Investing is a job. A job is where you make money. You make money in the stock market by realizing a return on investment.
Return on investment comes in two forms: capital appreciation and dividends. Of the two the only one with a degree of certainty is the cash dividend, which is a company policy and announced on a quarterly basis.
Capital appreciation is the result of good analysis. When you identify a high-quality company that offers good value, meaning a repetitive area of high dividend yield, and the company has a long-term history of dividend increases, the probabilities are that capital appreciation will follow.
When added to the dividends and dividend increases collected along the way the result is real total return, which is the only logical reason to invest in common stocks.”— Kelley Wright, IQTrends
— Broyhill 2018 annual letter
— Warren Buffett
If you had to choose between buying long-term bonds or equities, I would choose equities in a minute. If I were going to own a 30-year government bond or own equities for 30 years, I think equities will considerably outperform that 30-year bond.
I want to quickly acknowledge that in any upcoming day, week or even year, stocks will be riskier – far riskier – than short-term U.S. bonds. As an investor’s investment horizon lengthens, however, a diversified portfolio of U.S. equities becomes progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates. It is a terrible mistake for investors with long-term horizons – among them, pension funds, college endowments and savings-minded individuals – to measure their investment ‘risk’ by their portfolio’s ratio of bonds to stocks. Often, high-grade bonds in an investment portfolio increase its risk”— Warren Buffett
— Charlie Munger
… People who circle junkyards for macthing hubcaps will buy mutual funds without reading the prospectus. People who check the expiration date on cottage cheese wouldn’t think of investigating the background of their broker. They know next to nothing about whether the broker has made or lost money for clients, whether he’s been reprimanded or sued, or how long he’s been in the investment business.”— John Rothchild
… Ethylene is frequently used as a barometer for the entire petrochemical industry. It’s one of the most important building blocks of the modern world.
You use products made from ethylene every day of your life: food packaging, trash bags, diapers, toys, drums, bottles, window frames, pipes, automobile antifreeze, all kinds of clothing, carpet, tires, shoes, laundry detergents, flooring, adhesives…
I could go on, but you get the picture. You’re surrounded by ethylene-based products. You can’t get away from them, no matter how hard you try. Crude oil and electricity make our world go and keep it warm in the winter, cool in the summer, and well-lit at night, but much of the stuff that makes our world so advanced today is due to ethylene.
So if you think the global economy will continue to grow for the next few decades – as perhaps one billion-plus Chinese and Indians attain middle-class status – you must believe ethylene consumption will grow, too. And if you understand how important ethylene is in the manufacture of much of our modern world, a large, new, low-cost supply of the stuff is a boon to whoever owns it. Well, that supply is right here in the United States.
Before we move on, let’s summarize our manufacturing renaissance idea into some digestible bullet points:Dan Ferris from Extreme Value, August 2011
• Natural gas from shales is abundant in the U.S.
• Natural gas shales contain an abundance of natural gas liquids… ethane is in especially abundant supply in the Marcellus shale (the largest known gas shale).
• Ethane has one market: as a feedstock for making ethylene.
• Ethylene is the most widely produced organic compound in the world, the cornerstone of the global petrochemical market.
• Ethylene is used in so many manufactured goods… and it’s used in polyethylene, the most widely used plastic.
• An abundance of gas, ethane and ethylene plants will bring customers.
• Abundant supplies of natural gas, ethane and ethylene mean the U.S. will gain a cost advantage over the rest of the world in ethylene production… likely leading to an American Industrial Renaissance.
• Major petrochemical and energy companies have kicked off the American Industrial Renaissance, and are planning to build natural gas-processing and ethylene production facilities to exploit the now-abundant supplies of natural gas and natural gas liquids (primarily ethane).”
— Kelley Wright from “Dividends Still don’t Lie” P. 13
— Kelley Wright from “Dividends Still don’t Lie” P. 12
… In my experience the most successful investors have had an end goal in mind that they wanted to achieve, which necessarily dictated the majority of their investment decisions. This is not to say that you can’t be a successful investor without having a game plan mapped out, but understanding your motivation for putting your hard-earned money at risk in the markets can help you avoid taking unnecessary risks.”— Kelley Wright from “Dividends Still don’t Lie” P. 3