Absolutely brutal - 5/5

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mathjak107
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Fri Jul 15, 2022 4:54 pm

Your Profits come from share appreciation , not what is chosen to be paid out from that appreciation.

Any stock ,dividend or not can produce the same cash flow and balances left as long as total return is the same or greater .

Dividends are really not a sharing of profits , it Is a method of withdrawal of your invested dollars
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Fri Jul 15, 2022 4:57 pm

As example


you have 100 dollars in a stock paying a 10% dividend .

the stock goes ex div and a mandatory drop by the same amount has to happen before the stock trades , no different then a fund .


so you have 90 dollars left working for you for markets to work on and 10 dollars in hand .

great news , your stock doubled , they cured covid so you have 180 dollars invested .and 10 dollars in hand ...

so that is 190 dollars .


if instead of keeping the 10 dollars you reinvest it , you have more shares at a lower price which now equals the 100 dollars you had before the stock went ex div . if it doubles you have 200 dollars

if the stock didnt payout and still had the same 100 and it doubled you have the same 200 dollars .


there is no difference , its a wash,


here is at&t as an example

https://finance.yahoo.com/quote/T/history



on 4/12 it closed at 19.56 ... it paid a .278 cent dividend , the price was adjusted down to 19.28 ....

the stock opened at 19.12 which is the dividend less market action over night or after hours once it went ex div . .

so if you had 1000 shares you closed on 4/12 at 19,560 dollars .

the price was adjusted down to 19,280 dollars and you had the dividend in hand .

if instead of falling , markets doubled your stock price , you would have 38,560.00

if you reinvested you would have approx 39,120


if the stock never went ex div you would have no adjustment and the same 39,120 if it doubled.

of course while funds reinvest over night stocks usually lag so your reinvested price may vary a bit but the mechanics are the same .... for the most part its a wash reinvesting , you are only penalized if you dont reinvest so you have the same amount compounding for you.


anyone can create the same exact cash flow from non div payers or a portfolio.

So dividends are a withdrawal method , the company does it for you
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Re: Absolutely brutal - 5/5

Post by Xan » Fri Jul 15, 2022 5:03 pm

mathjak107 wrote:
Fri Jul 15, 2022 4:57 pm
So dividends are a withdrawal method , the company does it for you
I haven't said anything that contradicted that. And, what's your beef with jalanlong's friend's strategy, if all he's done is chosen a particular withdrawal method?
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Re: Absolutely brutal - 5/5

Post by Smith1776 » Fri Jul 15, 2022 5:04 pm

While dividends are not a factor, it is certainly a separate issue as to whether or not they are important. They are.

Dividends (either now or in the future) form the fundamental basis for stock valuation itself.

However, the factors we should be paying attention to, as good empiricists, are beta, size, value, investment, profitability and maybe momentum.
I still find the James Rickards portfolio fascinating.
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Re: Absolutely brutal - 5/5

Post by Smith1776 » Fri Jul 15, 2022 5:06 pm

It also appears that focusing on dividends can be a powerful behavioral tool that allows one to stay the course. To that extent, one may say that focusing on dividends is rational.
I still find the James Rickards portfolio fascinating.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Fri Jul 15, 2022 5:15 pm

My beef is that anyone who is living off dividends especially while retired is blindly spending money at a draw rate that they have no idea what it is .

Without looking at value one has no clue what they are pulling out …it is way to easy to draw more then it can support.

Just because I can put my money in a stock paying 6% doesn’t mean I should be spending at a 6% draw rate
Last edited by mathjak107 on Fri Jul 15, 2022 5:19 pm, edited 1 time in total.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Fri Jul 15, 2022 5:18 pm

Smith1776 wrote:
Fri Jul 15, 2022 5:04 pm
While dividends are not a factor, it is certainly a separate issue as to whether or not they are important. They are.

Dividends (either now or in the future) form the fundamental basis for stock valuation itself.

However, the factors we should be paying attention to, as good empiricists, are beta, size, value, investment, profitability and maybe momentum.
Yes , I agree .

The value of a dividend , especially a rising dividend can create a healthy feeling for a stock .

