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Invest in Xiaohongshu-Issue 205

PassFaced with dust and scars, we still have to believe in time

Whenever the dividend asset market falls back or rises, there are always people asking, when will this track switch?

Buffett has held Coca-Cola for 37 years, American Express for 30 years, See's Candies for 52 years, and Moody's Ratings for 23 years. These companies are essentially dividend assets, and they pay huge dividends to Berkshire every year. In fact, dividend assets are not a race track, but they contain the essence of investment and the investment secret of getting rich slowly.

Back to A-shares, if investors bought Kweichow Moutai 10 years ago, the dividend yield corresponding to the stock price at that time was only 2.72%. However, as the company's profits grew, dividends grew at the same or higher rate. The dividend per share of Kweichow Moutai distributed in 2023 was 31% of the stock price 10 years ago. Similarly, if investors bought Supor 10 years ago, the dividend yield corresponding to the stock price at that time was 3%. The dividend per share of Supor distributed in 2023 was 20% of the stock price 10 years ago.

Although the stock market has its ups and downs, the profits of excellent companies continue to increase over time. Buffett now receives $75 million in dividends from Coca-Cola every year, accounting for 50% of his purchase cost that year. Dividend assets bring investors not only the current visible dividend rate, but also a dividend rate that follows the company's profit growth.

"With each passing year, the rate of return on his initial investment will increase, and these figures will pile up like a pyramid." As Mary Buffett said in the book "Buffett Teaches You How to Read Financial Statements". To this day, Wang Wen of Ridou Investment still remembers the shock he felt when he heard Zhang Shuangwang, the founder of Yitai Group, say that "investment is about sharing money". The essence of investment is hidden in dividend assets. Don't just understand dividend assets from the perspective of investment style or track.