay, here’s my book recommendation:

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Originally posted 2013-06-28 13:43:12.

The Search for 20% Annual Returns

As some of you know, I analyze and discuss attractive stocks in the market over on Patreon, which you can assess here. However, since I have done a terrible job of marketing it, I wanted to include an excerpt from an entry I posted earlier today, with the name of the stock redacted for the obvious reason:

“The company, which earned $2.65 per share in profits in 2015 during its first full year as a standalone publicly traded corporation, is expected to earn $3.85 per share in profits this year, which is a growth rate of 13.26% annualized. And those profits are going to be somewhere north of $2.5 billion in 2018–for a size comparison, Coca-Cola earns a little over $9 billion in annual profits, making [redacted] so massive that it is one-fourth the size of the corporation that brings the world 3.5% of its consumable beverage supply. People don’t think of it as a blue-chip that reaps the stability benefits that come from massive size, yet there it is.

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Long-Term Investing Is Easier Than You Think

I got my hands on a Kiplinger Magazine from 1990 the other day, and one article was a list of the “Top 10 Picks For The Next Decade” by an investment club that had monthly meetings in Texas. The ten picks were: Gillette (now Procter & Gamble), Philip Morris (now Altria, Philip Morris International, Kraft, and Mondelez), Coca-Cola, Wal-Mart, Disney, Pepsi, Amoco (which is now BP), Johnson & Johnson, Disney, and their wild international pick was Nestle.

All of those companies still exist today, and are much more profitable now than they were then. Some people heavily discount information like this because there was probably some investment club in Florida that predicted Enron and Woolworth as its long-term holdings.

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Originally posted 2013-06-26 19:33:20.

Dividend Investing In The Context Of Your Life

judygarland

I spent much of the last evening reading a biography on Judy Garland (Dorothy from The Wizard of Oz). I was surprised to learn, at least from the biographer’s point of view, how sad and unhappy most of Judy’s life on this earth turned out to be. A lot of her personal unhappiness, from what I could tell, was the result of trying to find permanence and stability in her romantic and platonic relationships that were constantly shifting and leaving her feeling vulnerable. To mix metaphors from the lyrics of Bob Dylan, she tried to seek a shelter from the storm and was left with an abandoned love.

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Originally posted 2013-06-26 08:35:49.

WD-40 Is An Undiscovered Gem Of An Investment

Edward H. Heller, the famed venture capitalist of the early 20th century, had a knack for spotting small-cap stocks that would make their investors a lot of money as they grew to become mid-cap stocks. Heller said that he invested in companies that could be described as “vivid spirits”, which he further defined as companies focused on maintaining low costs with robust product improvement lines and an insatiable appetite for gaining market leadership.

If Heller were around today, I suspect he would put serious money into WD-40 Company (WDFC), the San-Diego based company known for its eponymous oil-based spray cans.

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