Talking Stocks 2.0

[vitalsigns]

In theoretical finance and in many real-world applications (as mentioned above, Berkshire being of particular note), dividends vs. buybacks do not matter (assuming tax equivalency).

The holder of a stock that doesn't pay dividends could easily replicate a dividend by selling a portion of the stock....et voila, you have an effective dividend, and your total stock value drops by just as much as if a dividend was paid.

I do, however, think there's an argument that *some* companies are better run when they have to generate cash flow to sustain dividends (and if expected, even increase them periodically).

But there's also an argument that the focus on cash dividend distributions for *some* companies is a bad idea, particularly those companies with a high cost of capital (debt or equity) and good ongoing ROI.

Would you want Apple to have paid dividends throughout the 2000s? No.
Would you want Altria to pay dividends now? Probably yes.

20/20 hindsight, of course...

[jaisonline]

Originally Posted by Letsgodiving

As Brad stated above, Berkshire Hathaway notably does not pay a dividend. Buffett discussed his view on dividends at some length in his 2012 shareholder letter where he specifically pointed out that his shareholders have far more wealth as a result of BH not paying a dividend.

True.

I also assume from a certain point of view, Berkshire shareholders indirectly get dividends since many of their holdings offer them. You just don’t see the dividends directly w/ BRK A & B shares in portfolios.

[scarlet knight]

I have held BRK.B on occasion over the last ten years. It never really performed well for me. I currently hold OXY because I think that Berkshire will take it over at a premium. They keep buying more of it.

[jaisonline]

Originally Posted by scarlet knight

I have held BRK.B on occasion over the last ten years. It never really performed well for me. I currently hold OXY because I think that Berkshire will take it over at a premium. They keep buying more of it.

I see your point. Granted, the “easy money” borrowing days since the late 2000s are likely over.

[glenn_herwig]

Originally Posted by jaisonline

I see your point. Granted, the “easy money” borrowing days since the late 2000s are likely over.

***This is not investment advice***

This stuff is fascinating. Buy and Hold with the active management combo. The particular strategy is Managed Futures, a type of hedge fund that goes Long/Short hundreds of markets. Best of luck.

Link below is PDF:

file:///C:/Users/glenn/Downloads/Berkshire%20plus%20Managed%20Futures.pdf

[EEpro]

Originally Posted by glenn_herwig

***This is not investment advice***

This stuff is fascinating. Buy and Hold with the active management combo. The particular strategy is Managed Futures, a type of hedge fund that goes Long/Short hundreds of markets. Best of luck.

Link below is PDF:

file:///C:/Users/glenn/Downloads/Berkshire%20plus%20Managed%20Futures.pdf

I don't have access to your hard drive though.

[enjoythemusic]

Originally Posted by EEpro

I don't have access to your hard drive though.

I was about to say.....

[glenn_herwig]

Originally Posted by EEpro

I don't have access to your hard drive though.

https://acrobat.adobe.com/link/revie...1-c076b8e31365

My apologies. Trying Adobe Acrobat. PM me if you want the paper on the two investments. Sorry for the link issue.

[macrowatch]

Originally Posted by enjoythemusic

I was about to say.....

He forgot to give us the keys to the crypto wallet too on the HD....

[austinp]

Great start to the year! Let’s celebrate a great quarter! Happy Friday everyone.


Sent from my iPhone using Tapatalk

[7sins]

Meant to chime in earlier but have been at Watches and limited Wonders. Many of you are looking at dividends from a pragmatic textbook application opposed to real world. It was interesting to see both sides of the argument made and I will refrain from my own opinion of the importance of dividends. What was lost upon the conversation is real world application that may not be appropriate for many of us in this form but MANY individuals, especially those in retirement live off the dividends from dividend paying stocks. Thus they can retain the same number of shares, yes the price declines, but they can use that income for their living expenses. That demand for income creates demand for the stock which creates price support or can push the stock higher. Additionally, for more sophisticated clients we take the dividend income and use it to invest into other securities/alternative investments as a way to improve diversification. While not certainly always the case dividend stocks like utilities are viewed as less volatile with exceptions IE the energy sector. Personally I find share buybacks meaningfully more beneficial as it reduces outstanding shares and shows the conviction management has in the company but alas a story for a different day. Just my .02 on this dividend debate, this has become certainly more interesting now that bonds have substantially higher yields than most SPY companies which is fantastic for someone who trades bonds haha.

[VictorGMT]

I view a dividend as a statement by management. "We do not have a way to deploy this cash in the business at a return you expect."

[macrowatch]

I remember at one point Larry Ellison got approx 750M annually in Oracle dividends. The figure is surely higher now to compensate for inflation. One could argue he became bearish on the company by extracting so much in dividends once he bought a Hawaiian island and lost focus.

