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Non-Tech : Kirk's Market Thoughts
COHR 184.50-1.3%Dec 31 3:59 PM EST
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To: Kirk © who wrote (5858)6/5/2018 7:34:09 AM
From: Jerome  Read Replies (1) of 26909
 
Hi Kirk, Here is an example of the benefit of dividends in stock selection.

In 2014 I bought GSK (Glaxo Smith Kline) at the price of $46.l8 per share. (100 shares). And the stock deteriorated from there. My crystal ball was out of commission at the time.

I still own those 100 shares. As of yesterday the stock closed at $40.70

So i still have a loss of ($779.00).Not my idea of good stock selection.

But I did get 21 cash dividend payments that came to $1203,00 About a 6.5% yield..per year

I have an overall gain of $424.00....plus I did write some covered calls against the shares I owned.

The only good news is that GSK has a new management team in place and their outlook is much better than it was four years ago.

In my stock selection I have three criterion that I review. Like a three legged stool.

1) Potential for appreciation..near term (about 6 months)..this is somewhat arbitrary

2) Dividends past and future

3) Is the stock a good covered call write that will generate some income near term?

I do make exceptions for the dividends on occasion. (MU for example and AMD)

This is a tough market and an investor should be prepared to have a stock go underwater, if politics turn against it. But longer term the bet will justify itself.
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