Thursday, February 7, 2008

diamond shreddies & the stock market

They're finally here, recent advances in cereal technology have allowed Post to take their popular Shreddies cereal to whole new level of geometric superiority; enter Diamond Shreddies.

Has all the diaper changing driven me insane...? No actually, I do realize that the clever marketing minds at Post are toying with us on this one. Did they get your attention though?

Peception is such a major force in the stock market, it is sometimes hard to separate perception from reality. From day to day, the world changes much less than the stock market would have us all believe. This is one of the reasons I like to focus so much on real earnings and dividend growth. The stock market trades every day on perception. The perception of analysts, big mutual fund managers, individual investors, and even political figures all drive the market up and down. I want to capitalize on this perception when I can by maintaining focus on a clear, emotionless, long term strategy. Buying solid, dividend growing companies, with histories of earnings growth, in boring businesses when I deem them to be cheap based on their earnings growth record, has little to do with perception.

I'll ride this strategy all the way down into market troughs and all the way back up to market peaks, not allowing those pesky diamond shreddies to get in the way of long term growth of my income stream, an eventually my base capital.

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