$40 PER SHARE - Then $32 and then $24 and then finally $16 per share. Instead of steadily growing the payout for investors year after year, all of a sudden there is a shortage of investable cash.
In 2008 I was holding shares of ProLogis (PLD-NYSE). They had recently re-affirmed positive guidance and I bought some shares in my ROTH Account at a price above $20. In late 2008 the Prologis share price abruptly dropped from well over $20.00 to below $2.00. This was for a large well-established company that I thought was well-respected on Wall Street. All of a sudden the share price was in free-fall. I watched in disbelief.
What did Merrill Lynch say when the price was at $2.00 - SELL.
The price could have been on its way to zero for the common shareholders after the debt was paid- if financing at reasonable terms would be available going forward. From years of Easy Money policies from the Federal Reserve (FED) to all of a sudden in 2008 no money was going to be available to even the most credit-worthy corporations. The way stck prices dropped in the second half of the Year was definitely irrational and in hindsight wrong. Since the lows of 2008-2009 stock prices have done quite well.
THANKS PRESIDENT OBAMA - FROM ALL GRATEFUL STOCK INVESTORS FOR THE LAST 8 YEARS...
AND THE FED finally raised rates????
WOW. IT ACTUALLY HAPPENED - FINALLY.
SO WILL BUYING ON THE DIPS STILL WORK?
JOHN THOM 2015
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in KMI, MNI, NOK, CPLP over the next 72 hours.
Additional disclosure: THIS ARTICLE IS FOR DISCUSSION PURPOSES ONLY. ANY OPINIONS ARE MY OWN AND I MAY WELL BE WRONG. FEEL FREE TO LEAVE COMMENTS.