PP vs Dividend Growth Investing

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Smith1776
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Re: PP vs Dividend Growth Investing

Post by Smith1776 » Fri Feb 07, 2020 3:07 pm

Decades and decades ago when Ben Graham shut down his investment partnership (what today would be called a hedge fund), he simply advised people to "buy AT&T" in place of investing in his fund.

The fact that they're still around and doing as well as they are... one hell of a call on Graham's part.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 07, 2020 3:16 pm

actually they have been a horrible stock to own for a long time now ... not even 5% as an average return with dividends the last 5 years
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Re: PP vs Dividend Growth Investing

Post by Smith1776 » Fri Feb 07, 2020 3:55 pm

mathjak107 wrote:
Fri Feb 07, 2020 3:16 pm
actually they have been a horrible stock to own for a long time now ... not even 5% as an average return with dividends the last 5 years
Right, I wouldn't quarrel with that.

What I mean to illustrate is that Graham made that stock call over half a century ago. There were many other prominent companies around in that era such as General Motors, General Electric, or Lehman Brothers that he just as easily could have picked. But he didn't. And we know how those companies turned out. No index funds in that era too of course. A mighty impressive call in my book.
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Re: PP vs Dividend Growth Investing

Post by pugchief » Fri Feb 07, 2020 4:40 pm

mathjak107 wrote:
Fri Feb 07, 2020 3:16 pm
actually they have been a horrible stock to own for a long time now ... not even 5% as an average return with dividends the last 5 years
This wouldn't surprise anyone who has actually had to deal with them. They are a poorly managed company, with awful customer service. I had extremely poor experiences with both their business division and their cell phone division, and I swore never to give them a penny of my money ever again.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 07, 2020 5:28 pm

Actually the biggest blunder in the business world in history was them ..

They were prohibited in the communications act in 1934 from being in the computer business....they were allowed to use but not sell any technology being developed relating to the computers of that age ....

Well they saw themselves as being the next Microsoft in the 1980’s by marketing Unix and developing a line of home computers .

the govt was trying to break up the phone company and of course the battle was long and hard ....so they came to the decision that if the govt would revise the act and allow them in to enter the computer business they would break themselves up .

What a disaster for them ...Unix never made it like Microsoft dos and the line of AT&T home computers failed
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Re: PP vs Dividend Growth Investing

Post by dualstow » Fri Feb 07, 2020 5:46 pm

mathjak107 wrote:
Fri Feb 07, 2020 5:28 pm
What a disaster for them ...Unix never made it like Microsoft dos and the line of AT&T home computers failed
That's kind of sad. We have Bell Labs largely to thank for GNU Linux and OSX and MacOS, not that AT&T got anything out of it.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Sat Feb 08, 2020 3:03 am

also , if anyone thinks that dividend payers are some how immune to squandering investor money AT&T is a prime example of why that would be a poor assumption .

AT&T paid $100 billion to enter the cable business

AT&T thought it would be a good idea to diversify by paying $100 billion to take on cable company TCI. It was wrong! AT&T broke itself up a few years later and sold off the cable assets.

AT&T tried to elbow its way into the personal computer business with a hostile $7 billion takeover of NCR. It didn't work, and AT&T later spun the company back out at a $4 billion valuation.
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Re: PP vs Dividend Growth Investing

Post by shekels » Sat Feb 08, 2020 8:43 am

Smith1776 wrote:
Fri Feb 07, 2020 3:07 pm
Decades and decades ago when Ben Graham shut down his investment partnership (what today would be called a hedge fund), he simply advised people to "buy AT&T" in place of investing in his fund.

The fact that they're still around and doing as well as they are... one hell of a call on Graham's part.
Att was bought and taken over by SBC in 2005
The former Att is gone.
But SWBT/SBC took Att as it's new name for the Global Recognition the Att brand name had.
Ed Whitacre of SWBT/SBC had been buying up the baby bells before the Att purchase.
After the purchase of Att, Big Ed retired and Randall Stephenson became the CEO of the new " ATT"
Since Randall became CEO of ATT the Silo Mentality has become more of a issue.
¯\_(ツ)_/¯
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Re: PP vs Dividend Growth Investing

Post by dualstow » Fri Feb 14, 2020 7:54 am

T Rowe Price raised its dividend more than 18%
‘Byoo-tee-ful.
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Re: PP vs Dividend Growth Investing

Post by mathjak107 » Fri Feb 14, 2020 8:40 am

now the stock needs the appreciation to match ...without matching appreciation your balance invested will shrink.

no different than increasing draw on a portfolio from 4 to 5% but the portfolio appreciates less than 5%
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Re: PP vs Dividend Growth Investing

Post by Xan » Fri Feb 14, 2020 9:03 am

Dividends keep a company's collective mind and priorities on the right thing: making money for stockholders. It's easy for a company that doesn't pay dividends to get wrapped up it itself. Dividends keep a company humble. Dividend companies remember the whole point of being in business: to make money.

My opinion, anyway. My stock allocation is a broad market index that includes many dividend and non-dividend companies, so I'm shielded against being wrong!
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Re: PP vs Dividend Growth Investing

Post by dualstow » Fri Feb 14, 2020 9:22 am

Xan wrote:
Fri Feb 14, 2020 9:03 am
Dividends keep a company's collective mind and priorities on the right thing: making money for stockholders. It's easy for a company that doesn't pay dividends to get wrapped up it itself. Dividends keep a company humble. Dividend companies remember the whole point of being in business: to make money.
...
This is how I feel as well. In the context of this thread, jalanlong's relative putting growth of holdings aside and focusing on payments, you can reap quarterly rewards that far surpass your initial investment if you stick to healthy companies. And a certain kind of dividend can indicate health.

A certain kind of dividend? Well, a healthy payout ratio. Certainly a mortgate REIT paying more than it can afford is going to punish you with a share price that ends lower than your cost. That's where the drum that mathjak keeps beating would come into play.

BGS (B&G Foods) is in this state right now, I think. Used to be a healthy company with both share price increases and dividend hikes. It flew too high too fast, and the share price sank. The dividend did not sink along with it, and is now a tempting 13-14%. Don't, uh, yield to temptation. O0 The dividend is unsustainable, in my opinion.

Compare that with T Rowe's yield. Even with the massive hike mentioned a few posts above, the yield on holdings is only 2.2% It's just keeping up with the company's growth.
New York City disbanded its anticrime unit of plainclothes officers on June 15, part of a $1 billion reduction in the city’s police budget. —WSJ
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