It’s the dream:
- Find a penny stock that your “special insight” leads you to believe that it’s undervalued.
- Buy tons.
- Watch it go to $10.
- Sell (pay 40–50% of your gains in taxes) & retire.
You might think this is investing, I think it’s gambling. Though, if you have a “special insight” you would be correct. Personally, I find it hard to believe that many people can beat the professionals. Professionals have special insight, and access to better information than regular people1.
Interesting Wall Street Journal article about P&G today that says it’s “aristocratic ways are getting tired.” Talks about how it’s overall return is all due to dividends and share buy-backs (as opposed to intrinsic company value growth).
I wouldn’t want my whole portfolio to be boring like P&G, but boring on the way up often means boring on the way down.
Even more important for your Elephants, it’s not about how big your Elephant gets but how big his paycheck gets. Steadily increasing dividends are awesome. They beat inflation, they’re dependable, and using the Elephant’s Paycheck Blueprint you maximize the value of boring to a very distinct advantage.
Boring dividend aristocrats are one of the pillars that the Elephant’s Paycheck Blueprint is built upon. Without boring, this strategy might not be as effective. Reinvesting the regular & increasing dividends lets you invest for “cash flow” rather than “balance sheet growth”. Cash flow lets you directly plan retirement or leaving your 9–5 to pursue your dream. Cash flow gives you flexibility to pay your bills without touching your principle (and while continuing to get raises every year). And, an Elephant’s Paycheck is an additional family income.
Who doesn’t want another paycheck?
Earn Money While You’re Asleep
I couldn’t resist this post’s image. You can’t exercise while you’re sleeping, but you certainly can earn money while you are.
I believe Apple remains a good buy, partly because I believe most professionals misunderstand exactly what they’re doing and what it means. That said, professionals “run the market” and Apple may remain undervalued in-spite of my “special insight.” ↩