[Mifune]

[BroncoOne]

Originally Posted by 7sins

Meant to chime in earlier but have been at Watches and limited Wonders. Many of you are looking at dividends from a pragmatic textbook application opposed to real world. It was interesting to see both sides of the argument made and I will refrain from my own opinion of the importance of dividends. What was lost upon the conversation is real world application that may not be appropriate for many of us in this form but MANY individuals, especially those in retirement live off the dividends from dividend paying stocks. Thus they can retain the same number of shares, yes the price declines, but they can use that income for their living expenses. That demand for income creates demand for the stock which creates price support or can push the stock higher. Additionally, for more sophisticated clients we take the dividend income and use it to invest into other securities/alternative investments as a way to improve diversification. While not certainly always the case dividend stocks like utilities are viewed as less volatile with exceptions IE the energy sector. Personally I find share buybacks meaningfully more beneficial as it reduces outstanding shares and shows the conviction management has in the company but alas a story for a different day. Just my .02 on this dividend debate, this has become certainly more interesting now that bonds have substantially higher yields than most SPY companies which is fantastic for someone who trades bonds haha.

Great commentary. One other important advantage of a stock buyback is that it isn’t a taxable event to the shareholder (and was not to the corporation until the “Inflation Reduction Act”).

[330ci]

https://www.nytimes.com/2023/04/25/b...ock-price.html

Going to need a separate thread to keep track of all these bank failures. Is first republic next?

[acebelt]

Originally Posted by 330ci

https://www.nytimes.com/2023/04/25/b...ock-price.html

Going to need a separate thread to keep track of all these bank failures. Is first republic next?

You called it a few days early! https://www.firstrepublic.com/resour...-clients-chase

[enjoythemusic]

Can this be true? By acquiring First Republic Bank, JP Morgan has bypassed laws against acquiring a bank while controlling 10%+(!) of US deposits. They shared $13 billion in losses with the FDIC while also receiving a $50 billion loan from the FDIC. Surely this can't be true. Jim Cramer loved FRB weeks ago and now is promoting JPM.

330ci, is it time to short JPM?

PS: Check out page 19... derivatives exposure.
https://www.fdic.gov/analysis/quarte...c/industry.pdf

[enjoythemusic]

Hmm, the PDF document that the link pointed to changed (very weird). Basically, it was about the derivatives exposure of JPM and other banks. By 'saving' FRB, were JPM and others actually 'saving' their derivatives exposure?

[330ci]

Originally Posted by enjoythemusic

Can this be true? By acquiring First Republic Bank, JP Morgan has bypassed laws against acquiring a bank while controlling 10%+(!) of US deposits. They shared $13 billion in losses with the FDIC while also receiving a $50 billion loan from the FDIC. Surely this can't be true. Jim Cramer loved FRB weeks ago and now is promoting JPM.

330ci, is it time to short JPM?

PS: Check out page 19... derivatives exposure.
https://www.fdic.gov/analysis/quarte...c/industry.pdf

When I saw that JPM held $2.5T in deposits my first impression was, "wow! They could almost use their fractional reserve powers to bail out the Fed if they didn't loan out money to other people."

Then I let that concept sink in a little bit.

When you think about it, that concept is absolutely terrifying. JPM already has more financial capabilities than the US Government could dream of at this point.

whats the point of shorting JPM. If they go under it sounds like it's game over for the economy.

If JPM goes under, there is going to be mass chaos, people will die, and war will potentially break out. I wouldn't bet against them, if they go under you could be a billionaire on paper and I imagine you'll still struggle to buy a loaf of bread with the money.



I know my comments about alot of these issues range anywhere from insensitive to blase, but that is more for emotional effect. Personally. I'm terrified.

People made fun of me when I said to stock up on rice and beans; but I think that's a better investment than shorting JPM right now. Personally I'm of the belief that nobody should be investing in anything tethered to the USD at this point. ROI is irrelevant in a currency collapse which is what we're facing


Being TRFs resident nutjob is tough somedays.

[330ci]

Originally Posted by enjoythemusic

Hmm, the PDF document that the link pointed to changed (very weird). Basically, it was about the derivatives exposure of JPM and other banks. By 'saving' FRB, were JPM and others actually 'saving' their derivatives exposure?

...wtf 1 page now, yeah thats shady.

I believe you, so many times I read articles, recite what I read only to have the original version modified to fit the narrative. Always funny when you catch it in real time.

[macrowatch]

Originally Posted by 330ci

When I saw that JPM held $2.5T in deposits my first impression was, "wow! They could almost use their fractional reserve powers to bail out the Fed if they didn't loan out money to other people."

Then I let that concept sink in a little bit.

When you think about it, that concept is absolutely terrifying. JPM already has more financial capabilities than the US Government could dream of at this point.

whats the point of shorting JPM. If they go under it sounds like it's game over for the economy.

