Investing Catechism

Chasing yield.



"With interest rates so low -- on Sept. 14, a two-year Treasury note yielded just 0.5% and a five-year note just 1.43% -- and investors so desperate for better returns, a relatively modest dividend payout gets a lot of attention and has a big effect on a stock's price. The day that Cisco announced that it was considering a 1% to 2% dividend, Cisco's shares, which had declined from $24.77 on Aug. 8 to $21.26 on Sept. 13, popped up 19 cents. That added $1.3 billion to the company's market value. An additional 23-cent gain in the stock price and the dividend will have paid for itself."

http://articles.moneycentral.msn.co...msnnl_6009.13.2.12&REFCD=emmsnnl_6009.13.2.12
 
Quote from trendlover:

Chasing yield.



"With interest rates so low -- on Sept. 14, a two-year Treasury note yielded just 0.5% and a five-year note just 1.43% -- and investors so desperate for better returns, a relatively modest dividend payout gets a lot of attention and has a big effect on a stock's price. The day that Cisco announced that it was considering a 1% to 2% dividend, Cisco's shares, which had declined from $24.77 on Aug. 8 to $21.26 on Sept. 13, popped up 19 cents. That added $1.3 billion to the company's market value. An additional 23-cent gain in the stock price and the dividend will have paid for itself."

http://articles.moneycentral.msn.co...msnnl_6009.13.2.12&REFCD=emmsnnl_6009.13.2.12
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If deflation takes hold, even these meager returns aren't that bad. The thing is that no one believes the FEDs inflation numbers since they appear to have nothing to do with the every day-to-day world.
 
In the days where corporations would hire people rather than pay a dividend, that was somewhat excusable and people looked the other way. Today? Pffffffffffffft, CEOs and other insiders raid the company to their own advantage. Fine, GIVE ME MY DIVIDEND then.
 
Quote from trendlover:

http://seekingalpha.com/article/260...end-yielding-stocks?source=article_sb_picks_4

You saw this before nitro?
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trendlover I hadn't seen that specific post but I am aware of the statistics.

People always cite the few tech stocks that go to the moon as the basis of their investment strategy that is so clearly refuted here, but these things are anomalies, and the dangers of being in them are horrific. But hey, if we had pets.com etc taking tech stocks to 5000 in 1999 2000, whose to say where NetFlix, Priceline, etc will take us this time?

Apple is the one stock that is sky high that can justify this stock price or even higher,but even AAPL will need a miracle to continue their pace of innovation. The rest are on thin ice.

AAPL is also one of the very very very VERY few stocks that I don't mind that don't pay a dividend because they spend on staff - the management doesn't line their own pockets with money. You work at AAPL to change the world. Walk into any AAPL store and look at the army of blue shirts with apple logo on them. These people hire like mad to make sure your customer experience is excellent. And their training is outstanding. They just do everything right man.

I want a matt-screen version of the iPad, please :(
 
Quote from nitro:

trendlover I hadn't seen that specific post but I am aware of the statistics.

People always cite the few tech stocks that go to the moon as the basis of their investment strategy that is so clearly refuted here, but these things are anomalies, and the dangers of being in them are horrific. But hey, if we had pets.com etc taking tech stocks to 5000 in 1999 2000, whose to say where NetFlix, Priceline, etc will take us this time?

Apple is the one stock that is sky high that can justify this stock price or even higher,but even AAPL will need a miracle to continue their pace of innovation. The rest are on thin ice.

AAPL is also one of the very very very VERY few stocks that I don't mind that don't pay a dividend because they spend on staff - the management doesn't line their own pockets with money. You work at AAPL to change the world. Walk into any AAPL store and look at the army of blue shirts with apple logo on them. These people hire like mad to make sure your customer experience is excellent. And their training is outstanding. They just do everything right man.
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The post is saying to look to the payout ratio. If the % pay out to the dividends is 75% or lower of the net income, he is saying they will keep paying to the dividend.
 
Here is one comment from the post.

"Great article, Marc. If there's any doubters out there still, let me give you a real world example. I invested $5,000 in AFL in 1990 and reinvested all dividends. Through stock splits, dividend increases and adding a few shares when I had some extra cash, that value is well over $1 million today.

Along with other investments and a healthy 401(k) that I can raid at age 59.5, I was able to retire at 40. Fortunately, I received advice similar to this article when I was 22 and followed-up on what I was advised to do. Yea, I made a few sacrifices over the years, but now it pays off every morning the alarm clock doesn't ring. Mar 26 11:05 AM Reply +50"



So when he is 22 years old he start and reinvest dividends.
 
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