5 ms·

Literally dividends. There was a period of time during which many thought it was the best way to get value out of your investments.

komali2 9y ago
I still think it is...
- klipt 9y ago
  Buybacks are more tax efficient.
  - prewett 9y ago
    Might be more tax efficient, but I've seen a lot of companies buy back shares when the shares are high. Aside from high growth companies (which aren't usually buying back shares), that's value-destroying. Buy high, then sell low via options... With that kind of buybacks, I'll take the dividends, thanks.
    - klipt 9y ago
      > value-destroying If you believe it's bad for the buyer (the company) then it must be good for the seller (you, if you participate in the buyback).
  - komali2 9y ago
    Hmm, I appreciate your comment because it resulted in me looking into it and learning more. However as a result I've found that such a blanket statement is slightly dangerous - the [1]investopedia article goes into some good scenarios towards the bottom under "Additional Considerations." [1]http://www.investopedia.com/articles/active-trading/073015/dividend-versus-buyback-which-better.asp http://www.investopedia.com/articles/active-trading/073015/d...
EliRivers 9y ago
Apart from selling my stock, it's the only way I could get any value out, but selling off the good dividend stocks just seems silly. Some of them have paid for themselves over the last decade; unspectacular, but very welcome. Seguing off topic, a surprising number of companies are really bad at expanding; I'd much rather they gave the profits to me than waste them on failing ventures.
sidlls 9y ago
I think it's a fantastic way to get value. Short of having significant influence over a company (Buffet) or very good intelligence about a company (e.g. to speculate that the value of a stock will change dramatically and use that information to make a trade) I consider it just about the best way to get value out of equities. The cash from dividends can be reinvested (the yield acts something like an interest rate on a savings account, although obviously the risk is higher and it isn't exactly the same thing) or pooled with cash from other dividends to diversify, etc. I also like to issue covered calls/puts against assets/cash in my brokerage account for cash flow, although that's a tad more speculative than taking dividends.
mcguire 9y ago
Given that the alternative changes investing from a positive sum game to a zero sum game, they were probably right.
aeorgnoieang 9y ago
What I was replying to: > ... a stock that gives you no profits, no income from dividends ...

komali2 9y ago

I still think it is...

klipt 9y ago
Buybacks are more tax efficient.
- prewett 9y ago
  Might be more tax efficient, but I've seen a lot of companies buy back shares when the shares are high. Aside from high growth companies (which aren't usually buying back shares), that's value-destroying. Buy high, then sell low via options... With that kind of buybacks, I'll take the dividends, thanks.
  - klipt 9y ago
    > value-destroying If you believe it's bad for the buyer (the company) then it must be good for the seller (you, if you participate in the buyback).
- komali2 9y ago
  Hmm, I appreciate your comment because it resulted in me looking into it and learning more. However as a result I've found that such a blanket statement is slightly dangerous - the [1]investopedia article goes into some good scenarios towards the bottom under "Additional Considerations." [1]http://www.investopedia.com/articles/active-trading/073015/dividend-versus-buyback-which-better.asp http://www.investopedia.com/articles/active-trading/073015/d...

EliRivers 9y ago

Apart from selling my stock, it's the only way I could get any value out, but selling off the good dividend stocks just seems silly. Some of them have paid for themselves over the last decade; unspectacular, but very welcome. Seguing off topic, a surprising number of companies are really bad at expanding; I'd much rather they gave the profits to me than waste them on failing ventures.

sidlls 9y ago

I think it's a fantastic way to get value. Short of having significant influence over a company (Buffet) or very good intelligence about a company (e.g. to speculate that the value of a stock will change dramatically and use that information to make a trade) I consider it just about the best way to get value out of equities. The cash from dividends can be reinvested (the yield acts something like an interest rate on a savings account, although obviously the risk is higher and it isn't exactly the same thing) or pooled with cash from other dividends to diversify, etc. I also like to issue covered calls/puts against assets/cash in my brokerage account for cash flow, although that's a tad more speculative than taking dividends.

mcguire 9y ago

Given that the alternative changes investing from a positive sum game to a zero sum game, they were probably right.

aeorgnoieang 9y ago

What I was replying to: > ... a stock that gives you no profits, no income from dividends ...