Look at me , not only can we keep handing you back your own money , but we can keep increasing the rate we give it back .

Just paying a Dividend ?meh ..companies like GM , citi , Polaroid , Kodak ,sears , ge , etc ,all paid dividends just about up to the grave or while losing money for a long time .

A rising dividend , NOT FROM A FALLING SHARE PRICE , has some merit

A stock like AT&T had a rising dividend because the share price fell worse and worse , not because the board was upping the payments.

So dividends can imply other things about the company ..

But at the end of the day the dividend itself is just a chosen withdrawal method.

Whether you should be spending it is a whole other thing based on total return
Last edited by mathjak107 on Fri Jul 15, 2022 5:56 pm, edited 2 times in total.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Fri Jul 15, 2022 5:30 pm

We have a simple way of dealing with dividends since tax wise dividends are inefficient.

If I draw the same amount out of non div payers we pay tax only on the gain portion.

The same cash flow as a dividend can be taxed on the entire dividend .

So most dividend payers we own are in tax deferred money and the dividends are reinvested .

Those in our taxable account are put in a bucket that is held until next year .

We found trying to fund current spending hand to mouth with them is far to variable since they can be cut or suspended .

So all current dividends go into next years bucket .

On Dec 31 we see what we are short for the next year and Refill the difference for the year and done ….

Then we wash and repeat for the following year as once again we fill the following years money from incoming dividends .

But that total draw is based on total portfolio value , so yeah one needs to know values
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Re: Absolutely brutal - 5/5

Post by whatchamacallit » Fri Jul 15, 2022 10:52 pm

One thing I just picked up from a random walk down wall street regarding dividends.

It is actually preferred for a company to buy back shares instead of distributing dividends because you pay less tax on capital gains versus dividends.


I don't have proof right now but I expect it is now rare for a company to start paying dividends if they had not previously because of this tax advantage.
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Re: Absolutely brutal - 5/5

Post by boglerdude » Sat Jul 16, 2022 2:01 am

I'm giving the CEO my money so he can make more with it, not give it back to me
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 4:16 am

the gap widens as the pp falls farther behind the others in the downturn

portfolio labs shows

pp ytd down 15.81%

wellesly down 9.80


insight income down 10%
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 6:22 am

mathjak107 wrote:
Sat Jul 16, 2022 4:16 am
the gap widens as the pp falls farther behind the others in the downturn

portfolio labs shows

pp ytd down 15.81%

wellesly down 9.80


insight income down 10%
This information for PP doesn't match what's shown on Yahoo Finance or Google Finance or any other site that I looked at. I'm getting roughly 11% for the PP YTD, excluding dividends/coupons. Unless you've got access to a different batch of information that's not matching the data available everywhere else I've looked then you're once again just spewing word salad on a message board
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 6:36 am

mathjak107 wrote:
Sat Jul 16, 2022 4:16 am
the gap widens as the pp falls farther behind the others in the downturn

portfolio labs shows

pp ytd down 15.81%

wellesly down 9.80


insight income down 10%
OK, the more I look at this the more I realize you're just a mathematically challenged individual (witness your inability last week to figure out how to convert a ratio to a percentage when discussing the cost of the insight model). Basically you're claiming that as of last week, the PP was down 14% ytd, and that has now become 15.81% this week. Let's look at how the individual components have worked out this week, and then tell me how the PP has dropped 1.81% as a whole.

VTI-down 1.09%
TLT-up 3.2%
GLD-down 2.02%
Cash-pretty much flat of course

Please explain to the group how the above perfomances of the individual components add up to a nearly 2% drop for the total portfolio.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 7:07 am

Pay attention .

I am not claiming anything .

Portfolio labs gives the results daily as well as they include a quarterly rebalance so they are not just individual returns ytd with the pp.

Got a gripe ,. Complain to them , not me
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 7:14 am

mathjak107 wrote:
Sat Jul 16, 2022 7:07 am
Pay attention .

I am not claiming anything .

Portfolio labs gives the results daily as well as they include a quarterly rebalance so they are not just individual returns ytd with the pp.

