Apr 15, 2017

Cory Diary : Dividend Play - Part 2

Dividend Play essentially is about investing in business that are driven to return profits to shareholders. Management naturally will be driven to efficient their operation on what they have after. A strong management has the ability to do that consistently over time. Constantly churning out dividends to shareholders and making use of what has been left to continue to optimize and grow their returns.

A weak manager can constantly ask for money to grow the empire. Many can to fatten their pocket while reducing shareholder returns. The worst situation is when management has too much cash and wasted on lousy investments or to grow their revenue with no meaningful profits. This is where their guard is down. The thirst to do better is not seen. Some maybe even tempted to have their hands on it. The legal way will be to pay themselves very well on shareholders expense.

Surely there will be exception to norm. However they are really exception. Investment is about not losing money and not exchanging for poor deals. A Master said that in his two rules of investment. I looks for result not words from management. And what better way than continue to give me dividends while growing the business by optimizing what they have.

And this will be my main strategy moving forward in my investment.


Cheers

Cory
20170415



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