Heretical views!

Managing a portfolio based on cashflows? Heresy! Well, maybe not. Others are also making arguments similar to mine in Getting Back to Business. See Jim Garland’s 2019 CFA Institute Research Foundation Brief, introduced by Laurence Siegel. Thanks to Will Goetzmann for the link here .      

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Random Book Project #3: The Sinews of American Commerce (1941)

Is it acceptable to post about something other than the social and political crises wracking our nation at the present moment? Might anything less than 100% devotion to a pressing cause–whatever that cause may be–be considered a hostile act?  I hope not; I believe not. We entered this crisis period with our individual interests, our individual histories. They did not cease to exist even though they may be  overshadowed at the moment. Continuing to pursue them does not entail thinking any less of the issues dominating the news today. So I am going forward with what some may consider a …

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Barron’s conversation about dividend investing

A conversation with Barron’s Lawrence Strauss and Lauren Rublin on dividend investing in the current economic and financial climate.  The replay should be “free” but you may have to register with Barron’s to hear it. https://tinyurl.com/ya5apobb Note: The views expressed here are those of the author alone, and do not necessarily reflect the views of his employer. Nothing written here should be construed as investment advice. Consult your investment advisor for specific recommendations. 

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Another battle in the neverending war between clarity and confusion….

A recent opinion piece in the Wall Street Journal starts off with a promising title, “Why Many People Misunderstand Dividends, and the Damage This Does.” June 7, 2020 . That is most certainly true. After nearly two decades helping to manage dividend portfolios, I can say that even institutional investors and pension fund consultants still seem to trip over the basic math of dividend investing. Unfortunately the newspaper article only adds to the confusion when the author, an academic, asserts that “Paying dividends doesn’t benefit investors, because a dividend of $1 simply reduces the stock price by $1—just as withdrawing from …

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You mean big business is good? Tyler Cowen says yes.

You mean big business is good, contributes to our general welfare, and is not generally guilty–with notable exceptions–of all of the charges made against it?  That’s the argument libertarian economist Tyler Cowen makes in his book Big Business: A Love Letter to an American Anti-Hero (St. Martins, 2019) Most NBN listeners will raise an eyebrow to that claim, but most of those same NBN listeners are up for a good back-and-forth on the virtues and demerits of our market system. And to that end, being familiar with Cowen’s arguments–made in this book and his many other publications and platforms–is very useful.  The shift …

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New York Times column on dividend investing.

A recent column by Jeff Sommer in The New York Times (https://www.nytimes.com/2020/04/24/business/coronavirus-stocks-investing-dividends.html) highlights some of the challenges faced today by investors seeking income from their stock holdings. While the economic shutdown has certainly created an adverse environment for the public-company cashflows that have historically been paid out in dividends, income-seeking investors will want to consider a few additional perspectives beyond what is raised in the Times. First, Sommer implies that because stock ownership has shifted from individuals a century or half century ago, to mutual funds, pension portfolios, and other institutional accounts now, that dividends are somehow less felt on …

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At the intersection of History and Finance…..

Think that Wall Street has nothing to do with the real economy? You are probably not alone in that regard. But it turns out, you are wrong. As William N. Goetzmann demonstrates in his Money Changes Everything: How Finance Made Civilization Possible (Princeton University Press, 2016), the tools of finance were as important for the rise of civilization as were the soldiers, castles and battles. Were it not for property contracts, agreements over imports and exports of grain, how to manage risk in increasingly complex economic ventures, etc we are still living in small agricultural communities eaking out an existence, …

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