buffett

It is that time of year again - the time when the "Oracle of Omaha", the "greatest investor alive", the chairman of Berkshire Hathaway, Warren Buffett, delivers his letter to shareholders (PDF). Here are four interesting discussion points from this year's letter.

Warren Buffett’s letter to shareholders gives us a great view of the overall economy from a man who has his finger in every pot and his letter to investors gives us a very good insight as to how things are going in the various sectors his operations cover. Most importantly, what I have learned in my own 40 years or reading Mr.

Did we seriously just spend $830Bn to give tax cuts to the rich when we’re already $15Tn in debt? When 20M Americans are officially out of work and another 30M have jobs where they can’t make ends meet? Did Obama and the Democratic "leadership" just fold like an empty suit and sell what’s left of their supporters down the river and in exchange for what?

How much money will you need for retirement? This a very difficult question to answer. There are many factors and assumptions that go into estimating the income that will be needed in retirement. However, one certainty is that if you only invest in fixed income instruments, you will need more than if your investments provide you a growing income.

At one time or another, we all have thought, ‘If only knew this when I was younger.’ I purchased my first dividend stock for income in 2003. Like many newly converted income investors, I was chasing yield. I quickly built a portfolio consisting of Real Estate Investment Trusts (REITs), Master Limited Partnerships (MLPs) and high yield, high risk stocks.

For many investors, there is no clear conviction as to how they should invest. Today’s investments are guided by what was read yesterday, and the popular media is constantly churning out new and different ideas. Granted, it makes for some “interesting” reads, but it certainty is no way to run a portfolio.

If you want to lower the risk of your income portfolio and position yourself to increase returns, you can not ignore asset allocation. Many dividend investors loaded up on banks and other high-yield financials, only to see their portfolios collapse along with the financial markets. So what can you do to protect your portfolio from stock and sector specific declines?

Abbott Laboratories is a diversified life science company and is a leading maker of drugs, nutritional products, diabetes monitoring devices, and diagnostics. Linked here is a detailed analysis and commentary.

In the southern U.S. where I live, there has been some controversy over harvesting forests of hardwoods and reseeding them with pines. Growing hardwoods is very similar to investing in dividend stocks. What you plant or invest in today will not yield much for years to come. That is not to say progress is not seen. It is just slow and deliberate.

Dividend sustainability is paramount for the high-yield investor. Having a stock cut its dividend could potentially crush their income. A high-yield investor is less concerned about dividend growth than maintaining the current high-yield.

Colgate-Palmolive Company (Colgate) is a major consumer products company that markets oral, personal and household care, and pet nutrition products in more than 200 countries and territories.Linked here is a detailed analysis and commentary.

Dividends from a quality, well-diversified portfolio are much more predictable than capital gains and best of all, they are passive. You don’t have to do anything, they just show up in your brokerage account each quarter. Inflation? Not to worry, the good companies routinely raise their dividends well in excess of the inflation rate.

It seems nowadays that every investing article ends with the same conclusion – you should be buying dividend stocks. They are all quoting studies citing the performance edge that dividends have enjoyed over the long-term and the value of a semi-fixed return generated from periodic dividend payments. However, you should beware of some of the information provided.

Warren Buffett says Berkshire Hathaway is the "dumbest" stock he ever bought.

He calls his 1964 decision to buy the textile company a $200 billion dollar blunder, sparked by a spiteful urge to retaliate against the CEO who tried to "chisel" Buffett out of an eighth of a point on a tender deal.

Wal-Mart Stores, Inc. is the largest retailer in North America. The company operates retail stores in various formats worldwide. It operates through three segments: Wal-Mart Stores, Sam's Club, and International. Linked here is a detailed analysis and commentary.