Believe in My Bezos Law; Invest with Mr. Dividend

May 26, 2017 By E.J. Smith - Your Survival Guy

Make no mistake. I am a believer in Jeff Bezos. I even coined a term in his name:

The Bezos Law: If Jeff Bezos enters an industry, prices will be lower.

But that doesn’t mean I’m a buyer of the stock. Remember the dot-com boom and bust? I do.

I had a front row seat as a college intern with the founding team of a grocery home delivery start-up. It was the Webvan of the east coast, with the same unfortunate result; Bankruptcy.

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What went wrong? Turns out, among other things, shoppers like to pick their own produce.

What’s changed? Not much, as far as I can tell. Will FreshDirect be able to scale? We shall see.

In the meantime, my preferred method of making money in stocks is through income.

I don’t put much emphasis on price appreciation.

Much like a rental property, I like cash flow.

I like the fact that management has to think about me. Imagine that empty chair at the board meeting. Now imagine it reserved for “Mr. Dividend,” and you get my point. It’s nice having a seat at the table.

I smile when I hear the dire predictions about retail. Dire predictions pray on investors’ emotions. Perfect. Emotions swing open the doors to better values for income investors.

Greedy Wall Street types have saddled retail with debt. Let this play out a little bit longer.

For Bezos, sending rockets to space and back is hard. Getting groceries into my fridge may prove to be even harder. I believe in the Bezos Law. But for my money, I invest with Mr. Dividend.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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