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Winning investors know that stocks are money machines, not slot machines - MarketWatch

We will think of stocks as money machines, instead of slot machines. We will buy stocks because the prices are reasonable relative to the corporate cash flow, not because we expect stock prices to go up next week, next month, or next year. If we think this way, we won’t try to buy stocks before the market goes up and sell before the market goes down, because we won’t try to predict future prices. Instead, we will recognize that the stock market is a benevolent casino where we have the edge. So we can ignore temporary ups and downs and be assured that, in the long run, we will make money buying stocks as long as publicly traded companies continue making profits. By most value-investing metrics, stocks are reasonably priced now relative to dividends, earnings, and free-cash-flow, once low interest rates are taken into account. This is not a bubble, nor a buying opportunity of a lifetime. It is a time when stock prices are sensible, not wacky. The S&P 500 SPX, -0.10%  dividend yield is approximately 2%, while the longest-term U.S. Treasury bonds yield around 3%. If dividends grow by more than 1% a year, the broad U.S.

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