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Heisenberg Principle

 
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  • 5 Reasons The KIT Digital Buyout Bid May Give You Indigestion [View article]
    Because the offer is bull imo.
    Nov 23 11:22 AM | 2 Likes Like |Link to Comment
  • SodaStream Is The Most Undervalued Soft Drink Stock [View article]
    You're joking, right?

    I may buy a second Sodastream just out of spite.
    Nov 22 03:28 PM | 2 Likes Like |Link to Comment
  • Why REIT Dividends Are Not A Mirage [View article]
    Well, it's been fun, gentlemen. I am unclicking the follow. Feel free to come to my page for further accurate discussion. I'm not trying to sell you a book.
    Mar 6 06:47 PM | 1 Like Like |Link to Comment
  • Amarin's Descent To $5 [View article]
    Excellent points.
    Mar 6 06:04 PM | 1 Like Like |Link to Comment
  • Amarin's Descent To $5 [View article]
    EXCELLENT ARTICLE :)
    Mar 6 05:58 PM | 1 Like Like |Link to Comment
  • American Realty Capital Properties Is No Mirage: It's Time To Back Up The Truck [View article]
    What's funny is anybody believing these giant dividend yields are real when most serious dividend investors won't even touch them.
    Mar 5 10:08 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Makes no difference if it's a toy dog doo maker. A REIT that pays a yield that is a fraction of its equity raises is a mirage.
    Mar 4 10:31 PM | 1 Like Like |Link to Comment
  • Time To Sell Universal Display And Buy Apple [View article]
    Fair response. It's mostly a trade idea with the intention of potentially selling AAPL and going back into PANL at another date. Of course I cherry picked that which made my case strongest as the dip in AAPL vs. the spike in PANL in such a short timeframe the switch that much more tempting.
    Mar 4 03:57 PM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    No, these companies HAVE earned their dividend. However, that becomes irrelevant if they choose to raise money to pay out the dividend rather than pay it out from retained earnings.

    And, yes, I know they pay it out from earnings on paper to keep the IRS happy. But not really.
    Mar 4 03:52 PM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Cash in the pocket feels great. I confess that I always enjoy seeing those REIT dividends pop up in my account too when they are delivered.

    They only come at the sacrifice of capital gain. But boy they feel great!

    Not the same as rental income though with real estate in real life. Your tenants don't dilute you to pay the rent. :)
    Mar 4 03:29 PM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Those people would be wrong. Dividend yield mirages only exist with companies raising money to pay them.
    Mar 4 01:55 PM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    I agree with your article. The "False God of Dividends" article is wrong. He ignores that in the long run we're all dead so there is a big difference between a company hoarding its cash (like Apple) and one actually paying out a consistent dividend.

    This topic, however, has nothing to do with REITs that are raising equity while paying out a dividend. Your article was based on PG -- PG isn't raising equity while paying dividends. PG's dividends are real; not a mirage. It's a real return of corporate EARNED money BACK to shareholders. REITs, on the other hand, are literally returning shareholder money back to shareholders that they just raised sometimes mere weeks or even days prior. Not the same. Diluting shareholders by 10% (for example) then paying them a 10% dividend isn't creating value. PG paying a dividend 100% from their earnings per share, and not from equity raise, IS paying value to shareholders. REITs are not. Their dividends are a mirage. People foolishly think they are getting a free lunch.

    It looks free because the stock prices are up nicely and the dividends are paid. But the return is identical whether the dividends got paid or not. That's why the market refuses to raise the stock prices to a level that the dividend yields aren't so high. The market is completely disregarding the dividend yields of these REITs, and rightfully so, because they are a mirage.
    Mar 4 11:02 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    STWD went up because their return on capital is very high. The mirage dividends had nothing to do with it. Save for taxes, your return in STWD would have been IDENTICAL even if they didn't pay dividends. In fact, it would have been higher because there would have been less dilution and higher return on overall capital since their marginal return is higher than their overall return.
    Mar 4 10:52 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    When a company raises $89 million in equity, that's fine for the IRS to tell them $20 million was paid out from earnings, but the economic effect is identical -- it was paid out from dilution.
    Mar 4 10:11 AM | 1 Like Like |Link to Comment
  • REITs: Why The Dividends Are A Mirage [View article]
    Tim Plaehn,

    1. Yes, they raise capital through the equity markets to invest in more properties.

    2. No, they don't pay out dividends from income. They retain ALL of their income AND pay in additional capital. The dividends essentially come from the equity raises. Yeah, sure, they call it net income to satisfy the IRS and avoid taxes. I think my article answers your questions more clearly with actual examples. They raise money via equity in far greater amounts than they pay in dividends -- the amounts above the dividends are spent on new investments and are accretive.

    Example: MITT raised $89 million and paid dividends equal to $20 million. So $69 million ($89 million - $20 million) was plowed into new real estate investments and is likely accretive. The $20 million paid out to shareholders is NOT accretive and is a mirage. $20 milion of the $89 million in equity raise was simply turned around and paid out in a dividend. Clueless shareholders were happy having no clue zero value was created (other than the IRS tax savings).
    Mar 4 10:01 AM | 1 Like Like |Link to Comment
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