….a steady rising dividend has the potential of attracting “ignorant coupon clippers, not business owners.” (Jason Zweig asks the following in the commentary after the chapter: “If this company is healthy enough to deserve my investment, why is it paying a fat dividend on its preferred stock instead of issuing bonds and getting the tax break?”)
……Thus the preferred holder lacks both the legal claim of the bondholder (or creditor) and the profit possibilities of a common shareholder….In other words, they should be bought on a bargain basis or not at all. Really good preferred stocks can and do exist, but they are good in spite of their investment form, which is an inherently bad one. The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task. This has been against the law for American citizens since 1935 – luckily for them.įrom this there has developed the general notion that the rate of return which the investor should aim for is more or less proportionate to the degree of risk he is ready to run. The standard policy of people all over the world who mistrust their currency has been to buy and hold gold. I found the quotes below to be the most valuable: In between readings, I gained more investing experience, thus I gained more knowledge by rereading the second time. I read The Intelligent Investor for the first time in 2015, and in December 2019 I had the pleasure of rereading the book. Quality is much better than quantity, and reading twice, in my opinion, is more valuable than reading more. I believe it’s important to read, but at the same time being careful what to read. The Intelligent Investor by Benjamin Graham.
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