I bought my first stock in October 2010. You could say I’ve invested for 12 years now.
“When I first started, I was stubborn as an ox.” I wrote this in my first Diligence newsletter.
I thought I could invest better, applying complex strategies hedge fund managers used. Strategies that delivered massive profits — in a short amount of time.
In other words, I was picking small, risky stocks: “turnarounds” and “spin-offs”. Stocks with a special situation.
I had few big wins. But when my stocks went terribly wrong? I clocked HUGE losses. Investing came with lots of volatility. Lots of churn.
To be honest,
It might seem you’re winning big by doing a lot of trading. But my total returns weren’t worth the risks. And investing took a chunk of my time.
Now, I first learned about Warren Buffett from a book my cousin — a full-time trader then — lent me, called “The Essential Buffett” by Robert G. Hagstrom. I was blown away.
I discovered how simple Mr. Buffett’s strategy was (I urge you to read the book).
From then, I decided to change.
I absorbed everything on Warren Buffett. He forced me to sum up investing in ONE simple sentence: Find great businesses I could understand, buy them at sensible prices and keep them over the long term.
To me, that’s investing.
To me, that should be the way of a retail investor’s operation.
Buffett shaped most of my thinking.
I also tore through all other finance books, written by finance gurus: Benjamin Graham, Howard Marks, Seth Klarman, John Burr Williams, Phillip Fisher, Joel Greenblatt, Ray Dalio, David Einhorn, Michael Burry, Bruce Greenwald, George Soros, and many more!
My passion for investing drove me to complete the CFA program. I sacrificed sleepless nights, poured in more than 2,500 hours of studying. Because of this, I even had frequent fights with my girlfriend (now wife). It was a painful.
Investing became an obsession.
I worked hard to improve my skills in every way possible. I loved the creative process of surgically deconstructing a business, digging deep into what made good businesses last.
My desire drove me to become a research analyst. Then later on, an investment advisor for private banking clients.
Along the way, I discovered another investing secret. It was long forgotten in the broader investing community.
I observed: a tiny group of private clients who were successful with their investments, had an element of consistency. They weren’t just chasing high returns on a stock. They were creating a stream of passive cash flow.
In fact, these clients’ portfolios were collecting 5-figures, even 6-figures income.
I tested this secret for my mom. The returns were okay at first. Then one day, she rubbed her eyes wide, after seeing this filled her bank account: $140, $48, $330, $63, $165, $300, $121, $120, $50…That month was just August.
She was rich with dividends.
Now, it’s crucial to find great businesses I could understand, buy them at sensible prices and keep them over the long term.
More importantly, what I learnt was this: great businesses that paid dividends were a hallmark of financial excellence.
Instead of buying badly beaten down stocks, my mom’s portfolio now had a stable of high quality companies.
Dividends rolled in.
If you want to retire early, have money work safely and profitably for you, then you have to use this one strategy — dividend investing.
This is my little story. And now, it’s my goal to help you use this strategy.
Sometimes, investing can be simple.
Willie Keng, CFA
CEO and Founder, Dividend Titan
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