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Message from discussion dividends are irrelevant
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drez...@gmail.com  
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 More options May 16 2008, 7:15 pm
From: drez...@gmail.com
Date: Fri, 16 May 2008 16:15:58 -0700 (PDT)
Local: Fri, May 16 2008 7:15 pm
Subject: Re: dividends are irrelevant
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dividends are irrelevant for the following reason.

a) a noble prize was awarded to merton miller, who came up with this
maxim

b) if a company will issue dividends, it could just as well keep that
money and invest on its growth and/or expansion, which long term
compensates for the issuance of dividends. reinvesting the dividends
makes this all the more obvious. why reinvest [post-tax] if the
company can do it for you? when companies grow too big they no longer
know how to invest in growth [or do not want to]; when they sense
weakness in the demand for their stock they may also choose to issue
dividends; but this is hogwash long term.

oui...@gmail.com wrote:
> Dividends are NOT irrelevant. Over time, dividends that are re-
> invested will return more than any stock strategy. Dividends RULE!!!

> However, DIA is a better fund because it is more diversified, and
> hence less likely to suffer from sectors downturns, such as the
> financials and housing at the moment. Plus DIA yields a nice 2.1%,
> which over time (33.5 years to be exact) will by itself double your
> investment.


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