06-20-2014, 04:25 PM
Here's a good article that was posted on Seeking Alpha today talking about the Chowder Rule.
Basically, in a perfect mathematical world, an equal Chowder # provides equal total returns with the reinvestment of dividends.
The trick is finding the high quality companies with good moats and good management that are shareholder friendly who can provide the results over a very long period of time to provide those mathematical returns.
I find it much easier to find stocks in the 1-3% yield, growing at 8-11% than I do finding stocks in the 10-12% yield growing at 0-2% over the long term. Which is why I have many more KO's, CLX's and GIS's than I do LNCO's, SDRL's, or DX's in my portfolio.
Basically, in a perfect mathematical world, an equal Chowder # provides equal total returns with the reinvestment of dividends.
The trick is finding the high quality companies with good moats and good management that are shareholder friendly who can provide the results over a very long period of time to provide those mathematical returns.
I find it much easier to find stocks in the 1-3% yield, growing at 8-11% than I do finding stocks in the 10-12% yield growing at 0-2% over the long term. Which is why I have many more KO's, CLX's and GIS's than I do LNCO's, SDRL's, or DX's in my portfolio.