| | | A guy over at SA only invests in high-yield stocks like CEFs and BDCs and I think his nominal yield is well over 10% and since in accumulation phase (and this guy is DRIPing all of it), his share prices tend to be flat-ish (he posts the PF monthly using real numbers because it is really his money and how he's invested it)... however, the "value" of his total PF will double every 7 years even if his share prices don't go up a dime...
Now, as for what happens when a stock goes ex-div? I know the answer you want/insist upon is that the value/share price goes down the same amount as paid out in divvies... except that very seldom happens in the real world... the share price on that one ex-div event may go down less, the same or more than the amt. paid out, or it may not change at all, or it may actually go up -- I actually back-tested this some years ago and found that share prices went down the same as the amt. paid out only actually occurred at close of market on ex-div date less than 10% of the time.... in the real world, it is crazy to even try to predict what the share price of any stock will do on any given day, let alone some day a month, quarter, year or decade.
Yes, of course we're only talking about very specific stocks -- we do our DD just like ST traders and swing traders do, except we also tend to dig deeper to examine divvy coverage/safety, the quality of the company and its products as well as their management quality (and many other things like what happened in '08-'09 with a company's shares and what happened next)...
Detailed DD is part and parcel of what all good investors do regardless of their methodology or even ST/IT/LT goals, including esp. guys like Buffett.
We are not choosing our stocks with darts. And we all have different goals (Steve even includes that in his monthly recaps -- real numbers reflecting his real world investments, goals and real world income/losses) and there are many ways to achieve a successful outcome -- the goals achieved. |
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