American Budget Cuts

Shit Crash, with your 30secs googling capability, you already can make far better investment decisions than the top banks.Again, I'm not going to waste time discussing this at length with someone who thinks that soundbites gleaned from a quick google in some way constitute meaningful discourse. No, you wouldn't, because the historic share price of Barclays over the entire crisis period isn't available for general scrutiny. Oh, wait... No shit. You're a genius at those googling skills. What, did you think that the bailout was made in the expectation that the banks would fail?And can you tell the difference between "made money" and...

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The government could make a profit of as much as 27 billion from the bailed out banks Lloyds and RBS over the next five years, according to new analysis.

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"could make a profit"...? For fuck's sake Crash, why would I use google? I didn't get paid $200k by DB so I could look up answers on the fucking internet.Edited by cavediver, : No reason given.

you're right - there's no one out there making an income from the dividends on their equity investments. Stupid of me to think otherwise. I guess I should go back on all my old analyses and excise the impact of dividends on valuations, 'cos as you say, they are nothing more than an irritant.You're fucking clueless, Crash. Irrelevant. The value of the Google share is based on the future value of the dividends. At present, Google is viewed as having far better return by reinvesting its dividends back into the company, owing to growth potential. Should that view change, and Google still did not pay a dividend, the share price would plummet. As we saw with all the dot coms that did not make it. If Google announced that their shares will never pay a dividend, then the furture value of the dividends is zero and the value of the shares would drop to zero, except that what would actually happen is that the shareholders would simply dismiss the board...So, again, if stocks never pay dividends, then their value is zero. It is the view of future dividend stream that determines the price of the share. No, Crash. There are those of us who understand this stuff, and there those of you who seem to think that googling and dictionaries suddenly makes you an expert on a subject - no, it just makes you a moron. Sorry.Look, I have no interest in debating this. You want to learn something from me, great, ask a question. But if you just want to prove me wrong from your amateur perspective, I have no interest. Let's just say you are completely correct in all that you say, and I have no clue. I'm more than happy with that. My time is precious enough...Edited by cavediver, : No reason given.

Well I don't claim to know anything about this stuff. And I haven't even bothered to google it (because I thought I would ask here instead).But I had always thought the main point of wheeler dealering in shares was to do with short term selling of them for more than you bought them for. Dividends being a safer longer term thing or (primarily) a way of those who own companies (i.e. majority shareholders?) paying themselves fat packets.Is it true that no dividends = worthless shares? Doesn't the share price reflect the overall value of the company? Or something like that.....Edited by Straggler, : No reason given.

The dividend is being paid, just not in the form of a "dividend check" but in the form of "retained earnings." The "share value" increases. Note I did not say the trading price of the shares on the market increased but the "book" value of each share.Usually, the market will reflect this increased book value in a higher market price but the market, being a rather emotional beast, it may take a while for this to show up as other considerations in the market segment, the general economy, etc, have their effect on the "perceived" values of shares. Eventually, however, this increased book value will reflect in the share price.Berkshire-Hathaway is kind of the poster child. Never a paid dividend in 40 years. No splits. The share price today is nearing $130,000 per share. Warren Buffett is a unique one-off case to be sure, but this does reflect the power of retained earnings (unpaid dividends) on a share's market price.So, yes, if a company has no dividend (paid or unpaid) for long enough then its shares are a worthless pile of paper not long to bankruptcy. Edited by AZPaul3, : added thought.Edited by AZPaul3, : No reason given.Edited by AZPaul3, : No reason given.

Well, AZPaul3 beat me to it, and put it perfectly Sure, this is the popular view of share trading. You have to remember that there are trades (the action of buying or selling) and there are positions (the actual size of trades). Trades are dominated by high-frequency computerised trades - these are formed up of trading strategies and hedging strategies (often to balance derivative positions). Positions are dominated by the long term funds (mutual, pension,etc). The conventional wheeler dealer traders form a tiny fraction of what is actually going on. Don't fall for the bullshit spin. As a shareholder, those profits are yours, whether they are retained or paid out as a dividend. It doesn't matter if you hold 1 share or 100% of the shares.The amount to pay out as dividend is a complicated choice, and has to be carfeully balanced against the market view of the company. You have invested your money in your shares because you view that the company can produce for you a better return than investing elsewhere. If they return too much of that money to you as dividend, they can be viewed as essentially saying that they don't trust their own ability to make a good return on the profits earned! If they pay too little or nothing, with no clear presentation of their growth plan, then investors will again complain. Yes, but that value needs to be returned to the shareholder (i.e owner) at some point, even if that point is perpetually being moved forwards in time.

