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Dear Mr. Covel, Actually, from my investment perspective you have it exactly backward. As far as I am concerned, anything you buy in the hope of the price going up so you can sell at a higher price is speculation. The term ‘investment’ I reserve for those business that have a long-term proven history of very high rate dividends. Needless to say, I am an investor, not a speculator. It would make about as much sense to put your hard-earned retirement funds in a business such as a farm, and then depend for your retirement income every year to go and sell off little pieces of land. Your cash flow would not last very long at that rate. A business may have very good internal cash flow and price action, but if that has not historically been translated into a steady stream of dividends, it does the real value investor no good. One has to be very choosy in that even very profitable companies most often use their profits to expand, buy back stock, etc, rather than pay dividends. I have several base metal companies that pay around 20%, and a number of oil companies that pay from 12-16% The secret is to find companies that do not need to expand all the time because they have a huge resource, and a policy of high dividends. For myself, I happily buy the high dividend payers, and sit back and enjoy the income stream that does not diminish my capital as I spend the income. That is especially true as I am retired, and do not know how long I will need this income stream. That is my philosophy, and Mr. Buffet’s. Regards, Richard T.
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