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Tag Archives: tax-free compounding

Chasing Some Dividend Tail (II)..?

25 Wednesday Jul 2012

Posted by Wexboy in Uncategorized

≈ 16 Comments

Tags

Avon Products, dividend coverage, dividend snorting, dividend yield, income/dividend bubble, Ponzi, REIT/MLP sector, Supervalu Inc., tax-free compounding

Continued from here.

OK, so what’s wrong with a focus on income/dividends?

– Erm, everything..? I wrote about this recently – a focus on a single investment attribute’s always dangerous, but dividend yield certainly seems the v worst of the bunch to me. Sure, it all starts out innocently enough… You have a little toke on a 4% yield occasionally – feels good! But all too soon, it’s not enough – you end up calling your broker every single day, snorting up 6% yields left and right. But it’s OK, it’s low risk, you still know what you’re doing – not like those other losers… So how come I came across you the other day, twitching on a park bench, scanning the dividend column in the FT, muttering ‘All I need is just one more 9 per-center…‘?

– A ‘good‘ dividend yield can’t save a bad share. I wonder how much money’s been lost by people saying ‘…but hey, it’s got a great dividend…‘? All higher yields mostly seem to offer in a portfolio is a gradual migration into mature and/or declining businesses. And what does that offer in terms of upside?! Even worse, it leaves nowhere to hide when the dividend’s compromised – your income drops, and the share price crashes…

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Chasing Some Dividend Tail (I)..?

12 Thursday Jul 2012

Posted by Wexboy in Uncategorized

≈ 3 Comments

Tags

AIM stocks, dividend coverage, dividend yield, Expecting Value, income/dividend bubble, pitch books, REIT/MLP sector, Richard Beddard, Stockopedia, survivorship bias, tax, tax-free compounding, The Reformed Broker, UK Value Investor

There’s been a lot of good dividend commentary & debate in the UK blogosphere recently. Stockopedia seems to have ignited the debate:

http://www.stockopedia.co.uk/content/the-dividend-puzzle-or-why-the-dividend-emperor-may-have-no-clothes-66275/

Expecting Value & UK Value Investor chimed in with these:

http://expectingvalue.com/aroundtheweb/friday-reading-29#more-2326

http://www.ukvalueinvestor.com/2012/06/how-to-find-the-best-high-yield-shares.html

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