The Antithesis of Dividend Investing

If you’ve been reading these pages for any period of time, you’ll know a favorite quote of mine is an old Charlie Munger classic, “invert, always invert”. I use the concept often, looking to turn things upside down, in a non-literal way, to ensure a full perspective is gained in a manner that is as objective as possible. There’s no better philosophy for us as long-term, income-oriented, fundamentally driven investors looking to build wealth the old fashioned way—no, not inheriting it. We do this through a consistent application of our craft that is underpinned by the ability to not be distracted by the “next shiny thing”.

When we invert our “boring”, “time-tested” strategy of looking for companies with strong fundamentals, including solid management teams, track records of long term, diversified product success and a history and adherence to returning at least a healthy level of returning capital to shareholders via consistent dividends, we see things like the 3-D printer fad. Chasing growth, knowingly over-paying on valuation in the spirit of momentum and betting on our ability to trade out of the stock before an inevitable crash. That ain’t us. That ain’t me. If you’re reading this, that almost certainly ain’t you. As long-term investors I choose to believe we sleep better as we rarely mull over the shoulda, woulda, coulda’s of a missed entry or exit of a shiny new stock. Know thyself — a Socratic philosophy reinterpreted by Jesse Livermore for smart investing. Well played Mr. Livermore, well played.

Source: Dividend.com

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