With regard to my INTC bet:
What % of my portfolio did I commit?
What price per share did I pay?
What day did I make the buy?
Ask the censor, S/He knows.
OK, I guess that's it for me today. The censor clipped the end of my last post in mid-sentence.
Just off the top of my head, the absolute amount (~10 B$ T4Q) that AAPL pays out should NOT decrease in the future.
IMO, investors expect the dividend per share to be "sticky". Either pay the same amount next year, or preferable, more, but NO reductions allowed!
To make money available to buy back shares investors are involuntary giving up a fraction of their potential dividend per share TODAY, hoping for a larger dividend per share in the FUTURE. They're trading income today for growth tomorrow. If that doesn't happen, they'll justifiably punish the stock's price per share in the future.
FYI, I made a small bet on INTC, last month,
Sorry, hc, I don't know the answer to that one.
What I do believe is that buying back shares at a price per share below IV (Intrinsic Value) per share does increase IV per share, but only for those equities whose valuation is based on a projection of their future distributions (DIVIDENDS PER SHARE AND THEIR GROWTH PER SHARE).
That buying back shares at a price per share greater than Book Value per share decreases BV per share which in turn decreases iV (imaginary Value) for those equities whose valuation is based on using a multiple of Book Value per share.
JMO, hope that helps.
In spite of the fact that most of what he writes is over my head, I am a James Montier fan.
His latest white paper is a gem, but I am not allowed to discuss it here.
WHY did you delete my post: "OT - GMO Forecasts"?
Last night, I posted some absolutely worthless jibber jabber and you were fine with THAT.
This morning I post something of substance and within 39 seconds (I kept a screen copy) you blow it out of the water. WHY?
If you have "do's and don'ts" style guide, post it.
Only those poor souls who are coherst into buying overpriced hamburgers are going to complain.
On the other hand, and not surprisingly, the sellers will generally be ecstatic.
Every putt makes somebody happy.
By the way, my original reply was censored.
balt, you're right. I'll never own those puppies. I'm smart enough to know that I'm far too stupid to play that game and win. The good news is, I won't be competing with the sharpies who do sell those insurance policies to other speculators.
« seems odd ? »
Not at all.
If the goal of an insurance company is to run a tight operation and make the bulk of their money off investments of their float then the current credit & equity markets must be incredible frustrating.
And who's to blame for that?
balt, thanks for the concern, but I'll pass. At my age, I just don't want to make the effort to learn new ways of losing money. The old ways work well enough.
hc, I don't hate options, I just don't understand them well enough to want to get involved with them. While the Time Value of Money equation makes sense to me, the Black Scholes does not. I don't understand the pricing.
« Every period of outperformance starts with a post like this. »
That shouldn't be too hard to do going forward. My guess is that the S&P 500 would have only done about ~5% YTD if folks hadn't bid the multiple up ~24%. At the start of the year they were only willing to pay a $1.31 for a dollar of sales and now they have no problem with paying $1.63. Think about it. About 80% of the current YTD return is a joke. A dollar of sales only puts about three cents worth of dividends in your pocket and sales per share have been growing (nominally, which includes inflation) recently by about 3% to 4% per year. IMO, if your goal is to make a ~7% return on your investment then you shouldn't be bidding more than 1.00X sales. JMO.
But, according to the "Historical, Forward Returns by Capital Distribution Practice – Relative to S&P 500 TR Index" chart (page 11) in FactSet's BUYBACK QUARTERLY, 23Sep2013, what folks really like (reward) are companies with "No Buybacks and No Dividends".
hc, I'll stop begging for a dividend if you stop begging for a buyback, deal?
Thomas Russo suggested (BARRON'S, 6/16/2012) a solution to that problem:
Below is an excerpt from the interview:
What about Berkshire post-Buffett?
It will be a different company, but I think it could be a very value-creating company still. It has an able team to help deploy Berkshire's cash, and Berkshire could pay a fairly high dividend when you consider that the bulk of Buffett's shares will end up inside the Gates Foundation, and that entity is burdened with a 4%-5% payout ratio.
You're referring to government rules on spending by charitable organizations? How high could the dividend be?
It could be 4% because Berkshire generates so much cash. At the end of the day, the burden of putting cash to use that Warren has faced may not be faced by his successors because of share buybacks and a big dividend.
Looking, is this some kind of sick joke?
"Deposits would be subject to a negative interest rate, too, only smaller than the reserve interest rate. Banks would take demand deposits at, say, –7 percent interest, or time deposits at perhaps –5 percent or –3 percent, and make loans at –1 percent or 0 percent."
Correct me if I'm misinterpreting this, but are you/he really suggesting that the banks should CHARGE ME to deposit my money with them and then PAY OTHER FOLKS to borrow it?
hc, the answer you seek might be found in the "Doubleline Income Solutions Fund" thread over on the other board. If something looks too good to be true, it probably is. I mentioned previously that Vanguard threw in the towel on VPDFX after they realized they couldn't do a ~7% annual distribution. Now, they're going to try 4%, and that's probably still too high.