Got a gripe ,. Complain to them , not me
They're not the ones coming on this website and spouting their information. That's you. Providing information to the Gyroscopic Investing website that doesn't appear to be correct and not doing due diligence to ensure its validity is not portfolio labs fault, that's yours.
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Re: Absolutely brutal - 5/5

Post by dualstow » Sat Jul 16, 2022 7:17 am

mathjak107 wrote:
Fri Jul 15, 2022 5:15 pm
My beef is that anyone who is living off dividends especially while retired is blindly spending money at a draw rate that they have no idea what it is .
Without looking at value one has no clue what they are pulling out …it is way to easy to draw more then it can support.
Just because I can put my money in a stock paying 6% doesn’t mean I should be spending at a 6% draw rate
Conversely, though, you could reinvest what you don’t spend into that 6% dividend stock, or a stock paying 2%, or 3%.
You know how much you’re going to draw next year, give or take a bit, because dividends gradually rise, and sometimes get cut.

If you have to sell shares for income, do you know whether remaining shares are going to rise or fall with the level of certainty and precision that a dividend investor knows what his dividend take will be next year?
RIP Marcello Gandini
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 7:21 am

Xan wrote:
Fri Jul 15, 2022 5:03 pm
mathjak107 wrote:
Fri Jul 15, 2022 4:57 pm
So dividends are a withdrawal method , the company does it for you
I haven't said anything that contradicted that. And, what's your beef with jalanlong's friend's strategy, if all he's done is chosen a particular withdrawal method?
Mathjak is a perfect example of someone who has accumulated a lot of knowledge, but then doesn't have the wherewithal to actually do anything with it. He's incapable of truly understanding the concepts that he's stored in his knowledge, and therefore unable to intelligently argue for or against certain positions that others take, and in fact completely unable to understand the position or the arguments that others are making. He's only capable of spewing more knowledge onto a computer screen that may or may not have anything to do with what's been said by others, and may or may not even accurately describe his own position (such as it is) to others. Witness the discussion yesterday in the bond ETF thread where he cited someone else's article, made an incorrect assumption from the information included in that article, and then in literally the next post contradicted what he had said one post earlier.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 7:38 am

Stop your worthless babbling already.

You can be a real dick and add no value at all to any conversation other than argue

So far there is nothing to be learned from your posts at all
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 7:41 am

dualstow wrote:
Sat Jul 16, 2022 7:17 am
mathjak107 wrote:
Fri Jul 15, 2022 5:15 pm
My beef is that anyone who is living off dividends especially while retired is blindly spending money at a draw rate that they have no idea what it is .
Without looking at value one has no clue what they are pulling out …it is way to easy to draw more then it can support.
Just because I can put my money in a stock paying 6% doesn’t mean I should be spending at a 6% draw rate
Conversely, though, you could reinvest what you don’t spend into that 6% dividend stock, or a stock paying 2%, or 3%.
You know how much you’re going to draw next year, give or take a bit, because dividends gradually rise, and sometimes get cut.

If you have to sell shares for income, do you know whether remaining shares are going to rise or fall with the level of certainty and precision that a dividend investor knows what his dividend take will be next year?
If you reinvest then your are not spending down .it is not part of The draw rate .

Same as our rmds …they merely get reinvested in the same funds outside the deferred account.

The whole idea of a swr is you do know what you can draw next year ….for it not to hold you would need to fall below a 2% real return average over the first 15 years at 4% draws for a 30 year retirement.

Dividends get cut and suspended in down turns so by themselves are not a safe with drawl rate without considering total value and total return

Safe withdrawal rates provide a safe ,secure and consistent income in good and bad times with no prediction of next year
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 7:49 am

mathjak107 wrote:
Sat Jul 16, 2022 7:38 am
Stop your worthless babbling already.

