Wednesday, October 15, 2008

Why I Hate "Dividend Investors"

They hang on in industries, like autos, putting pressure on managements to keep paying out, when the prudent thing for companies to do is to build reserves or re-invest in ways that strengthen the firm in anticipation of adverse times.

Sure, dividends are a "signal", but they are not a shareholder "right".

If you must have a dividend, go buy a utility, for pity's sake.

(Sorry, but I just read someone whining aloud and unashamedly about their Bank of America dividend).

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