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Strategies & Market Trends : Value Investing
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To: Broken_Clock who wrote (4653)8/15/1998 1:49:00 AM
From: Paul Senior  Read Replies (1) of 78628
 
Hi Papaya King! Weren't you the person who got me interested and into TCMS?? Ouch!! Cripes, it's less than 50% of bv now. Luckily - or wisely - for the others on the thread, they did not succumb it seems.

Dividends haven't been more important than capital gains since about 1958 IMO. (About when people stopped thinking they had to have high div's on their stocks to compensate for bonds which were thought less risky--- or so I've read.)
Dividends will return to favor (have a much stronger influence in investing) in 17 years. That is, I figure you're about 35 and at about age 52 you'll actually focus and act on the realization - as you already suspect or know with your 20 years of experience - that dividends do matter-- both as a safety prop for the stock price and as a discipline for management (who often need it). IMO, dividends are the one and only claim investors have -- just try claiming your share of discounted cash flows or earnings or of assets - ha. (Of course, investor claims to dividends are subject to change of div. policy by management- but such changes in div. policy are - should be - rare.)
My idea is that it's not either/or. Some stocks should be bought for dividend yield -- there's a clue there for inferring under- or overvaluation based on historical dividend yield- or bought for growing dividend yield (ref. Tigue&Lisanti-"The Dividend Rich Investor"). Other stocks are bought for other reasons (e.g. capital gains). Paul.
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