First smart thing I heard on CNBC this year

[vladiator]

Quote from vhehn:



in theory you are correct but in reality what was happening was that management was using the excess cash to enrich themselves or overspending in purchasing other companys at huge market premiums. at least if the cash is paid out as dividends it cant be wasted by corrupt or inept management.

Yes, I'm aware of that problem It's actually covered by another theory called "agency theory".

 

[Babak]

Quote from vladiator:

Why is it not the same from the perspective of an investor, ignoring market frictions??? I either get the dividend or have a "homemade" dividend by selling a portion of my stocks after the price gain.

vladiator, you're right. Why don't we all just sprinkle some pixie dust on ourselves and fly off to "Frictionless Land".

 

[stock777]

I just had a brilliant thought.

If you want to collect a dividend, BUY A FREAKIN' BANK CD!!!!!!!


Now, if they make divs tax free, then they may get the nod over a sure stream of coupon clipping. Otherwise ........