****OFFICIAL STOCK CHALLENGE & DISCUSSION THREAD****

[Hog's Gone Fishin]

Stock Discussion

[Hog's Gone Fishin]

Hell, just watch the video I posted. The guy rakes in 9K-10K per month and doesn't give a shit about the actual stock price. He LIVES off the dividends.

[Hog's Gone Fishin]

Not financial advice, just interesting to listen to creative thinking. That's all!

[lewdog]

Originally Posted by Hog's Gone Fishin

You keep saying that but I don't see it , Why do people even invest in dividends then?????????

For example:

I put 100 shares of MAIN in my daughters portfolio 1/2021 at 31.96/share

That's $3196

It pays 7% yield at .22 per share per month

The stock is at $39.50 per share now 116.69 shares through reinvestment

Her 100 shares are now worth $4582

That's an increase of 43.36% while the increase in stock price from 31.96 to 39.50 represents 23.59% increase the dividend gains represent the remaining 20% gain.


Yeah, it's free money!

That’s how dividends work. It comes off the share price. If a stock is $10 and pays a 10% dividend that dividend is paid and now the stock is worth $9 and I have the dividend as cash or to reinvest. There’s no free money there so you are misleading people without doing the actual math on the return.

I’m just saying not to get short sighted. It’s NOT free money like paid interest. So many times people focus on a dividend when in that time the index would have given them a bigger overall return!

What would something like VOO be valued at now if you had invested in it on the same date, 1/21? How does the return on VOO compare to MAIN for the same time frame? If MAIN did in fact fair better (I think it did) that doesn’t mean every dividend paying stock will just because it pays a high dividend. Many dividend paying stocks lag market return. MAIN is likely an exception, not the rule. See something like AT&T stock.

All that matters is total return since a dividend is again, not free money and taken out of the stock price.

[lewdog]

Hog, I love you. Always know that. I just don't want people getting lost in thinking a dividend is free money. It's not, it is paid and draws down the stock price.

Let's talk about a large company like 3M which is ticker MMM. Known company and many people hold because it's a dividend king as it pays 6%. It may be but that doesn't mean much for total return which is all that matters.

Let's talk about compound annual growth rate (CAGR) for return.

Ytd MMM has lost 13% including all dividends ..it has lost money for an investor the last 5 years.

It has returned 3.50% cagr the last 10 years compared to 12% for the S&P.

It has been a dog, dividend or not. I classify it with at&t which has been awful over the years.

At&t has returned 1% cagr to an investor the last 15 years compared to 10% for the s&p. But God dammit, you got that 6% dividend (sarcasm!)!!!!

A simple s&p fund have blown these two away….no reason to own either one in my opinion, least of all for a dividend.

These are large companies that people purchased because of a consistent dividend, but why?!?!?! You are getting behind an index investor by just focusing on dividends. You are betting on some of the worst performers in blue chip stocks by just focusing on dividends. Risk a high dividend for a small cap stock and you're really taking a gigantic risk that the stock prices tanks and at some point the company won't even be able to pay a dividend.

Dividends are fine but should not be the main focus for most investors. Too much talk out there like dividends are free money (it isn't!). The key is growth over time and nothing more and index funds are the ones that mostly accomplish this.

[Rain Man]

Originally Posted by lewdog

...
These are large companies that people purchased because of a consistent dividend, but why?!?!?! You are getting behind an index investor by just focusing on dividends. You are betting on some of the worst performers in blue chip stocks by just focusing on dividends. Risk a high dividend for a small cap stock and you're really taking a gigantic risk that the stock prices tanks and at some point the company won't even be able to pay a dividend.

...

Here's the advantage for people like me. I'm playing defense now. I don't want to sell stocks low to fund my retirement. I just want stocks to provide cash flow, either by selling them periodically (frown) or having them spin off cash without selling them (smile).

