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AgAuMoney

AgAuMoney
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  • Misguided Interest In Dividend Paying Stocks [View article]
    '''I cannot believe all of the posters that don't understand Larry's investment strategy. I would recommend for these people to not invest in the stock market.'''

    The point you missed, is that some of us have understood Larry's strategy, perhaps even tried it, and have found something better.
    Dec 31 03:37 PM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''This is an interesting question, and Mr. Swedroe has summarized the research well. You may agree or disagree with his findings, but if there are more fundamental features, then it is obvious that one should go after them rather than the derived features of dividends and dividend growth. '''

    Or if the simplicity of dividends is sufficient, why bother with more complex theories? Occam's razor, and all that.
    Dec 31 03:35 PM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''People tend to forget that dividends have a greater cost than the amount of money paid out. The company also pays tax (in effect) on the amount of the dividend, a double whammy.'''

    Which makes it all the more amazing that dividends are proven to be the majority of returns and dividend payers have higher returns than non-payers.

    Of course, it is impossible for some to believe that the real world does not conform to their "first year" academic theories.
    Dec 31 03:34 PM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''Dividends don't explain returns. That's what the studies on real world returns show'''

    Dividends are sufficient to explain returns. That's what the studies on real world returns show.
    Dec 31 03:31 PM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''You can set it any p/b and the math will be the same. It must be worth more with cash than without or you believe dividends are free lunch '''

    But 'b' has no near term relationship with 'p'. It is proven time and time again that dividends form the majority of returns and that dividend paying companies have higher returns than non-payers.
    Dec 31 03:29 PM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    @Larry, '''you have the EXTRA cash in the company if no dividend paid out plus you also get the earnings the cash generates. '''

    But if the dividend IS paid out, then I can buy more shares which have BETTER earnings than the cash left in the company.
    Dec 31 03:28 PM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    @Larry, '''But it is obvious that a company with fewer cash assets is worth less (all else equal, which it is) than one with more. '''

    Which is precisely why I stated, '''The "all else equal" part is what makes the math not so simple.'''
    Dec 31 03:27 PM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    @Larry, I expect a public article when you discover the difference between price and value, and how that relationship invalidates any argument reliant upon your assumption '''that a company always trades at its book value'''.
    Dec 31 03:25 PM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''Just answer the simple question. Your buying a company, it has more cash or less cash, which one would you pay more for? '''

    The one that was worth more, which depends on cash flow far more than it depends on cash assets.
    Dec 31 03:21 PM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''All I've pointed out is that it makes no difference in bear market if you take the dividends or sell stock equal to the amount of dividends. Both are the same disinvestment'''

    Only in a first year textbook.

    In the real world they are very, very different. Which is why if you account for the 18% deflation, and receive dividends at the market yield near 14%, the market was back before 1935. If you held you were also. But not if you sold.
    Dec 22 01:06 AM | 2 Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''What is truly amazing is that this stuff is the most basic of things taught in first year finance classes.'''

    And if you never progress beyond that first year, you will never learn why the simplifying assumptions invalidate the argument.

    Or maybe in finance they don't get that advanced?

    In physics we use the same simplifying assumptions for first year students. But you cannot pass advanced classes if you do not learn the difference between theory with simplified assumptions, and the real world.
    Dec 22 01:05 AM | 2 Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''A dividend payment is the exact same disinvestment in a company as if no dividend payment were made and you sold the number of shares to get the same dividend'''

    Then please explain to me how:
    1) I own 2x the number of PG shares I purchased
    2) I have been paid back all but $4/share of my purchase price
    3) PG closed over $81/share on Friday.
    ?
    Dec 22 01:02 AM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''Simplifying assumption, let's assume companies trade at book value'''

    Everything based on that assumption is invalid.
    Dec 22 12:59 AM | 1 Like Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    '''m active today in buying and selling companies and work with investment banking firms to value them '''

    So when a company is purchased, is the tender offer equal to the book value?

    Or is the company worth more or less than book value?
    Dec 22 12:48 AM | Likes Like |Link to Comment
  • Misguided Interest In Dividend Paying Stocks [View article]
    Assets are used only to compute the liquidation value of a company.

    A company also has revenue and profit (hopefully) and those make the company worth more than the sum of assets minus liabilities.
    Dec 22 12:45 AM | Likes Like |Link to Comment
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