Club Mulgoa

Saturday, April 09, 2011

LEI

When I was deciding whether to sell LEI, this is what I used to calculate. If a company keeps winning large contracts but the dividend is not increasing, then something is wrong. So I sold.

In other words, if you are working hard and you are not making a big profit, then you are working for pittance or someone is pilfering your money.

This is where simple arithmetic works so well. I have dumped LEI before the recent revaluation of the company was performed by the market. I only made a small profit but at least I didn't make a loss. No need to go to university to do an accounting degree; primary school arithmetic is good enough. My late father used to say "dividend is king" (but (Wal) King of LEI gave poor dividends). He only went to school for 2 years. Wal King was paid more than $10 million a year to stuff up a big company.

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