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It's different from baseball cards because a given baseball card can't start paying dividends if all the people who own the card have a vote and decide it shoul
by astrofinch 16y ago
It's different from baseball cards because a given baseball card can't start paying dividends if all the people who own the card have a vote and decide it should.
I used to spend a lot of time playing Railroad Tycoon 2, and in that game a good way to get rich is
1. Put all your money in to a railroad you control.
2. Grow your railroad. As your railroad grows, the value of your stock in it grows. This causes your purchasing power to rise, allowing you to borrow money to buy more stock in your railroad.
3. Eventually you're in a ton of debt, but you've also got a ton of stock in your (presumably successful) railroad. Then raise the dividend paid by your railroad's shares and rake it in.
The problem with raising the dividend paid by your shares early on is that it will give your railroad less capital to expand with. So you only want to execute step 3 when your railroad is making more money than you know what to do with.
I think there's a good argument to be made that companies like Google know what to do with the money they're making.
- jimbokun 16y ago"I think there's a good argument to be made that companies like Google know what to do with the money they're making." There's a good argument that a company like Microsoft doesn't anymore, which is why they were pretty much forced to pay out a big dividend a few years back. Just to give an example at the opposite end of the corporate life cycle. Just found this article suggesting it's still an issue: http://www.bloomberg.com/news/2010-07-22/microsoft-may-use-cash-to-boost-dividend-this-quarter-after-two-year-lull.html http://www.bloomberg.com/news/2010-07-22/microsoft-may-use-c...