When it comes to time spent on investments, the majority of my time is spent reading. Reading is varied and includes books about businesses I am interested in. In the last 3 months I have read books on Wal-Mart, Johnson and Johnson, Guiness (now Diageo), McDonald’s and Coca Cola. I also spend time reading articles about potential acquisitions, reading forums, reading other dividend investing sites etc. Sometimes it feels like nothing material is being achieved, but the knowledge is cumulative, and I try to learn something new every day. Then there are company filings and annual reports which are important for getting the hard facts, and trying to understand where the business is going, and what the prospects are going forward.
However, I can find reading gets a little tiring at times, and one can start to feel somewhat disconnected from the real world, only learning about the world through books and filings and press reports, and blogs..
For this reason, I particularly enjoy an area of research which is perhaps not as important, but still vital, the Dividend Tycoon’s equivalent of walking the factory floor. As a Dividend Tycoon you cannot afford to sit in your office all day, you need to get out and visit your businesses, and in fact, even your employees, because yes every person who works for a business in which you own stock is in fact an employee of yours, although please don’t try firing them if they give you bad service.. So what do i do?
Well, often it can be as simple as a trip to the local mall. The mall itself may be a part of a REIT i have some stock of. I have some stocks of a retailer, so how busy are they, are the shelves well stocked, do the employees look happy, is the service good? Have a closer look at the shelves, how much space is devoted to Unilever products, how much space does Procter and Gamble have, is there a new product that you have not heard about? Take note and google the manufacturer when you get home, perhaps they are a little known stock, for now.
Then perhaps take a break at a coffee shop which belongs to a company in which I own stock. In a friendly way ask your waiter if they are very busy, do they enjoy their job? and finally, did your coffee taste good!
As i have alluded to in previous articles, I own stock in the company which has the rights to Burger King in South Africa. Now, fortunately I am a fan of the Whopper Burger, so going to visit every now and then and get the feel for the place is not a serious chore. I also go to new locations opened in my city to see how they are performing and how busy they are. I also take note for example that they sell Pepsi, not Coca-Cola, but i can file that away for later.
One does not need to ‘walk the factory floor’ every day or even every week, but it is important. It is so easy to forget when you receive a dividend that there is a real product or service behind it, working constantly to make a profit. You need to monitor your dividend sources and to perhaps get ideas for new sources of income. Every biography I read about great business leaders, whether it is Sam Walton or Ray Kroc or whoever, they all made a lot of time to visit stores, talk to employees, and get the feel for the business. As responsible Dividend Tycoon’s, I feel we should do the same.
It is Friday, so I just wish I had stock in Altria or Inbev, so that I could test their beer out. Will have to work on that! Have a great weekend, and perhaps let me know what you do to monitor your dividend machines?