I'm still here too reading this thread everyday. I don't have tons of money to purchase right now but when I don't it's cool seeing the company's help me out by way of dividends!!

This thread has slowed my build tremendously. lol

John

I am a new member here, never thought I would read about investing on lateral-G. LOL With that being said, pretty much everything Mr Weld has written is stuff we have all read before. It feels different coming from someone not on Wall Street. (and that is a Good thing) It's good to read about some of the thoughts and ideas others have to make you think about the "big" picture of investing and not making foolish mistakes. I am sure that I would be speaking for everyone when I say "Well done Sir":thankyou:

WELCOME PAUL.... It's 477 pages of repetition because the real theme doesn't change. Feel free to chime in and ask questions if you want to. Nobody has to share personal info -- I do, but only for the purpose of goading and real time actual details.







There is nothing new here.... saving money - investing it - reinvesting dividends etc is not new. What is "new" is that most people know what they SHOULD be doing but never do. My goal in all of this is to get people to taste what it's like - and see or experience what a huge difference it will make in their lives. Then they're hooked. That's when the magic happens.

Keep it up Greg.

I'm still following as well. I don't post much as I dont have a whole lot to add to what's already been said. lol.

To the newcomers, welcome!

I still track my investments daily, with my tracking spreadsheet that keeps me in the loop.

My "Home Run" has been LMT, which I had actually bought a little before joining in this thread, but I was starting to learn on my own/elsewhere about dividend investing. Cool thing is now its payin me 7% dividend. :) Just wished I had a couple grand to throw at it in the beginning, rather than a couple hundred. LOL.

Still reading as well Greg. Your goading is what got me hooked in the first place and now the repetitive goading is pushing me to do more. Keep it up man. It's much appreciated and educational. Just to read how you look at the stock beyond the charts is beneficial not only in stocks/market but in everyday business dealings.

On another note, I have been wondering what tools are beneficial on the Schwab site? They have all kinds of links on the right hand side of the research page which I just get lost in...corner stock of the day, highlights, pick lists, Morningstar, etc. Most of this seems to be "noise" to me. I have delved into some of it but not sure if you have any suggestions on how to use these links or continue to focus more on the charts, screeners, and comparison tabs.

I have become "comfortable" navigating these tabs but was curious if there was any additional tools or ways to use them you would recommend to us as we look at the research page.

Hows everyone doing on oil?

I must say I was tempted to sell back when I was under ~25%

But I didnt and instead threw a grand at it from my former companies 401k

so far looks like it helped, with the lower cost basis as of this morning I am "only" -1.6%

Just wanted to say thanks to Greg and the other financial wizards posting on here, if not for you guys, I would have sold it when the pressure was on

I am looking to buy more of it. KMI and COP. Not much more but maybe another $1000 of each. It's what I am comfortable with when having some discomfort with the market.

I read this today as well and was curious what people think about these types of dividend yield suggestions posted by Marketwatch.

By Philip van Doorn, MarketWatch
Looking at free cash flow is very important when picking a dividend stock
If you are an investor relying on stock dividends for income, you want to be sure that the company will be able to continue making the payments, and maybe even raise the dividend at some point.
Back in December, we published a list of dividend stocks for solid income while U.S. interest rates remain low. Since then, long-term interest rates have stayed low, with 10-year U.S. Treasury notes yielding 2.14% on Tuesday, which was actually a pretty significant increase from 2.05% on Friday, as investors looked ahead to next week's policy speech by Federal Reserve Chairwoman Janet Yellen.
The previous list included S&P 500 (SPX) companies with dividend yields of more than 3.5%, that had sufficient free cash flow over the previous 12 months to make it appear that the companies were well positioned to raise their dividends.
Free cash flow is a company's remaining cash flow after capital expenditures. We can calculate a "cash flow yield" by dividing cash flow per share, for a particular 12-month period, by the share price. If the resulting figure is higher than the dividend, the company has "headroom" to increase the dividend.
This approach was suggested by Bill McMahon, the chief investment officer of Thomas Partners, back in May.
So what has changed since then we published our previous list in December? For one thing, 334 S&P 500 companies have had their 2015 earnings estimates cut since the beginning of the year. Two big reasons for this are the decline in oil prices and the rising value of the dollar (EURUSD) against the euro, which means higher prices for exports and declining sales for many companies.
So we thought it would be useful not only to consider the past 12 months' free cash flow, but to look ahead using the consensus free-cash-flow estimates for 2015, among analysts polled by FactSet. This data isn't available for every S&P 500 stock. But a list confined to companies for which the data is available indicates continued headroom to raise dividends is certainly a more conservative one.
Here are the highest-yielding S&P 500 stocks, with headroom to raise dividends based on the past 12 months and consensus 2015 free-cash-flow estimates:

