If youve ever wanted to go into the mind of a professional money manager and learn a bit about what makes them tick, I suggest you read The Single Best Investment.  If you want to learn more why dividend investing is considered a viable, long-term plan to build wealth, then read The Single Best Investment.

Lowell Miller, the author, is the President and lead portfolio manager of Miller/Howard Investments Inc. a firm that manages over $1 billion of other peoples money. Hes been a professional investor for more than 30 years.  In his spare time, Miller is a sculptor, a writer and holds a 5th degree black belt in Aikido, all pretty cool for a money guy.

After hearing about this book from various bloggers, DIY Investor I recall, I figured Id buy it and put it on my nightstand.  I finally got through this a few months ago.  It took some time, but it was worth it.

The title of the book, first of all, certainly intrigued me but the pages that followed were more than enough to keep me captivated. One of the things that made this book enjoyable to read was the writing style of Miller. He speaks plainly and openly with little technical jargon. There are no complex terms or theories to decipher. There are no graphs to be hoodwinked by. The graphs that are included are pretty much common knowledge: when inflation is factored in fixed-income investments always lose to equity investments, and holding cash does even worse. Instead labouring on these facts, Miller instead wrote a book for financial builders, people who want to understand how best to leverage the forces of time, modest, reliable and compounding growth to their advantage. Miller reminds his readers that investing is really, investing a methodical accumulation of capital through a sensible, disciplined plan that recognizes shares are not as he puts it little numbers that jump around in the paper every day. They represent a partnership in a real business.

Miller prescribes than any investor, can and should have a reasonable set of financial goals to work towards because they will always be plagued by financial doubts and uncertainties. Unlike many aspects of ones life, price and market changes cant be explained away. They just are. Therefore, because the market is always beyond our control and will frequently give us some emotional discomfort, you are wise to select a strategy that avoids playing the market but being an investor in it.  Buying and holding established companies that have a great history of rewarding investors in good times and in bad through consistent dividend payments, can be one such strategy Miller explains. Like a well-made old wool blanket, investing can be solid and comfortable, if you approach it sensibly.

Overall, I found The Single Best Investment an enjoyable read. It galvanized many dividend investing concepts and also highlighted a few new ones for me. The novice or experienced stock investor will enjoy this book. Each chapter is summed up quite nicely with key messages extracted from the chapters essays. Although the book has a distinct U.S. stock market bias, Canadian investors will benefit from Millers plain, blunt mantra – invest in the compounding machine that is dividend paying stocks and avoid story stocks or what the talking heads will praise.  Stick with what has worked (and rewarded investors) and dont look elsewhere Miller claims. Steady and dependable (dull and boring) will undoubtedly win the race.  

In the weeks to come, I hope to share my favourite takeaways and quotes from Millers book. Stay tuned for that post. 

What about you, have you read The Single Best Investment?  If so, what was your take?  If not, are you intrigued?

Cheers,
My Own Advisor

Japan has the third largest economy in the world based on gross domestic product for purchasing power parity and nominal GDP. Three quarters of the GDP comes from the service sector. The countries unemployment rate is 5.1%. The Tokyo Stock Exchange is the largest exchange in the world outside of the United States. There are over 15 different Japanese companies that trade on American stock exchanges, according to WallStreetNewsNetwork.com.

The Tokyo based Canon Inc. (CAJ), the popular manufacturer of copying machines, laser printers, inkjet printers, and cameras, pays a decent 2.3% yield and trades at 19 times forward earnings. The price earnings growth ratio is a very reasonable 0.96. Earnings for the quarter ending September 30 were up an astounding 85.6% on a 17.9% rise in revenues. The company reports earnings on January 27.

Toyota Motor Corp. (TM) is another Japanese dividend payer, yielding 1.1%. This manufacturer of cars, minivans, SUVs, and trucks has a forward price to earnings ratio of 20.7. Earnings for the latest quarter ending September 30 were up an incredible 352%, with sales increasing by 5.8%. Toyota reports February 4.

For a free list of Japan based stocks, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author didn’t own any of the above at the time the article was written.

