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Fleccy
"DT there is loads of content explaining the advantages of Dividend Reinvestment, but you probably already know that as you also hold dividend paying stocks yourself."
All i have tried to get across is there are no black and white rules as to how to make cash, either capital gains on sp increases or soley the divis you bang on about.
There is a room for a mix and exactly the reason why i dont care that mikey doesnt pay any divis, but the rule that capital preservation is king 100% correct and should be all investors main goal. Everything else capital or divi is gravy.
Dividend reinvestment has fallen out of fashion, due to the decade long US bull market propelling US "Growth" stocks to dizzy heights, with the FTSE underperforming the US massively; Clearly this means, either the FTSE has to go up at some point, or the US needs to drop; In my opinion they'll probably never meet, but the percentage performance differences should narrow considerably. The historic move to Growth is clear to see, as evidenced by the performance of the Nasdaq, but recent evidence suggests the growth trend may be coming to an end, again evidenced by the Nasdaq. If the era of cheap money really is coming to an end, then it stands to reason that a risk off trend will take over, with investors preferring income over growth. Crypto's recent declines is further evidence of a trend reversal, and the rhetoric suggests that Crypto is following the Nasdaq down; In my opinion, Crypto isn't following the Nasdaq, they are both reacting to the same headline events, and fluctuating in tandem with risk off/risk on sentiment. The Crypto world is currently being supported by big vested interest money, with Sam Bankman-Fried bailing out Crypto firms BlockFi, and Voyager, holding off further carnage, but for how long? The Nasdaq/US stocks are currently finding some support, because a narrative is being pushed that the magic money fueled bull train isn't damaged beyond repair, it's just waiting at the station, ready to depart in the not so distant future; Is this true, or a false narrative pushed by vested interests pumping, so they can dump?
https://www.forbes.com/sites/johntobey/2022/06/24/exceptionally-good-conditions-for-stock-bull-market-launch-in-july/
https://www.cnbc.com/2022/06/22/sam-bankman-fried-rescues-crypto-lenders-blockfi-voyager.html
https://www.google.com/finance/quote/UKX:INDEXFTSE?comparison=INDEXDJX%3A.DJI%2CINDEXNASDAQ%3A.IXIC%2CINDEXSP%3A.INX&window=MAX
DT there is loads of content explaining the advantages of Dividend Reinvestment, but you probably already know that as you also hold dividend paying stocks yourself.
https://www.youtube.com/watch?v=irkYdLzKSyc
https://www.youtube.com/watch?v=-cc4HNi_ags
https://www.youtube.com/watch?v=s4g33b4fAbY
John
This was the bit i noted the most.
"investors who reinvest dividends MAY also benifit should a stock or fund decline in value TEMPORARILY"
Just how long is 'temporarily'?
It could be for a very very longtime, likely permament, while you hold the capital loss.
Just look at the favourite slave trader for an example.
If you'd bought that in the 400's following dopey dungs advice, you certainly wont be having many sleep filled nights - even if it paid a divi.
Capital preservation is KING.
Of course, being brokers earning commission, it doesnt at all mean the 'advice/suggestions' in the article is/areintended to encourage more purchases of stocks, to keep their industries commisions rolling in. Nah, course not.
"I bet you'd sell if they put a spurt on and you actually made a gain, unlikely though with your three picks as currently demonstrated."
It would have to be big gains for me to sell any of my stocks, but I'm in no hurry as I'm getting paid to hold.
I always intended BT to be a long term hold, as things stand I'm looking at holding until at least 2030. There's a lot to like about BT:
£2.5 Billion a year cost savings by the end of 2025.
Big reduction in operating costs from PSTN switch off and move to cloud/Passive Optical Networks.
Pension trustees looking at insurance buyout of pension scheme in the next 10 years.
Debt reduction in line with drop in lease liabilities, on the back of the exchange closure program, plus a cut of the profit from Telereal Trillium repurposing the buildings and selling them.
Vodafone's a bit trickier, but they're a behemoth with lots of assets and good cashflow. I view Vodafone as the having the biggest risk of a dividend cut, but they're not currently signalling a future cut.
Lloyds is just dirt cheap; In fact Lloyds current share price defies logic, which is why I'm buying more as dividends become available.
"So do i. You'd never buy here because of whatever your hang up with this company is, but you are happy to continually tell others what to do."
