Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Spekulatius who wrote (44720)	10/1/2011 7:26:23 AM
From: Difco	of 78670

Clownbuck, Thanks for the chart! I think what it also shows is that dividend yields are probably going to go up from here. I agree with you that buybacks in general add more value than dividends, but not always. Buybacks are most effective when they are done at the right (low) prices (your example of BRK.A/BRK.B is valid below), but then you would see a lot of companies purchasing their own shares in bull markets at inflated prices just because they are enjoying business optimism at the time. It doesn't take much brain to declare a dividend, whereas capital allocation is more complex. You bring another good point that I've always been wondering about. I still don't understand why dividends are taxed at the same level as capital gains? They are fundamentally different animals. For example, preferred dividends are a pre-tax expense item, which is not double-taxed. Just because regular dividends are reduction of stockholders' equity, does it make it right to double-tax? I would argue that capital gains ought to be higher and dividends on the common lower.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next