Investing 102

[GregWeld]

Originally Posted by LS1-IROC

Thanks again! I enjoy reading your posts. You have a way of putting things in a language I can understand. I spent about 3 hours lastnight doing research on investing and it was mostly very boring dry reading, unlike your posts.

Thanks! I'm just a hot rod guy - but I like helping other people... and would truly like to see AMERICA save and invest more because money isn't everything... but it beats the hell out of whatever is in second place!

If you're researching - there are really only a few things you need to look at...

Do you understand what the company is/does?

Do they pay a small dividend that has been paid over a very long time - and they have had stock price appreciation to make up for the smaller dividend?

Do they pay a larger dividend - but the price is "steady" over a long period of time (more like a utility) - and has their dividend GROWN over time. i.e., 5 years ago they paid .38 per share and they're now paying .61 per share... that means they're EARNING MONEY and returning it to the share holders. Not wrong or right just a different way to get there.

If the stock price dropped in HALF -- would you buy more of it? Because you understand their business... and you trust the product or reason why you bought it. So it's "outside forces" that crushed the price -- not because they screwed up the company.