User 305589

On Buffett-Back Riding

btw: I'll likely never understand why people want to piggyback Buffet's stocks when they could easily do so first hand by buying Berkshire's stock -especially at times like now, when it trades at a substantial discount (30-40%) to intrinsic value.

On Buffett-Back Riding

Jeremy Siegel has shown in a study spanning 110 years that 97%(!) of the returns generated by stocks came from - the dividends.
The point here is not to buy the highest yielding stocks but those with robust, durable moats that have a high earnings yield and strong cash flow because sooner or later these earnings will translate into (growing) dividend payouts.


On Jan 27 11:33 AM Nick Waddell wrote:

> Regarding the yield equation: I wonder if, on average, dividend paying
> stocks are priced inordinately higher than those that don't pay a
> dividend. Is there research on this?
>
> It seems to me that every time the market hits a tough patch investors
> are told to reflexively flock to "high quality dividend producing
> stocks". It makes me wonder if people are giving up too much on the
> equity side and if high quality companies that don't pay a dividend,
> such as DELL, could be better bets.

Burlington Northern: Then and Now

Hi Paul,

you may wish to correct your numbers when calculating cash outlay and RoI. You cannot just short-sell a $70 Put. You will have to put up margin for that. Depending on your Broker, that could be anywhere between 7.000$ (full margin) or about 2.500 $. It is still a good proposal, but you absolutely have to include these margin requirements in your calculation or else you will end up with grossly overblown RoI on naked option sales.


Another note: Given how bad almost ANY stock fared over the past 12 months BNI held up rather well and one has to see Buffet's purchases in the light of his remarks that a) he didn't see much value in the ,arket at that time - so BNI was one among very few. and b) that he has to invest billions in order to move the needle. so, among big-cap stocks, BNI certainly was one of the better choices if you consider that JnJ, PG, KO etc. already are in Buffet'portfolio.