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To: Geoff Nunn who wrote (83665)	12/4/1998 9:27:00 AM
From: BGR	Respond to of 176387

Geoff, I completely agree that other things remaining the same, a growth stock paying dividends will perform worse than one not paying dividends. My approach towards DRIPs was a little different, however. Focusing less on the dividend part, I was really treating DRIPs as single stock no-load mutual funds, which I can then mix and match to create a target portfolio (including leverage), make an arrangement with my bank to deposit a certain amount on a recurring basis and then forget about it. Background: My experience has been that my best profits were made not by choosing the best investment, but in making right amounts of investments at the right time - which is small amounts all the time. I can do that easily in my 401k, but not outside that plan. Not w/o incurring serious expenses anyway. My savings outside my 401k - which I have been putting in my ESPP till now - are substantially more than the maximum that my 401k will allow, and become even more with ESPP discounts and stock growth. I do not want to leave that money in my ESPP plan from diversification reasons as I hold substantial stock options as well. Thus, every six months I am stuck with a relatively large sum of money which I then have to slowly invest on my own in preferred growth stocks like DELL among others. I have been doing this by buying a certain number of the furthest out LEAPS calls once every 2 weeks - which is a pain. But as I am convinced that timing the market is a sure way to lose capital, I refuse to invest the entire amount all at once. Hence I would love to have a DELL DRIP plan with OCP. -Apratim.

To: Geoff Nunn who wrote (83665)	12/4/1998 9:33:00 AM
From: PAL	Respond to of 176387

Geoff, excellent analysis on DRIPS. I agree completely with you that it is better to invest in growth stocks than high paying dividend. The problem with dividend is is it is taxed twice. It comes after the company paying income tax, and the recipient is subject to tax as well. You are quite right that the compound growth in non tax defered account is less than growth stock. You may add that this analysis also holds for people who buy and hold versus those who are in and out of the stock. Regards Paul

To: Geoff Nunn who wrote (83665)	12/4/1998 7:56:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Geoff, I agree with all you said, but unless I missed the point in a previous post, I think the majorthe problem with DRIPS is its implicit capital rationing underpinnings. When a company pays a dividend it means that it can find no better use for the cash. That is, within the spectrum of possible investments, returning cash to shareholders appears to be the best course. Perversely, this is pretty much what a share buyback program does, but investors get very excited about it. Of course, the shareholders take the buyback as a sign that the stock is undervalued. If you made this point in a previous post, my apologies. TTFN, CTC