Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 Don't forget the real reason dividends are irrelevent: when a stock goes ex-dividend, they reduce the price of the stock by the amount of the dividend, which makes the "return" of the dividend a complete fiction. So when the dividend is paid, you end up with the same amount of money that you had before it was paid. Don't know how you could have missed that. This is true however when your reinvest those dividends (though sometimes very small) you are purchasing more shares. So if you reinvest those dividends over time you will have more money in the long run than if you took them as income. So they are relevent either way, if you take them as income many times at a very decent yield or if you reinvest them. Link to comment Share on other sites More sharing options...
3rdnlng Posted February 23, 2012 Share Posted February 23, 2012 This is true however when your reinvest those dividends (though sometimes very small) you are purchasing more shares. So if you reinvest those dividends over time you will have more money in the long run than if you took them as income. So they are relevent either way, if you take them as income many times at a very decent yield or if you reinvest them. This may be true, but in the case of negative dividends you would be better off if you took them (even if there weren't any)than reinvest them and have them reduce the value of your portfolio. Link to comment Share on other sites More sharing options...
DC Tom Posted February 23, 2012 Share Posted February 23, 2012 This is true however when your reinvest those dividends (though sometimes very small) you are purchasing more shares. So if you reinvest those dividends over time you will have more money in the long run than if you took them as income. So they are relevent either way, if you take them as income many times at a very decent yield or if you reinvest them. Dammit, I know that. I was setting him up. Thanks for spoiling it, !@#$. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 This may be true, but in the case of negative dividends you would be better off if you took them (even if there weren't any)than reinvest them and have them reduce the value of your portfolio. Reinvesting them would not reduce the value of your portfolio. Why do you think comparing a value of a portfolio over a long period where the dividends were reinvested vs where they were not that you would have considerablly more money if you reinvested them. This of course is assuming that the dividends taken were spent and when you take them for income that's what is typically done. Link to comment Share on other sites More sharing options...
3rdnlng Posted February 23, 2012 Share Posted February 23, 2012 Reinvesting them would not reduce the value of your portfolio. Why do you think comparing a value of a portfolio over a long period where the dividends were reinvested vs where they were not that you would have considerablly more money if you reinvested them. This of course is assuming that the dividends taken were spent and when you take them for income that's what is typically done. It was a poor version of a Crayonz post---on purpose. In other words I was being facetious. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 Dammit, I know that. I was setting him up. Thanks for spoiling it, !@#$. Sorry. I flipped a coin on that regarding where you were headed. Reason why I never go to Vegas. It was a poor version of a Crayonz post---on purpose. In other words I was being facetious. Ok, I will watch this one from the sidelines going forward. It's hard to detect sarcasm when people are talking about what you do for a living. Link to comment Share on other sites More sharing options...
DC Tom Posted February 23, 2012 Share Posted February 23, 2012 Sorry. I flipped a coin on that regarding where you were headed. Reason why I never go to Vegas. I was hoping you'd say "Well...it's Tom. He can't seriously be arguing that dividends are irrelevant. He's not THAT stupid." Link to comment Share on other sites More sharing options...
Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 I was hoping you'd say "Well...it's Tom. He can't seriously be arguing that dividends are irrelevant. He's not THAT stupid." We can just go back and delete everything. Daycare ends when, 3:30pm? Link to comment Share on other sites More sharing options...
Jauronimo Posted February 23, 2012 Share Posted February 23, 2012 Care to rethink your stance on dividends, Dave? http://finance.yahoo.com/news/apple-investors-divided-dividends-152746218.html Link to comment Share on other sites More sharing options...
3rdnlng Posted February 23, 2012 Share Posted February 23, 2012 Care to rethink your stance on dividends, Dave? http://finance.yahoo.com/news/apple-investors-divided-dividends-152746218.html 100 Billion in cash is a nice problem to have. Chef--throw your hat in the ring and show them the benefits of diversifying--with you of course. Link to comment Share on other sites More sharing options...
/dev/null Posted February 23, 2012 Share Posted February 23, 2012 Care to rethink your stance on dividends, Dave? http://finance.yahoo.com/news/apple-investors-divided-dividends-152746218.html Yeah but Apple is different. They aren't an evil corporation like Big Oil®, Big Banks, or Big Pharma®. Apple helps the 99% tweet and blog about the injustices of the 1%. Link to comment Share on other sites More sharing options...