You're correct, I wouldn't invest in any travel and leisure stocks, as the sector is volatile and subject to geopolitical macro events. The US Airline industry is currently in turmoil, Europe's going the same way. I'm amazed sentiment toward Airlines has held up as well as it has.
"Unlike DT, I haven't got the luck to pick stocks that double in value soon after I purchase them, then again neither do the professionals; DT should apply for a job at Morgan Stanley, since he appears to stock pick better than 99% of fund managers at the top US banks."
You appear to be lowering yourself to the levels of dung and calling me a liar Fleccy?
Well unfortunately, for you at least, your wrong, so perhaps try not to lower yourself eh!
For your info, after i purchased Glen, it did indeed drop horrendously, so Morgan Stanley sacked me, however, it soon rocketed back to far higher levels, my examination of the stock completely vindicated after the market wobble.
No matter though, you stick with your favoured three - all of which currently owe you money and you remain stuck holding, despite the "im in it for divis retoric"
I bet you'd sell if they put a spurt on and you actually made a gain, unlikely though with your three picks as currently demonstrated.
As for telecoms, banging on repetedly about those being undervalued forever isnt/wont change the fact that the markets seem not to agree with you. Everybody else must be wrong, right?
And im pretty sure the average Joe is clever enough to work out that the Net is supported on Telecoms networks, you dont seem to think anybody else in the world understands this? What a stupid thing to say.
"You've been very lucky in timing your buys DT"
Nah, its called patience and decent research in the main, with a bit of luck thrown in. Covid a negative, and the war a 'positive' (obviuosly only from a financial view, not humanitarian one)
" I know what I'd do."
So do i. You'd never buy here because of whatever your hang up with this company is, but you are happy to continually tell others what to do.
Accordingly you have missed out on a winner - you could have bought and sold out yourself at €18. No divi, but one hell of a capital gain to move elsewhere to chase divis with.
"Is the intention of your 12.49 post to prove you can add and multiply.
However , such virtues don't really cut the mustard when it comes to making shrewd investment decisions. They only come into play AFTER you have made the investment decision."
John, I didn't do any adding or multiplying in the 12:49 post; You must be referring to the copy and paste, in quotes, from the article I linked to at the bottom of the post.
Tell me John, how do you make shrewd investment decisions without a crystal ball? There's no reason why Telecoms have underperformed over the last 5 years, other than the market power players have deemed it so. My opinion is, at some point Telecoms will see a re-rating with big jumps in the valuations within the sector. People forget that big tech's business model is totally reliant on Telecom infrastructure, at some point the market will have to recognise that.
In my 20 odd years of investing, I've rarely picked stocks that've immediately outperformed. My most memorable trade was the Vodafone takeover of Cable & Wireless Worldwide, where Vodafone payed around 38p a share, in cash; I immediately reinvested the money back into Vodafone shares around 160p, soon after Vodafone announced the sale of their stake in Verizon Wireless to Verizon Communications; As well as profiting from my CWW shares, I saw a profit of around 38% on the VOD shares in short order, selling around 220p. Most of my other trades have been more mediocre, usually underperforming after my purchases, but moving well into profit before I sold. The bottom line is, I've never lost money on my trades, so I must be doing something right even though I hit bumps and troughs on my investment journey. Unlike DT, I haven't got the luck to pick stocks that double in value soon after I purchase them, then again neither do the professionals; DT should apply for a job at Morgan Stanley, since he appears to stock pick better than 99% of fund managers at the top US banks.
"Id sooner buy a stock that i think will rise, rather than bumble along or decline (BT, VOD, Lloy), such as Glen (others are availible), have the value double in a year or two."
Wouldn't we all, but how would you know what's going to "double" and what's going to "bumble along"?
I'm not being funny, but Warren Buffet said "if you don't feel comfortable owning a stock for 10 years, you shouldn't own it for 10 minutes"; The reason he said that is because no one can predict the direction of a stock, or sector, and the market can surprise either way. I also agree with John Maynard Keynes, who said “Markets can stay irrational longer than you can stay solvent", except in my case I can stay solvent for as long as it takes. I consider myself unlucky with the timing of my initial investment, but my strategy will pay off in years to come. If Lloyds, Vodafone, and BT, go bust, then it's pretty much game over for everything, since it would only happen if the whole system collapses, with Gold being the only safe asset, until someone robs you of it.
