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dc984

dc984
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  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    con,

    In the dividend capture strategy, you buy BEFORE the ex-date. Then sell 5 days after. The price recovers in 5 days (you say). So you get to keep the whole dividend AND sell the stock for the same price as before (according to your logic). No need to hold for one full quarter, just 5 days. Does it work or not?
    May 27 09:28 AM | 2 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    conk,

    If it is indeed short-lived (5 days or less as you said) then the dividend capture strategy should work. Right?
    May 27 04:10 AM | Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    <<Share price does drop momentarily on the ex dividend day, but then recovers usually the same day or the next. >>

    So there's no need to hold a stock throughout the year then, if you can sell the stock at the same price the same day or the next. Do you understand why the dividend capture strategy doesn't work?
    May 26 12:06 AM | 3 Likes Like |Link to Comment
  • Should You Buy My Picks? [View instapost]
    Thank you Mark for your advice
    May 25 09:52 PM | Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    PTI: When you say 'outperformed' are you talking about share price only or including dividends? (total return) I think it's the latter, right?

    In any case, it's not surprising that the universe of dividend payers does better than non-dividend payers, since usually only successful businesses can pay dividends in the first place, while the universe of non-dividend payers includes many poorly-performing classes of stocks such as IPO's and penny stocks.

    Now I'm no expert, but according to the (also reputable) studies that Larry S has cited, that once you account for value (P/E), profitability, etc. that dividend payers return around the same as non-dividend payers.

    In other words, a low P/E company will likely do better than a high P/E company, regardless of dividend policy. Now remember that we're discussing total return here. So if the dividend payer manages to have the same average total return as a non-dividend payer, then the non-dividend payer must have had a higher share appreciation along the way. At least that's the way I understand it.
    May 25 09:46 PM | 1 Like Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    Because I trust management of those companies to compound the earnings better than I can. Buffett explains this well.
    May 24 11:57 PM | Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    PTI,

    Thanks for your thoughts. I submit that there are more ways than only the dividend to ascertain the greatness of a company, but one can't go wrong with growing dividends!
    May 24 11:52 PM | Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    conjkc,

    Thank for your thoughts. I agree with you and that's why a significant fraction of my portfolios is in dividend payers. A small part is in speculative (growth) stocks.
    May 24 11:51 PM | Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    gfmn,

    I am not suggesting that KO not pay a dividend. I agree that for mature companies like KO, it makes more sense to pay dividends than to reinvest it (i.e dividends are a positive attribute in that regard). Again, I repeat, I am not anti-dividend and I am not suggesting that "managers of these companies would always put the excess cash to profitable use".

    I am merely suggesting that one may (and should, if he/she wishes to be more diversified), invest in great businesses, whether they pay dividends or not. Since you yourself has invested in non-dividend payers, can we agree at least that dividends are good for some companies, and not good for others, but both can be great businesses either way?
    May 24 11:46 PM | 1 Like Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    gfmn,

    You're confusing cause and effect here. The only reason that a company can pay a growing dividend in the first place is that its earnings are growing. With growing earnings, a company can buy back shares (which Buffett says he likes), pay dividends to BRK (which Buffett loves), or reinvest in itself (which Buffett loves as well, if the opportunity for growth is there).

    So yes, growing dividends are an "attribute", but they are a CONSEQUENCE of growing earnings, which Buffett has consistently said is one of the most important factors he considers when he buys a business (also wide moat, good value). So clearly, growing dividends is, at best, secondary to growing earnings. Given that Buffett has many non-dividend payers, I would say that he doesn't consider dividend POLICY to be that important at all.
    May 24 02:13 AM | 3 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    "If any of the Berkshire holdings like KO, WFC, etc otherwise cut or eliminated their dividends...Buffett would dump them faster than you can imagine."

    Why?
    May 23 10:08 PM | 1 Like Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    "I would invest in a great business that does not pay a dividend before I would invest in a lousy business that pays a dividend. "

    And so would Buffett. So can we agree that Buffett buys great businesses that also happen to pay dividends, and not great businesses BECAUSE they pay dividends? Buffett is a lover of great businesses, growing earnings, wide moat. End of story. The fact that some (most) also pay dividends is irrelevant.
    May 23 10:01 PM | 2 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    >>>Also, it is not the dividend that makes the company great....it is the great company that offers the dividend, and really great companies are able to pay and increase dividends for decades on end.<<<"

    So if you found a great company that did not pay a dividend, would you buy it?
    May 23 12:51 PM | 1 Like Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    Pt:

    Obviously you wouldn't care because you wouldn't even consider investing in a non-dividend payer in the first place. But if others were to do so and invest in a growth company like GOOG or FB, wouldn't you think they would be thinking to themselves "gee, if the company isn't giving us dividend out of their profits, I better be expecting better price appreciation down the road thanks to the earnings that are compounding within the company"?
    May 23 11:45 AM | 3 Likes Like |Link to Comment
  • Why Selling A Few Shares Is Not The Same As Getting A Dividend [View article]
    gior:

    I have checked out Briar's comments. He is agnostic to dividends, not against them. His statements are backed with logic. IMO.

    Supporting BRK not paying a dividend is hardly the same as being anti-dividend. Surely you could come up with better examples if you claimed that "non-DG investors write absurd articles about how DG is the surefire route to rack and ruin."
    May 23 12:31 AM | 1 Like Like |Link to Comment
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