More T. Rowe Price Quotes and Buying and Selling Tips

February 1, 2018 The 1804 House Journal 0

More T.  Rowe Price Quotes

 

“The growth stock theory of investing requires patience, but is less stressful than trading, generally has less risk, and reduces brokerage commissions and income taxes.”

 

“Buy stocks of growing businesses, managed by people of vision, who understand significant social and economic trends and who are … Read more

Crowd Psychology and Crises

February 1, 2018 The 1804 House Journal 0

Crowd Psychology and Crises

 

Edson Gould felt his most important discovery was “the action of the stock market is nothing neither more nor less a manifestation of mass crowd psychology in action.”

Gould made his discovery in Gustave Le Bon’s 1895 book, The Crowd: A Study of the Popular Read more

History of Dividends

February 1, 2018 The 1804 House Journal 0

    Corporations with common stocks first appeared in the early seventeenth century when monarchs approved them for trade, exploration and colonization purposes. Stocks were first used by speculators but over time, they became accepted as investments. Speculation returned again and stocks fell out of favor by many people.

The East India … Read more

Joseph Schumpeter – Economist

February 1, 2018 The 1804 House Journal 0

(Joseph Schumpeter inspired John Burr Williams to write about intrinsic value.)

 

      The central point is that capitalism can only be understood as an evolutionary process of continuous innovation and “creative destruction.”

 

From Schumpter’s Theory of Economic Development: “Excluding any innovations and innovative activities, we have a stationary start. The … Read more

Four Enduring Takeaways from John Burr Williams

February 1, 2018 The 1804 House Journal 0
  1. Focus on Dividends, Not Earnings. 

The intrinsic value of a company is equal to the present value of its future dividends, not earnings. “Earnings are only a means to an end,” Williams argued, “and the means should not be mistaken for the end.”

 

  1. Investment versus Speculation. 

     An investor is … Read more

Dividend versus Growth

February 1, 2018 The 1804 House Journal 0

A recent web article compared a total return from 1960 to 1999. A table showed the S&P 500 average annual total return was 12.5% (3.4% in dividends [27.9% of the total] and 9.1% in capital gains). Using the old Dividend-Bond Multiple Rule (via hypothetical market prices based on 120% dividend-bond … Read more