Weekend Reading 2/11/2012

Hopefully everyone is having a nice weekend. Here are a few articles on dividend stocks and other topics for your interest.

Might as well start with Buffett. If you haven’t heard by now, he’s stirred up a hornets nest this week. This article was written by the billionaire investor himself:

Why Stocks Beat Gold and Bonds
In the article, Buffett slams both gold and bonds. For bonds, he points out they have some utility, but that with interest rates so low, after taxes and inflation are taken into account, returns are nil. Bonds are basically just a way to try to break even. For gold, he’s far harsher, comparing it to the tulip bubble, internet bubble, and housing bubble. He goes on further to describe how, for the same price as one could pay for all the gold in the world (and fit it in a baseball infield), one could buy all the cropland in the US and 16 Exxon Mobil’s, the world’s most profitable publicly traded company, as well as $1 trillion left over. Instead of gold or bonds, Buffett advocates buying productive assets such as companies, farms, real estate, etc. Things that produce cash flow.

For the most part, I agree with him. I’m not speculating on gold, and bonds aren’t satisfactory to me right now, although I hold some for asset allocation. Stocks are where I’m at, even though they’re not, in my view, very attractively priced right now.

Dividend Stocks 101: The Essential Guide
If you’re new to the site, check out this key resource.

Wall Street Hates Monopolies
Money Mamba wrote this high quality article on monopolies and valuation.

Bank Stocks: High Risk
AAAMP Blog provides a good article on the risks of bank stocks. In fact, I consider one of my riskiest portfolio selections to be HCBK, my only bank stock. Despite it being a simple thrift, I already took a hit on this one. Even though they withstood the recession gracefully due to sticking 100% to good loans, they still ended up cutting their dividend due to a large balance sheet restructuring that was tied to the low interest rate environment and rather asymmetrical competition from the government sponsored enterprises which can lose billions and keep competing.

18 Stock Picks for 2012
The Dividend Guy pulled out his crystal ball and made some picks for 2012. He also reviewed his picks for 2011, which worked out well compared to the general market.

Five Reasons why I Love REITs
Dividend Ninja hosted a guest post on Real Estate Investment Trusts.

Dividend Income Update
My Own Advisor received over $5k worth of dividends in 2011. Well done.

Carnival of Personal Finance
One Cent at a Time hosted the carnival of personal finance and included one of my articles. There are a multitude of great links there.

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Comments

  1. Thanks Matt. My portfolio isn’t diversified as much as yours, but it’s definintely getting there :)

    Have a great weekend.

    Mark

    • I actually try to avoid over-diversification. I try to keep my number of positions at any given time, under 20, with low portfolio turnover. I want to be divided among numerous sectors, and sometimes among the top competitors of those sectors, but in order to keep track of my companies and vote my shares, I need to keep the number of positions reasonably manageable.

  2. Thank you for the mention.

  3. Dividend Monk, thanx for the mention !! :)
    Cheers

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