Comments on: Buying Stock in a Company Just Because You Love The Products?

By: Last World’s News » Blog Archive » Buying Stock in a Company Just Because You Love The Products?

Sat, 06 Oct 2007 21:40:50 +0000

[...] ???????? ????????? ?? The Dividend Guy ???… [...]

By: AF

AF — Wed, 26 Sep 2007 19:13:56 +0000

It is an interesting approach, I don’t really have much to add to what everyone has already mentioned about it, but what did kind of bother me is when you said “it does not matter what price he buys at as over long periods of time these blue chips have usually gone up.” Yes, price matters less than if they guy’s timeframe was a couple of years, but it matters a lot nevertheless. It could be a difference of as much as 4-5% in additional annual return on that stock, if he bought it at a premium to the stock’s intristic value at the time of the purchase instead waiting for the right price. So yeah, price definitely matters and it is a big part of Warren Buffett’s investing strategy – great company and great price.

By: Carnival of Personal Finance #119 - Blunt Money

Carnival of Personal Finance #119 - Blunt Money — Mon, 24 Sep 2007 13:05:23 +0000

[...] The Dividend Guy Blog presents Buying Stock in a Company Just Because You Love The Products?. Is this a good idea, or are other methods [...]

By: Investing » Buying Stock in a Company Just Because You Love The Products?

Investing » Buying Stock in a Company Just Because You Love The Products? — Mon, 24 Sep 2007 10:53:59 +0000

[...] unknown wrote an interesting post today onHere’s a quick excerptWe all have all read that it is our responsibility as dividend investors to buy stocks in companies that we know and that we can understand. There is also the mindset that one should invest in companies that you are a passionate user of … [...]

By: anonymous

anonymous — Fri, 21 Sep 2007 19:22:46 +0000

“The real risk of this strategy is that he will not be bought into why he took a position in the company and if and when the stuff hits the fan, you will not have the data or understanding to make an informed decision with.”

Do you have an example of a time when the stuff hit the fan and you were able to make a better decision than your friend? Just to play devil’s advocate: what if Coke (or PG) suddenly came out with a horrible product, or more likely, came out with no new products, and some competitor had a whole bunch of new competing popular products. Because of his style, your friend would immediately see this, and maybe exit his position. If you are too focussed on the fundamentals, it could take a couple of quarters for the company’s lack of vision/ingenuity/etc to appear in the fundamentals. At which point the stock may already have partially sold off.

Understanding your friend’s investment style is important, even if it’s only because there are (more than a few) people out there who invest in similar ways.

BTW, Coke Zero is awesome.