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

To: Difco who wrote (44718)	9/30/2011 11:37:31 PM
From: Difco	Read Replies (1) \| Respond to of 78666

Link to the Credit Suisse Global Investment Returns paper. This is the 2011, most recent version (I can't find link to the one I've read). infocus.credit-suisse.com

To: Difco who wrote (44718)	9/30/2011 11:57:01 PM
From: Spekulatius	1 Recommendation Read Replies (2) \| Respond to of 78666

The dividend yield was much higher for most of the 20th century, that is why dividend yield used to matter that much. However nowadays the dividend yield is about 3%, less than the 5% averaged that is used to be for the better part of the 20th century. Compounding with dividend works just as well as compounding with capital gains. In fact I would argue that if companies indeed would manage capital allocation well and only buy back stock or do acquisisiton when it is accreditive for owners, stock buybacks are better for investors than Dividends because dividends have the drawback of double taxations. That is one of the reasons why a company like BRK is likely to outperform and index like SP500 buy a couple of points annually (quality of management is another one) even though BRK does not pay any dividends right now.