Re:What Business is Wall Street In?
by prodigal_erik on Saturday September 22, 2012 @04:04AM
(#4557406)
Without dividends, there's no reward for buy-and-hold investing, and no reason to pick companies that will actually perform well. Instead anyone who buys is gambling that they'll be able to dump their position at a fortunate time, which leaves them dependent on predicting the irrational market's perception of the company's prospects.
Re:What Business is Wall Street In?
by yummyfajitas on Saturday September 22, 2012 @09:46AM
(#4557835)
Unfortunately dividends are double-taxed relative to cap gains/interest/etc. Until that's fixed, we won't go back to the era of companies returning money to investors.
Companies can and do return money to investors through stock buybacks. To first order, it is the same as a dividend, except that only the investors who want money get it.
Re:What Business is Wall Street In?
by yummyfajitas on Saturday September 22, 2012 @03:02PM
(#4558676)
To first order, stock buybacks are equivalent to dividends. To second order, the IRS makes it complicated, as do regulators.
Re:What Business is Wall Street In?
by lifeisstillgood on Saturday September 22, 2012 @04:17PM
(#4558873)
What - really double taxed ? Do you mean dividends are paid out of post tax cash, then taxed as income for the stockholder?
Just wondering
Where Keynes' rule applies in spades is when you are doing things like shorting an overpriced stock. Now as the price goes up you keep on having to put more money in, and should you run out of money you lose your shirt.
And about poker, there are a lot of variants of poker out there. Texas Hold 'em is what everyone is playing because it has the combination of more strategy and thinner edges. So good players have a real challenge figuring it out, and weaker players have a better chance of walking away lucky on any given night.