Montgomery Whiteboard Series – Dividends 11/9/2012
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Peter Ferguson
:
I agree with Michael that Roger’s evidence is too limited to prove a generalisation.
However I don’t think Telstra is a handpicked example rather the most obvious example. Telstra is promoted as “the” income stock.
The presentation demonstrated to me that inspite of Telstra being the darling of the yields seekers, despite Telstra being the most widely held stock in income portfolios, despite Telstra’s long term inclusion in the top 10 holdings of almost all Australian equity funds its performance for investors has been appalling and has been for many years.
The presentation may not prove, but it does caution.
robyn mckinnon
:
wanting your opinion on Rio. I have shares that owe me $60.00 per share and wondering if I should sell.
I have concerns about the iron ore in this market.
Greg Wheat
:
Likewise – unable to watch the video. Flashes to the whitboard and back again.
Michael
:
While it makes sense to me that you should not select companies based on dividend yield alone, I am not sure that selecting a hand picked sample of two provides compelling evidence to prove it. I sure anything could be proved using this method.
Greg McLennan
:
I’m not so sure it’s that easy, Michael. Can you provide some examples demonstrating the opposite of Roger’s scenario here? Two dividend paying stocks with significantly different economic performance where the poorer performer has provided a significantly better return over a 7 year period?
I know what you’re saying, but I think that Roger’s scenario holds true in most cases.
Peter Ferguson
:
Must agree
Roger Montgomery
:
Indeed. Thanks to Peter for this Great content.
peter brough
:
Why can i not watch any of the reports?
Roger Montgomery
:
Not sure Peter. What devices are you trying to watch with?
Andrew Legget
:
Also, if you are after dividends i think it comes in handy to remember that the bigger discount to intrinsic value the higher the yeild will be.
Value Investing, especially our version where we focus on quality companies, does not need to be mutually exclusive from yield investing, in fact it enhances your prospects of getting the best possible yeild.
kevin seppanen
:
The following is purely scuttlebug and is my interpretation of a conversation with a contractor involved with various NBN installations.
The contractor’s view is that the NBN will make telstra obsolete. He indicates that Telstra has made its profits from payments for various parts of the existing network for use by the NBN. In other words the NBN will replace telstra.
He also indicates that the Aust. Government has put in place “Big Brother” abilites to trace all communications with the NBN ( a flow on cost from the fall out of 911).
Roger Montgomery
:
Thanks for the Scuttlebutt Kevin.
Kshitij Gupta
:
Wonderful videos as usual. You pick excellent examples and give lucid explanations. I hope this video helps retirees and middle aged investors to plan for the future. You should do a video on how to select a better dividend paying company between 2 “good” candidates in terms of your methodology. It takes time for non- professional investors and retirees to understand the various landmines in dividend investing. Also confidence ebbs for investors at times (Mr. Market effect!) so it needs to be reinforced !
Good day !