Forum Archive Index - August 2000

[Paul.Menneer@sealedair.com]

I suppose that alot does also depend on the quality of the management and
their track record at using the retained earnings to grow shareholders
funds. Also, I would suppose that it depends on the investor's investment
strategy as well. Do they require a return or are they reinvesting the
dividend back into the market anyway for example.
Just my thoughts.
Paul Menneer




"John and Beth Schwartfeger" <timestwo@xtra.co.nz>@sharechat.co.nz on
03/08/2000 15:49:36

Please respond to sharechat@sharechat.co.nz

Sent by:  owner-sharechat@sharechat.co.nz


To:   <sharechat@sharechat.co.nz>
cc:

Subject:  Re: [sharechat] Big picture issues



Brian,
Interesting thoughts but it raises the question. Who is better  at managing
your money? You or the company? Surely you have a right to take your  share
of profits from a company you own and invest them as you think fit. The
results of that would mean you are ultimately esponsible then for your own
destiny as it was you who made the investment decisions.
Being an ex dairy farmer where it is rife that the companies  believe they
can use your money better than you can yourself they were for ever  with
holding money from payout to invest in factories and other companies on
your behalf under the pretext it would benefit your payout further down the
track. Unfortunately payout went backwards for many years and the guess for
10  years time is payout will still be at its current levels. To me in that
case I  would be better off having my share of the profit to try and invest
and see if I  myself couldn't get a greater return.
The logic that by maintaining money within the company and  expanding or
reinvesting as they want just doesn't seem to be the case. Not  being the
brightest in this chat site at company and share business I wouldn't  start
to try and teach anyone in here but my initial assessment indicates that
share price has more to do with fashion at times than anything else.
Restaurant  Brands for example reported they had their 6th quarter profit
in a row (I think  thats what it said:))yet their share price languishes.
Is it because of a  dividend payment or is it because they are out of
fashion? This could be argued  with many companies and really is a chicken
and egg argument..  Just like  the question about the American share market
and its dividend / share price  comparison. Another chicken and egg
argument.
I could be wrong in my line of thought but personally I vote  for high
dividend payment so I can control my own investments but not at the  cost
of inhibiting the company. Give a company more money to spend and they pay
higher directors fees, more flasher company cars and so many other wasteful
non  profit making expenses.
Just my thoughts.
Cheers..  John Schwartfeger




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