Compania Cervecerias Unidas S.A. (ADR) (NYSE: CCU)

After reading "The Warren Buffet Way", the theme that really stuck with me was the comparison of buying stocks to counting cards in blackjack. When the odds are strongly in your favor, put down a big bet. You want to make a large enough bet to really make a significant impact to your portfolio if the bet works out. That bet for me was Compania Cervecerias Unidas S.A. (ADR) (NYSE: CCU) or United Breweries Company, Inc.

I like this stock over other choices for 3 specific reasons:

1. The dividend yield currently sits at 6.68%, which doubles what bank interests were paying me, and it had a depressed stock price only due to stock market momentum in my opinion because this company has produced a positive cash flow since 2005.
2. It's an international beverage company that operates in Chile and Argentina. The company's diverse product line includes wine, beer, mineral water, and soft drinks.
3. It owns licensing agreements with many familiar names such as Pepsi, Anheuser-Busch, and Heineken.

I mainly wanted a company that was internationally concentrated so that it would be some what immune to the US economy recession. I also wanted to own a conservative industry that, in my opinion, will never die out and alcohol fits that description nicely. Besides, what do people do when they have problems and are losing money? They drink!

July Stock Portfolio

As you can see, I currently hold positions in 12 different stocks (see chart below). My stocks are spread over many different industries, however, this was not my intent since Warren Buffet doesn't believe in diversifying.

Although I don't fully understand how Warren Buffet determines a company's intrinsic value (true worth of a company based on historical financial earnings), I look for positive earnings over a 3 to 5 year period of time. If a company can show consistent positive cash flow over this range of time, it tells me that this company has a successful business model in place to hopefully continue this trend in the future. All of my stock positions qualify under my definition of intrinsic value.

Symbol	% of Assets	Description	Dividend Yield	Industry
CU	32.01	United Breweries Company, Inc.	6.83	Alcoholic Drinks
BRK.B	15.70	Berkshire Hathaway Inc.	0.00	Insurance
GOOG	10.24	Google, Inc.	0.00	Online Services
CSCO	4.98	Cisco Systems, Inc.	0.00	Data Networking
JOYG	4.37	Joy Global, Inc.	0.84	Construction Machinery
WMT	3.43	Wal-Mart Stores, Inc.	1.69	Discount Stores
JNJ	3.36	Johnson & Johnson	2.69	Drugs
SCHW	3.29	Charles Schwab Corp.	1.10	Securities
FRE	2.30	Freddie Mac	12.53	Finance
ADM	2.11	Archer Daniels Midland	1.80	Agriculture
STKL	2.09	Sunopta, Inc.	0.00	Agriculture
PXD	1.94	Pioneer Natural Resources	0.47	Energy
CASH	16.38	Cash	2.66	Cash

About Me

I’m a 30 year old technology consultant from the Bay Area. When I was a child, my father always taught me the value of investments. I bought my first stock at age 14 and have been following stock market investments as a hobby ever since.

Two of my favorite investors I follow are Warren Buffet, who has consistently been ranked the richest man in the world at over $50 billion, and Carlos Slim, who recently overtakes Bill Gates as the richest man in the world at $53 billion.

Lately I've been interested in finding stocks with high dividend returns. This type of investment provides an opportunity to return higher yields (5% to 10%) than if I had parked my money in a bank (3% at Washington Mutual).

This blog will showcase some of my own investment ideas, what investment vehicles have worked for me, and how I decide where my next investment will be. Like every investment, there are risks involved, but I try and minimize these risks with my own research and understanding from the infinite amount of data available to us via the internet, print media, and industry trends around our daily lives.

I enjoy comments of all kinds, so please feel free to post your opinion and definitely post information related to the investment topics I write about here.

Many Thanks.

The Hobby Investor.