Jauronimo Posted February 23, 2012 Share Posted February 23, 2012 Yeah but Apple is different. They aren't an evil corporation like Big Oil®, Big Banks, or Big Pharma®. Apple helps the 99% tweet and blog about the injustices of the 1%. Not true dev. As Dave and Co. pointed out, Apple has gotten rich off of exploiting the Chinese. Apple forces their Chinese laborers to work 60 hours a week sometimes (gasp), and pays them better than their peers (the horror), and that obviously leads to suicide!!! But somehow Dave has been able to put his outrage aside as long as Apple continues to beat earnings. But you do have a point. Apple enriched the world with things people cannot live without, like iPods and smartphones. Where would we be without those developments? The oil companies supplying cheap energy and the raw materials for nearly every product we consume are crooks. The only firms worse than the oil companies are those bastards curing diseases. Link to comment Share on other sites More sharing options...
DC Tom Posted February 23, 2012 Share Posted February 23, 2012 Care to rethink your stance on dividends, Dave? http://finance.yahoo.com/news/apple-investors-divided-dividends-152746218.html Actually, one of the stocks he claims to own (Kinder-Morgan, I think. Wasn't Apple or Home Depot, at any rate) has a 5%+ dividend rate. 5% is hardly irrelevant. Link to comment Share on other sites More sharing options...
/dev/null Posted February 23, 2012 Share Posted February 23, 2012 Not true dev. As Dave and Co. pointed out, Apple has gotten rich off of exploiting the Chinese. Apple forces their Chinese laborers to work 60 hours a week sometimes (gasp), and pays them better than their peers (the horror), and that obviously leads to suicide!!! But somehow Dave has been able to put his outrage aside as long as Apple continues to beat earnings. A single potential Democratic voter death is a tragedy A thousand Chinese slave laborer suicides is a statistic Link to comment Share on other sites More sharing options...
Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 100 Billion in cash is a nice problem to have. Chef--throw your hat in the ring and show them the benefits of diversifying--with you of course. I'll let them know I discount my fee to 25bps for anything over $1bil. And the fact that I'm local is a plus. Actually, one of the stocks he claims to own (Kinder-Morgan, I think. Wasn't Apple or Home Depot, at any rate) has a 5%+ dividend rate. 5% is hardly irrelevant. Especially at 15% vs ordinary income. Link to comment Share on other sites More sharing options...
Jauronimo Posted February 23, 2012 Share Posted February 23, 2012 Actually, one of the stocks he claims to own (Kinder-Morgan, I think. Wasn't Apple or Home Depot, at any rate) has a 5%+ dividend rate. 5% is hardly irrelevant. I noticed that as well. I can only guess that his dividends are insignificant opinion is based on the fact that the dividend for 2 shares of KMP comes out to a little less than $10, therefore a 5.2% yield is negligible, or something asinine like that. Link to comment Share on other sites More sharing options...
DC Tom Posted February 23, 2012 Share Posted February 23, 2012 I noticed that as well. I can only guess that his dividends are insignificant opinion is based on the fact that the dividend for 2 shares of KMP comes out to a little less than $10, therefore a 5.2% yield is negligible, or something asinine like that. It's almost 4. Where is the little potato head? Link to comment Share on other sites More sharing options...
B-Man Posted February 23, 2012 Share Posted February 23, 2012 It's almost 4. Where is the little potato head? Detention ? . Link to comment Share on other sites More sharing options...
Chef Jim Posted February 23, 2012 Share Posted February 23, 2012 (edited) It's almost 4. Where is the little potato head? You set your watch around whack-a-mole? Almost like Five O'clock Charlie Edited February 23, 2012 by Chef Jim Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted February 23, 2012 Share Posted February 23, 2012 Care to rethink your stance on dividends, Dave? http://finance.yahoo.com/news/apple-investors-divided-dividends-152746218.html Yes! Thanks, I was wrong and thanks for posting that But if Regan can increase capital gains taxes Obama can raise taxes on dividends. The world will not end Link to comment Share on other sites More sharing options...
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