If I buy a stock with a 5 percent dividend and then never sell it, guess what? I don't care about fluctuations in the stock price and get a guaranteed 5% cash flow each year without selling any stock. I sleep better.

If the stock goes up, great. If the stock goes down, I just don't sell it and take the cash flow. My only risk is a dividend cut, which isn't an issue in most cases.

[Hog's Gone Fishin]

Here's one for you Rainman. It's an OTC stock

FRCLL The current share price is .0143

It says it pays a Quarterly dividend of .2656

Yield is 7425%


Is that good ?

[lewdog]

Originally Posted by Hog's Gone Fishin

Here's one for you Rainman. It's an OTC stock

FRCLL The current share price is .0143

It says it pays a Quarterly dividend of .2656

Yield is 7425%


Is that good ?

Stock used to trade near $150 per shares. It’s now at $.39. 39 cents. Care to calculate that loss?

Don’t be obtuse on why that dividend is so high. Think they’ll cut it? Your risk.

What’s a high dividend like that matter when the person who owns this up through $150 has now lost 99% of their capital.

[Hog's Gone Fishin]

Originally Posted by lewdog

Stock used to trade near $150 per shares. It’s now at $.39. 39 cents. Care to calculate that loss?

Don’t be obtuse on why that dividend is so high. Think they’ll cut it? Your risk.

What’s a high dividend like that matter when the person who owns this up through $150 has now lost 99% of their capital.

You're looking at FRCB which used to be FRC. Now .39 I've actually been trading that stock. Been in and out at least 3 times. But FRCLL is some derivative of the FRC, not exactly sure what it is.

Yeah, I would expect the divi to get cut but if you don't already own the stock and the divi isn't getting cut I think it's a fair price to buy at now.

FREE MONEY! LOL

[Hog's Gone Fishin]

FRCLL price just jumped 31% while I was responding to Lewdog!!!! Now at .0188

[Rain Man]

Originally Posted by lewdog

Stock used to trade near $150 per shares. It’s now at $.39. 39 cents. Care to calculate that loss?

Don’t be obtuse on why that dividend is so high. Think they’ll cut it? Your risk.

What’s a high dividend like that matter when the person who owns this up through $150 has now lost 99% of their capital.

Yeah, Hog's playing a different game than me with those stocks. He may be adept enough to play out some wins with short-term trading, but I'm kind of a buy and hold guy, so I'm not the right fit there. I like companies with dividends that are consistent, albeit a lot smaller.

[Buehler445]

Originally Posted by lewdog

Hog, I love you. Always know that. I just don't want people getting lost in thinking a dividend is free money. It's not, it is paid and draws down the stock price.

Let's talk about a large company like 3M which is ticker MMM. Known company and many people hold because it's a dividend king as it pays 6%. It may be but that doesn't mean much for total return which is all that matters.

Let's talk about compound annual growth rate (CAGR) for return.

Ytd MMM has lost 13% including all dividends ..it has lost money for an investor the last 5 years.

It has returned 3.50% cagr the last 10 years compared to 12% for the S&P.

It has been a dog, dividend or not. I classify it with at&t which has been awful over the years.

At&t has returned 1% cagr to an investor the last 15 years compared to 10% for the s&p. But God dammit, you got that 6% dividend (sarcasm!)!!!!

A simple s&p fund have blown these two away….no reason to own either one in my opinion, least of all for a dividend.

These are large companies that people purchased because of a consistent dividend, but why?!?!?! You are getting behind an index investor by just focusing on dividends. You are betting on some of the worst performers in blue chip stocks by just focusing on dividends. Risk a high dividend for a small cap stock and you're really taking a gigantic risk that the stock prices tanks and at some point the company won't even be able to pay a dividend.

Dividends are fine but should not be the main focus for most investors. Too much talk out there like dividends are free money (it isn't!). The key is growth over time and nothing more and index funds are the ones that mostly accomplish this.

You're mostly right, but a dividend strategy can work, especially for risk averse investors.

