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General_Magician Special user United States 707 Posts |
Yes but when we look at the results of Warren Buffet's company and it's investment in companies that do pay dividends, then the results don't lie. Warren Buffet has excellent results in the investments his company has made and his results are one of the best around. His track record for providing shareholder wealth is unquestionable. If I am going to invest outside of Buffet's company, I am going to look for companies that have paid dividends for at least 20 consecutive years.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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Dannydoyle Eternal Order 21214 Posts |
Yet you pick and choose what advice of his you think is gospel.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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General_Magician Special user United States 707 Posts |
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On Jul 31, 2014, Dannydoyle wrote: That's false. I only pick and choose his advice that makes sense and has corresponding good results. I don't agree with Buffet on everything but I do respect him and have learned a lot from him. Many of the ideas I am talking about in this thread is what I learned from him that made him a billionaire and one of the richest people in the world. The same ideas you mock and ridicule Danny. But yet, you can't argue with his results Danny no matter how hard you try to troll, ridicule, argue and mock. The results don't lie no matter what your opinion is. Don't you have anything better to do with your time instead of trying to troll people on the internet? Isn't there better things to do with your time than to waste it trolling others? You are not contributing to the discussion at all Danny and you haven't offered anything positive. If that's all you are going to do is troll, then I am simply going to put you on ignore and not waste my time responding to you given that you are not interested adding anything positive or constructive or having a real conversation with anybody.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
Quote:
On Jul 31, 2014, LobowolfXXX wrote: Quote:
On Jul 31, 2014, mastermindreader wrote: To be clear, there's no tends to be, generally, or sometimes about it; we needn't soft-sell this idea. When a stock goes ex-dividend, the share price always drops by exactly the amount of the dividend. If the price of the stock were $10.00 per share on the last day before it goes ex-dividend (with a $0.50/share dividend), then the price will be $9.50 on the day it goes ex-dividend. (Of course, there are other forces that will also cause the price to change, but the effect of the dividend is always a reduction by exactly the value of the dividend; there are simple arbitrage transactions to ensure that that's the case.) |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, General_Magician wrote: But you're saying that he wouldn't have had the same results if he had invested in companies that don't pay dividends. Where's your data to back up that claim? |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, General_Magician wrote: And that's your choice, of course. But to say that buying a stock that pays a dividend is inherently better than buying a stock that doesn't pay a dividend is patently false. |
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tommy Eternal Order Devil's Island 16532 Posts |
Nature told me that. In god we trust.
If there is a single truth about Magic, it is that nothing on earth so efficiently evades it.
Tommy |
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Dannydoyle Eternal Order 21214 Posts |
Quote:
On Jul 31, 2014, General_Magician wrote: So people who disagree with your ALL DEBT IS BAD position, and show you exactly how fallacious it is are trolls? I have shown you CONSIDERABLE things to back up my position, and you simply don't respond and still make the ridiculous claims. But hey live in your own dream bubble.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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tommy Eternal Order Devil's Island 16532 Posts |
Is it better to buy money or rent it?
My daughter, she seems to think it's better to live with me rent free and not keep her room tidy .
If there is a single truth about Magic, it is that nothing on earth so efficiently evades it.
Tommy |
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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts |
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On Jul 31, 2014, S2000magician wrote: That's right. I should not have used the word "generally." It should have been "always." But, as far as the shareholder goes, it sometimes IS just six of one or half a dozen of the other as far as his/her benefit goes. Also, capital gains and dividends are taxed differently. |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, mastermindreader wrote: Absolutely correct. In fact, if capital gains and dividends were taxed the same, the only difference between a true dividend and a synthetic dividend (i.e., selling a percentage of your stock to get cash flow) is that the latter involves some (frequently inconsequential) transaction costs. |
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General_Magician Special user United States 707 Posts |
Well, if a company is not paying out dividends only to save shareholders on taxes and has a consistent record of growth in the price of the stock then that's a different story as I have already stated. I've already stated that dividends are taxed differently than capital gains long before you guys even brought up the point. It also seems you guys have changed your position in that you think that it is always good that a company doesn't pay a dividend. That's not the case. Not all companies have a good reason for paying a dividend. Maybe the company simply is performing poorly or maybe the management isn't doing it's job of serving the shareholders and doing something shady. Most companies that perform well pay dividends.
