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well they can chose to own it , i an saying its toxic. i am saying that when a company says here is your money back there is nothing more i can do to grow the company more than we are you have to ask yourself if that is what you want.
while i believe 80% of the s&p dividend payers at this poiint would use the extra money more effectively if they could but can't call do overs lets assume they really can't do anything more.
so the s&p 500 is saying here take your money back. at x amount per share our stocks can't do much better if we have the money.
but then what if indexing instead of being only 30% of the fund investors becomes 60%. if those same companies are saying now we can't add much more to the party how over inflated will those prices be on those shares when all the index funds have to buy all the same shares.
i don't want to discuss indexing at all but you do have to give some thought to the potenial over valuations that are taking place each year as more come on board.
Absolutely. But I hope you understand that in order for you to make money using your strategy you need those other people.
Also many people see those companies as being similar to fixed income assets. What would you rather own right now (assume these are your only 2 options) a 10 year treasury with a yield of 2.1% or a company like JNJ with a 2.7% yield and still averages income growth of 4-5% a year?
If you say neither, I am going to assume you aren't actually interested in talking about investing in general, but instead are interested in talking about how awesome you are at investing.
You are basically saying you choose indexing because you don't care about the companies. I don't think most people who choose indexing feel that way, but ok. Either way it doesn't change the fact that the stock itself represents the expected future cash flows and assets of a company. It's good that you don't choose individual companies because you don't seem to care about the math and theory of investing. But just because you don't doesnt mean it isn't true.
Most of my money is index and mutual funds to because I want exposure to everything over the long term, but when I choose individual companies I don't choose a company based off of the expectation that the share price will rise. I choose it because I think the company itself will increase in value over time. A good side effect of that is the share price increasing.
There are countless theories and equations out there, thousands of books and personal Universities on the matter, to say that someone doesn't know anything about them would be careless. Whatever you do is what you do, myself or the next broker/trader doesn't care, and that is the good thing about the market. However, when someone comes out of the woodwork to disclose their personal failures with the market we can analyse and comment on their said issue.
In my estimation there are only two rules in trading:
1. The price always fluctuates
2. Price follows volume
Therefore, I think your statement about picking a company based on subjective opinions on how well you think a company will do is rather dolt, I do not suggest this to anyone.
Therefore, I think your statement about picking a company based on subjective opinions on how well you think a company will do is rather dolt, I do not suggest this to anyone.
Because that is literally exactly what I said....way to pick one sentence from 14 pages of a discussion take it out of context and prove your point. You win the Internet.
Discussion is over. I will concede, the only reason to invest in a company is to see your share price rise. There is never any other reason.
Because that is literally exactly what I said....way to pick one sentence from 14 pages of a discussion take it out of context and prove your point. You win the Internet.
Discussion is over. I will concede, the only reason to invest in a company is to see your share price rise. There is never any other reason.
Unacceptable.
This of course might satisfy a certain type of trader, but not another. Too many flavors to be upset. Good luck.
Because that is literally exactly what I said....way to pick one sentence from 14 pages of a discussion take it out of context and prove your point. You win the Internet.
Discussion is over. I will concede, the only reason to invest in a company is to see your share price rise. There is never any other reason.
Correct. Never any other reasons. Share prices will rise forever, because someone else will buy them from you regardless of the fundamentals or expected future cash flows.
I submit it's time to get all in cash, because just as in 1929, the shoeshine boys are giving stock tips.
exactly, a rising share price is all that matters. few care how we arrive there . most investors don't stay long enough to care or are invested in funds and don't even know to care nor should they..
Correct. Never any other reasons. Share prices will rise forever, because someone else will buy them from you regardless of the fundamentals or expected future cash flows.
I submit it's time to get all in cash, because just as in 1929, the shoeshine boys are giving stock tips.
Yup, just look at the dotcom boom. I think Pets.com is still going up.
the only thing needed to move stocks is fear ,greed and perception.
don't forget those big companies in the s&p had great products ,great ideas and great mgmt that made them what they are today.
they had huge jumps in value from profits and market share. paying those dividends were the result of them getting to where they had more money than they knew what to do with not the result of giving investors back their money.
today they no longer can compound money at the old rates of retuirn and are different companies from the powerful growth engines they once were.
there is still a place for them , they are still locked into paying those dividends or face the consequences now that folks are used to them as well a folks having a big misunderstanding of them and what they mean .
a day doesn't go by without someone touting how they are getting paid to wait which of course is not true and nothing they couldn't do by selling a bit on their own.
even if companies had a better use for that money they can't have do overs once the diie is cast .
Last edited by mathjak107; 01-11-2015 at 04:45 PM..
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