The dudes at r/dividends pimp SCHD that has performed evenly with SPY since it's inception if you DRIP (I haven't verified it, but that's what they say). I've started a dividend strategy in a taxable account (which is stupid - I should shelter it, but I have some other shit going on which I don't want to create problems for myself, so I'm leaving it out for now) to push dividends. The intention is by retirement I can have enough income to pay the property tax on the house or some other overhead expense.

I'm a little different in that I have pretty massive risk in the business, that makes me probably more averse to risk than I should be. And my retirement fund is still all growth (I think - most of it is target dated funds). But I'm sticking some in as a risk averse strategy. I may change my tune a bit when a bull market starts again, but the idea of building an income instrument for retirement at a lower risk rating is appealing to me.

I'm not going to disagree with you, but don't dismiss a dividend strategy whole cloth.

[Rain Man]

Originally Posted by Buehler445

You're mostly right, but a dividend strategy can work, especially for risk averse investors.

The dudes at r/dividends pimp SCHD that has performed evenly with SPY since it's inception if you DRIP (I haven't verified it, but that's what they say). I've started a dividend strategy in a taxable account (which is stupid - I should shelter it, but I have some other shit going on which I don't want to create problems for myself, so I'm leaving it out for now) to push dividends. The intention is by retirement I can have enough income to pay the property tax on the house or some other overhead expense.

I'm a little different in that I have pretty massive risk in the business, that makes me probably more averse to risk than I should be. And my retirement fund is still all growth (I think - most of it is target dated funds). But I'm sticking some in as a risk averse strategy. I may change my tune a bit when a bull market starts again, but the idea of building an income instrument for retirement at a lower risk rating is appealing to me.

I'm not going to disagree with you, but don't dismiss a dividend strategy whole cloth.

For 30+ years, I was an all-out daredevil stock investor. I never messed with options and stuff, but I was 100 percent stocks. It worked fine because I never needed to cash out. I just got depressed in the bear markets and made it back in the bull markets.

Recently, though, I've discovered that I'm much happier outperforming the market when it's down than I am in outperforming the market when it's up. I'm in pain avoidance mode now given that I'm half-retired.

I'll still keep my IRAs fully invested in stocks because I figure I won't start tapping those for another 20 years, but I'm slowly steering the ship toward more conservative waters in my investment accounts that will fund my short-term retirement. My new CD strategy is a recent element of that.

[Buehler445]

Originally Posted by Rain Man

For 30+ years, I was an all-out daredevil stock investor. I never messed with options and stuff, but I was 100 percent stocks. It worked fine because I never needed to cash out. I just got depressed in the bear markets and made it back in the bull markets.

Recently, though, I've discovered that I'm much happier outperforming the market when it's down than I am in outperforming the market when it's up. I'm in pain avoidance mode now given that I'm half-retired.

I'll still keep my IRAs fully invested in stocks because I figure I won't start tapping those for another 20 years, but I'm slowly steering the ship toward more conservative waters in my investment accounts that will fund my short-term retirement. My new CD strategy is a recent element of that.

Yeah, you're a good case of a dude that needs to be in dividend producing instruments.

I probably need to look into bonds and bond funds because I'm getting friggin old and yields matter for the first time in 2 decades.

[Hog's Gone Fishin]

I'm actually building a dividend portfolio ,started a couple months ago. Just whenever I make a profit on a trade I'm moving a little into it.

I just added one share of IEP mainly to keep it on my radar. It's close to the bottom of the 52 week range. It took a big hit recently from a short seller report. 24% Free Money (poking Lew)

The ex-dividend date is today also 5/19

[Hog's Gone Fishin]

Am looking at the Yieldmax ETF's

I put up a chart of TSLA and overlayed the TSLY and the stock price follows identical so with the TSLY divi yield at 69% currently , yet declining , if TSLA has a good year then TSLY should be an awesome dividend stock.