Warren Buffet's company Berkshire Hathaway primarily invests in dividend paying companies even though it doesn't pay a dividend to it shareholder just so that it can save the shareholders money on taxes. However, if you want to invest in his company, you better have some serious capital ready to invest as each share is priced pretty high. Otherwise, if you want to invest in companies that perform well, then you are probably going to end up investing in dividend paying companies. Also keep in mind, that when you sell a stock, you lose that share of stock and maybe both any possible price appreciation or dividend payout. If you collect a dividend, even though the taxes are higher, you still keep that share of stock for future dividend payouts. Also, when I was paid a dividend on my index fund, I still had a capital gain even after the dividend payout (it pays a quarterly dividend). Even with the stock market plunging today, I still had a capital gain without even calculating the dividend payouts I received. My overall return on investment is higher once I calculate the dividends re-invested back into the fund. But a great time to purchase more shares in index funds, is when the stock market is going down. It's also a great time to start looking for bargain buys on individual stock. Prices of stock do not always reflect the intrinsic value of a stock either. A stock can be priced much higher or much lower than what's it's really worth (if they did, then their would no be such thing as 'value' or 'bargain' investing). I like dividend payouts because I prefer not to sell a stock unless it is simply holding onto dividends to save me from having to pay income taxes. That's not the case with most companies, though it is the case with Warren Buffet's company. Just because a company doesn't pay a dividend doesn't mean they have a good reason for not paying a dividend. They might simply be ignoring their duty and responsibility to shareholders and just simply looking out for themselves while screwing over their shareholder that they are supposed to be serving. Another thing to consider, is if these other companies that don't pay a dividend are so great, then why hasn't Warren Buffet's company invested in them? Why is he buying primarily dividend paying companies? If these other companies were so great, he would simply buy them up and keep watching them grow in price and his shareholders could simply sell their shares of Berkshire Hathaway when they needed income.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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LobowolfXXX Inner circle La Famiglia 1196 Posts |
If the shareholders get a dividend of 50 cents per share and the stock price drops 50 cents to reflect that the company has less in assets (the cash used to pay the dividend), then the shareholders haven't really benefitted.
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley. "...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us." |
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General_Magician Special user United States 707 Posts |
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On Jul 31, 2014, LobowolfXXX wrote: What do you mean they haven't really benefited? The dividend payout should be a return on investment. That's a what a company is supposed to be doing is providing a return to the shareholders. Companies that don't pay dividends are not necessarily holding returns which increase the share price and not all price fluctuations in stock reflect any return on investment for the shareholders of that company or the true value of that share of stock. If you sell that stock you also lose any future dividend payouts that share might pay as well even though you might pay higher taxes on dividends vs capital gains. I wish I did have the money to buy a few shares of Class A stock of Berkshire Hathaway, that would indeed be a great investment. Then again, on the other hand, Buffet is a pretty old fellow. But, for right now, I am having to stick with index fund investing.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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Dannydoyle Eternal Order 21214 Posts |
The value just went down by .50 a share. It is a wash.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, General_Magician wrote: Nobody here is saying that the primary reason that a company doesn't pay a dividend is that they're taxed at a higher rate than capital gains. I'm not sure where you got the idea that they were. Quote:
On Jul 31, 2014, General_Magician wrote: Nobody's said that it is always good that a company not pay a dividend. I'm not sure where you got the idea that they were. Several of us have said that there are very good reasons for a company not to pay a dividend; those reasons exist in some companies, and not in others. Quote:
On Jul 31, 2014, General_Magician wrote: We agree. Quote:
