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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (33412)	2/2/2009 3:50:25 PM
From: Jurgis Bekepuris	Respond to of 78742

Companies that pay dividends may not be a specific metric that Warren Buffet uses to screen investment opportunities but may signal candidate stocks that meet his other key investment criteria. I agree with this. :) And I already said earlier that for Graham dividend policy WAS one of the important investment criteria, so I don't dispute value investing based on dividends. I do know from my current portfolio asset allocation, I am currently moving some bond money (yielding less than 1%) into dividend "aristocrat" type equities that yield over 3% so I can lock in a better than bond yield and get a Buffet type value bargain. I guess the important part is to remember that dividend yield is not a substitute for great management and great business. :) I think you consider that already though. :) I have no problem with someone incorporating dividends into their investment policy. I don't do it myself though and I explained why. :) If you looked at my portfolio, you may discover a lot of dividend paying stocks - this just does not mean I paid any attention to divvy when buying them. :) Good luck.

To: E_K_S who wrote (33412)	2/2/2009 4:31:14 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78742

"I do agree with you that buying equities based on dividend yields alone (especially when treasury rates are much higher) is not a very useful metric for screening undervalued stocks." There are some who do have "dividend yield" as a primary metric for screening undervalued stocks. I am a fan of the work of Anthony Spare: amazon.com and his ex-associate, Nancy Tengler: books.global-investor.com These two (and their methods) seem to have disappeared in past five or so years. Ms Tengler ran a mutual fund that used her methods, but that fund disappeared too. (It had some trouble too with SEC in that year where several funds got caught allowing purchases after market close.) Maybe their methods will return to some favor. It sometimes looks to me that we're back in the 1958 era where stocks yield more than bonds, and that they should according to that mindset, since stocks are risky and growth/growth stocks, what's growth in a long-term recession? I wouldn't be surprised to see more emphasis on dividend yield as a reasonable screening metric. We see on this thread - it seems to me anyway - there are more people requiring a dividend yield or emphasizing dividend yield in their stock selections. (just my impression)