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On the investor side at least, some investors actually want an ongoing income stream, especially retirees or someone wanting a passive income. Paper valuations

On the investor side at least, some investors actually want an ongoing income stream, especially retirees or someone wanting a passive income. Paper valuations don't pay for groceries & bills & travel. When bank savings interest rates are low (1 - 2%), shares with dividend payouts of 7% and higher look attractive, especially from a stable company (like a national supermarket chain or a telecommunications near-monopoly). And some stocks have a progressive dividend, ie they pledge to increase their dividend payout per share each year. (So in my case, one of the shares I bought about 10 years ago now pays out the equivalent of an 18% return to me in dividends every year.) As the dividend payouts increase, people are prepared to pay more for the stock, so it pushes the share price. (So that 18% yield stock has since tripled in price, as many investors are happy to just take a 6% return instead.)

pellucide 10y ago
18% yield is awesome. Care to reveal the name of the company ? If I were to take a guess, it would have to be Costco or AT&T
- SyneRyder 10y ago
  Eeek, that should have been 14%, not 18% (sorry, my mistake!). I'm in Australia, and the company is Wesfarmers (WES.AX), an Australian mining company that diversified into retail, bought the second-largest supermarket chain in Australia, and now 87% of their earnings comes from retail. I bought most of my shares at the very bottom when they did a capital raising at $13.50 (start of 2009). Today it pays $1.98 annual dividend per share. (Today's share price is $43.29). I've obviously cherry-picked my best example ;) But I also got close with JB Hi-Fi (JBH.AX), bought them at $10.24 in 2012, today it pays $1.09 annual dividend per share (so yielding 10.6% on the price I bought at, and the share price today is $25.65). I wrote more about my method in this HN comment a couple of years ago: https://news.ycombinator.com/item?id=10904190 https://news.ycombinator.com/item?id=10904190 Basically I look for stocks that are yielding 6 - 8%, check for a pattern of steadily growing dividends, and make sure it isn't suddenly high-yield because it's about to go bankrupt or in a dying industry. Hope that helps!

pellucide 10y ago

18% yield is awesome. Care to reveal the name of the company ? If I were to take a guess, it would have to be Costco or AT&T

SyneRyder 10y ago
Eeek, that should have been 14%, not 18% (sorry, my mistake!). I'm in Australia, and the company is Wesfarmers (WES.AX), an Australian mining company that diversified into retail, bought the second-largest supermarket chain in Australia, and now 87% of their earnings comes from retail. I bought most of my shares at the very bottom when they did a capital raising at $13.50 (start of 2009). Today it pays $1.98 annual dividend per share. (Today's share price is $43.29). I've obviously cherry-picked my best example ;) But I also got close with JB Hi-Fi (JBH.AX), bought them at $10.24 in 2012, today it pays $1.09 annual dividend per share (so yielding 10.6% on the price I bought at, and the share price today is $25.65). I wrote more about my method in this HN comment a couple of years ago: https://news.ycombinator.com/item?id=10904190 https://news.ycombinator.com/item?id=10904190 Basically I look for stocks that are yielding 6 - 8%, check for a pattern of steadily growing dividends, and make sure it isn't suddenly high-yield because it's about to go bankrupt or in a dying industry. Hope that helps!