Carnival of Value Investing #3

Welcome to the April 9, 2011 edition of Carnival of Value Investing.

Thank You all for participating knowing that the Blog Carnival platform has not exactly worked correctly in the last week. Hopefully it settles down soon.


Mike Ross presents The Lottery: An “Investment” for Fools (with Bonus Lottery Simulator!) posted at Get Rich Slowly, saying, “Playing the lottery as a strategy to gain money is a fool’s game.”

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The only reason I have included this piece in this Carnival is that it does suggest that investing is better than playing lottery, something I wholeheartedly agree. Still, one wonders that for a sufficiently high “jackpot”, when it is highly probable that a winning number will be drawn, buying a lottery ticket might in fact might be modeled as a sort of a call option on the jackpot. If the conditions are right, than buying a lottery ticket might yield a positive ROI expectation. So yes, a lottery might have some investment appeal, but not something a value investor should concern himself with.

David Sheffield presents Competitive Advantage posted at The New Value Investor, saying, “An educational guide for determining competitive advantage in firms.”

Well illustrated with metaphors, David supplies a good common sense approach to evaluating the competitive moat of a company.

Hussein Sumar presents Investing in S&P 500 High Yield Dividend Aristocrats Index posted at High dividend stocks, saying, “The S&P High Yield Dividend Aristocrats Index is a method of measuring the 60 highest dividend paying stocks in the S&P Composite 1500 index & only lists those companies that have consistently raised their dividends in the last 25 years, without missing a single year.”

Consistent rising dividends with a strong balance sheet is an indication of a well run profitable firm. One could do worse than looking at the Dividend Aristocrats for their investment ideas.

Note: The site is inactive hence the links have been removed.

That concludes this edition.

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