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Re: Zim

By: Zimbler0 in 6TH POPE | Recommend this post (0)
Sat, 11 Mar 23 3:22 AM | 28 view(s)
Boardmark this board | 6th Edition Pope Board 		Msg. 40882 of 58609
(This msg. is a reply to 40880 by Fiz)
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Fiz > If you don't mind, I would appreciate reading a little about how you select your stocks.

Zim : Companies that have paid out dividends for a very long time and which increase the dividend at a healthy rate are high on my list for companies to buy.

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=MKC&x=35&y=13&time=13&startdate=1%2F4%2F1999&enddate=3%2F11%2F2023&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=7168&lf=134217728&lf2=0&lf3=0&type=2&style=320&size=2&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=10

I don't know if the above link will show you what I like to see with McCormick or not . . . It is supposed to be a chart showing the 'rolling dividend' for the last ten years. It looks like a staircase - increasing every year - with a 'glitch' in 2021 when it did a stock split. In reality my dividend checks were right on time and increased as expected.

Fiz > However, the stock market AND US TAX LAW, in general, hasn't rewarded companies for paying dividends in the last 30-40 years

Zim : I'm going to have to disagree with you here. Have you ever heard of 'Qualified dividends'?

>>>
A qualified dividend is an ordinary dividend that can be reported to the IRS as a capital gain rather than as income.

Most taxpayers pay a 15% tax on capital gains, according to the IRS.

The maximum tax rate for qualified dividends is 20%. Ordinary dividends are taxed at income tax rates, which as of the 2022 and 2023 tax years maxes out at 37%.
>>>

Every 'equity' (stock) I own pays out in qualified dividends. Reducing my income tax bill. And, in spite of what the thrust of your post suggests, I believe a lot of people buy because of the dividends . . . and many companies pay them out because they know that many folks want that 'return on their investment'.

Fiz : What is not recognized GENERALLY, in the stock-buying public (and sometimes not by me, I confess), is that partial ownership in an asset which does not pay you in predicable cashflows of dividends, interest, or salary to is worth ZERO.

Zim : That is also not true. Many companies had a lot of real value but did not pay a dividend. Those companies re-investing the dividends and growing the business increased in value. Share Holders could, and often did, buy, hold, then sell for quite a bit more money than they paid for them.

And then there were the hyper-inflated dot.coms . . . No way YHOO was worth what some fools were paying for it just before the Y2K market collapse.

Fiz > I'm sure you know that, Zim, and I admire your discipline in buying dividend paying stocks even during a long period (40+ years) when dividends have been belittled while speculation has been rewarded.

Zim> I started investing in 1997. What little I knew then . . . well, somewhere I read that power companies and REIT's were stocks for widows and orphans . . . And I said that sounds like where I ought to be. Power companies have served me very well for a long time now. The REIT's were doing well . . . I think it was 2008 when they went into a 'bubble' and I haven't seen the yields I used to get from them. (I have no REIT's now.)

But I like having two ways of increasing my money. The possibility of long term capital gains, and those regular dividend payouts. And, if the company likes to increase the dividend every year (and most of what I own do just that) it's like getting an annual pay raise without having to fuss at the boss.

Zim.




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The above is a reply to the following message:
Re: Zim
By: Fiz in 6TH POPE
Sat, 11 Mar 23 2:23 AM 		Msg. 40880 of 58609

Thanks for writing about this.

If you don't mind, I would appreciate reading a little about how you select your stocks. I gather dividends are your most crucial metric, but I gather you look deeper than just the current APR of he dividend?

Outside of stocks, I am more of a real asset, real returns kind of guy. However, the stock market AND US TAX LAW, in general, hasn't rewarded companies for paying dividends in the last 30–40 years (http://www.forbes.com/sites/greatspeculations/2012/12/07/tax-code-rewards-debt-penalizes-dividends/).

Actually, it is worse than that: Most companies which pay dividends are punished mercilessly. Dividends are not considered as COST of attracting investment capital (as interest on a bond or bank borrowing is treated) but as a SQUANDERING...a stupidity. It is a NON_EXPENSABLE *LOSS*. Just think about that.... The Congress wanted to encourage speculation (gambling). It didn't want stocks to be a legitimate, predictable asset anymore. (I expect it was to help aid and provide cover for the wtfhappenedin1971.com heist).

http://mavenroundtable.io/theintellectualist/news/stock-buybacks-were-once-illegal-why-are-they-legal-now

What is not recognized GENERALLY, in the stock-buying public (and sometimes not by me, I confess), is: partial ownership (so you have no control) in an "asset" which does not pay you in predicable cashflows of dividends, interest, or salary to is technically worth ZERO. (Except for gambling thrills in a rigged market)

I mean, if I said, "if you give me money (which I can stick in my pocket) I give you NOTHING in return...forever!!!!" ;-> All for me; nothing for thee!

How many people would be stupid enough to buy my "asset"? Would the government even allow it? And, yet, US tax law and Central Cranking have foisted this stupidity off on the American public as "investing in stocks". And it is seldom to never questioned by normal citizens.

In finance, and still in residential real estate and hard business investing, the VALUE of an asset is the discounted value of future cash flows. Period. http://www.investopedia.com/terms/p/presentvalue.asp. So, anything which is does not cash flow TO ANYONE BUT INSIDERS is worth zero.

I'm sure you know that, Zim, and I admire your discipline in buying dividend paying stocks even during a long period (40+ years) when dividends have been belittled while speculation has been rewarded.

But, getting back on topic, how do you select for your companies?


"Experience keeps a dear school, but a fool will learn in no other." - Franklin

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