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dc984

dc984
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  • Equity CEFs: 1st Quarter 2014 Review - A Change In Leadership [View article]
    Thanks Doug for the article. Might buy some JTD soon.

    I reservations about MFD...if one is buying for the senior loan component. The expense ratio of MFD is around 2%...wouldn't it be better to go for an ETF for senior loans (BLKN) which charges 0.66%?
    Apr 1 10:04 AM | Likes Like |Link to Comment
  • 17.8%-Yielding CEFL - Diversification On Top Of Diversification, Or Fees On Top Of Fees? [View article]
    Why don't you look at the 1-year chart of the top 10 components of CEFL...I think you will be surprised.
    Mar 30 09:40 AM | 1 Like Like |Link to Comment
  • 17.8%-Yielding CEFL - Diversification On Top Of Diversification, Or Fees On Top Of Fees? [View article]
    Yes. That is what leverage does.
    Mar 29 02:06 PM | Likes Like |Link to Comment
  • SandRidge Mississippian Trust II: PV-10 Reflects Another Mississippian Nightmare In The Making [View article]
    Opened a small position of 35 shares of SDR today
    Mar 28 08:38 PM | Likes Like |Link to Comment
  • Blood In The Streets, It's Time To Buy Russia [View article]
    Paulo thanks for the article. Would appreciate your opinion on how the valuation metrics of RSXJ compare to RSX? (P/E, PEG, P/B, etc.) The P/E ratio in Russia has been consistently low, can the numbers be trusted?
    Mar 28 06:08 AM | 2 Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt: Thanks for your reply. Glad we agree re: dividends and earning. I understand why you would be more concerned about "real world" rather than academic studies, I would too. But one must remember that the academic studies ARE based on real data. In statistical studies, one is forced to make certain assumptions in order to be able to analyse the data, and to draw trends, and make conclusions. And then one can use those conclusions to help you make "real world" decisions.

    You deride Larry for providing "unprovable" models (note that you can never "PROVE" anything in science/social science). But at the same time, you make statements like: "as I've shown you...at some point by selling shares for income you will go broke, unless you are very careful with the amount of income you take out." Does that constitute proof either? In fact "AlanInTempe" and "advisor4" above have debunked your example, showing that you will NOT lose all your shares if the company grows faster than its dividend. Do you have any rebuttal in response?

    Furthermore, did you read Larry's explanation of how he understands the "value premium". It helped me understand how applied Buffett's methodology. If you did, do you agree or disagree? If you disagree, why?

    Thank you for your opinion.
    Mar 28 12:46 AM | 1 Like Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt: I am sorry but you have not rebutted a single of Larry's points. In fact, from the way I see it, it is you that have continually misunderstood Larry's arguments, or have simply presented incorrect facts (e.g. "dividends have no relationship whatsoever to the so called "capital base", "Simply buying various funds that invest the herd's money in various sector funds, is not beating the market.... it IS the market" and failing to understand how Larry applies Buffett's methodology). Many here, including myself, have patiently tried to explain to you the misunderstandings that you seem to have, but you have ignored them; you appear to be as firmly entrenched in your view as Larry. You are welcome to continue investing however you wish to, and I commend you on your 30 years of success, but if you are not willing to appreciate evidence or partake in constructive discourse then further conversation becomes futile. Best wishes to you.

    p.s. As a disclaimer, I should mention that I am not one of Larry's clients, nor will I ever, in all likelihood, be one. I understand Larry's arguments, but do not religiously adhere to them (e.g. I love dividends for dividend's sake, and I enjoy stock-picking). So I am not EMH indexer (since it appears you have a strong dislike of such folk).
    Mar 25 12:08 PM | 4 Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    OK, Pt, I'm beginning to understand you.

    At least we agree on this, which is just basic maths (I was confused by your wording earlier, which suggested something different)
    "Assuming the dividend was cut due to some business reason, the earnings or loss would be better off by the amount of the unpaid dividends obligation."

    Now, I agree that there are many factors affecting a real company. All you said is very reasonable. No problems there.

    However, this is where you and Larry are talking past each other.

    You say:
    "The bottom line -- that you can look up -- is that dividends historically provide something like 40% or the S&Ps return, and arguing about whether these dividends would have been put to better use by retaining them is really arguing about how many angels can dance on the head of a pin."

    Larry didn't say that! Larry is simply saying while the dividend can be a significant component of total return, it's not the dividend policy itself that EXPLAINS the returns, according to the evidence (I take it that you are not an anti-intellectual). Larry actually agrees with you because he's not trying to argue whether or not the earnings would have been put to better use by retaining them either! (He's saying that it doesn't matter, in aggregate)
    Mar 25 01:20 AM | Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt, simple question. Maybe we are just misunderstanding each other, and you are actually right (in your own way of thinking).

    You say:
    "Dividends are not considered as a detriment to retained earnings."

    Question:
    If a company chose not to pay its dividend that quarter, would its retained earnings be higher or the same?
    Mar 24 11:12 PM | Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt:

    "If you wish you can extend your argument to saying that earnings would be higher without having to pay other obligations of salaries, or taxes, or rent or debt service or maintenance expense and so on. "

    That seems true to me?! Any money that is paid out (including salaries/taxes) reduces the amount of earnings a company has - why would companies go to great lengths to pay less taxes otherwise?! Now if the company decides to pay out dividends out of the earnings, it's giving up part of his capital base for the future (i.e. earnings that are not retained). That's the whole reason it's called "retained" earnings.
    Mar 24 11:09 PM | 1 Like Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt:

    Not the way I understand it.

    "1. The capital acquired during an IPO, or the additional offerings of a company, plus any retained earnings."

    States clearly that retained earnings --> Capital base.

    "2. Retained Earnings -- the percentage of earnings not paid out as dividends."

    If a company paid out dividends, its earnings would be reduced. Ergo, less capital base for the future.

    Thus this is false:
    "dividends have no relationship whatsoever to the so called "capital base."
    Mar 24 10:26 PM | 1 Like Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Agreed gior. I was just debunking the belief that many appear to adhere to.
    Mar 24 01:36 PM | 1 Like Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Pt:

    Why doesn't it work? You have presented a statement, not an argument.
    Mar 24 02:45 AM | Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Leopard: without resorting to simple assumptions, it becomes impossible to analyse any situation.

    OK, let's say you're right. Investment is not mechanical. Then how are you so sure of your positions, that "stocks that pay dividend is not hampered in any way in the long run within their markets and/or competition"? Do you have evidence or its just based on your gut feelings? Because for every example you give, I will have a counterexample, I have my own "human wisdom" that can trump anything you say. Theoretically anything can happen.
    Mar 24 02:43 AM | Likes Like |Link to Comment
  • Dividends And 'The Magic Pants' [View article]
    Dividends are a return of capital inasmuch as the earnings of the company become its new capital for the future.

    Analogy:

    You own 100 restaurants. Your earnings this year are enough for you to purchase 2 more restaurants.

    Situation A: You re-invest the entire of your earnings into your business. You will have 102 restaurants next year.

    Situation B: You decide to pay yourself a dividend equivalent of half your earnings that year. Therefore, you will have only 101 restaurants next year, though you will have the cash equivalent of 1 restaurant to spend.

    The two situations are THE SAME. If the company pays out a dividend, it will have less assets compared to if it didn't pay it out (note: it CAN still grow, just not as quickly). In that specific sense, your basis in the company is reduced (compare situations A and B).
    Mar 23 02:18 PM | 1 Like Like |Link to Comment
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