My stock buying guidelines

The general principle to buy a stock is to convince myself that the stock is a really good long term investment.  

1. The company must be one of the CCCs.

The CCCs stand for Dividend Champions, Contenders and Challengers, as maintained by David Fish monthly. Dividend Champions are companies that have increased their dividends for at least 25 consecutive years, while Dividend Contenders and Challengers are companies that have increased dividends for at least 10 and 5 consecutive years respectively.

Although there are gems besides the companies in this CCC list.  I have to say that I am not able to hunt for them as far as my current knowledge and time concern.  The companies in the CCC list prove with time their excellent performance, and they are a long list too.  I'll start with the Dividend Champions first. My current holdings JNJ, PG, WAG are all among the Champion list.

2. The company must has a sustainable moat and product. 

The company should be a big player in its industry.  Compared to its competitors, it has its own advantages.  Also the industry should have higher barrier to entry for future competitors.  It could be large scale of investment,  infrastructure build up,  the industry leader who heavily influences the industry future trend.  Technology and patent should be considered here too, but need to be caution of valid period.  

 5. Wait for a desirable entry point

Dividend growth investment is an attractive strategy for me.  However, after reading many articles on seekingalpha.com, I still can't convince myself to agree with the popular opinion of DG investment that an entry point doesn't matter.  To me, entry point does matter because if I patiently wait for a low entry point that I desire, the initial capital gain from my patience can worth one year or years of dividend income.  The reality of stock market is that, every now and then, some of the stocks in the watch list will get back to the price point that is attractive enough to me.  Patience pays off. 

Another reason to buy stock on sale is the high yield on cost.  The lower the initial purchase price, the higher the yield on cost.  This buy-on-dip benefit will become more and more obvious later when the valuation of a quality company increases along with time.