The linguistic shift wasn’t all that subtle, and we apologize for not
picking up on it before, but our valued subscribers need to know what we know,
and as red-faced as your MacDougal Post staff finds itself this morning, all of
us here at Global Headquarters are rushing to right the oversight five hours
after realizing we’ve been making it.
Five hours because that’s the amount of first-lap rack time MacDougal
gets these days, and you don’t want to read what that sleepyhead can come up
with when horizontal duty calls, and thoughts of what we’re about to cover for
you hit our guru as he was hanging ten on the cusp of Shuteye City kind of
early last night, early even for an ancient blog bot like Irving.
Subscribers, there’s no such thing as a “dividend stock”. The label, which pops up endlessly these days,
is flat out misleading, and deliberately meant to be so. It makes us cringe to think how we’ve
remained silent whenever the offending term was used in our presence in the past. Traditionally, the righteous way to go here, equities
have always fallen into two classifications, investment-grade and speculative. Investment-grade common stocks pay dividends. It’s definitional, for goodness sakes. Failure to do so excludes the guilty issue
from the Investment Universe. The nonbeliever,
used to picking stocks the way he hits on an
endless line of potential girlfriends, will jump in with “what about Berkshire Hathaway?”* or some other naive tommyrot, and fail to see The Light no matter how hard a
seasoned journeyman tries to spread the consecrated word, that PRICES OF STOCKS ISSUED BY COMPANIES NOT PAYING DIVIDENDS REVOLVE AROUND DREAMS. Dreams of future dividends mostly, unless
you’re looking for a buyout or something, as well as dreams that what those financial statements say is there, is there.
“Dividend stock” implies that there's some other kind of investment
that doesn’t pay dividends. There
isn’t. To wit:
Sometime before the dotcom catastrophe at the beginning of the
century, Wall Street Crime Families began using talking heads and them to lure
suckers into “trading”, the insidious con that turns marks into counterparties to the racketeers’ much-ballyhooed “trading profits” whereby pretty
much everyone else but the Crime Lords totally lose their a$$e$$. It was the start of a movement that led to
the “Buy and Hold is Dead” campaign that ultimately destroyed so many financial
lives less than a decade later, leading us to where we are now, which is almost
broke. Except for the Crime Families, of
course.
Readers, whenever you see the two words, “dividend” and “stock”,
joined together, get p!$$ed off. Financial
psychopaths are using the term to go after your wad.
That a company pays dividends, does not necessarily make the stock investment grade.
And that another doesn't, means you shouldn't be mentioning the two companies in the same dang apples and oranges sentence. We wouldn't even put them in the same dang paragraph together.
*In the case of Berkshire Hathaway, Warren Buffet has been confiscating what should've been your dividends and reinvesting that money to build his empire. His premise that he can do more with your dough than you can should, in our view, be rephrased to, he can do more for himself with your dough than you can.