You've been very lucky in timing your buys DT, the reason I say lucky is because of your performance around holding your Ryanair stock when you clearly should have sold at €18, and took the 11% hit off your target price. If it manages to climb back to €18, will you sell? Or hold out for the extra €2 per share? I know what I'd do.
"i don't understand why all retail shareholders don't invest in dividend stocks, it's a no brainer as far as I'm concerned"
Id sooner buy a stock that i think will rise, rather than bumble along or decline (BT, VOD, Lloy), such as Glen (others are availible), have the value double in a year or two. Sell half and get the initial stake back, and leave the gain as 'free runners', alternatively leave the lot in for more of confident of further rises..
All the while collecting divis on top.
Preservation of capital at its finest with no risk whatsoever as playing with 'house' money.
And if i wake up one morning in a mad mood and fancy a Ferrari, the cash is still 100% there to do it, without selling at a loss.
Also, dividend stocks unless paying at least inflation, are losing money, less than cash obviously, but losing non the less.
"I hope your "dividend" advice is better sourced."
Speaking of Dividends John, I've just been looking at my upcoming Divi's.
I've got 4.5 Eurocent (3.9p) per share Dividend due from Vodafone, on the 5th August. That'll give me £1,713 in the ISA's available to reinvest immediately, and £1,354 transferred out of the standard sharedealing accounts, ready for next April.
Then there's a 5.39p per share BT dividend due on the 12th Sep, which will give £1,692 in the ISA's to invest immediately, with £2,488 transferred from the standard sharedealing accounts ready for next April.
Currently I'm ploughing my dividend reinvestments into Lloyds; So assuming the Lloyds share price remains below 45p, between now and mid September, I could purchase at least 7,506 Lloyds shares with the ISA dividends, taking me up to around 392,000 Lloyds shares. I'll reinvest the next Lloyds dividend back into Lloyds, whatever and whenever that is, until I hit around 400,000 Lloyds shares.
I don't understand why all retail shareholders don't invest in dividend stocks, it's a no brainer as far as I'm concerned.
"I hope your "dividend" advice is better sourced"
There are loads of articles discussing the advantages of dividend reinvestment. As I've said on may occasions, dividend reinvestment can be viewed as a form of growth.
"For example, if an investor owns 10 shares of a stock or mutual fund valued at $5 a share, and the stock or fund pays out a 50-cent dividend, an investor reinvesting dividends can take that dividend payment ($5 total) and purchase another share. An investor taking cash may simply use that $5 however they wish.
Reinvesting dividends has the potential to accelerate growth of capital. For example, in the aforementioned case, let’s say the investor who reinvested dividends now has 11 shares, at a total of $55. If the stock climbs to $6 a share, the investor now has a total asset value of $66. The investor who took dividends in cash would have 10 shares worth $60 and $5 in cash for a total value of $65.
Investors who reinvest dividends may also benefit should a stock or fund decline in value temporarily. If a stock or fund declines to $4 a share, those 11 shares are worth $44. However, if the stock or fund pays out another 50-cent dividend, the investor can purchase 1.375 shares through reinvestment, for a total of 12.375 shares. (Partial share purchases through dividend reinvestment are common for mutual funds.) Should the share price climb back to $5, the total value of 12.375 shares now stands at $61.875. The investor who took dividends in cash would have 10 shares valued at $5, plus $10 from two dividend payments, for a total of $60."
https://www.capitalgroup.com/individual/planning/investing-fundamentals/rewards-of-reinvesting-dividends.html
"are you sure you got the right woman. In my experience the bride's nightie comes down just once and stays down"
I didn't make that one up John, you'll have to email John Shuttleworth and ask him, unless John Shuttleworth's your pseudonym?
https://sonichits.com/video/John_Shuttleworth/Up_and_Down_Like_a_Bride's_Nightie?track=1
Just the way a capital gains growth invester like me likes it :)
Not being able to duck in and out taking gains suddenly because of delisting f'ing sucks though, grrrr.
Onwards and upwards Mikey
"It's an extraordinary outperformance."
The 5 year chart is quite extraordinary, Ryanair has been up and down like a brides nightie since 2017. Hard to know if it'll drop back to Aug 2019 levels, but there was also threatened strike action then, probably driving the price down.
It's an extraordinary outperformance.
The share price was lower in August 2019,
pre covid, the huge oil price spike, airport chaos,
the Russian invasion of Ukraine and now a looming recession.