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You sorta made my point for me. My argument is that the market wants quarter to quarter growth over stability. There are many industries that are stable, genera
by Aloha 13y ago
You sorta made my point for me. My argument is that the market wants quarter to quarter growth over stability. There are many industries that are stable, generate lots of revenue, are profitable, but do not generate high stock prices because of no growth, like:
Truck Stops
Utilities
Tire Companies
Banks
Insurance
My argument is before the mid 80's - the focus was on the dividend not on the stock price itself, IMO, buying and selling based on stock price, rather than earning disbursed to shareholders, is merely speculation, rather than investing.
- WalterBright 13y agoThe focus on dividends vs stock appreciation is driven by the difference in tax treatment of the two. Tax policy has alternately favored one over the other, with the predictable resulting shift in investor focus. Saying stock purchasing anticipating future growth in the stock price as "mere" speculation is very incorrect. A company can choose to issue a dividend or repurchase stock (thereby pushing up the price), these are economically equivalent. The choice is made based usually on tax treatment.