Nintendo Co., Ltd appreciated more than 100% in July after the launch of Pokemon GO. A month later the shares have already declined 27% from the peak.
Speculating is not investing
It’s great if you got in on the action before Pokemon GO was launched, but after the launch and the stock already went up, it’s too late to jump in.
To add to that, no one knows how long people will continue playing Pokemon GO. Actually, Pokemon GO already lost some users as the hype dies down a bit.
If investors are buying Nintendo just because of Pokemon GO, it’s purely speculation and not investing, unless they believe in the future of Nintendo as a company.
Besides, it’s not like Nintendo owns the Pokemon game. Check out Quora for the relationship between Nintendo, Niantic, and the Pokemon company and find out who benefits from the game.
In fact, I was surprised by the answer that Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) get a share of the pie. I think both of these tech giants are better investments than Nintendo, especially Apple, which trades at about 12.9 times earnings and yields 2.1% at about US$108 per share.
Gotta catch ‘em all?
In the Pokemon world, one of Ash’s goal was to catch all the pokemon. Not for investing, though. You better not try to catch ‘em all. Read More
Following Ben Reynold’s popular article on 3 important dividend investing concepts with real life examples, I gave some thought about the important concepts about investing.
“Never lose money.”
Ok, I stole this one from Warren Buffett. His No. 1 rule is “Never lose money.” and his No. 2 rule is “Never forget rule No. 1.”
By buying and holding great companies which have track records of delivering results, you cannot lose money given your holding period is forever. If you are buying the best of the best companies, why would you ever sell it?
One easy way to tell that a company is great is if it has increased its dividend for many consecutive years. In Canada, the longest dividend growth streak for a publicly-traded company is more than 40 years. Fortis Inc (TSX:FTS) is one of two companies that has achieved that.
Unfortunately, Fortis is fully-valued and trades at a price-to-earnings ratio (P/E) of 20 at about CAD$43 per share. Whenever it yields close to 4%, it’ll be a decent place to buy some shares.
In the U.S., the longest dividend growth streak is more than 50 years!
Here’s a list of Canadian dividend-growth stocks and U.S. dividend-growth stocks that are updated by devoted investors who update them every month. Read More
This is a guest contribution written by Ben Reynolds at Sure Dividend. Sure Dividend uses The 8 Rules of Dividend Investing to systematically find high-quality dividend growth stocks trading at fair or better prices.
Investing concepts can seem divorced from reality. Theories become more understandable through real world examples.
This article takes a look at 3 important dividend investing concepts and provides real world examples to help either explain the point or show evidence of why it matters.
Total return measures exactly what the name implies. Total return includes the capital appreciation and dividends of an investment.
The concept of total return is critical to investing success. It is the one number that determines how quickly your money will grow. All other things being equal, the higher the total return, the better. Here’s how you can double your money.
Calculating a reasonable expected total return will help to guide your investing decisions.
Returns in the market can come from only 3 places:
- Change in intrinsic-value-per-share (typically measured by earnings-per-share growth)
- Change in valuation multiple (typically measured by the price-to-earnings multiple (P/E))
My estimate of The Coca-Cola Co’s (NYSE:KO) total returns over the next 5 years is below.
First, we know the company’s dividend yield is 3.2%. The company is a Dividend King – it has paid increasing dividends for over 50 consecutive years. We can reasonably assume Coca-Cola will continue paying dividends.
3.2% a year is our expected return from dividends for Coca-Cola. Read More