The next time you are at the grocery story go by the egg section and see how people buy eggs. Many people will buy eggs on a regular basis for one or more of their meals, to use in cooking as the egg is a needed ingredient. For the most part eggs come from factory farms where many chickens are in a barn and they lay eggs. The eggs are collected, sorted and go into cartons to be shipped to grocery stores. Eggs are one of the few products where before buying, people will open the cartoon to ensure all the eggs are in a ready state to be eaten. If you observe how people buy the eggs – some will take the cartoon and not look; some will take a short glance and others will carefully examine each egg in the cartoon. None of the methods is wrong for in the end the person is buying eggs.

Linking to dividend paying stocks, there are many methods to buying stocks and every year the ability to use the methods is easier for everyone. When markets reach new highs it seems everyone is right, because the market went up. When the markets are up even if you threw darts to pick the stocks and they have risen in value, whatever you did was correct, because you are invested. The trick of course is to duplicate whatever you did in the past to pick winners in the future. The easiest method to duplicate is to pick proven profitable companies which pay a dividend. When the company is profitable it should have a higher multiple of trading versus a company not making profits. because at the end of the year it will still be in business. If the company pays a dividend, you can ensure the margins it makes to pay the dividend remains a constant, if the margins are falling, there needs to be other reasons to own the company. Eventually the markets will correct themselves and it turns out profitable companies stock will fall less because how much money the company earns will be a prime reason for owning it.

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