Investing 102

[chichirone]

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?

[GregWeld]

Originally Posted by chichirone

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.