tag:blogger.com,1999:blog-7294165939647321702.post9147313092400175647..comments2024-03-11T10:31:06.107-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Aztec: Just How Long Is Your...Term?Saj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7294165939647321702.post-64222139504598839292012-04-28T14:51:46.974-04:002012-04-28T14:51:46.974-04:0030 years for a stock to pay off from dividends?
W...30 years for a stock to pay off from dividends?<br /><br />What?<br /><br />That sounds crazy to me.<br /><br />If you are looking for income, stocks can TOTALLY pay themselves off MUCH, MUCH sooner than that.<br /><br />A good example is National Beverage (FIZZ). I actually owned it (400 shares) for a couple of years. I wish I had held onto it. The stock has split to 7680 shares and paid out $27,178 in cash dividends.<br /><br />The original investment was about $1,700.<br /><br />Another example is Apple. Another example are the REITS that cratered in 2008 but are still paying dividends.<br /><br />I suspect small community banks are another possibility today. It will be interesting to see where their dividends are in 10 to 15 years.<br /><br />If your time line is 10-15 years, you can eventually get 50% cash dividends every year, or more.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-16108183586008499302012-04-26T11:08:27.535-04:002012-04-26T11:08:27.535-04:00What's interesting is that if you buy stocks a...What's interesting is that if you buy stocks and *never* sell them, the cash payouts can take a while to have it pay itself off. That is, unless it's a liquidation. When Buffett buys though, he doesn't appear to care about what the markets offer for a sale, because he seems to be content holding long enough to realize the value through dividends. (KO, for example)<br /><br />Here's a quote from an article he wrote in Fortune in 1977 where he describes equities as 100-year bonds: <br /><br /><i>"Stocks are quite properly thought of as riskier than bonds. While that equity coupon is<br />more or less fixed over periods of time, it does fluctuate somewhat from year to year.<br />Investors' attitudes about the future can be affected substantially, although frequently<br />erroneously, by those yearly changes. Stocks are also riskier because they come equipped<br />with infinite maturities. (Even your friendly broker wouldn't have the nerve to peddle a<br />100-year bond, if he had any available, as "safe.")"</i><br /><br />The challenge I see is that it could take 30+ years for something to pay off entirely if you view it as something you're okay holding forever. Is my understanding correct? I actually always fear making money, but having the wrong process, because it will only lead to disaster - just because a stock rises and the market gives me an "out" does not tell me that I was right, but may have instead just pawned it off to a bigger fool. I may be overanalyzing it though.Ankit Guptahttp://www.selectedfinancials.comnoreply@blogger.com