You can be a real dick and add no value at all to any conversation other than argue

So far there is nothing to be learned from your posts at all
There's plenty to be learned from my posts by other people. Countering your misinformation is of value to other people. I understand why that seems like there is no value to you, the misinformer. But countering incorrect information is important to everyone else.
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 7:51 am

mathjak107 wrote:
Sat Jul 16, 2022 7:41 am
dualstow wrote:
Sat Jul 16, 2022 7:17 am
mathjak107 wrote:
Fri Jul 15, 2022 5:15 pm
My beef is that anyone who is living off dividends especially while retired is blindly spending money at a draw rate that they have no idea what it is .
Without looking at value one has no clue what they are pulling out …it is way to easy to draw more then it can support.
Just because I can put my money in a stock paying 6% doesn’t mean I should be spending at a 6% draw rate
Conversely, though, you could reinvest what you don’t spend into that 6% dividend stock, or a stock paying 2%, or 3%.
You know how much you’re going to draw next year, give or take a bit, because dividends gradually rise, and sometimes get cut.

If you have to sell shares for income, do you know whether remaining shares are going to rise or fall with the level of certainty and precision that a dividend investor knows what his dividend take will be next year?
If you reinvest then your are not spending down .it is not part of The draw rate .

Same as our rmds …they merely get reinvested in the same funds outside the deferred account.

The whole idea of a swr is you do know what you can draw next year ….for it not to hold you would need to fall below a 2% real return average over the first 15 years at 4% draws for a 30 year retirement.

Dividends get cut and suspended in down turns so by themselves are not a safe with drawl rate without considering total value and total return

Safe withdrawal rates provide a safe ,secure and consistent income in good and bad times with no prediction of next year
Please point out where anyone conflated dividends with safe withdrawal rate. Perhaps it's there in a post that I missed, and if so I apologize.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 7:52 am

Right here .
dualstow wrote:
Sat Jul 16, 2022 7:17 am


If you have to sell shares for income, do you know whether remaining shares are going to rise or fall with the level of certainty and precision that a dividend investor knows what his dividend take will be next year?
there is no predicting with a swr .

The income is consistent far more then a dividend can be .

That is the purpose of having a swr rate .

So no predicting of next years income is needed
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 7:58 am

mathjak107 wrote:
Sat Jul 16, 2022 7:52 am
Right here .
dualstow wrote:
Sat Jul 16, 2022 7:17 am


If you have to sell shares for income, do you know whether remaining shares are going to rise or fall with the level of certainty and precision that a dividend investor knows what his dividend take will be next year?
And where is he claiming that a 6% withdrawal rate is a 'safe withdrawal rate?' In fact, he even specifically says that he is going to reinvest what he doesn't spend, which means that his withdrawal, safe or otherwise, is less than 6%. And he specifically states he's open to reinvesting in a different stock. Again, you're conflating a discussion on how to mentally differentiate dividend income from total income with a discussion on safe withdrawal rate, which is a completely separate discussion.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 16, 2022 8:02 am

I said it .. as an example.

one cannot blindly spend dividends to live on with out knowing the rate of the draw and how much may have to be reinvested to keep to a safe draw rate.

When one is drawing an income to live on , it is advisable that they know their draw rate and not blindly pull money.

Could they ? Sure they could .should they ? Not if they are smart.

I don’t give a rats butt what anyone does , but that doesn’t mean what they are doing is a good idea for others to do.
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sat Jul 16, 2022 8:10 am

mathjak107 wrote:
Sat Jul 16, 2022 8:02 am
I said it .. as an example one cannot blindly spend dividends to live on with out knowing the rate of the draw and how much may have to be reinvested to keep to a safe draw rate.

When one is drawing an income to live it is advisable that they know their draw rate and not blindly pull money
OK. So you're the one that's taken a discussion about a person who claims to just get his dividend check and live off of it and never check the principal, into a discussion about safe withdrawal rates, then proceeded to argue with everyone else about safe withdrawal rates when everyone else is still trying to focus on the original discussion? Jalanlong has said his relative does this, but you have no other information about it. Perhaps his relative has half a billion dollars in practically every stock in the S&P 500, so of course his income is plenty high enough from dividends alone. You on the other hand have decided to turn the discussion to someone who is trying to just scrape by off a 6% dividend stock that's on it's way to going out of business. At any rate, your argument is a straw man.

Anyway, right now VTI has a dividend yield of 1.58%. Are you saying someone who lives off the dividends alone is in danger of overdrawing their portfolio?
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