Well, than one top bank. The top bank you claimed was so much better off as a result of your singular expertise that they "avoided a bailout" (not true).Obviously it just goes to demonstrate another critical inefficiency introduced by the profit motive. RAZD has this irritating phrase "inability to refute"; I think it applies here. Obviously. You didn't get paid $200k by anybody at all. Who on Earth would hire someone too stupid to Google his facts first?

Nobody's buying Google for the "future dividends", cavediver, because Google is adamant that they don't pay dividends. You think they're just going to change their mind about that?People are buying and selling Google's stock for speculation. They're gambling that the price of the stock will change over time, that the asset will command a higher or lower price in the future than it does now.Speculation. Gambling. Almost all stocks are bought for eventual resale - the vast majority of stocks are held for approximately eleven seconds, which is obviously far too short a time to make it to the company's ex-dividend date. Even for the stocks that actually do pay dividends, the vast majority of participants in the market aren't holding the stocks long enough to get paid any dividends at all.Clearly, obviously, stocks are predominantly bought and sold for the capital gains, not for the dividends. Not knowing this is tantamount to failing to understand that stocks are bought and sold for money - oh, wait, you don't believe in that, either. You're right. It's just too bad you're obviously not one of them. You didn't even believe that stocks cost money! LOL! Nobody's twisting your arm to make you come in here and tell such incredibly stupid whoppers.

yep, keep believing it Crash - as long as you're convinced... Ooh, he's accusing me of lying again. Does that make you feel good, Crash? Does it?

It's strange, isn't it Crash, who people come to to ask the questions? You'd think that people long ago would have realised that I just enjoy making shit up and talking bollocks. Yet they keep coming back and asking me questions. Strange. Do you think they are perhaps capable of realising where the content lies?

So, what you mean is that the company is keeping the dividends.And that's different from not paying out a dividend in exactly what way?I'd like to try that on my next bill, I guess - "sorry, restaurant, tonight I'm going to pay my tab in the form of 'retained earnings.' You'll be pleased to note from my prospectus that I'm doing fine, and that my personal holdings just increased by exactly the sum of an excellent four-star meal!" And so what's the point of being a Berkhath shareholder? Absolutely nothing, unless you're able to make money off the capital gains of Berkhath stock.Speculation, in other words. Your example proves my point - most stock activity is gambling. Cave would have us believe that Berkhath shareholders are just holding out for eventual dividends. 40 years, though? Surely a lot of their shareholders have died waiting, at this point. Are stock traders just credulous morons, or is it maybe possible that dividends aren't the source of the market's interest in Berkhath stock?

There's a sucker born every minute, I guess. If people want to waste their time with a flim-flam artist, that's their business. I'm not the one claiming to be an expert; I'm just the one using simple research tools to expose the fact that nearly everything you've offered on this subject is an easily-refuted lie.

Keep believing it Crash - it's keeping you happy in your ignornace, and that's what counts. Anyway, back to your computer games now. As I said, I'm happy to be completely wrong and you to be correct. Well done

I am hoping that most readers are not as stupidly dense as Crash as to think that this is what has been suggested by either myself or AZPaul3. And just because the dividend is not received does not automatically mean a trade is gambling. A large percentage of trades are actually hedge positions which are actually reducing (and in some cases almost eliminating) risk, and as such are the exact opposite to gambling.Many other trades are for developing balanced portfolios that are designed to generate a return over that paid by bonds and other debt instruments, whilst maintaining a low risk profile. This is the behaviour of the funds which are the investment vehicles behind people's pensions and investment trusts. Whilst these are certainly more risky than savings bonds, it is not we would refer to as "gambling".

You keep telling me you're done, you're out, you're done with this - and here you are, posting again. But, of course, it wouldn't do to say you were a liar, right? You're right! For instance, Berkhath owners could own the stock because they like Warren Buffet! Maybe they just like the name "Berkshire-Hathaway." It's certainly got a nice ring to it. I mean, not everybody who buys and sells stocks does it for the money, right? It's perfectly reasonable to suggest that many - even most! - market participants are doing it for reasons that have nothing at all to do with fiduciary gain! Gamblers reduce risk, too - for instance, sports betters playing the spread, or craps players making don't pass bets - so there's absolutely nothing anti-gambling in reducing your expected value in order to reduce the near-term risk of a loss. That is, in fact, a crucial tactic for any form of professional gambling, especially on the stock market.

No, Crash. I'm just done with you I thought that was obvious...