Number of Companies in an Individual’s Portfolio ?

This is one question that almost all long term investors ask themselves. Most of the well known value investors that we read about in public domain, usually, are concentrated in teens. If that’s the case, then what about diversification? The concept of risk is very subjective because every person will have a different risk profile. These well known value investors have proficiency to balance risk vs. returns. They have resources to be able to manage that risk of concentration. As individual investors, we do not have such resources at our disposal, and hence risk level changes for us. In addition, we cannot generalize that a fixed “number of stocks” provides diversification.

Being a dividend investors, I am looking for companies that have potential to grow their dividends over time. I have observed that companies that grow their dividends, with good quality of earnings, the market value (or share price) also grows. This not only provides dividend cash flow, but also the capital appreciation over time. continue reading rest of the article….

Building Core Competency for Long Term Survival

Theory of evolution says continuous change is inevitable and if one does not evolve, they will perish. This is true for businesses and corporations. If corporations do not evolve then their survival is in jeopardy. One thing key to survival is a core competency that the company has built over time.  Yes, it is important to make and sell products or services. However, I believe products and services are just the end product or end result.

Corporations that are successful and continue to survive have shown that they focus more on building core competency. Based on their core competence these corporations have build products or services that can be applied to variety of applications. Successful companies are more eager to build competence that will help them become world leaders.  They do not solely focus on products alone.

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