A situation seemingly confusing or complex likely means you have it wrong. Truth is usually pretty simple. Graham has it somewhat right if you interpret “return” correctly. But FINRA, and most of the financial services industries has is wrong. It is one of several semantic distinctions we have lost – including journalism vs propaganda in recent decades.

As an equity buyer you do not own the retained earnings. You have the right to sell your security and you have any dividends or yield declared for shareholders. The dividends are your return on your capital investment. No dividends, no investment. Without dividends, it is a 100% speculation, with price being simply a function of what some other buyer (properly labeled speculator) is willing to pay.

I have set this out in dozens of conversations over the past five years and written it in similar quantities of web postings. Pretty much 1% gets its it and the closer the other 99% are to the financial industry, the cool-aid takes over, and they are sure I am wrong and begin a long conversation argumentative about risk.

I get that the industry does not want its retail customers to get this distinction. And many of those same customers do not want to think they are speculators, speculating on speculations. Being an investor, investing, on investments is a better spin for sales, for sleep-at-night, and for convincing one’s partner all is well. In 2008 many, unfortunately were shocked at their security value declines. Few understand they were all in speculations.

Robert, above, got it right about Buffett – he is a hypocrite investor, failing to provide anything more than a speculation to his capital suppliers. Shame. I have personally requested, the past two years the “reporters” invited to his annual meeting to confront him on this. None have dared do it. The media is part of the cool-aid!

Buffett does have the “sell when others are creating a bubble” an “buy when others are panicking” part right. What is not to like about buying more yield for less?