PP vs Dividend Growth Investing

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mathjak107
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:12 pm

Your logic makes no sense.. growth funds in etf’s , shouldn’t exist by your logic
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 4:20 pm

mathjak107 wrote:
Fri Feb 14, 2020 4:12 pm
Your logic makes no sense.. growth funds in etf’s , shouldn’t exist by your logic
Suppose you were the only investor in the world. Is there any reason to buy a stock that doesn't pay a dividend? No. You don't make any money until a dividend is paid.

Now expand that to however many investors there really are. As a whole, just like the lone-investor scenario above, they don't make money until a dividend is paid. The sum total made by the investors is zero until there's a dividend, as I described earlier with the Berkshire example. Do you disagree?
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:26 pm

That is a silly analogy ..if I was the only investor in the world with no stock appreciation all that would happen is they are handing me back the invested dollars I gave them ...without other buyers to bid the stock up there is zero return .

I have a feeling you do not understand that the paying of a dividend is a zero sum event ...they are giving you back not profits but your invested dollars .....

It is mandatory that what ever your stocks value is before it goes ex div that the value of your invested dollars is reduced by an equal amount ...what gets compounded on by markets is that much less once it trades again ..there is nothing gained or lost by you getting that dividend ...you could have sold off the same dollars yourself pre ex div and would be in the same spot
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 4:29 pm

mathjak107 wrote:
Fri Feb 14, 2020 4:26 pm
That is a silly analogy ..if I was the only investor in the world with no stock appreciation all that would happen is they are handing me back the invested dollars I gave them ...without other buyers to bid the stock up there is zero. Return
But taken as a whole, investors are doing exactly that, just passing the same thing around among themselves, with a net gain of $0. Until there's a dividend.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:31 pm

Wrong ....right up until it goes ex div I can sell the same dollars off and be in the same position..I don’t need them to hand me back a piece of my invested dollars to make investing worth it .

All stocks need the same appreciation to survive or grow and any can spin off cash flow off that appreciation
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 4:34 pm

Nope, selling is just passing the same thing around. The investors, as a whole, are still up exactly $0.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:41 pm

Nonsense .

I can have a portfolio of non div payers and draw 4% off it ......that is no different than a 4% dividend ....

In the. Case of the dividend if that stock Is flat once it is reduced than your return is zero and you have less dollars compounding going forward

If my portfolio is flat after pulling out the same dollars representing 4% than my return is zero and I have less invested going forward


It is the identical end result.. if both saw 4% appreciation then both returns are the same 4%
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 4:43 pm

You're only up because someone else is down. The investors as a whole have made zero from owning the stock.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:47 pm

Xan wrote:
Fri Feb 14, 2020 4:43 pm
You're only up because someone else is down. The investors as a whole have made zero from owning the stock.
wrong again ..STOCKS ARE NOT A ZERO SUM GAME .

i can buy a stock and sell it to you at a profit , you sell it to the next guy at a profit , he makes a profit and he sells it .. we can have hundreds of investors making money and banking it all off my one purchase. to think stocks are a zero sum game is false .
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 4:49 pm

mathjak107 wrote:
Fri Feb 14, 2020 4:47 pm
Xan wrote:
Fri Feb 14, 2020 4:43 pm
You're only up because someone else is down. The investors as a whole have made zero from owning the stock.
wrong again ..STOCKS ARE NOT A ZERO SUM GAME .

i can buy a stock and sell it to you at a profit , you sell it to the next guy at a profit , he makes a profit and he sells it .. we can have hundreds of investors making money and banking it all off my one purchase
Until there's a dividend, they are indeed zero sum.

Take my example from earlier: add up all the money everybody has ever spent on Berkshire stock, and all the money they've ever received for it. It is exactly zero. Do you agree?
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:50 pm

whether you create your own cash flow by selling the equal dollars from a non div portfolio or they sell off a piece of your share price is irrelevant .
here is a perfect example ... on dec 11th if you had 10 shares of this you had 57.41 x 100 shares = 5741 for markets to compound on ..
the stock went x div and handed you back roughly .47 cents .

when the stock opened the next morning it was reduced to 56.96 so now you have 5696. compounding for you plus the dividend in pocket ... that is the same 5741 you had before the dividend .

so if you reinvest the 47 dollar dividend you will buy in at the reduced price of 56.96 giving you more shares but the same 5741 for markets to act on .
if the stock did not pay the div out and went up 5% the next day you have 5741 x 1.05 = 6028.05

if the stock paid a dividend and you did not reinvest , you have 5696 x 1.05 = 5980.80 or less then you would have had if no div was paid .
if you reinvest then you have more shares worth the same 5741 x 1.05= the same 6028 working for you .

DIVIDENDS BEHAVE LIKE STOCK SPLITS . THEY MERELY SWITCH AROUND EXACTLY WHAT YOU HAD .

they cushion nothing in a down market -period . this is a myth that won't die ...the stock may hold up better because RISING dividends are a sign of health but that has nothing to do with the stock doing any better from the mechanics of that dividend . the stock is still solely dependent on appreciation to gain a penny .

all your gains are based on total return and all that counts is dollars invested x the percentage up or down ... number of shares is irrelevant .

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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 4:52 pm

Xan wrote:
Fri Feb 14, 2020 4:49 pm
mathjak107 wrote:
Fri Feb 14, 2020 4:47 pm
Xan wrote:
Fri Feb 14, 2020 4:43 pm
You're only up because someone else is down. The investors as a whole have made zero from owning the stock.
wrong again ..STOCKS ARE NOT A ZERO SUM GAME .

i can buy a stock and sell it to you at a profit , you sell it to the next guy at a profit , he makes a profit and he sells it .. we can have hundreds of investors making money and banking it all off my one purchase
Until there's a dividend, they are indeed zero sum.

Take my example from earlier: add up all the money everybody has ever spent on Berkshire stock, and all the money they've ever received for it. It is exactly zero. Do you agree?
no , because as i explained equities are NEVER a zero sum game. potentially we all can be winners. all we need is a buyer for each share , that is all that is required and no one has to be a loser . options are a zero sum game , not stocks .
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