A Newbie Guide to Investing

(23-11-2013, 11:17 PM)gautam Wrote: In summary,

1. Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.

2. And use the dividends to buy more shares.

BINGO...you are there!!!

Berkshire Hathaway doesn't pay a single dime of dividends from its coffers.
General Motors had a consistent dividend history but collapsed in the 08 crisis.
Microsoft IPO in 1986 and only started its dividend distribution in 2003.

(24-11-2013, 01:24 AM)arthur Wrote:

(23-11-2013, 11:17 PM)gautam Wrote: In summary,

1. Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.

2. And use the dividends to buy more shares.

BINGO...you are there!!!

Berkshire Hathaway doesn't pay a single dime of dividends from its coffers.

I will avoid BH. I would not work for a boss who only pays me a bigger gratituity the longer I work for him and only get paid at the time of termination. I want a boss who pays me regularly and increases my pay as I go along

General Motors had a consistent dividend history but collapsed in the 08 crisis.

I haven't read abt GM history. u mentioned consistent, but does it raise dividends consistently for the 20yr period from 1990 to 2008?
From the chart below, it doesn't really did that.

2007-11-14 $0.25
2007-08-15 $0.25
2007-05-09 $0.25
2007-02-14 $0.25
2006-11-15 $0.25
2006-08-09 $0.25
2006-05-10 $0.25
2006-02-14 $0.25
2005-11-08 $0.50
2005-08-10 $0.50
2005-05-17 $0.50
2005-02-09 $0.50
2004-11-04 $0.50
2004-08-11 $0.50
2004-05-12 $0.50
2004-02-11 $0.50
2003-11-10 $0.50
2003-08-13 $0.50
2003-05-14 $0.50
2003-02-12 $0.50
2002-11-12 $0.50
2002-08-14 $0.50
2002-05-15 $0.50
2002-02-13 $0.50
2001-11-13 $0.50
2001-08-15 $0.50
2001-05-09 $0.50
2001-02-14 $0.50
2000-11-14 $0.50
2000-08-09 $0.50
2000-05-10 $0.50
2000-02-09 $0.50
1999-11-08 $0.50
1999-08-10 $0.50
1999-05-28 $14.33 GM spins off parts division, Delphi Automotive Systems.
1999-05-11 $0.50
1999-02-02 $0.50
1998-11-09 $0.50
1998-08-11 $0.50
1998-05-12 $0.50
1998-02-17 $0.50
1997-12-19 $3.59 Restructures Hughes Electronics and spins off defense electronics unit to Raytheon Company.
1997-11-10 $0.50
1997-08-12 $0.50
1997-05-13 $0.50
1997-02-04 $0.50
1996-11-12 $0.40
1996-08-13 $0.40
1996-05-14 $0.40
1996-02-13 $0.40
1995-11-14 $0.30
1995-08-15 $0.30
1995-05-05 $0.30
1995-02-10 $0.20
1994-11-10 $0.20
1994-08-12 $0.20
1994-05-06 $0.20
1994-02-11 $0.20
1993-11-05 $0.20
1993-08-13 $0.20
1993-05-07 $0.20
1993-02-05 $0.20
1992-11-05 $0.20
1992-08-14 $0.40
1992-06-01 $0.40
1992-02-07


Microsoft IPO in 1986 and only started its dividend distribution in 2003.

I will avoid M. For the same reason I mentioned abt BH.

Thanks,

Feel free to post comments for meaningful discussion.

(23-11-2013, 11:17 PM)gautam Wrote: In summary,

1. Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.

2. And use the dividends to buy more shares.

BINGO...you are there!!!

I once thought that SMRT met this requirement, until...

SMRT IMO also met this criteria.

Every stock has its own ups and downs. take a look at its div 10yrs ago.

SMRT CORPORATION LTD DIVIDEND 19 Jul 2004 21 Jul 2004 03 Aug 2004 SGD 0.032 LESS TAX
SMRT CORPORATION LTD DIVIDEND 12 Nov 2003 14 Nov 2003 28 Nov 2003 SGD 0.013 LESS TAX
SMRT CORPORATION LTD DIVIDEND 21 Jul 2003 23 Jul 2003 05 Aug 2003 SGD 0.0178 LESS TAX
SMRT CORPORATION LTD DIVIDEND 06 Nov 2002 08 Nov 2002 21 Nov 2002 SGD 0.013 LESS TAX
SMRT CORPORATION LTD DIVIDEND 19 Jul 2002 23 Jul 2002 05 Aug 2002 SGD 0.015 LESS TAX
SMRT CORPORATION LTD DIVIDEND 07 Nov 2001 09 Nov 2001 23 Nov 2001 SGD 0.013 LESS TAX
SMRT CORPORATION LTD DIVIDEND 20 Jul 2001 24 Jul 2001 06 Aug 2001 SGD 0.015 LESS TAX
SMRT CORPORATION LTD DIVIDEND 20 Jul 2001 24 Jul 2001 06 Aug 2001 SGD 0.0165 LESS TAX
SMRT CORPORATION LTD DIVIDEND 15 Nov 2000 17 Nov 2000 30 Nov 2000 SGD 0.015 LESS TAX

