Dividends

  • 06 Dec
    This Is Why You Need To Think About Dividends

    This Is Why You Need To Think About Dividends

    • Dividends and inflation have accounted for 99.7% of returns from 1929.
    • A global look at the dividend environment shows that there are excellent opportunities for dividend growth.
    • The dividend environment has also been distorted by the accommodative central bank policies as yields are very different now, while the companies paying them aren’t that different.



    Introduction

    Back in October, I wrote an article that discussed 8 charts that show how the stock market doesn’t always go up.

    Aside from these charts, I discussed the research of Professor Emeritus Edward F. McQuarrie, from the Leavey School of Business at Santa Clara University. What’s interesting from his research is that he found that dividends and inflation contributed to 99.7% of investing returns since 1929, which is a mind-blowing number. More →

  • 28 Nov
    Here’s Why You Might Want To Rethink Buy & Hold

    Here’s Why You Might Want To Rethink Buy & Hold

    • A buy and hold investing strategy sounds appealing, you buy something, forget about it for 20 years, and wake up rich.
    • However, it’s highly unlikely that such a thing happens.
    • I’ll discuss the main issues and benefits of a buy and hold strategy.



    Introduction

    Buy and hold is one of the most famous investing strategies, made even more famous by Warren Buffett himself.

    For Buffett, the idea behind buy and hold is that all you have to do is buy a wonderful business at a fair price and hold it forever. However, there are many flavors of the buy and hold strategy, and today, we’ll discuss how the strategy as a whole fits in the current environment. More →

  • 27 Oct
    These 8 Charts Will Change Your Mind On Buy & Hold Investing

    These 8 Charts Will Change Your Mind On Buy & Hold Investing

    • If you take a different perspective on the stock market, things aren’t all that rosy.
    • If the stock market has done well in the last 15 years, it probably won’t do that well in the future.
    • I’ll share 5 things that will enable you to reach satisfying returns in the long term, no matter what happens in the stock market.



    Introduction

    Today, I’ll discuss two academic research papers that look into slightly longer stock market periods to analyze returns in order to stress the importance of DIY investing and taking responsibility for our financial lives.

    I’ll conclude today’s article with some insight on what to look for in stocks to outperform the market in the next 15 years. More →

  • 19 Sep
    10 More European High Dividend Yielders You Should Consider Now

    10 More European High Dividend Yielders You Should Consider Now

    • There are interesting recession-proof companies on this list, all yielding 5% or more.
    • Some companies are cash cows, but don’t forget that tobacco companies have been the best investment in the past 30 years.
    • I’ll finish this list with a systemic risk analysis and a surprise stock with huge growth potential that offers a nice yield of 3%.

    Introduction

    I hope you enjoyed the first part of my two-part series of European stocks with dividends that yield 5% or more.

    Today, I’ll present you with another 10 interesting dividend plays, and I’m sure you’ll find interesting picks that fit your portfolio risk reward appetite. More →

  • 22 Aug
    Gold Royalty Companies – Reap The Reward Without All The Risk

    Gold Royalty Companies – Reap The Reward Without All The Risk

    • Gold streaming companies carry much less risk than a miner thanks to lower costs and better diversification.
    • However, these companies are still exposed to exploration upside and benefit from higher commodity prices.
    • Most of them even pay a dividend.

    Introduction

    Central banks will continue to print money even if it looks like they are taking a breath now. Therefore, gold investing still remains an important hedge for every portfolio. A hedge that is even cheap if gold prices are at a subdued level. More →

  • 21 Jul
    Why Investing In Australia Is A Good Idea Now

    Why Investing In Australia Is A Good Idea Now

    • Positive demographics, strong economic growth, a good business environment, and relative cheapness is what you should look for when investing abroad.
    • Australia has it, and on top of it, Australia offers a high dividend yield and a large potential currency tailwind.
    • The ETF is highly skewed toward financials but a decent stock picker can find a few great picks on the Australian stock market.

    Introduction

    Before investing in a country, I first like to check the demographics because it’s an easily predictable trend that has a huge impact in the long term.

    Because demographics are a long-term trend, it’s usually shunned by most analysts, but a population that grows at 3% per year adds at least 30% to a country’s GDP over 10 years in comparison to a country without population growth (think some European countries). More →

  • 13 Jul
    This Is What Could Happen To Berkshire Hathaway After Buffett

    This Is What Could Happen To Berkshire Hathaway After Buffett

    • BRK’s companies aren’t reliant on Buffett when it comes to their performance.
    • Buffett leaving leads to two uncertainties, but the outcome of both are positive.
    • The power of BRK lies in the quality of its businesses and huge cash pile. At this point, even an idiot at the helm of BRK would do well.

    Introduction

    One of the biggest concerns surrounding Berkshire Hathaway (NYSE: BRK.A, BRK.B) is what will happen after Buffett and Munger.

    To keep our karma positive, I’ll write this article under the assumption that Buffett gets an offer from Bill Gates to be the project manager of Microsoft’s (NASDAQ: MSFT) new multi-billion virtual reality Bridge game project. I think something like this could make Buffett leave BRK as I wish him many more decades of health. More →

  • 26 May
    Corporate America’s Focus Isn’t On Shareholder Value Creation

    Corporate America’s Focus Isn’t On Shareholder Value Creation

    • Earnings haven’t grown in the last 10 years. What is corporate management doing?
    • A temporarily higher stock price isn’t good for the majority of investors, especially those investing for the long term and retirement.
    • Buybacks are idiotic, management pays $ 3million for a home they can build for $1 million.
    • There is only one company that does smart buybacks.

    Introduction

    There’s a huge problem affecting corporate America that nobody is seeing because most people think in positives and negatives, and can’t think on an relative scale. What do I mean by this? Well, when shareholders judge management, they look at whether the bottom line is positive and in line with what the competition is doing. Nobody is assessing whether it could have been much better.

    We expect only the best from our favorite athletes and we hope our children develop to their full potential but when it comes to corporate management, we remain mostly silent and accept whatever they throw at us. More →

  • 16 May
    When CEOs Become Delusional: The Case of Unilever’s Polman

    When CEOs Become Delusional: The Case of Unilever’s Polman

    • Unilever CEO Polman declared himself more competent than Buffet just because Unilever has outperformed Berkshire in the last 8 years. The funny thing is, Unilever outperformed thanks to Buffett.
    • Not only that, but Berkshire outperformed Unilever on revenue and earnings while at equal valuations, Berkshire would also largely outperform.
    • The 8-year bull market has clearly gotten into some CEOs’ heads. This creates a very dangerous situation for long term shareholder value creation.

    Introduction

    In an interview with Jim Cramer, I was thunderstruck to hear Unilever’s CEO (NYSE: UL), Paul Polman, tell the world that his returns have been better in the last 8 years than Buffett’s Berkshire Hathaway (NYSE: BRK.A, BRK.B). More →

  • 15 May
    Why You Shouldn’t Love Dividends

    Why You Shouldn’t Love Dividends

    • It’s human nature to like immediate compensation. When it comes in the form of a dividend, even better.
    • However, there are far more disadvantages than advantages. Dividends are another indication of how irrational markets are.
    • We can’t even imagine what Microsoft or Apple would look like if their cash had been reinvested and not used for repurchases or dividends.

    Introduction

    When a company announces increased buybacks or hikes its dividend, the market usually reacts very positively. However, there are some people that aren’t so enthusiastic about dividends and especially buybacks as they see the former as a poor allocation of the company’s cash and the later as a fast way to destroy shareholder value. In this article, we’ll analyze why dividends aren’t as good as they seem at first sight. More →

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