Over the past couple of weeks, I have spent most of my time focusing on the interplay between valuation and excellent companies, often leaning in the direction of selling companies that are currently overvalued by a moderate to substantial degree. While I stand by my point, there is another element of the decision-making process that I would like to highlight: if you do decide to hold onto your overvalued blue-chip stock, you should still do quite well if you have a 10+ year time horizon.
After all, even though Warren Buffett decided to have Berkshire Hathaway (BRK.B) hold on to Coca-Cola (KO) stock through periods of severe overvaluation in the late 1990s, he still managed to turn his $1.3 billion investment in the soda giant (shares he accumulated from the late 1980s through early 1990s) into just shy of $15 billion today (and that is without reinvesting the dividends along the way). In hindsight, Coca-Cola traded at 30x earnings in 2002, and the company has still managed to deliver total returns of 7.39% since that time.
Source: Seeking Alpha
Related Articles:
- Who is Ben Grossbaum and Why Should We Listen to Him?
- 9 High-Yielding Mega-Cap Stocks
- Best Stocks for 2013
- Dividend Investors Should Focus On Stocks, Not The Market
- The Secret Ingredient of Dividend Growth Stocks
Holding Dividend Stocks Is Not A Mistake
Posted by D4L | Monday, March 25, 2013 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Boring stocks to buy and hold almost always align with deeply established businesses. While they won’t offer the outstanding growth potentia...
-
Did you know that if a company were to increase its dividends by 5% per year, it would take 14 years for its payouts to double? And if its r...
-
The quick rise in interest rates over the past year turned investor sentiment toward REITs negative. Higher interest rates make it harder fo...
-
While there are many paths investors can take to generate long-term wealth, our preferred method is to buy-and-hold quality dividend stocks ...
-
Indeed, with recession on the horizon, investors are increasingly emphasizing quality, safety and dividends in their portfolio selections. W...
-
While it is prudent to build a more robustly diversified portfolio than just three stocks, the three discussed in this article are sure to g...
-
Cash is king when you’re looking to add dividend stocks to your portfolio There’s ample reason for caution. In case you haven’t noticed, a l...
-
Linked here is a detailed quantitative analysis of Texas Instruments Inc. (TXN). Below are some highlights from the above linked analysis: C...
-
Countless people dream of being able to pay their bills with the cash they receive from their investments. But it doesn't have to be jus...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.