If JPM goes under, there is going to be mass chaos, people will die, and war will potentially break out. I wouldn't bet against them, if they go under you could be a billionaire on paper and I imagine you'll still struggle to buy a loaf of bread with the money.

I know my comments about alot of these issues range anywhere from insensitive to blase, but that is more for emotional effect. Personally. I'm terrified.

People made fun of me when I said to stock up on rice and beans; but I think that's a better investment than JPM right now.


Being TRFs resident nutjob is tough somedays.

Don't bet against Mr. Dimon! Seriously impressive executive. I think his only draw back is he enjoys his job too much to leave and will end up being like Jack Welch where he gets a second rate successor because the best ones left a decade earlier due to no vacancy at the top.

Further, there is no major bank CEO that was currently CEO back in 2008 except for Mr. Dimon right? Steady hands that one. Savy and experienced this second go around.

PPS, technically I think JPM does 'lend' money to the fed overnight and get paid interest on it.

[HHIslander]

Originally Posted by macrowatch

Don't bet against Mr. Dimon! Seriously impressive executive. I think his only draw back is he enjoys his job too much to leave and will end up being like Jack Welch where he gets a second rate successor because the best ones left a decade earlier due to no vacancy at the top.

Further, there is no major bank CEO that was currently CEO back in 2008 except for Mr. Dimon right? Steady hands that one. Savy and experienced this second go around.

PPS, technically I think JPM does 'lend' money to the fed overnight and get paid interest on it.

Heh. The JPM window is open to just a select few.

I also wouldn't short JPM. They are the banking sector equivalent of MSFT, they don't fail to execute and betting against them is a bet that they will make a mistake. I don't see that happening. BAC and C, on the other hand.

[330ci]

Originally Posted by macrowatch

Don't bet against Mr. Dimon! Seriously impressive executive. I think his only draw back is he enjoys his job too much to leave and will end up being like Jack Welch where he gets a second rate successor because the best ones left a decade earlier due to no vacancy at the top.

Further, there is no major bank CEO that was currently CEO back in 2008 except for Mr. Dimon right? Steady hands that one. Savy and experienced this second go around.

PPS, technically I think JPM does 'lend' money to the fed overnight and get paid interest on it.

He is a very successful orchestrator of market manipulation without getting caught. He's a despicable human being and if there were any sense of justice in this country he'd have been executed long ago for Treason. Or at a very minimum charged alongside his executives. How blissfully unaware he is of the inner workings at JPM anytime theres questions to be answered.

The game is rigged, they're the ones rigging it. Hard to lose a fixed game. The house always wins.

If being a career criminal makes someone an impressive CEO, I'd say we need less impressive CEOs and more honest ones.

Who would want to step down from that position though? He's arguably the most powerful executive in the world. I can't imagine anything in life being fulfilling after holding that position. Might as well ride it out.

[330ci]

Originally Posted by enjoythemusic

330ci, is it time to short JPM?

Look into what happened to those who shorted FRC too BTW

I can't even begin to explain that one.

[Romeojk]

Anyone running from PARA?
Ugh, I recently added due to the dividend and to lower my overall cost per share.

Paramount announced it will slash its quarterly dividend to 5 cents a share from 24 cents a share.

This “updated dividend policy…will further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability,” Chief Executive Bob Bakish said in a release.

Its down 27% for the day


Any thoughts?

[macrowatch]

It's a bizarre year when stody bank stocks that make money are worth less than community fiat of bitcoin.

For me it's even more weird watching banks we hold money in that are strong mid tier banks, super regionals get vaporized in market cap.

[huncho]

Originally Posted by Romeojk

Anyone running from PARA?
Ugh, I recently added due to the dividend and to lower my overall cost per share.

Paramount announced it will slash its quarterly dividend to 5 cents a share from 24 cents a share.

This “updated dividend policy…will further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability,” Chief Executive Bob Bakish said in a release.

Its down 27% for the day


Any thoughts?

i work in media and there's no growth in the sector and wall street knows it. all these companies are trading well below sales and have been for a while, i'm not sure what it will take for that to change. margins are small and there's too much competition and costs are only rising, while we have high inflation and people are struggling financially. the only exception is netflix since they're technically a tech company at its core

the fact that not even para is showing good signs is enough to not touch that entire market imo

[330ci]

Carl Icahn - Forbes https://www.forbes.com/profile/carl-...h=3d7be84a35eb


https://www.cnbc.com/2023/05/02/hind...rt-seller.html


Bad day for Carl, I wonder what the terms of his leverage are. Seems like there might be a forced takeover.

[330ci]

https://www.usatoday.com/story/money...s/70184497007/


https://youtu.be/Zpx3bUudMsA

Someone needs to do a bank failure montage dubbed over Another one Bites the dust at this point.



Nothing to worry about here though JPM says the worst is over