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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (39972)	3/4/2001 2:13:03 PM
From: Mike Buckley	Respond to of 54805

Mucho, I think it would be cool if tech stocks paid dividends. The ostensible reason for not paying dividends is double taxation. The real reason is, IMHO, it's a lot easier to bloat the earnings picture by telling the lemmings to pay attention to pro forma figures, than it is to pay a check to shareholders with cold hard cash, and to raise the payout on a regular basis. I disagree. First, as long as dividends are taxed at such a higher rate than long-term capital gains, I'd prefer that my companies put the cash to use in a way that fuels long-term gains in the price of the stock. Second, the leading companies most of us tend to invest in would have no trouble paying "competitive" dividends, especially once gorillas get onto Main Street. If the hundreds of millions of dollars and billions of dollars they achieve in cash flow isn't important enough to recognize, paying dividends won't help. Third, considering how important it is to me that individuals save, it's equally important to me that the companies we invest in save also. Fourth and by far most important, paying dividends doesn't do anything toward sustaining a competitive advantage. If anything, it weakens it. --Mike Buckley