Golden Nuggets

Hello. Happy Friday! I have two recommendations for you today.

The first is a book, 'The Million Dollar Portfolio: How to Build and Grow a Panic-Proof Investment Portfolio' by David and Tom Gardner, the guys behind Fool.com (http://www.amazon.com/Motley-Fool-Million-Dollar-Portfolio/dp/B002M3SOZ6/ref=sr_1_1?ie=UTF8&s=books&qid=1253897791&sr=1-1). I think it is a reasonably easy to read text regarding investing as an individual investor. I am about a third of the way through, and already feel like it has been worth the read.

Sometimes it is important to go back and reread things you think you know. I never dismiss opportu reinforcement and reminders of sound ideas.

The second rec comes from the reading and a piece of news flow that hit the tape yesterday - McDonald's (ticker: MCD) raised its quarterly dividend from 50 cents to 55 cents. That means the MCD annual dividend is now set at $2.20. At the current share price that results in a dividend yield of 3.9% ($2.220/$56.99).

At today's valuation of 13.3x FY10 earnings, net debt to total capital of 40%, a return on capital of 27% and a top five global brand, I think you could be happy purchasing MCD stock without the dividend yield. However, with the dividend yield, this is a no-brainer. You need to keep up with market developments and what is going on operationally at the company, but generally speaking this stock can be tucked away in your portfolio. If the stock manages just 2% capital appreciation per year over the next seven years, you would have made almost 50%. Slow and steady wins the race!

I know the fries kind of suck and the Angus Burger doesn't stack up to an In and Out Double Meat, but MCD has made some good menu adjustments and the drinks franchise is slowly coming to dominate as the value-oriented alternative to SBUX. That McCafe thing is tasty! For a stock, you could do a lot worse than MCD.

Have a good weekend!

-2outof4