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  • jim56442 jim56442 Jan 19, 2006 12:39 PM Flag

    Earnings

    Knox,

    Just for the record that should probably have been 7 years.

    Closing price 12/31/1998 was $40.31 a share. The point is that anyone owning the stock at that point and time could have sold it for that price.

    So all those long term investors who owned the stock at that point in time have just basically made the dividend as their total return in the last seven years. Which is less than a 3% total annual return for the last seven years. Not a great investment for anyone.

    This is a fact whether someone likes it or not.

    Now look at what JA and company makes verus the 1998 figures. Seems he was paid and paid well to accomplish getting the stock to $40 once and now the shareholders are paying to accomplish the same purpose again.

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    • "Closing price 12/31/1998 was $40.31 a share. The point is that anyone owning the stock at that point and time could have sold it for that price"

      That is correct, within reason.

      "So all those long term investors who owned the stock at that point in time have just basically made the dividend as their total return in the last seven years."

      Okay, that works.

      "Which is less than a 3% total annual return for the last seven years. Not a great investment for anyone."

      You don't have enough information to know my return. To calculate that, you would need my cost basis which is not even in the same area code as $40.31.

      The expected come back is "well you could have sold and bought another security that has appreciated." That is true as well. The problem is, my crystal ball is rather cloudy. When looking ahead in 1998 to say today, I had to weigh expected return. One key piece of data was the then current dividend. Based on my cost basis, a lowball estimate of expected return for just the dividend was 9%.

      Can anyone look around today [because hindsight is 20/20] and tell me of a security I could buy today and receive a 9% yield that is virtually guaranteed WITH the 'possibility' of market appreciation? The harder question is can anyone tell me were to get a guaranteed 20+% because with the dividend increases, that's what I'm receiving on my initial investment on a yearly basis.

 
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