Investing Catechism

[nitro]

Quote from trendlover:



So the dividend is guarantee in the ponzi. But some people see (momentum)(new buyers) in the chart. They see this, then sell.
So you are saying for people who can not watch the chart (buy and hold) better to buy dividend stock?

You want a stock that has a history of rewarding it's investors by raising the dividend when it does well. The preimminent company that does this is PG, as I posted before.

I know scores of people that have through DRIPs (Dividend Reinvestment Programs)

1) Send several kids to school
2) Got the down payment for their house (20% +)
3) and still own the stock into retirement

Would you want to own this stock?

WAG

Obviously, every one and their cousin wants into WAG because of this, so you have to be prudent when the stock is driven so hight that the dividend yield goes lower. But the thing just keeps pumping out earnings AND rewarding it's investors with higher dividend streams.

As an investor, find these sorts of stocks, and forget the rest. As a trader, do whatever, just understand one vs the other.

 

[trendlover]

Quote from nitro:

You want a stock that has a history of rewarding it's investors by raising the dividend when it does well. The preimminent company that does this is PG, as I posted before.

I know scores of people that have through DRIPs (Dividend Reinvestment Programs)

1) Send several kids to school
2) Got the down payment for their house (20% +)
3) and still own the stock into retirement

Would you want to own this stock?

WAG

Obviously, every one and their cousin wants into WAG because of this, so you have to be prudent when the stock is driven so hight that the dividend yield goes lower. But the thing just keeps pumping out earnings.

As an investor, find these sorts of stocks, and forget the rest. As a trader, do whatever, just understand one vs the other.

Yes! Very good thread Nitro! Thank-you!
You should write the book "Investing Catachism"

 

[nitro]

Quote from trendlover:

Yes! Very good thread Nitro! Thank-you!
You should write the book "Investing Catachism"

This book has been written a thousand times. Just listen to Warrent Buffet when you are investing.

Seperate the stocks you invest in, from the stocks you trade. AMZN is a trading stock, not an investment.

 

[trendlover]

Quote from nitro:

This book has been written a thousand times. Just listen to Warrent Buffet when you are investing.

Seperate the stocks you invest in, from the stocks you trade. AMZN is a trading stock, not an investment.

Is he investor or trader or both? Sometime he has to sell for his profit, true? Then he use that profit to make more money.
So he is long term trader, or he is investor?

 

[ang_99]

nitro, you're failing to understand what a share of stock is, its purpose and the reason behind the secondary markets.

Let me try to keep this simple. Think of it like you want to buy the entire company and take home all the profits for yourself.

Microsoft makes a shit load of money every year. If I want access to ALL those profits I would have to buy every share of Microsoft stock. At the moment COLLECTIVELY the millions of owners of the company are saying that I would have to pay at least 250 billion for the whole damn thing, of course it would be more than that because you always pay a premium.

The share price values the company, if microsoft was trading at a penny, I could I could make a tender offer for all the shares for about 100 million. I would be making 15 Billion a year for only 100 million!!!

Now do you get it?

This isn't a game, its real important stuff.

 

[crash n burn]

Quote from nitro:

This book has been written a thousand times. Just listen to Warrent Buffet when you are investing.

Seperate the stocks you invest in, from the stocks you trade. AMZN is a trading stock, not an investment.

you seem to forget that eventually all companies will become dividend paying companies, as they stop growing EPS and cash flows. this has to do with the maturity of their industry and the stage of their life. now they need cash, so they dont pay dividend to shareholders, as they'll require that cash to expand their business. then, when they become big enough and well funded, they start paying dividends as there is no point in retaining earnings anymore.

you also miss another important aspect. the real owner of the company are the share holders. hence, the management team will decide paying dividends whenever the shareholders demand it. so paying dividends or not doing so does not differentiate the type of stocks in its essence, just in its associated projected cash flow.


saying that AMZN is not an investment because it doesn't pay dividend today is totally off base.

 

[riskfreetrading]

Quote from nitro:

Trendlover,

I am getting really frustrated because I keep telling people that I understand what P is, I understand what E is. But people refuse to acknowledge the fundamental question: HOW DOES THAT TRANSLATE INTO $ for the INVESTOR if it isn't done through D?

[/QUOTE

It translates to $ through D that investors project will come in the future.

You also make such a projection when you buy a stock that is currently paying dividends. If your stock does not pay in the future at all, its price should be only the next dividend (discounted).

It it not about P or E. It is ALL and ONLY about D.

Price is a call option on Ds + cost of carry if Ds were to be known. The latter is the price of a bond.

 

[riskfreetrading]

Quote from nitro:

You want a stock that has a history of rewarding it's investors by raising the dividend when it does well. The preimminent company that does this is PG, as I posted before.

I know scores of people that have through DRIPs (Dividend Reinvestment Programs)

1) Send several kids to school
2) Got the down payment for their house (20% +)
3) and still own the stock into retirement

Would you want to own this stock?

WAG

Obviously, every one and their cousin wants into WAG because of this, so you have to be prudent when the stock is driven so hight that the dividend yield goes lower. But the thing just keeps pumping out earnings AND rewarding it's investors with higher dividend streams.

As an investor, find these sorts of stocks, and forget the rest. As a trader, do whatever, just understand one vs the other.

There is a contradiction in your thinking. Here is how to probably see it.

If every investor were to elect DRIP on all their investments, what do you get? a stock that does not give dividends. Worse, you even lose if you pay taxes on the dividends. So according to your argument against non current dividends, you should not own this stock. Own and not own conclusions at the same time?

So your argument is flawed. What you should say is that one should not give money to a company that does not demonstrate it can give it back, as the reason one invest in the company is that he will get his money back in the future and more (not from selling stock to another, but from future dividends).
The selling of stock is only an exchange of rights on future dividends.

 

[nitro]

I am not going to respond to these sorts of explanations for investing in stocks that don't pay dividends, or that do, but are comparable to a CD in yield. Great, I get all the risk of a stock, and the returns from a CD.

I have refuted this argument many times already. There is nothing in what you are saying that isn't something I understood when I was ten years old.

Quote from ang_99:

nitro, you're failing to understand what a share of stock is, its purpose and the reason behind the secondary markets.

Let me try to keep this simple. Think of it like you want to buy the entire company and take home all the profits for yourself.

Microsoft makes a shit load of money every year. If I want access to ALL those profits I would have to buy every share of Microsoft stock. At the moment COLLECTIVELY the millions of owners of the company are saying that I would have to pay at least 250 billion for the whole damn thing, of course it would be more than that because you always pay a premium.

The share price values the company, if microsoft was trading at a penny, I could I could make a tender offer for all the shares for about 100 million. I would be making 15 Billion a year for only 100 million!!!

Now do you get it?

This isn't a game, its real important stuff.

 

[ang_99]

Quote from nitro:

There is nothing in what you are saying that isn't something I understood when I was ten years old.

So I don't get why you're whining like a 10 yo girl then.


What the hell was the point of your thread?


You're pretty lost for somebody that has been here since '01, I suggest you find a new hobby.