Investing Catechism

Quote from trendlover:

Nitro is talking about (The greater fool theory) in the investing. So he make sense to me.
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Ok, now we have a big event today with a bid to takeover POT at $130 US a share. According to your buddy companies this large don't get taken over and their share price is suspect at all times ( only reflecting the next "suckers" price ).

I haven't looked at POT's dividend someone can quote that if they like.

Ok, so the shares have channeled roughly between $90 and $130 for some time. The next "sucker" I guess according to you guys is the takeover company willing to pony up $40 billion dollars to buy POT. And POT doesn't want that price, it is considered too LITTLE. There were some estimates of $150 value being bandied around this morning.

So let's ask Nitro's big question why do investors want to pay $100 a share for POTASH given their dividend record. Well here's the answer; because the company is worth AT LEAST $130 to a confirmed buyer, and you can sell your shares today for a nice profit.

Are you getting this yet ?
 
Quote from Nine_Ender:

Buddy, your ideas are to put it bluntly ignorant.....
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Nine_Ender,...you have a lot of smarts,...we get it.

But its hard to read your post when your constantly on the attack!
 
nitro u would be wrong,

i would not trade or invest in stocks with dividends if i'm looking for growth companies.

the growth in earnings would be around 20-30%
each year the company is worth 20-30% more
this is net earnings.


quite simple, dividends are for mature non-growth companies.
 
Nitro, of course you are entirely correct. And as long as the truth does not become the common wisdom Wall Street will continue to do just fine.
 
Quote from piezoe:

Nitro, of course you are entirely correct. And as long as the truth does not become the common wisdom Wall Street will continue to do just fine.
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POT has a dividend of $0.10 US, a tiny fraction of its share price.

In CDN$, the stock has traded between $90 and $130 ( approx ) for a year. Today you can sell that share for at least $150 CDN.

How significant is the dividend to investors in POT ? Well, I guess it is a dime and that's more then zero lol. Oh, I suppose you could have bought Yellow Pages for the monster yield instead, but as an investment that would likely have cost you money.

So I've presented undisputable proof that Nitro is just plain wrong. Not only is POT being bought up this week, there are numerous other companies gaining value because they also represent good value takeover targets.
 
Quote from Nine_Ender:

POT has a dividend of $0.10 US, a tiny fraction of its share price.

In CDN$, the stock has traded between $90 and $130 ( approx ) for a year. Today you can sell that share for at least $150 CDN.

How significant is the dividend to investors in POT ? Well, I guess it is a dime and that's more then zero lol. Oh, I suppose you could have bought Yellow Pages for the monster yield instead, but as an investment that would likely have cost you money.

So I've presented undisputable proof that Nitro is just plain wrong. Not only is POT being bought up this week, there are numerous other companies gaining value because they also represent good value takeover targets.
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You have submitted facts, but they do not prove Nitro to be wrong.

They don't show Nitro to be wrong any more than he would have been shown to be right by my citing an example of a stock that is selling at the same price today as it was a year ago, but in the meantime paid a 5% dividend, or by my citing any of hundreds of stocks that don't pay dividends and are selling for less today (assuming they still exist) than they were 11 years ago.

Since you mentioned the word "investment". Let's discuss long range retirement investment. Bogle has offered irrefutable evidence that on average managed stock investment accounts do no better than the broad market before expenses, and worse after expenses. This was the basis behind his recommendation that people put their retirement account money, in earlier years, into index funds, which because of lower expenses do better, on average, than actively managed funds.

When one examines the total returns of the S&P 500 in constant dollars over roughly the period after Breton Woods was abandoned to the present day, and omits dividends, it can be seen that the total return is comparable to the non-constant dollar return from Treasuries. So the return, without dividends is somewhat better than Treasuries, but the risk is much greater. Comparing this constant dollar return of the S&P with the non-constant dollar, i.e., inflated, return of the S&P including dividends, will make it immediately obvious that inflation and dividends are the two most important contributors to US stock prices, and that earning's growth makes only a small contribution by comparison.

Thus, and in spite of the Wall Street mantra, the long term retirement investor would do well to use Bogle's idea of a passively managed fund, but restrict the fund's holdings to dividend paying stocks. There are such funds.
 
Quote from piezoe:

You have submitted facts, but they do not prove Nitro to be wrong.

They don't show Nitro to be wrong any more than he would have been shown to be right by my citing an example of a stock that is selling at the same price today as it was a year ago, but in the meantime paid a 5% dividend, or by my citing any of hundreds of stocks that don't pay dividends and are selling for less today (assuming they still exist) than they were 11 years ago.

Since you mentioned the word "investment". Let's discuss long range retirement investment. Bogle has offered irrefutable evidence that on average managed stock investment accounts do no better than the broad market before expenses, and worse after expenses. This was the basis behind his recommendation that people put their retirement account money, in earlier years, into index funds, which because of lower expenses do better, on average, than actively managed funds.

When one examines the total returns of the S&P 500 in constant dollars over roughly the period after Breton Woods was abandoned to the present day, and omits dividends, it can be seen that the total return is comparable to the non-constant dollar return from Treasuries. So the return, without dividends is somewhat better than Treasuries, but the risk is much greater. Comparing this constant dollar return of the S&P with the non-constant dollar, i.e., inflated, return of the S&P including dividends, will make it immediately obvious that inflation and dividends are the two most important contributors to US stock prices, and that earning's growth makes only a small contribution by comparison.

Thus, and in spite of the Wall Street mantra, the long term retirement investor would do well to use Bogle's idea of a passively managed fund, but restrict the fund's holdings to dividend paying stocks. There are such funds.
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Sorry, but I'm really not sure why you are so challenged to stay on topic or say something relevant. I clearly illustrated why Nitro was wrong. You have been much less clear and almost religious ( not scientific ) in your beliefs.
 
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