SBI Single Best Investment Miller

THE

SINGLE BEST INVESTMENT

THE

SINGLE BEST INVESTMENT

2nd Edition

CREATING WEALTH with DIVIDEND GROWTH

LOWELL MILLER

Copyright 2006

THE SINGLE BEST INVESTMENT. Copyright ? 2006, Lowell Miller. All rights reserved. This book, or parts thereof, may not be reproduced in any form without permission from the publisher; exceptions are made for brief excerpts used in published reviews. For information, please write to: The Print Project, P. O. Box 703, Bearsville, NY 12409.

Distributed to the book trade by: Independent Publishers Group, 814 North Franklin Street, Chicago, IL 60610, (312) 337?0747.

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

-- From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

SECOND EDITION

ISBN-10: 0-9651750-8-1 ISBN-13: 978-0-9651750-8-1

ACKNOWLEDGMENTS

For all my friends and colleagues at Miller/Howard and Overlook: youre always the best . . .

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TABLE OF CONTENTS

INTRODUCTION

A typical situation . . . information everywhere . . . so many options . . . is there a simple strategy that makes sense and works? . . . this books goal . . . impeccable common sense . . . comfort level . . . the mind extrapolates . . . important lessons from the field of Behavioral Finance . . . the psychology of loss, the psychology of gain . . . sell too quick? . . . self control . . . narcissistic distortions . . . open your inner eyes . . . awareness of the inner life . . . investors, listen up! . . . summing up.................................................................................xi

chapter 1 THE FIRST HURDLE: SAY GOODBYE TO BONDS AND HELLO TO BOUNCING PRINCIPAL

The environment for investors . . . a bill that never arrives in the mail . . . maintaining purchasing power . . . graphical view of inflation and the declines of the dollar . . . a loaf of bread became a slice of bread . . . "safe" investments do not outperform inflation . . . bonds haven't really beaten inflation . . . bonds, bad . . . learning to love fluctuations . . . the risk/confidence equation . . . banks in the 1990s . . . easy to hold, easy to buy declines . . . summing up..............1

chapter 2 THE EIGHTH WONDER: A FIRST LOOK AT COMPOUNDING

Harnessing the power of time and growth . . . compounding is the money that money makes . . . simple vs. compound gains . . . time is all you need . . . some magical examples . . . the eighth wonder . . . average annual returns . . . time, patience, and the right kind of stock . . . a company's reliable growth shared with owners . . . summing up..........................................................................17

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