Not vested, but my view is that:
thus dividends now is back to 10years ago.
indeed now, its down to 2c pa. If one takes a long term view, and stay vested till the DTL are all up n running, together with inflation taking place, the dividend should increase.
And if one was vested at $1 donkey yrs ago, he wld still be up.
Similarly, if one was vested at 1.8, he wld be down, but if he can wait, I am quite sure one day smrt will hit $2.2 again. its just the question of when, not would it happen. at same time, he can enjoy the ride with smrt and collect its dividends.

I am a long time investor and thus my views might not be shared with the majority. But so far this strategy has done me good. Importantly, no need close monitoring and no loss of sleep.

one additional thing to note from gautam's point;

He wrote "Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.". The word look means you observe and not buy into every such company. This is because at times a good dividend paying stock could be selling at a high valuation or is doing a 100% payout (which is not sustainable).

So yea look for stocks that are giving dividends but also observe other factors.

(24-11-2013, 11:18 AM)CY09 Wrote: one additional thing to note from gautam's point;

He wrote "Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.". The word look means you observe and not buy into every such company. This is because at times a good dividend paying stock could be selling at a high valuation or is doing a 100% payout (which is not sustainable).

So yea look for stocks that are giving dividends but also observe other factors.

U read between the lines and got my point CY09.

I, too, am no accountant. But with these simple strategies in place, I found investing extremely rewarding for close to a decade already and low risk enough for me to enjoy life.

Life already itself got ups and downs. If add that to the market ups and downs, if both downs would to concide with each other, I think its too much a handful for me to take.

So I rather take a long term view and enjoy the fruits and smell the roses as I go by.


Thanks!

Guatam

(24-11-2013, 12:26 PM)gautam Wrote:

(24-11-2013, 11:18 AM)CY09 Wrote: one additional thing to note from gautam's point;

He wrote "Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.". The word look means you observe and not buy into every such company. This is because at times a good dividend paying stock could be selling at a high valuation or is doing a 100% payout (which is not sustainable).

So yea look for stocks that are giving dividends but also observe other factors.

U read between the lines and got my point CY09.

I, too, am no accountant. But with these simple strategies in place, I found investing extremely rewarding for close to a decade already and low risk enough for me to enjoy life.

Life already itself got ups and downs. If add that to the market ups and downs, if both downs would to concide with each other, I think its too much a handful for me to take.

So I rather take a long term view and enjoy the fruits and smell the roses as I go by.


Thanks!

Guatam

So what other factors investors should observe beside high valuation or 100% dividend payout?

Thanks all for your help!
I'm still a very young investor and by gaining more knowledge i'll be able to unearth more things and learn more about investing.
Thanks everyone for teaching.
Currently, i think the best way is to build my nest egg and load on lots of valuable knowledge about investing before i start 'firing'.

God Bless Everyone

(24-11-2013, 12:57 PM)arthur Wrote:

(24-11-2013, 12:26 PM)gautam Wrote:

(24-11-2013, 11:18 AM)CY09 Wrote: one additional thing to note from gautam's point;

He wrote "Look into companies which pays dividends EVERY single year over the past decades and have characteristics of raising dividends.". The word look means you observe and not buy into every such company. This is because at times a good dividend paying stock could be selling at a high valuation or is doing a 100% payout (which is not sustainable).

So yea look for stocks that are giving dividends but also observe other factors.

U read between the lines and got my point CY09.

I, too, am no accountant. But with these simple strategies in place, I found investing extremely rewarding for close to a decade already and low risk enough for me to enjoy life.

Life already itself got ups and downs. If add that to the market ups and downs, if both downs would to concide with each other, I think its too much a handful for me to take.

So I rather take a long term view and enjoy the fruits and smell the roses as I go by.


Thanks!

Guatam

So what other factors investors should observe beside high valuation or 100% dividend payout?

As i aluded to earlier, these are the main factors I look for. skipped dividends, I give it a pass. no raised dividends over 1 or 2 decades, that's out as well.

my criteria might not agree with most. but to me, dividends represent physical cash paid out that the company is truly making money thus giving out money over the past decades and increasingly so,

...a truth NO annual report or research analyst or tipper can give.

the other criteriae are case by case basis, depends on industry, market share etc. hard to describe. but if you got any companies in mind, i could give you my 2 cents worth.

Thanks,

Gautam

I've heard about the value investing summit too. I guess for newbies it would be better to learn investing and find the most suitable ways by ourself.

It may seem really tempting to pay and attend and just buy the stocks they recommend but at the end of the day, we'll still learn nothing. It's like 'them' fishing for us. I just feel that if you spend lots of effort learning how to fish, the future rewards will definitely be greater.

Have a good day!