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Dividend Paying Stocks: You Only Have to Be Lucky Once

Devin, have you heard of the investment strategy called value investing ? It is obvious why CSCO's stock price didn't increase much during the past ten years and you point it out yourself: it was overvalued in 1999 (P/E == 100 !). It just took 10 years for the market to eventually correct that overvaluation. I personally believe that, as of today, $100B is a fair value for the company (therefore it *still* isn't a good buy because according the strategy you should invest in undervalued companies, not fairly valued ones). My background is IT/CS/Networking, and yes I did research CSCO :-)

Conversely, I haven't looked at PG, but I bet if you looked at their fundamentals you would notice they were *not* overvalued to begin with, so it was logical for their market cap to keep increasing because it is growing.

I also don't think that investing is a matter of luck. At a conference in the 1990s, Warren Buffett refuted that argument by showing data that him and a group of friends following this strategy were able to consistently outperform the market, every year, for a period of 20+ years, with differences in their portfolios.

I should say that even though I have probably less experience than most people here, my first exposure to investment strategies has been value investing, and it strikes me as so obvious that this is the right way to invest that I wonder why not more people follow it.