I will agree that 4% is better than zero, but if a person has that view, they better buy it and not look at the stock. IF it goes back to $13.50 that is an 8% loss.
It's really insane that Bernanke is putting the retail investor is a situation that they have to put up $200,000 at risk to get a measly $8,000 which is taxable and may be taxable at a higher rate next year.
You're looking at it all wrong. Whether taxable at a higher rate next year or not, dividends will still be taxed equal to or less than interest income. Glass half full. Plus, your time and stock price horizons seem too constrained. If you're worried about MT going to $13.50 and yielding close to 5%, or a paper loss, you can’t invest in the stock market. The thing will drive you crazy. When you buy a stock, you should hope/expect it to go down. You buy stocks in increments. For example, with this cycle I started buying MT at $16 and plan to buy it at every $2 increment down to $2 if need be. I already have buys completed at $16 and $14. If something significantly changed at the company, then I may reconsider the overall plan. But Lakshmi is running the company just fine IMO, given the horrific circumstances in Europe and sub-par outlook in the US and around the world. Since the 08/09 Depression, MT has cut its debt by a third, improved its liquidity by almost 25% and extended its maturities by almost 3x years. Yet the stock is the same price it was back then (actually it's worse), and some in the investment community are worried about its debt profile and cash flow. That doesn't make any sense. Those particular folks don't understand the company or the industry. Despite Lakshmi's attempt to diversify the company over the past decade, the industry and in turn his primary business is still largely cyclical. I won't begin to try to predict an exact timeline of when the cycle will again turn upward. But it will turn upward again. And as the largest steel supplier in the world by far, MT will benefit handsomely once again. In the meantime, they'll keep shutting plants and cutting costs to balance supply and demand as they've always done effectively. And when the good times do roll once again, you will just need to remember to hit the sell button into the fit of excitement, just like you had to do and I did back in 2006-08. It's not often you get a generational opportunity to buy stocks, let alone 2 in 3 years. But that’s the beauty of a market where equities are still the most hated game in town.
Look, if you think the world is going to come to an end, forget buying stocks. Heck, under that scenario your money won't be worth anything anyways so why bother getting out of bed. I like to buy stocks when it appears as if the world is coming to an end. In 2013/15, as Brazil is building its infrastructure to handle the capacity of the World Cup and Olympics, we'll be staring at a new growth engine for steel. And that's only one Bullish argument. MT is unfortunately currently tracking Europe. The stock is priced as if 100% of MT's business is in Europe when in fact it's more like 20%. The stock market has always been efficiently inefficient. This time has been no different thus far. Technically, the stock has been oversold of late and still nobody wants to buy it. So it will likely head lower again. But there are plenty of gaps above at much higher prices to fill. If you're a technical trader, you believe gaps always fill. It may be a while before they do, but if you believe in Santa Claus you might as well believe those gaps will fill at some point in the future. Put a little faith in the system and let Lakshmi down your chimney for years to come. Then, if we're all still around, come back to this message board in 2017 and talk about all the money Lakshmi has given his family and yours over the years.
One can augment the 4.4%/yr dividend return by selling covered calls. I just sold Dec18's for $0.17/share in my IRA. That is a 1.1% return in 9 weeks or 6.6%/yr. If it is called at 18, then that would be a 22% return for 9 weeks.