Company Ticker Free cash flow yield - past 12 months Free cash flow yield - 2015 estimate Dividend yield Headroom - past 12 months Headroom - 2015 estimate
Windstream Holdings PLC 13.91% 12.36% 11.19% 2.72% 1.17%
Mattel Inc. 9.48% 5.95% 5.50% 3.98% 0.45%
CenturyLink Inc. 9.57% 11.50% 5.47% 4.09% 6.02%
AT&T Inc. 5.48% 7.38% 5.42% 0.06% 1.96%
Frontier Communications Corp. Class B 8.57% 10.56% 4.77% 3.79% 5.79%
Verizon Communications Inc. 6.56% 8.19% 4.46% 2.10% 3.73%
Plum Creek Timber Co. 4.77% 4.92% 4.02% 0.75% 0.90%
GameStop Corp. Class A 5.63% 11.41% 3.53% 2.09% 7.87%
Seagate Technology Inc. 11.66% 10.56% 3.49% 8.17% 7.07%
Garmin Ltd. 4.26% 5.52% 3.43% 0.83% 2.08%
Source: FactSet

I own two oil stocks. Both went from black to red when oil dropped. One has now increased by $14 a share from it's recent low while the other has only come back around $3. I have bought more oil stocks in the last few months.

I have COP as well, only because my dad works for Halliburton on their (Conoco's) shale plays, so I have decent visibility on how things are doing.

yea its alot lower than where I initially bought it, but they arent cutting back nearly as bad as some of the other oil companies in the area.

Wow --- several good questions in here!! I'll respond later today or tomorrow. Since I've been gone for a week I've got several things on my plate that need to be finished before I head off to USCA T-hill for another week...

I only use Schwab for looking at charts of companies I'm interested in - and for comparing choices by overlaying one or two companies to see if they march in lockstep or ??

And I use them for the TOTAL RETURN which they show if you know where to find it. Total Return over a period of time tells me pretty much everything I need to know... So I use the chart to make sure it's low on the left side and climbing to the right side -- and the Total Return numbers to help me see and compare one choice over another. Other sites have these tools - but I know where they are and can navigate quickly on Schwab.

Since moving to Sun Valley -- I've only kept a very small amount in Schwab since they have no local office here.... and I use their site over other sites because I like their tools.

I have used their "finders" tools in the past - but usually just for research. I don't - NEVER - blindly buy some company just because I read about them or found them on the top of some list. That's the kiss of death! If you don't KNOW the company and are familiar with it - stay away! I don't care what the number say. The reason for that is you'll be what's called a weak hand holder. The first time the stock hiccups -- you'll tend to sell.... and that's when you lose money. This is one of my top recommendations about investing. You can't buy and hold and add money to your holdings if you're not familiar with them and feel totally comfortable long term.


So if I want to invest -- I look for a couple categories -- pull up a name I'm most familiar with -- then alway scroll down (using Google Finance) to see what other names are considered to be in the same category -- and I start poking around and comparing the 2 or 3 I know - to see if I can find a better "version" of what I started with.... it's how I learn -- and expand my horizon... but even if I find one that has better numbers - if I'm not familiar with them I don't buy. I'll buy the one with slightly lower numbers used for reference and stick with it.

It's like this oil slump we're in now.... everyone got hammered and suddenly. You'll lose money only when you freak out and sell because of being a "weak hand" --- but if you're comfortable with the name - you might tend to stick some more money in when it's DOWN ---- and reap the reward of the rebound.

