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Strategies & Market Trends : Dividend investing for retirement
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To: JimisJim who wrote (21211)11/26/2014 12:28:39 PM
From: deeno  Read Replies (2) of 34328
 
"Perhaps JF wanted to get all of the pain out of the way in one big "event" creating an opportunity to increase his own holding on the cheap?"

I doubt it was so sinister. More of a confirmation that the oil situation/pricing has fallen well past expectations and that recovery is nowhere near or clear. Seems fiscally prudent with a high leverage company to circle the wagons until a light is seen at the end of the tunnel. By cutting out the dividend all together you are telling your bankers that all cash flow available will be coming to them. That gives them some comfort and in fact may allow you to retire some high coupon debt.

Some of my biggest losers over the many years have come from chasing yield (well that and FDA denials). I would be very worried if the whole industry wasn't also in the tank. The biggest risk for this company is a BK by having credit withheld during a liquidity event. This prudent action might rile dividend investors (If you want it bad...You get it bad) but makes sense from a survivor standpoint. A resumption of dividends might well be the ringing of the bell that the sector is recovering. In the meantime tax loss selling should bring this even lower.

A Happy Thanksgiving to all.
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