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Pastimes : Triffin's Market Diary

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To: Triffin who wrote (412)	12/7/2011 11:16:46 PM
From: Triffin	1 Recommendation Read Replies (1) of 868

BC: PRINCIPLES OF DIVIDEND GROWTH INVESTING .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Step 1. Get paid regularly. Always buy stocks that pay a dividend. It’s like having a job that pays a regular salary as opposed to one that promises to pay a huge bonus based upon profit sharing sometime in the future (whenever the company turns a profit). Why work for promises. Show me the money. Step 2. Make sure the company has a history of giving raises. If a company pays dividends but doesn’t raise the dividend regularly how am I going to keep up with inflation? I need that raise. I want that raise. Show me the history. Step 3. The company must have a sustainable advantage that ensures both steps one and two well into the future. I don’t care if it is a low cost advantage, a technology advantage, patent rights with a long time to expiration, or differentiation. It just has to be real and costly to imitate. Step 4. Stick with the “Best of Breed.” Always choose the company that is the dominant player in its field with a good reason that it will retain that position and continue to grow (see Step 3 above). Step 5. Stay away from debt hogs. If a company has to borrow constantly to stay in business and make ends meet or to pay its dividend, look elsewhere. The end is near. Step 6. Do your homework and be sure that what you’ve read about the companies is true and not hype. Some folks like to buy first and pray later. I like to pry first and get paid later. Step 7. Stay diversified. Don’t make big bets in any one company or industry. It’s too much like gambling. Steady, consistent total return with less volatility than the overall market provides a better risk-adjusted return.

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