So this is exactly what I just wrote about when I responded to Jay's question above. You AVERAGED DOWN your cost -- getting them closer to where the stock is currently trading. This way it only has to go up a little to get your loss smaller or maybe even turn it into a gain. THIS DOES NOT ALWAYS WORK THIS WAY. Trust me -- I've lost plenty of times trying to catch the falling knife!! But you have to TRY -- and you have to have CONVICTION about the name and be willing to take some risk like this once in awhile. It's HOW YOU FEEL about the names your investing in - that keeps you from folding like a blubbering little school girl when things aren't so rosy! That's when you make some money!! Is it HARD to do? Oh hell yeah. Will you lose sometimes? Oh hell yeah! But we have to look at our pile of money as just that -- the pile -- if the pile is growing overall --- then we're okay. So if you're winning on 6 out of 10 investments -- and even on 2 - and losing on 2 - it's okay! You'll rarely if ever have all 10 firing all at the same time.

I'm going to have to add to this ----


ALWAYS go back and redouble your research before investing more!! Go back and really make certain this is a company that's "okay" and you're comfortable holding. Make sure there's not news you missed about the companies outlook etc.

In other words --- DON'T JUST GAMBLE. Don't just make a bet that you'll buy more on the dips and it will reward you!! You'll feel way better about investing if you've atleast done your homework and think that you have a really good understanding of where you're money is going to work. If you still feel it's a good investment - then go ahead and add to your holdings while it's down.

Thanks Greg for the guidance on research tools and how to best use the resources to educate oneself.

How do you feel about holding 2 of the top 3 or 4 companies in a segment when the indicators show positive growth charts (low on the left and higher on the right) for the segment?

For example: does it make sense to hold both Verizon and AT&T as they both are fighting for the same/similar marketshare, have slow to moderate growth outlook and an above average dividend yield around 4.5-5.5%? It seems they trade punches but continue to expand the overall market, re-invest in infrastructure (bought, built or rented) and pay a decent dividend. Definitely a longer term holding but not sure if its better to select one or carry both, since competitively, they seem to make one another stronger. Thoughts?

Great question Jay ---- and it's one that has an "it all depends" answer. Depends on how well you think you are diversified overall... accounting for your TOTAL investment portfolio.

I used to hold both... mostly because of the dividend payout and safety I think they BOTH offer. But my personal investments are one to two million per name -- and at one time I had about 1.7 million in these two.... and realized that I wasn't really "gaining" anything. So I cut Verizon (VS) simply because I'm a long term AT&T customer (the go with what you know).

To me -- it's like owning Coke and Pepsi.... or Altria and Lorillard.... I just think you're better off owning the one you like the best --- and then pick some other area to cover.

Old 401K??
 

So I've got my old 401k just sitting from my last job. I'm working again and thought it's time to do something with it?? But what or where do I start?? :hello:

P.S. The new job does not offer a 401K at this point, well not one that makes any sense to get into anyway. So if I want to move my old 401K and keep adding to it what's the best way to go about it??

Signed Lost and confused!!! :lol:

Super easy!!! Go to the brokerage of your choice -- and ask them to do a ROLL OVER for you.... Bring the info (Statement) from the "old" so you have account numbers and all of that info... and they'll help you with filling out the paperwork and they'll do all the rest!

Some times they can "bring" the account over "in kind" --- just transferring all the holdings.... Some times they can't bring over the holdings and then they're all sold and converted to cash -- and they bring over the cash. Either way there's no taxes involved so it's not a big deal. Then you can start fresh! Buying whatever you want to in a "self directed" retirement plan.

Greg is it better to go to the brick and mortar or can it be done online?? Does it really matter which brokerage house??

I called Fidelity on the phone and spoke with them about this when I started my new job. However, my old and new company both used Fidelity. I am happy with them so there was no reason for me to shop around. It's a fairly straight forward thing to do so I would imagine speaking on the phone would work fine so long as you know who you want to use for this service. Biggest thing to keep in mind is that at no point should you allow the money from the account to pass into your hands. It must go between institutions or you'll face taxes.

I would try to roll it into a Roth IRA if possible. Not sure if it is considering the different tax structures of the accounts. I just happen to like the tax structure of the Roth better than the 401K. You're limited to $5500 a year contribution though and you have income limits you must be below to qualify. So it might not work as well for you.

I would discuss the Roll Over options with your Accountant.

