 Taking the time to read the time to read Buffett’s letters to shareholders is, in my opinion, the best investment of a few hours a young investor could possibly make. It provides the unusual opportunity get behind the scenes and get a look at the some of the thinking that goes into some of Berkshire Hathaway’s largest buys and sells. It also provides the opportunity to learn from the mistakes made by one investor in the hopes that you won’t repeat them in your own investing experiences.
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 In the previous article we started a discussion on boring companies. I argued that the reason so many elite investors like boring companies is due to the consistent and sustained profits these businesses often have. I then went on to detail how boring companies have deep moats that keep competition at bay, produce limited time use products that force the customer to be repeat customers, and always produce staple products that are consistently required by consumers regardless of any current economic conditions.
To remind us again of the definition provided from our first article on boring companies:
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 Today Bernie Madoff was sentenced to 125 years in prison. To send him off here are a few tips for Madoff on going to prison, bullet points are borrowed from a prison blog Top 10 prison survival
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- Keep your mouth shut
Shouldn’t be a problem Madoff ran his scam for years before he was eventually caught. In fact the folklore around Madoff was that if an investor cornered him at a public function and pushed him to talk about their investment that he would pickup the phone and have their investment canceled.
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 Dividend rate cuts are painful and can send your portfolio into a tailspin. Why do they happen and can we see them coming? In our continuing series on dividend rate cuts we are going to look at stale dividends with these questions in mind.
Stale dividend rates/ earnings
Dividend rates are set by companies with an expectation around the future growth of the company. As the company’s profits increase so too should the dividend rate. When you find a company where the dividend has remained fix for an extended period what you have is a stale dividend.
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Over the last six months we have witnessed a staggering number of dividend cuts. To Graham style investors, or pure dividend investors this has come as upsetting news- especially to those who didn’t see it coming. A dividend cut can instantly impact the stock price of a company in addition to your ROI. Why do dividend cuts happen, and how can we learn to see them coming? In the following short series we will introduce some of the main reasons why dividend cuts happen and how you can learn to anticipate them. Our first topic is the most common reason for dividend cuts so lets get into it.
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 For part 3 of our series on Buffett’s investment filters it is time to look at “able and trustworthy managers”. There are two components to able and trustworthy managers, lets examine each individually.
Trustworthy Managers
Managers of public companies come in all sorts, unfortunately they also come with an equally diverse set of ideas as to their job’s purpose. Some understand that they work for the shareholders, others though think that investors are nothing but an inconvenience.
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I haven’t had a broker for a few years now but every once in a while someone asks me how to pick a good one and I dig out this story from my own experiences.
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 Many listed companies will setup an investor call every quarter to allow shareholders and others to ask questions about the company’s latest financials and overall health. Investor calls are often skipped by the common investor as they are thought to be too technical or too involved. But, to pull a Yogi Berra, “you can hear a lot by listening”. So what if you don’t know what a tipping point ratio is, so what if you don’t understand what the market bend is, it does not matter in the least. Listen to how the people in these calls talk as much as you listen to what they say.
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