why holding shares long term makes sense, page-21

"buy solid companies with divs hold them"

actually you don't need to buy companies that pay a dividend

companies make a profit and they must decide what to do with it
usually they pay out part as a divi and the rest is retained
if the company's return on equity is about 20% then you don't want the company giving you a dividend
what will you do with the dividend?
put it in a bank account earning 6 or 7%?
of course not
what you want the company to do is retain all profits and hope company will reinvest the retained earnings at a rate of around 20%
theoretically price should equal value
as the company increases its asset base it becomes more valuable and ultimately you get this back as a capital gain

the return on most of warren buffetts companies is higher than 20% so he prefers not to pay out a divi
and that is the way it should be

my advice is just put your money into a company with a high return on equity and hold it for as long as possible