You CAN roll it over to a Self Directed retirement account. Generally speaking, a Rollover IRA. With no penalties, tax changes, etc. AS LONG AS THEY do the roll over.

You CAN roll it over to a ROTH IRA, but your hit with taxes due to the fact your retirement account was a PRE-TAX account, and the ROTH is a POST-TAX account. Depending on the penalty, it "might" be worth doing this, but you'd really have to crunch the numbers. The ROTH IRA you will NOT pay taxes on the money when you pull it out for retirement. Since you paid taxes on it when you put it IN the account.

So, need to really crunch numbers to see what's better. Simpler option would just be to roll it over to an IRA and be done with it. Buy your stocks, and pay your taxes at the time you pull it out when you retire.

GOING FORWARD, I would suggest opening/using a ROTH IRA. Max that puppy out each year. At least until the company offers a decent 401k option WITH a company match (= free money). Put enough in the company 401k to get the FREE match, then everything else goes back into the ROTH.

Hope that helps. You should also be able to do this all over the phone/online with the brokerage of your choice. I use Sharebuilder, but its because I'm a costco executive member and they give a discount on fee's and sometimes a bonus when you open your account. I use Schwab too, but only for research tools.

I think the brokerage choice is more about CONVIENENCE... as long as we're talking "discount" brokerages. Fidelity / Schwab etc.

I'm positive you can not do the transfer via "on line" as you'd need to sign documents etc.

RE: The ROTH vs traditional rollover (basically nothing more than a fancy word for transferring control).... BE VERY CAREFUL HERE!! The US Government wants you to screw this up so they can stick their hand in your pocket!! TALK TO A PROFESSIONAL before doing anything! Thus going to see your new discount brokerage first hand and asking some important questions.

Their are limits to the ROTH --- Tax consequences -- Income limitations - and on and on.... The ROTH account is by far the best but this is a math issue when transferring one type of account into another type of account. The brokerage can help you think thru this plan.

If you've read this thread --- then you've heard me complain about hidden fees -- etc --- and particularly --- in company retirement plans... and MUTUAL FUNDS.... and how these can affect your account dramatically over time.

I'll give Obama credit for finally trying to do something about it (I won't give him credit for much else). It's just ABOUT TIME someone quits ripping people off!



President Obama will order the Labor Department on Monday to begin developing new rules for financial managers who handle retirement accounts for working Americans.

The goal is to end "hidden fees that hurt consumers and back-door payments that help Wall Street brokers," said a statement from White House senior adviser Brian Deese.

Well, that's all well and good, but we kinda already did that 2+ years ago. See DOL Rule 404(a)5 (for participants) and 408(b)2 (for plan sponsors). The problem is, the DOL requirements were so broad that the resultant fee disclosures coming from these "financial managers" range from being so brief they don't actually tell you anything to so complex that only those with finance and legal background can draw any valuable conclusions.

So...I say lets fix what's already in place by having the DOL work with those who have implemented these existing regulations rather than layer yet another new regulation onto the retirement industry. Which, by the way, will inevitably increase costs to the participant...exactly what he's trying to avoid.

Edit: The regs I listed above were about disclosure of fees. If they're going to make certain payments illegal, I think that's trying to hit a moving target. People will find new ways to classify a fee or payment or make other arrangements so that it fits within the law. I say lets improve the disclosures and then dare the over-charging entities to try to slip one by their client. But, it's a two-way street. We, as investors and/or company owners, have to take responsibility for this stuff, learn about the industry/fees/disclosures, and be accountable to our employees.

IMPORTANT WORDS you want to avoid....


"Your Government is here to help you".

No doubt. I could have probably left out my diatribe and just said the part about us being accountable for these things. But, I also know it's a utopian view to expect that everyone in the general public will open their brain and learn about this stuff.

You've done an excellent job of opening people's minds and spreading the knowledge of investing Greg, well done sir.

And coming from an employer's perspective (me and the company i own/run), this pension/401k is simple yet complicated. I keep telling my employees, ya gotta invest/watch/manage your money as well, DONT count on just your pension. Myself included. Most people will have SSI, and maybe a pension. Our investing goal for graduated incomes should be Pension, Roth's, SSI, and our personal investments (what i'm doing here and with real estate, in other words, income)

If you make over "X" in retirement, do you still qualify for SSI? my understanding is if you paid in, its "owed" to you....

