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Technology Stocks : The New QUALCOMM - Coming Into Buy Range -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (1017)	8/20/2007 9:33:09 PM
From: carranza2	Read Replies (2) \| Respond to of 9129

Perhaps I am looking at it wrong. This is my thinking: Assuming that Paul has shares which cost him $2 a share on average, then his receipt of .56 a year in dividends gives him an appx. 25% yearly return. Unless the share price falls below $2 or the dividend rate falls, this is a very nice and safe return. If I had shares with that kind of cost basis, I would think of them as CDs with a particularly favorable interest rate. If I had shares that I acquired at a $2 cost, there is no way I'd sell. The practically guaranteed 25% income stream from such an investment is not something easily attainable. This calculation speaks volumes for LTBH. If one holds for long enough in quality companies, stock splits and appreciation will end up providing a terrific income stream at a very cheap cost. The appreciation is also nice but if one were to cash in the shares, the proceeds after a 20% cap gains tax would be about $30. At a 5% interest rate, the return after buying a CD would be $1.50, considerably less than the appx. 25% rate Paul is currently receiving.