In one of the financial papers there is a wonderful story of someone who made a living in the investment world with the resources of company’s financial reports and Value Line reports. His name was Walter Schloss.  Mr. Schloss used judgment and some rules – he would look for stocks trading at new lows, he narrowed the field to companies whose business models he understood. How does the company make money? Mr. Schloss looked for little debt and tried to avoid greedy management or companies whose products he thought would fail. If he liked what he saw, he would invest in a diversified portfolio. If you want to listen to a lecture – go to The Ben Graham Centre for Value Investing (bangrahaminvesting.ca) and click on the links Burgundy Resource Centre.

Linking to dividend producing stocks, while value investing focuses on underperforming stocks, it is possible some underperforming stocks produce dividends. The key is understanding how does the company make money? If it is simple such as the investor owned utility makes it money from consumer and business ratepayers, the next step is ask how secure is it? If a company is making most of their money by hedging or betting against the markets, there are other questions that follow, by asking a variety of questions it allows you to react to events that affect your investments.

There are always more questions than answers, till next time – to raising questions