By Stockerblog.com

Sure, I made some investing mistakes this past year but Ive also made some significant progress and in the end that’s what matters. More steps forward than backwards. 

Stay tuned to find out where I’m at next month!

Cheers,
My Own Advisor

Back in October last year, I announced the purchase of Aqua America (WTR:US), a water and wastewater services company that has over 3 million customers across 14 states.  At the time, I was pretty pleased with my purchase. Why?

o Aqua America provides what everyone needs; clean, safe, reliable water.
o Theyve been a dividend payer since 1939.
o Theyve paid quarterly dividends consecutively for more than 60 years.
o Their five year average dividend growth rate is over 8%.

With a market cap of about $3 billion they are not a small company and they have lots of room to grow through both acquisitions and service diversification.

So why did I sell them with mostly upside to be had?

Although I consider Aqua America a good company with long-term growth prospects, I recently found out that Aqua America is not eligible for any dividend reinvestment plan with my discount brokerage institution. This is in contrast to what Aqua America offers with their transfer agent Computershare in the U.S. Here are some highlights from their website:

o Aqua America, Inc. has a Dividend Reinvestment and Direct Stock Purchase Plan (the “Plan”) that offers investors a convenient and economical way to purchase shares of the Company’s Common Stock.
o Computershare Shareholder Services, Incwill administer the Plan and act as Agent for the participants.
o As a shareholder, you can buy additional shares of our common stock at any time for as little as $50. You can pay by check or by a one-time online bank debit through the Buy Stock Direct option noted above, or have your payment automatically withdrawn from your U.S. bank account.

While DRIPping Aqua America through Computershare has its merits, I do not want to go through the hassle of setting up a U.S. bank account or always commit to a minimum $50 cheque to purchase more WTR:US shares. Unfortunately when I made my Aqua America purchase in October I assumed because they offered a full DRIP via their transfer agent they would offer a synthetic DRIP with my discount brokerage institution. This was not the case. This was alarmingly clear when dividends were paid to me in December in cash.  

My lesson learned?

Before I make another U.S. stock purchase, Ill check with my discount brokerage institution to ensure the stock is synthetically DRIP eligible. Not all U.S. companies who offer DRIPs with their transfer agents offer these plans synthetically with brokerages. Im not sure why WTR:US Board of Directors made this decision (maybe they want to keep more control over the companys shares?) but it was an annoying revelation for me.

Sure, I could have kept Aqua America shares and not had the dividends reinvested but I think that goes against my strategy as a dividend investor. For every stock I own, I want to have enough shares of any company to DRIP at least one full share every quarter. I can do that for almost every stock in my portfolio, except for a couple Canadian stocks. 

o My DRIPs will provide me with dollar-cost averaging.
o My DRIPs take the emotions out of my investing.
o My DRIPs will not cost me anything to buy more shares.
o My DRIPs will take advantage of the magic of compounding.
o My DRIPs help me set and forget part of my retirement plan.

 
What can I say? I made another investing mistake and Ill probably make more.  How about you? Any investing mistakes you care to share?

My Own Advisor

But there are also regular corporations, such as Alaska Communications (ALSK) which provides landline and wireless services to Sarah Palin’s state. The stock sells for around $10 per share, has a forward price to earnings ratio of 37, and pays a yield of 7.8%. The company reports earnings on March 4.

Another example is Hercules Technology (HTGC) which is a private equity, venture capital, and venture debt firm. It sells for less than $11 per share, has a forward PE of 9.8, and pays a yield of 7.4%.

Provident Energy (PVX) processes, transports, stores, and markets natural gas liquids in the United States and Canada. It sells for slightly more than $8 per share, has a forward PE of 17, and yields 8.8%.

For a list of over 15 stocks that pay a yield over 6% and sell for less than $10 per share, go to wsnn.com. Just remember, very high yields may not be sustainable.

Disclosure: Author didn’t own any of the above at the time the article was written.

By Stockerblog.com

If you had invested an equal dollar amount in each of those companies, your account would be up as of yesterday’s close, by an amazing 11.7% in only one month. If you invested that same total amount in the S&P 500 (to give an apples to apple comparison – no pun intended), your account would only be up by only 4.15%. So the Beatles Stock Index outperformed S&P 500 by an amazing 7.5 percentage points! You would have achieved almost twice the return from ‘buying the Beatles.’