On Jul 31, 2014, General_Magician wrote: Or maybe the company has projects in which it can invest that will earn a higher rate of return than is required by the shareholders. We've mentioned this several times before, but you seem to be ignoring it. Why is that? Quote:
On Jul 31, 2014, General_Magician wrote: This statement is patently false, another statement we've made before that you choose to ignore. Why is that? If a company can earn 15% on a project and its shareholders require only a 10% return on their investment in the company's stock, it's stupid for the company to pay a dividend; it’s not in the shareholders' best interest. The shareholders will earn more when the company invests its cash in the project instead of paying it to them as a dividend. Why do you keep ignoring this basic fact? Quote:
On Jul 31, 2014, General_Magician wrote: You've mentioned this before. The fact that Berkshire Hathaway invests in dividend-paying stocks doesn't in any way suggest that investing in non-dividend-paying stocks isn't just as good an idea. Your idea that stocks that pay a dividend are inherently a better investment than stocks that don't is, again, patently false. Quote:
On Jul 31, 2014, General_Magician wrote: I've already addressed this above, but you've chosen to ignore what I've said. Let me reiterate: if you think that receiving a dividend is fundamentally different than creating a synthetic dividend by selling shares of stock, then you simply do not understand how investing in stock works. Apart from the tax treatment, the two are exactly the same. Exactly. You lose absolutely nothing. Quote:
On Jul 31, 2014, General_Magician wrote: Just because a company doesn't pay a dividend also doesn't mean that they're ignoring their duty and responsibility to shareholders, which we've mentioned more than once. You keep ignoring this fact. Why is that? This would be a much more interesting dialog if you would address some of the points we've made, rather than ignoring them and simply repeating what you've already written. |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, General_Magician wrote: What he means is that before the dividend was paid, your portfolio was one share of stock worth $10. After the dividend was paid, your portfolio was one share of stock worth $9.50 and $0.50 in cash for a total portfolio value of $10. You haven’t benefitted. A whit. It seems that you really don’t understand how stock investments work. |
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tommy Eternal Order Devil's Island 16532 Posts |
They work like Rick's casino in Casablanca. viz: manipulation is more profitable than speculation.
If there is a single truth about Magic, it is that nothing on earth so efficiently evades it.
Tommy |
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General_Magician Special user United States 707 Posts |
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It seems that you really don’t understand how stock investments work. Ohh really? Here is an article on the arguments that oppose dividend payouts and the arguments that support dividend payouts. Most companies that do payout a dividend have a hybrid approach to dividend payouts, which is a combination of residual and stable dividend payout policies. I think a cmopany should be paying dividends because it has an obligation and a duty to provide a return on investment to shareholders and to share earnings with shareholders rather than always attempting to find new projects to invest in or simply just trying to prop up the share price of a stock. Shareholders invest to make money and see a return. Here is a quote in support of my argument on dividend payouts: Quote:
Hybrid S2000, are you sure you are not the one who understands how stocks work? Here is the argument from this article which opposes my argument in favor of dividend payouts by companies; Quote:
Arguments Against Dividends Here is the article in full from investopedia: http://www.investopedia.com/articles/03/011703.asp
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
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On Jul 31, 2014, General_Magician wrote: If you don’t understand that paying a dividend erodes the stock price, then, yes, really. Quote:
On Jul 31, 2014, General_Magician wrote: What you're ignoring is that investors can just as readily see a return through appreciation of the stock price. Remember: paying a dividend erodes the stock price. I believe that companies have an obligation to provide their owners (shareholders) with the highest return possible (subject to constraints on risk, legality, and so on); if they can provide a higher return by retaining their earnings and investing in profitable projects than they can by paying a dividend, then paying a dividend is shirking their responsibility. I also believe that you'd be hard-pressed to find a competent analyst who disagrees with that point of view. Quote:
On Jul 31, 2014, General_Magician wrote: I am sure that I understand how stocks work. |
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