If you have been watching the Olympics or sports in general, you are aware in each race there is a strategy in place. If it is executed to the satisfaction of the coaches and athletes, a success is achieved, If a medal results so much the better. In the world of dividend paying stocks – the writer recently reread a book called Billion Dollar Lessons by Paul Carroll and Chunka Mui, Portfolio Books, 2008. The book is subtitled What Can You Learn for the Most Inexcusable Business Failures of the last 25 Years,

This blogs often highlights great stories of the past that continue as the companies pay dividends well into the future, but the reality in the marketplace is there is as much failure as there is success. In the book, the authors do not say these strategies are wrong, but with Murphy’s law  something that can go wrong often times does.

The 7 strategies dividend holders have to watch for (because loss billions generally means you had to make billions) are Synergy – the whole is great than the sum of the parts; Financial Engineering – the aggressive use of legitimate accounting or financial mechanisms; Rollups – buying small companies and making a big one for efficiencies; Staying the course – with a clear threat at hand, doing the same thing the company has always done; Adjacencies – moving into a adjacent market to stretch itself; Riding technology – the technology the management backs does not become industry standard or changes drastically; Consolidations – Buying your competitor except your competitor does not operate like you think it does.

Over the next few columns – the examples will be elaborated on, for today you can think of when you have heard the strategies before and continue to hear them.

There are always more questions than answers – to raising questions.