Don't think a bear market will derail your dividend machine

Despite the fact that my largest holdings have dropped in 2008 ,do not let poor market sentiment make you lose focus. Personally I have a 3 year and 5 year time horizon MINUMUM when I buy a stock. Here are my 3 largest stock purchases and how they turned out.


First example was my purchase of Altria in January 2000 at 23 dollars per share . Within 2 months the stock dropped 20%. 3 years later,at the end of 2002, if you added the almost 7 dollars of dividends per share and the 40.53 closing price you have MORE than doubled your inital investment and exceeded 25% compounded annually.The same amount invested in the S&P would have dropped more than 37% in that 3 year span. Buying the right stock at the RIGHT price is KEY

In my book Consume Consume and Consume More I had forecasted 2 stocks to "buys" .Anheuser Busch which was recommended at 41.60 in Sept of 2005 was 68 dollars per share 3 year later and was taken over by Im Bev. In this years poor maket Anheuser Busch was a ray of sunshine.The 73% gain with dividends included gave me a 20% annual return compounded which was slightly higher than the 16% forecasted in the text. Berkshire Hathaway purchased at 2730 got off to a much faster start than BUD, reaching 5000 last year. Today it is 3200 per share which is only a 6% annual return which is less than the 13% annual return forecasted. The market is much lower in the past 3 years but Both of the stocks proved to be profitable

Becoming a successful investor means to have the"conviction" and patience to wait for a "fat pitch" and hit it out of the park. My proceeds from Anheuser Busch has been rolled almost primarily into Altria and Phillip Morris International. It takes COURAGE to be financially independent. The market guarantees you nothing. Often most people get in too late and exit too early. However many invest in industries like financials which are impossible for the layman to understand. In the examining the top S&P performers including dividends reinvested 18 of the 20 were either consumer goods companies or big pharma and I didnt see any banks or a company like IBM which benefited from the technology boom from 1957-2003. Instead a "boring" no GROWTH product like a Tootsie Roll which became less"popular" in the 70s with the advent of other candy choices gained more than 3 times an Investment in IBM did in the same 46 year period. Remember this adage, let your life be exciting but your investments be BORING ,but Profitable. I didnt have anyone to tell me this 8 years ago when Altria dropped more than 20% in 2 months and many predicted BANKRUPTCY and that the Bull market was over and the Bear Market was upon us. Well the 37% drop in the market did Happen. But Altria showed me and the REST of the world why from 1957-2003 it beat EVERY S&P stock by at least 3 million dollars on a simple 1000 dollar investment WITH dividends reinvested. I am going to "bore you" with my chart that I keep repeating in hope it will finally resonate



TOP PERFORMING STOCKS 1957-2003
This assumes All dividends are reinvested
$1,000 grew to
Annual Return

1 Philip Morris $4,626,402 19.75%
2 Abbott Labs $1,281,335 16.51%
3 Bristol-Myers Squibb $1,209,445 16.36%
4 Tootsie Roll Industries $1,090,955 16.11%
5 Pfizer $1,054,823 16.03%
6 Coca-Cola $1,051,646 16.02%
7 Merck $1,003,410 15.90%
8 PepsiCo $866,068 15.54%
9 Colgate-Palmolive $761,163 15.22%
10 Crane $736,796 15.14%
11 H.J. Heinz $635,988 14.78%
12 Wrigley $603,877 14.65%
13 Fortune Brands $580,025 14.55%
14 Kroger $546,793 14.41%
15 Shering-Plough $537,050 14.36%
16 Procter & Gamble $513,752 14.26%
17 Hershey Foods $507,001 14.22%
18 Wyeth $461,186 13.99%
19 Royal Dutch Petroleum $398,837 13.64%
20 General Mills $388,425 13.58%
- S&P 500 $124,486 10.85%
Notice how The difference BETWEEN 16.51 % annually compounded (WHICH IS GREAT) and 19.75% is over 46 years time. A mere $5000 at 19.75 % is more than 23 million and at 10.85% is 622,430. Thats a HUGE DIFFERENCE.

My grammar and sentence structure wouldn't get me into medical school but my constant quest to develop a formula and filters combined with the COURAGE I have to make BIG CONCENTRATED bets has made me financially independent . Many hate my constant self promotion and my unconventional SELF ASSURED BORING STYLE OF INVESTMENT. Well guess what?Im not crazy about their lack of conviction and their constant "critiqiung" of my marketing and investing methods. The fact is MY INVESTING METHOD WORKED and is Duplicable for all hose who"believe in it" Despite the markets wild drop in 2008 ,my annual dividend yield is NOW MORE than 8 times my Margin Interest and more than exceeds my annual living expenses. That's the object of the game isn't it? To achieve the most, with the least amount of "work"? This is only one man's way of doing it.OF COURSE I think my way is BEST.Who doesnt?WITHOUT COURAGE you will never become financially independent UNTIL its too late to matter.peace