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BigIslandBum

BigIslandBum
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  • Dividends And 'The Magic Pants' [View article]
    "As I showed the math they are the same, in up or down markets"

    You showed using unrealistic assumptions. Here's a spread sheet to compare an actual dividend growth portfolio to an artificial dividend portfolio over the last 10 years.

    http://bit.ly/1iB5tqv

    The green section is the dividend growth portfolio metrics and results. Ending value of the dividend growth portfolio was determined by multiplying the beta of the portfolio (0.70) * the growth of the market over the given time period.

    The white section is the artificial dividend portfolio with a beta of 1.0, so SPY was used as a price proxy. The artificial dividend portfolio had to sell enough shares to match the income generated by the dividend growth portfolio each quarter.

    You'll note that the resulting value of the two portfolios is significantly different and that the artificial dividend portfolio has less than half its original shares remaining. It would appear rather obvious that, outside of unrealistic academic assumptions, it is not the same, in up or down markets.
    Mar 18 10:09 PM | 2 Likes Like |Link to Comment
  • 8 Questions And Answers About The General Electric Spin-Off [View article]
    "GE said that the plan is to use the expected funds generated from the share swap to buy back 500 million shares."

    I'm obviously missing something... how are "funds generated" by a share swap?
    Mar 17 02:46 PM | 1 Like Like |Link to Comment
  • How You Can Invest Like Warren Buffett [View article]
    Stating "investing in A instead of B would have been better (or the same)" is not difficult and is rather pointless.
    Mar 16 03:36 PM | 3 Likes Like |Link to Comment
  • How You Can Invest Like Warren Buffett [View article]
    On a related note, the rear view mirror was introduced by manufacturers in 1914.
    Mar 16 02:53 PM | 4 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    I'm guessing you don't do your own taxes. Taxes on dividends are very dependent on total income and the sources of income. A married couple can earn $92.5K in dividends and pay 0 federal tax if it's their only source of income (using standard deduction).
    Mar 14 10:41 PM | 6 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    "However, if someone is just going to reinvest the divvy back into the company, why would they want to pay taxes on it first?"

    They may not have to pay taxes on the dividends. It could be held in a tax advantaged account or their combination of total income may not be high enough to be taxable.
    Mar 13 10:27 PM | 3 Likes Like |Link to Comment
  • Debunking The 'Dividends Don't Add Shareholder Value' Myth [View article]
    And if you only eat half of your remaining food each meal, you'll never have to buy groceries again.

    Meanwhile back on planet reality...
    Mar 13 09:26 PM | 24 Likes Like |Link to Comment
  • How You Can Invest Like Warren Buffett [View article]
    "... Didnt see any mention in the letter about increasing allocation to publicly traded stock. I agree he is a savvy guy and knows where the superior returns will come from....and its not buying public companies."

    From page 5:

    "Berkshire increased its ownership interest last year in each of its “Big Four” investments – American Express, Coca-Cola, IBM and Wells Fargo. We purchased additional shares of Wells Fargo (increasing our ownership to 9.2% versus 8.7% at yearend 2012) and IBM (6.3% versus 6.0%). ..."
    Mar 11 04:50 PM | 5 Likes Like |Link to Comment
  • Altria: This 5% Yielder Is My Next Buy [View article]
    "Hi, Larry. MO ..." and Curly.

    This is what happens when I don't get enough coffee in the morning.

    Thanks for the nice article Larry.
    Mar 3 10:40 AM | Likes Like |Link to Comment
  • Coca-Cola Yields 3% And Everyone Should Know It [View article]
    Based on history, Coke usually announces dividend increase a few days after the 4th quarter earnings release. Likely either the end of this week or sometime next week.
    Feb 18 01:19 PM | Likes Like |Link to Comment
  • The Parity Conundrum [View article]
    13302632 : "For an example if I had a billion dollars invested and that investment increased to 3 billion with it all unrealized capital gains, it is incongruous to conclude you have made nothing and should not be taxed because those gains are all unrealized."

    You can't buy groceries with your 2 billion dollar unrealized capital gain, you have to sell and pay taxes to do that.

    13302632 : "I think it is ludicrous to sell a house held for 30 years and have to realize capital gains without taking inflation into account."

    If it's your primary residence, you don't have any taxes to pay.
    Feb 14 03:26 PM | 1 Like Like |Link to Comment
  • What Happens To Dividend Growth Investing When Inflation Hits 10% [View article]
    If you hit the "Reply" in the lower right of the comment you would like to reply to, it will post your comment indented below the comment you are replying to. Replies appear in the order they were posted.
    Feb 10 01:20 PM | Likes Like |Link to Comment
  • Stocks For 2014: Fairly Valued Dividend Growth Stocks With An Emphasis On Dividends - Part 4 [View article]
    Yep, those percentages are the "stake" - the percentage of the company owned by BRK. By percentage of the BRK portfolio:

    WFC - 20.95%
    KO - 15.13%
    AXP- 13.15%
    IBM - 12.04%
    PG - 4.07%
    Feb 8 07:49 PM | Likes Like |Link to Comment
  • Stocks For 2014: Fairly Valued Dividend Growth Stocks With An Emphasis On Dividends - Part 4 [View article]
    Tumblebug,
    The reason I prefer the dividend growth route as opposed to growth & convert is due to my inability to time the market and my risk tolerance.

    I know if I had gone with a growth & convert paradigm, once my "number" was reached, I would be second guessing myself moment to moment about when to convert to dividend income. Definitely not a SWAN situation for me.
    I don't think dividend growth investing is better than other strategies, such as the growth & convert model you suggested. However, I do know dividend growth investing is better than all other strategies for me.
    Feb 7 02:28 PM | 1 Like Like |Link to Comment
  • The Common Mistake With Coke, Pepsi, And Dr. Pepper [View article]
    Dave,

    Thanks for the info, very interesting stuff.
    Feb 4 09:38 PM | Likes Like |Link to Comment
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