Maybe Warren Buffett Is Warning Us About Something

Post by [deleted] » Wed, Aug 28, 2019, 5:46 PM UTC

ericd wrote: post #90

derekp7 wrote: post #86

Earlier quoted context omitted.

Regarding sentiment, and stock valuation, this is the way I look at it, which to me makes sense (although it doesn't account for irrationality in the market). Let's say you have $100.00, and the market figures that you need to make a return of 4% per year. If you find a stock that gives dividends of $4.00 per year, that stock will then be worth $100.00. This is assuming that there is a really strong trust in this com…

What? The value of the stock isn’t based on the dividend yield. Dividends are just some of the money of the company being paid out, the value of the company decreases by that amount. The company can declare literally any amount they want to pay out at any time, and it will be the same company either way, with the same underlying value.

Post by RickJWagner » Thu, Aug 29, 2019, 1:43 AM UTC