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Martin Rice

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  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    varan, how could you possibly be sure that I wouldn't believe what you say? Is it because you, on principle, don't believe what others say?
    May 12 12:56 PM | 7 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    Thanks for the reply, S2L. After your comment, I went back and read DVK's article carefully again (3rd time). Try as I might, I cannot find where the thrust says that "the company in essence, created free money and delivered it consequence free to shareholders in the form of a dividend."

    To me, if we really want to boil it down to the "thrust," all he's saying to us is that selling shares to bring in income is NOT THE SAME as not selling shares and bringing in income solely through dividends.

    I don't see how anyone can argue with that proposition. In one case you have a sale and in the other you don't have a sale. That's not the same.

    Of course he says more than that, but to me that statement is the thrust.
    May 12 12:44 PM | 4 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    How about providing us with a bibliography of your publications from "any reputable journal that publishes articles of a scholarly nature," varan?
    May 12 10:28 AM | 2 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    I think that the difference here is that we dividend investors, especially those of us who are retired and living off our dividends (and whatever other income we might have), simply don't care about the accompanying drop in share price.

    We pick solid companies and the prices drop and the prices rise and the long-term trend is up with increasing dividends AND increasing income AND increasing share value.

    What difference does it make to us if there's an "accompanying drop in share price?" Absolutely none.
    May 12 10:26 AM | 4 Likes Like |Link to Comment
  • Diversifying The Perfect Retirement Portfolio - Here's How: Part 3 [View article]
    "Dividends are based on the number of shares you own, not the stock price." (chowder)

    "Dividends are based on expected earnings, which is also what the stock price is based on." (6228371)

    Perfect example of someone talking right past the other. Of course what chowder meant was if the dividend were being paid today, the amount he receives depends on the number of shares he owns. A .50 cent dividend pays $50 on 100 shares, $250 on 500 shares.

    I don't even think that you can say that "Dividends are based on expected earnings" because they're based on what the company decides to pay, and often the company doesn't just decide what to pay based on expected earnings.

    There are frequently strategic reasons for the size of the dividend. For example, perhaps the company wants to keep up a record of having raised the dividend every year for umpty years. This year the expected earnings will be lower, but they'll increase the dividend to keep their record. All they have to do is increase the payout ratio a bit.
    May 12 09:29 AM | 3 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    62, I have no argument at all with your comment. In fact, that's why I said, immediately after the sentence you quoted, "Well, there are reasons [to sell] of course, related to the state/health/dividend policy of the businesses we own, but not related to income other than to ensure its continued flow."

    What I meant by that was precisely rebalancing. I could have spelled it out more by adding more slashes and words like valuation, etc. But I did mean rebalancing.
    May 12 08:18 AM | 2 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    "I am comparing two companies that are exactly the same...." Where do you find two companies that are "exactly the same?" So as conkjc says, "theoretically."

    conkjc is talking about in practicality. Big difference.
    May 12 08:13 AM | 4 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    It has been fun following this thread, just as it has been fun following the same thread in many different S.A. articles.

    It strikes me, though, that much of these discussions have to do with making points that are far removed from individuals' needs and investing horizons. Consequently, it seems clear to me that the only thing that matters is what your purpose/need is in investing, and that changes radically depending on the individual's personal situation.

    Whether or not creating one's own dividend by selling is the same as receiving dividends without selling certainly doesn't matter in my situation, which is the same situation as untold thousands of other investors, that is, regardless of whether it's the same or not, I (IN MY POSITION) would be insane to sell shares for income.

    I begin with a dollar figure that my wife and I need to supplement our Social Security and defined pension income in order to live the life-style we want. And we know exactly what that figure is because we have tracked our expenditures for a long time.

    Currently, our dividend income is exactly that figure after taxes. So, for people like us, 76 (I) and 66 (she), why in the world would we ever sell any shares? Well, there are reasons of course, related to the state/health/dividend policy of the businesses we own, but not related to income other than to ensure its continued flow.

    We have everything we need based on our dividend income and the value of our holdings will either increase or decrease based on what the market does, but that really means nothing to us as long as we have the necessary income.

    So why in the world would I sell shares for that income? The sales I mentioned above only have to do with portfolio adjustments in order to preserve the income, not to supply it by means of the sales.

    Without selling shares we still get what we need and, after we kick off, our kids get all the shares that we have now.

    It seems to me that rather than focusing on the technicalities of what selling or not selling means for obtaining income, which is what most of this discussion does, one's first obligation is to focus on one's investing purpose and one's needs and then to chose the most profitable/advantageous method.

    In our case I feel we do, indeed, get to eat our cake and keep it, too. Well, our kids get to keep it; and if they just take the dividends then they, too, will continue to eat it and keep it.
    May 12 06:24 AM | 6 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    dc, I'm sorry that I gave what obviously seems to be the wrong impression in my remark.

    I wasn't talking about dividend capture strategy per se at all, which I, too, don't think works.

    All I was saying is that the reduction of the opening price by the amount of the dividend is pretty meaningless in that the price will change instantly after the opening. It can go down or go up but is no way "permanently" reduced.

    Sorry for the misunderstanding.
    May 10 05:08 AM | 1 Like Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    dc, nobody said that. And everybody knows that at least for an instant at the opening of the market the price is down by the dividend amount. But it's only an instant and then the price changes, maybe up and maybe down.

    As David Crosetti says below: "The price of a stock is changing every second." And that includes ex-dividend day.
    May 9 04:17 PM | 3 Likes Like |Link to Comment
  • How One Retiree Is Muddling Through Dividend Investing: Part IX - My Dividend Investment Business Plan [View article]
    I never look back, Gat. But in the meantime I bought PFE.
    Apr 30 09:25 AM | Likes Like |Link to Comment
  • Are Any High Quality Companies Decently Valued At The Moment? [View article]
    Just bought some more KRFT myself a few moments ago.
    Apr 29 03:34 PM | Likes Like |Link to Comment
  • How One Retiree Is Muddling Through Dividend Investing: Part X - My Investment Plan Vs. Reality [View article]
    feenst, thanks for reading and commenting. I, too, had worries about BGS and as I think I mentioned above, sold it. Since my whole goal in investing to to replace income in a continuing stream now that I'm retired, I don't have any no-yield stocks in my portfolio, though I do understand your strategy of mixing growth with dividend income.
    Apr 29 07:36 AM | Likes Like |Link to Comment
  • Are Any High Quality Companies Decently Valued At The Moment? [View article]
    Psycho Analyst, I was wondering whether anyone was going to mention that. Regardless of what kind of company they may be in business terms, they are ethically and morally bankrupt and that's the reason they'll never be in my portfolio, regardless of value.
    Apr 28 02:11 PM | 5 Likes Like |Link to Comment
  • Is Tupperware Brands The Perfect Dividend Growth Stock For Retirement Portfolios? [View article]
    Enthusiastic, where did you find your D/E figure? On M* it shows at 2.5. Nevertheless, when compared to the industry average of 0.5 (also on M*), it does seem high.
    Apr 28 09:30 AM | Likes Like |Link to Comment
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