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> Think about what happens to the stock price of a company once it stops growing. It falls through the floor. I don't entirely agree. Companies which can earn
by logn 13y ago
> Think about what happens to the stock price of a company once it stops growing. It falls through the floor.
I don't entirely agree. Companies which can earn stable profits and distribute those as dividends remain healthy stocks. Their stock prices might remain flat, but with dividend payments there's always a natural floor at which a stock will fall to, and no one's really holding them to make a profit on the sale of the stock (the stock price is more of a safeguard in case the companies cut dividends or you decide to liquidate to move your money). The key is finding companies which can sustain profits and those are often businesses with pricing power to keep up with inflation and competition. Here's a great blog:
http://www.dividendgrowthinvestor.com/ http://www.dividendgrowthinvestor.com/
His posts go back for years, and he's very focused on researching companies which have paid strong dividends for years/decades. It's an enlightening blog, especially after being surrounded by tech companies which rarely pay dividends and have stock prices based on growth potential (but Oracle, Intel, MS, etc. have transitioned to dividend paying companies).