So -- let's use a recent well known IPO (Initial Public Offering) i.e., GOPRO (GPRO) to learn from and continue to learn from what happens when a coming comes under the critical eye of WALL STREET - via going from a private company to a publicly traded one.

To set the tone -- let me say I have no dog in this fight -- and I AM an owner of at least 3 of these cameras.... and I believe them to be THE brand name in the business.


Today I see it's trading in the 43 to 44 range.... That would make it DOWN 30% since January 1st.... That's a real OUCH if you purchased on it's way up to, or near the top... You've lost even more -- DOWN 52% from the peak trades...

I've said in the past that many times it pays to WAIT and see where these IPO's are going to go --- waiting one or two quarters.... a quarter is 3 months -- so we're not talking about waiting a life time. Sometimes waiting costs you the opportunity to get in early -- so you leave some of the massive gains behind -- but sometimes it's better to wait and NOT lose money! And then have to wait and wait and wait for it to come back to break even!

Now -- HERE'S THE INVESTING 102 part of this....


When a company is hyped up - as was GPRO - and the stock shoots up... there's nothing wrong with that!! But what we don't know is how the company is going to do going forward... the management is "new" perhaps... we know the company is probably relatively new... maybe management needs to learn how to manage "wall street" and it's expectations (I'm thinking back to the big hiccup in Netflix when they made some unexpected announcements)..... Sometimes there's a big learning curve... Sometimes the HYPE just plain overshoots the actual execution and the stock has to adjust back down to the real facts.... SOMETIMES the expectations are exceeded and then some and it's off to the races! But here's the problem with that.... WE DON'T KNOW WHICH WAY THIS IS GOING TO GO. We have no history! We're just Betting with the herd!! Great when it works - not so great when it doesn't.

Now -------- I just found this pretty important info on GoPro....




Questions related to inventory revealed GoPro might have over-shipped end demand in the busy holiday season last quarter. 73% of respondents revealed there had been no stock-outs for GoPro products in the recent past. Bidness Etc believes the lower stock-outs are a function of slowing demand (due to seasonality) and higher inventory left over from the last quarter.

If GoPro did end up over-shipping end demand last quarter, it would explain why the company managed to post brilliant numbers for unit shipments last quarter. However, it would also mean that unit shipments this quarter may come in lower-than-estimated, leading to a possible revenue miss.

However, the problem seems to be at a manageable level. If there had been a build-up of GoPro inventory, retailers would have tried to clear it out by giving discounts. Our survey revealed that only 13% of the sampled locations are currently giving discounts on GoPro products. We believe that retailers are in no hurry to get rid of the old inventory because there is a lot of time until GoPro rolls out the new versions of its Hero series. Moreover, the strong brand presence of GoPro almost insures the retailers against write-downs, due to low demand.


When those two things happen (missing sale or guidance numbers) --- you wake up one morning and you have gotten your ass handed to you! Boom! Huge downdraft!!

Many times this will lead to what's called a "broken" stock. Where fundamentally there is really nothing that wrong with the stock --- but the investors that lost huge money (usually the "hot money boys") drop the stock and move on to something else. We need BUYERS to move the price up -- not sellers! It's usually best to just put a name like that on the "watch it" list... and see what happens over another quarter or two. Sometimes they spring right back - and other times they just continue to drift lower. Better to wait than to lose.

Some times the market is now going to go into the P/E ratio valuation... meaning that everyone is waiting to see if they can be profitable --- or if they can really crank up the sales numbers on a growth path which hopefully then they'll "grow into" the often lofty P/E (Price to EARNINGS ratio).

What we're really wanting to see is big growth - or stellar earnings - or BOTH... in order to assign a "value". It's hard to do this with most IPO's. They're generally still in their infancy as companies. If the P/E gets way out ahead of these numbers -- then the price has to shrink to bring it in to line with reality. I think this is the case with GoPro. The company has killer product... has the name... basically owns the market it's in ------ BUT WE DON'T KNOW WHAT THE SIZE OF THAT MARKET IS YET. Is the market billions or simply hundreds of millions going forward... WHO KNOWS?!

