Saturday, March 1, 2014

Four Investing Articles For Your Weekend Enjoyment

I spend a lot of time at my day job, spending time with my family, monitoring my investment portfolio and researching existing and potential dividend investments. I also spend a lot of time every single day, reading about investment articles and books about investing. I am usually very open to learning how other investors go about their investment process, and investment philosophy. I have highlighted a few articles from investors whose words I value a lot below:

Buffett's annual letter: What you can learn from my real estate investments

This was an excerpt from Buffett’s 2013 letter to shareholders, which discussed his experience purchasing real estate. The lessons learned are very applicable to stock market investors, and are lessons that are frequently mentioned by the Oracle of Omaha himself. The analogy of Mr Market and the reference to The Intelligent Investor are must reads for anyone who wants to be a long-term investor. To succeed in investing, think of yourself as a partial business owner in an enterprise, whose success is determined based on durability of the investment and its expected earnings, rather than the irrational nature of stock price fluctuations.In addition, he is also scheduled to post his full annual letter on the company website.

Separating Company Performance From Stock Performance

This article from Dividend Mantra was posted on the same day that the excerpt from Warren Buffett was posted on Fortune. I like the topic of focusing on the underlying business when investing, and ignoring the irrational nature of the stock market itself. Dividend Mantra walks us through the reasons why he kept adding to his exposure to Digital Realty Trust (DLR), despite the falling stock price. As a holder of Digital Realty myself, I found the decline in the stock price a welcome opportunity to add to my position there.

Kinder Morgan's Response to Barron's

The Kinder Morgan group of companies was featured in a very biased article by financial publication Barron’s over the past week.  That Barron's article didn’t really add anything new, that hasn’t been discussed before. However, it quoted the opinion of an analyst whose faulty logic has already been refuted by others before. (Motley fools article ) Unfortunately, investors who did not do a very good analysis of Kinder Morgan Partners or Kinder Morgan Inc panicked and have been selling off their ownership stakes. I own both KMI and KMR, and am happy to say that both account for the largest position in my portfolio. I like to have smart people like Richard Kinder work for me. My only regret is that I didn't use the dip to add to my positions in the general or limited partner, given my high exposure to Kinder Morgan.

On the Merits of Being a Financial Historian

I liked this article, because it discusses why it is important for investors to learn about financial history. History doesn't repeat, it rhymes. If you want to be a successful investor, learn about history, and avoid chasing returns. Many investors I have met, tend to always focus on stocks when everyone talks about it, and avoid them when stock are unpopular. To be successful, you need to develop independent thinking, which could only be done if you continuously learn about investments.

The Buffett Formula - How To Get Smarter

I really like this article from Farnam Street, because it discusses a little known fact that explains Buffett's success as an investor. The truth is that the guy has managed to read 500 pages a day for 60 - 70 years in a row. As a result, his knowledge of investments is superior to most anyone else in the world, which allows him to act fast when opportunities arise. There are no shortcuts to investing, so you need to be willing to work hard at analyzing businesses, reading annual reports and industry publications and reading books, in order to do well. I personally read about 80 - 100 pages/day,  but I also enjoy the process. After several years of following investments, it becomes much easier to spot what you are looking for.

3 comments:

  1. DGI,

    Thanks for the mention. Much appreciated as always. My article came out right before TGT and DLR both popped pretty nicely. As always, it's important to follow the fundamentals, not the noise. But you already know that! :)

    Oh, and I see Buffett's letter came out. Great stuff per usual.

    Best wishes!

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  2. Saw your comment on my site. Doing well just busy with work, soccer and other kids activities. I don't have much spare time with my new job to post. My dividend stocks are still doing well. My biggest holding is still KMP. Div Guy

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  3. Definitely a nice list of reading, thanks. I enjoy spending some of my Buffet formula time reading this blog and Dividend Mantra.

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