Looks like everyone here thinks that holding for dividends the one and only way.

Dutch Lady could have been sold at end Oct/early Nov 2012 and fetch a price of 49++.
Seller will miss the Nov dividend and this new 1.30 dividend.
Total dividends missed = 2.60.
Price of Dutch Lady is now 42.66.

Getting dividends is good but then price appreciation and price depreciation factors should not be ignored.

Talk stocks talk until God come out.

Yes not many will sell at 49 but there are some who would.

Look, I have been in the market long enough and I have seen many chased after stock dividend and yields and after many years of holding the stock, their returns have been dismal and this was because they dismiss that it is possible that one can lose money from investing in stocks that pay dividends. Of course, these are the exception or the rare cases and that there are many who had gained handsomely from the dividends received.

Hey Pinky.

Of course.

*cough*

These prime area ... who owns them ah?

I thought you were talking about them high rentals in the shopping malls.

These poor shops can survive ah?

It's fun thinking about it.

IF i am a reit (shopping malls type) investor, no need ask Ah Kwai, I sure demand more $$$ for my investment.
REITS manager also want more $$$.
How to get more $$$?



How to increase more rentals?
Have more malls? or raise rental?



If raise rental, shop raise prices.
Now what have I done if I am a regular at THAT mall?

Very strange.
When earnings was diving to the deep end, all want to buy cos of dividends.
Now when earnings shows signs of improvement, no one interested?

The power of group thinking....

Many fail to realise that the price that they pay for a dividend paying stock is never constant.
Stock price can go up and they can also fall.
If they over pay for that stock, the stock would correct and causes the price of their investment to actually go down.
In such incident, whatever 'gain' earned from the dividends is negated by the depreciation in stock price.

Example.

Let's say a player hunts for a dividend stock and the player adds in the growth factor into his/her search parameter.
Player chooses Dutch Lady.
Good pick? Or bad pick?
Growth? Tick.
Strong cash flow? Tock.
Strong balance sheet? Tick.
Past record. Nov 2011 it paid 50 sen total. Feb 2012 it paid 1.30 total. Tick.
Assumption. With more profits and more cash, Dutch Lady should pay more this year. Tock.
When to buy? To catch Nov 'dividends', the early bird tactic was considered. Tick.
Buy in Oct 2012 to catch the yummy worms in Nov 2012 and Feb 2013. Tock.
End Oct 2012, DLady was trading between 49 to 50.
At 49, using the min expected dividends (ie Dlady to pay the same amount, ie 50 sen + 1.30 (feb) ), the yield is 1.80/49.00 = 3.7%.
That's low right? But what is low to a dividend chaser?
Stock is EXPECTED to make more profits, therefor Dutch Lady should pay more.
Now this assumption came out correct. Tick.
Dutch Lady earned more profits and Dutch Lady is paying more dividends.
A total of 1.30 was paid for that Nov 2012 earnings and another 1.30 was announced in Feb 2013 earnings. Tock.
2.60 total dividends. Fanatstic. Spot on the assumption! Tick.
Based on the price of 49ringgit, that's a yield of 5.3%. Not bad. Tock.
But the price of Dutch Lady is the problem.
Price of Dutch Lady is now only 46.
And after Dutch Lady pays the 1.30 dividend, the stock price would be adjusted lower.

Player gains the dividends but whatever gain is negated by the fallen share price.

I just want to point out that one should NOT (edited ) solely look at dividends when buying a stock.
A lot of other factors needs to be considered thoroughly.
Dividend investing is not 100% sure win strategy.
We have seen companies suddenly decide to pay less/not pay dividends.

This post has been edited by Boon3: Mar 13 2013, 09:44 AM

Yeah, typo!

One factor not many talk about is the owner factor.
A stingy owner can suddenly surprise the market by giving a very generous dividend but such dividend is likely not to be sustainable and repeated in the future simply because the owner is a stingy poker. .

The example WAS given BASED on the following statement:



Agree and disagree here.
Agree that IF Dutch Lady profits continue to grow, a higher stock price is possible.
Disagree because the issue of Growth and Dutch Lady and Nestle are all correlated.
Currently BOTH Dutch Lady and Nestle are recording tremendous growth.
So if Dutch Lady's earnings continues to grow, by all means, Nestle's earnings should also continue to grow.

Are you paranoid with 49?
Look there is a reason why 49 is chosen. (I could have used 50 but I did not)
Dutch Lady based on historical trend paid its dividend in Nov and Feb.
That's the trend.
A dividend chaser, as clearly explained in the example, would have used Oct 2012, as an entry point.
It's a point where the dividend chaser is an early bird.
Look at the charts.
Mid Oct 2012 Dlady traded for a while above 49.
End Oct 2012 Dlady traded for a week above 50.
During these period, there are actual buyers and sellers for the stock.

Also, if the dividend chaser would employ this very SAME strategy for this year end 2013, I would say that Oct 2013 should be considered as an entry point if the dividend chaser want to 'gain' from dividends for Nov 2013 and Feb 2014.

When Dutch Lady was 18+, I remembered too because I bought more.
That was in Oct 2011. (Yeah, October)

Needless to say, in the stock price, every price has buyers and sellers.
At 18+ then, buyers and sellers existed.
Same with 49+.

Here's the issue.
The dividend chaser as mentioned, focused solely on dividends.
The chaser left out other factors.
PE and PEG.
At 18+ in 2011, what was Dutch Lady PE and PEG?
At 49+ in 2012, what was Dutch Lady's PE and PEG?

Rememeber my Dutch Lady example was based on foofoosasa statement:

Which I replied:

Many fail to realise that the price that they pay for a dividend paying stock is never constant.
Stock price can go up and they can also fall.
If they over pay for that stock, the stock would correct and causes the price of their investment to actually go down.
In such incident, whatever 'gain' earned from the dividends is negated by the depreciation in stock price.

And to back up my statement, I used the Dutch Lady example.

Ah Tan,

I talk stocks and 'investing' mah.
Tell me if I am wrong that majority here just talk about dividends only without focusing on other factors.
Like you, I would say dividends is good but the dividends must be sustainable.
And for the dividends is sustainable, there are so many other factors to consider.

Dutch Lady example is just one simple example to show why one cannot simply chase a dividend stock la.

Daiman and other Johor property stocks, like KSL and Crescendo etc etc all shot up based on Iskandar theme play.

Regarding the GE factor.

I am curious.
For those who believed that the GE factor would impact negatively, what would these players do?
Would they hold their stocks and wait till GE announce then only sell?
Or would they have sold much earlier?

Being attacked?
Here got what kind of attackers wor?

Only opinion(s) we share here.