This has been a great IPO to be sure! It's up some 40% if you were able to buy it at the IPO price.... but you've not had a happy ride if you bought it almost anywhere else.

Would I buy this stock? Not yet... I want to see what the real sales/growth rate is going to be. Did everyone rush out and buy one for Xmas -- but hasn't used it - or doesn't feel they need another.... Or did they buy one and can't wait to buy one for everyone in their family? We'll find out...

So far I have been lucky on my COP stock. My additional buy on it ended up being .08 cents from the bottom of the recent down turn. My other two I was able to average down too.

Now my 2 3D stocks have been killed. One is so bad I'm just going to just hang on and ride it to the ground or back up.

Over all my dividend stocks are up 9-23% after only one year not including the dividends. My 4 down or very little gained stocks are (play money) stocks I was hoping would make big gains and sell to invest in divident players. Its been a good learning experience. Had I invested that $4000 spead among my dividend players a year ago it would be worth $5000 instead of $2800 that it is today. :rolleyes:

...... and that's why I preach what I do... it's SO EASY to lose money.

right now Im around -6% in COP,

I keep it only because I have visibility on it with my Dad working on the Eagle Ford.

they are letting go of people, BUT its still not bad, they still have the man-camps going and the cooks out there serving steak and lobster.

Once all that goes, then maybe its time to panic.

I think COP is just trying to ride out the price drops

I'm on a 20+ year time horrizon. COP could drop 50% overnight and I would not loose any sleep at this stage of the game.

Here's what I thought was a good and informative read supporting the primary objectives of this thread: http://seekingalpha.com/article/2956...ly-maybe?ifp=0

On a side note, at 56 years old and 6 to 10 years away from cost effectively accessing retirement funds it's somewhat frustrating knowing my body is not going to perform at a level that allows me to do what I really enjoy doing at a level that makes it rewarding.......strength and reaction times are all starting to atrophy to a degree. Thus it's frustrating knowing I won't genuinely enjoy the activities at levels I consider respectable. Senior Tour Golf would be one simple example, the qualifying age is 50 and you don't see many competitive seasoned players over the age of 60......their second 'prime time' before they start sunseting is between 50-56 years old. Not 62.5-66 or maybe 70+ if the government continues leveraging.

Moral of the story, start young, resist superficial spending, invest aggressively, and set your retirement target earlier than 62.5 or 66 years. If you can pull it off you'll improve the quality of your retirement. :thumbsup:

Sieg, I'm 48...and this is a common discussion with my wife (shes 5 years senior of me) all of the time. Back in my 20s, I used to say I'd like to retire at age 45. At that time, I didn't have a clue what it would take, I was young, dumb and full of...well I was enthusiastic...

Over the years I've had times where I thought that was absolutely possible and had times where I was afraid that I'd lose everything and never be able to retire like I want. Not having any children has sped our ability to retire early up no doubt, along with good earnings early on, saving responsibly and smart spending choices along the way.

Having lost some family and friends unexpectedly early in recent years, retiring early is on my horizon once again...I'm in the I want to enjoy it now and would rather be broke when I'm 70 than scrimp through the next 20 years saving for when I'm 70 and too old to enjoy the fruits of my labor mode. The hard part is two fold, wondering if I really can afford to enjoy it now and the price I'll have to pay as the majority of our retirement funds are in tax deferred accounts which will be costly to access for the next 20 years.

The graph in the article you linked reminds me of the graph I looked at when making my first real investment when I was 21 years old, a cash value life insurance policy. To this day, still the best investment I've ever made. My advisor call it a reverse IRA and we used the $2000 a year figure as well as that was the IRA deduction limit back then. Good part of that investment for me is, I can borrow against that cash value sitting there long before I turn 70 fee free. That's my ace in the hole towards early retirement.

START EARLY!!!

hahaha

NICE!


As to the retiring early, thats a really great article, and hope I am making strides toward that goal

I'm 42 so a little behind you but not by much. I just wish I had followed through with my plans to retire early I had when I was in my mid 20's and started learning about retirement. :shakehead:

It's all about the journey, fellas. Waiting to live until you can retire is not a great philosophy, what if you don't make it? The opposite isn't any better. You end up living off social security and not dictating your own life when your age exceeds your money.

