Dividends and Warren Buffett, Charlie Munger interview at AGM

On You Tube there are many interesting interviews published for many reasons. Once in a while you can learn somethings which helps in your decision making process. A few weeks ago, listened to interviews from one of the Berkshire Hathaway’s Annual General Meeting. The first question was asked if there was some book or special thing to read in order to gain knowledge to help investing. Mr. Buffett said investing in the markets is one in which the more you do, the better you can do because investing is accumulative knowledge. Every year you learn more, the more you read and can see beyond the press releases. Mr. Buffett says he reads a great deal, besides the financial press including the Wall Street Journal, 10 k reports, annual reports. Mr. Buffett says he tries not to read analysts reports, for he does his own homework.

Another question was why do you have cash, rather than fully invested? Mr. Buffett noted he was looking for a certain return on investment and if you can wait and have the patience, you can find the “fat pitch”. In baseball a good hitter misses 70% of the time or .300 is a good hitter. A great hitter is closer to .400. One of the those hitters was Ted Williams who said he waited for the fat pitch or the pitch he thought he could hit. Patience is a key. Passing opportunities is something that happens or if you miss something that is okay. Successful companies are the business that you can understand in a relative short period of time.

Linking to dividend paying stocks, patience is the key but balance it off with keeping the majority of money in profit making companies. It is easier to be patience when the company you own makes money. Companies which make profits tend to trade at higher multiples than non profit making companies, as well if it pays a dividend you get paid while you wait. Waiting also means cycles happen, when stocks prices are down in price you have the ability to buy more, the dividends help gain the money to do that. If you are patience, you will buy low and wait for the capital gains.

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

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s