For a list of all the stocks in the Beatles portfolio, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author owns AAPL.

Photos courtesy of Wikipedia. No celebrity endorsement expressed or implied.

By Stockerblog.com

Archer Daniels Midland (ADM) has a corn processing division which produces ethanol from corn. The stock has a price to earnings ratio of 10.3, a forward P/E of 9.3 and a yield of 2%. Although revenues were up 12.6% for the latest quarter, earnings were down 30.4%.

The Andersons (ANDE), an Ohio based company, is involved in the management of ethanol production facilities and grain and ethanol trading. The stock has a P/E of 12.8, forward P/E of 11.3 and a yield of 1.2%. Earnings for the latest quarter were up 11.5%.

Bunge Ltd. (BG) is a White Plains, New York company founded in 1818 that produces ethanol from sugarcane. The stock has a P/E of 4.9, a forward P/E of 12.3 and a yield of 1.4%. Earnings for the latest quarter were down 8.6%.

A free list of stocks related to ethanol in some way, in an Excel format, which can be updated and sorted, can be found at WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Rare earths are used for such applications as superconductors, magnets, electronic polishers, car batteries, luminescent materials, lasers, optical-fiber communication systems, welding, night vision goggles, rangefinders, and radar. The rare earth metals are:
Scandium
Yttrium
Lanthanum
Cerium
Praseodymium
Neodymium
Promethium
Samarium
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
Other metals and elements are often (incorrectly) referred to as rare earth metals such as lithium and manganese. However, many of the companies involved in the mining of the rare earth metals are also involved in mining some of the other scarce elements.

Rare Element Resources is a Vancouver based company that explores for and develops mines in Canada and the United States, including the Bear Lodge property located in northeast Wyoming. This debt free company has 32 cents per share in cash, however the company reported a 6 cents per share loss for the quarter ended September 30.

Molycorp, Inc. (MCP) is another company involved in the rare earth industry, based in Greenwood Village, Colorado.The company has $5 million in debt, and over $351 million in cash, with $4.27 in cash per share. Latest earnings were a loss of 97 cents per share.

Another way to play this market is through the processors of rare earth metals, such as Neo Material Technologies, Inc. (NEM.TO) (NEMFF.PK), which trades on both the Pink Sheets and the Toronto Stock Exchange. This Toronto, Ontario based company processes rare earths, magnetic powders, and other metals. The company distributes cerium, lanthanum, europium, neodymium, dysprosium, yttrium, and other materials. The stock has a price to earnings ratio of 17.9 with a forward PE of 14. It also has an extremely favorable price earnings growth ratio of 0.31. Earnings for the latest quarter were up 53.4% on a 68.7% revenue increase.

A more conservative approach to rare earth investing is through the Market Vectors Rare Earths/Strategic Metals Exchange Traded Fund (REMX). This ETF has gone from 19.51 at the end of October to 25.63 now, a 31% increase in a couple months.

To see a free list of over 25 rare earth metals stocks, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

Weight Watcher’s International Inc. (WTW), founded in 1963, is one of the oldest weight loss companies in the world. The stock has a forward PE of 13.6, and pays a fairly generous yield, at least compared to other New Years stocks, of 1.9%.

Herbalife Ltd. (HLF) has done quite well this year, rising from 39.87 at the end of December last year to over 68 today, an increase of an amazing 70%. The company, a provider of nutritional supplement and personal care products, has a forward PE of 13, with a yield of 1.4%.

Lululemon Athletica Inc. (LULU) is another resolution stock that has performed extremely well, going from around 31 per share at the beginning of the year, doubling to above 68. It is a Vancouver, Canada based company that produces and markets fitness related apparel for yoga, running, dancing, and other exercise related activities. The stock has a forward PE of 39, and doesn’t pay a dividend.

To see the entire list of New Years Resolution stocks, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.

HAVE A HAPPY NEW YEAR EVERYONE!!!

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com