A life of balance is preferable. My goal is to get to a point where I can work for the passion and be able to give $ graciously. Imagine getting to a point where you can give away 25%, 50% or more of your income.

13 Quotes out of Buffett's Letter
 

These are pretty good.

Buffett’s 2014 letter: Corporate cancers, preachers of pessimism and lessons of history

NEW YORK (MarketWatch) — He’s at it again.

In his annual letter to Berkshire Hathaway BRK.A, -0.48% BRK.B, -0.63% shareholders, Chairman and Chief Executive Warren Buffett continues his tradition of delivering all sorts of cleverly worded musings on the markets, on the state of American business and on his own quirks and peculiarities (and how they affect his relationship with longtime Berkshire vice-chair, Charlie Munger.)

If you have the time, it’s always worth reading the whole epistle. If not, we’ve settled on 13 of the choicest quotes.

“At Berkshire, we much prefer owning a non-controlling but substantial portion of a wonderful company to owning 100% of a so-so business. It’s better to have a partial interest in the Hope Diamond than to own all of a rhinestone. “

“My successor will need one other particular strength: the ability to fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency. When these corporate cancers metastasize, even the strongest of companies can falter.”

“In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives.”

“Who has ever benefited during the past 238 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. In my lifetime alone, real per-capita U.S. output has sextupled. My parents could not have dreamed in 1930 of the world their son would see. Though the preachers of pessimism prattle endlessly about America’s problems, I’ve never seen one who wishes to emigrate (though I can think of a few for whom I would happily buy a one-way ticket).”

“The unconventional, but inescapable, conclusion to be drawn from the past fifty years is that it has been far safer to invest in a diversified collection of American businesses than to invest in securities — Treasuries, for example — whose values have been tied to American currency. That was also true in the preceding half-century, a period including the Great Depression and two world wars. Investors should heed this history. To one degree or another it is almost certain to be repeated during the next century.”

“Market forecasters will fill your ear but will never fill your wallet.”

“If you’ve attended our annual meetings, you know Charlie has a wide-ranging brilliance, a prodigious memory, and some firm opinions. I’m not exactly wishy-washy myself, and we sometimes don’t agree. In 56 years, however, we’ve never had an argument. When we differ, Charlie usually ends the conversation by saying: ‘Warren, think it over and you’ll agree with me because you’re smart and I’m right.’”

“We will never play financial Russian roulette with the funds you’ve entrusted to us, even if the metaphorical gun has 100 chambers and only one bullet. In our view, it is madness to risk losing what you need in pursuing what you simply desire.”

“Business models based on the serial issuances of overpriced shares — just like chain-letter models — most assuredly redistribute wealth, but in no way create it. Both phenomena, nevertheless, periodically blossom in our country — they are every promoter’s dream — though often they appear in a carefully-crafted disguise. The ending is always the same: Money flows from the gullible to the fraudster. And with stocks, unlike chain letters, the sums hijacked can be staggering.”

“At a healthy business, cash is sometimes thought of as something to be minimized — as an unproductive asset that acts as a drag on such markers as return on equity. Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”

“(We) frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels.”

“Berkshire’s yearend employees — including those at Heinz — totaled a record 340,499, up 9,754 from last year. The increase, I am proud to say, included no gain at headquarters (where 25 people work). No sense going crazy.”

“Though practically all days are relatively uneventful, tomorrow is always uncertain. (I felt no special apprehension on December 6, 1941 or September 10, 2001.)”

The man is brilliant. I have a friend that is on the Berkshire board - she is also brilliant. Smart people surround themselves with other really smart people.

there's an old saying I always remember told to me about surrounding yourself with others.....

If your the smartest guy in the room.....then your in the wrong room

what do you guys think about investing in the players in the "Cable wars"?

I was reading an article about cutting the cable and investing.

They were talking about how some invest in the big cable companies (comcast, att etc)

and some invest in the new comers who are looking to disrupt the cable industry (google with fiber, netflix, hulu, amazon etc)

But they were saying to instead invest in the content providers, since no matter who wins the battle to get the consumer the content, the content providers will still be there making money.

I was looking at FOX, AMC, VIA and DISCK

I watch a ton of programming on the channels under the Discovery umbrella and they look decent on the chart.

Thoughts?