From another perspective, say you are too old and don’t feel like dealing growth stocks, sell GOOG buy T and get way more dividends than have you invested in T 5 years ago.
If stocks are always perfectly priced, they are right. There is a market inefficiency or irrational market where this thesis is wrong. In addition, investors pay a premium for a stock that varies from actual value of the company. It is too hard to calculate actual value of the company.
For example, we just has two days fall, growth is down, but dividend amount remains the same. Dividends are shared from the profit, but not from stock price.
Any stock, just calculate as if a rental home where rent is yield and appreciation is growth.
The investment book is written for the public. As a hi-tech engineer, you are well verse with hi-tech which is the growth now. Not investing in hi-tech growth is not exploiting your knowledge You can invest in hi-tech growth stocks now & don’t sell as it is equivalent to DRIP, and switch to dividend stocks at the point of retirement
I have invested in google for years. Everyday I pray for it to hand out dividend. However, I will not sell any shares in lieu of a dividend payout.
Yes, I understand and I am not fully going to dividend portfolio, but partially going for it. I am mainly focusing on high profit margin companies (like 20% or above) esp on tech giants.
I long for it as Google have 15% Profit margin, now I bought FB as they have 39% profit margin. Even if FB goes down, plan to take more. I hope I hold for long (I do not know what the mirror one does !)
There is a hidden risk with internet companies like GOOG, FB and AMZN & similar, most of them profit from regulatory bodies not able to catch up with them and ignorance of users. With the “data breach” of FB, many things could change.
GOOG & FB - Sell user data for ad $, with increased awareness of users and regulatory bodies force to do something, this might reduce the attractiveness of ads if many user profile can’t be sold.
AMZN - Still pay zero sale tax right?
No. Amazon pays sales tax in every state that charges sales tax.
Increasing regulatory oversight may have the perverse effect of making Google and Facebook stronger. In the extreme case starting an internet company becomes as hard as starting a bank and we won’t see startups like Snapchat challenge the incumbents.
You gave an alt left answer
Basically my point in more details:
You know what tech startups hate? Complicated legal compliance. The problem is, Facebook isn’t a startup any more, but its competitors are.
There have been plenty of calls from congress and critics to regulate Facebook following the election interference scandal and now the Cambridge Analytica debacle. The government could require extensive ads transparency reporting or data privacy protections. That could cost Facebook a lot of money, slow down its operations, or inhibit its ability to build new products.
But the danger is that those same requirements could be much more onerous for a tiny upstart company to uphold. Without much cash or enough employees, and with product-market fit still to nail down, young startups might be anchored by the weight of regulation. It could prevent them from ever rising to become a true alternative to Facebook. Venture capitalists choosing whether to fund the next Facebook killer might look at the regulations as too high of a price of entry.
Yup. I’ve said for years that big regulations result in only big corporations being in an industry. Compliance with regulations cost money, and it’s more of a fixed cost. The cost doesn’t change much based on the size of the company. That means bigger companies have an advantage. They have more customers to spread the cost across. The cost of regulation is a much smaller percent of revenue for bigger companies.
Catchy title to attract eyeballs, one money quote from the article…
Yet with strong regulation like dismantling Facebook seeming beyond the resolve of congress, and weak regulation potentially protecting Facebook, perhaps it’s losing the moral high ground that will be Facebook’s real punishment.
Strong regulations work, weak regulations could lead to opposite to desired outcome.
Also, many regulations that are put forth might be heavily influenced by incumbent corporate
Hence, the problem lies in the regulatory body and not the regulation per se.
Sell FB and GOOG, and buy AAPL and AMZN
Apple’s privacy ethos. Tim Cook has made privacy a religion at Apple.
Amazon is service-first. Amazon’s focus is on delighting the customer through the services they provide.
The biggest risk to Facebook is attrition and, to a lesser, extent regulation.
You’ve become the dragon boy of facebook now?
Good joke. Have you forgotten that I am accumulating FB I need to assess risks all the time. I am not on a crusade to blast FB.
Now that I have put down FB and GOOG. Is time to put down AMZN
Amazon uses people like Soylent Green. Apple doesn’t.
Amazon deserves the same scrutiny as Facebook for it reprehensible data harvesting and abuse tactics. Apple has for the entirety of its existence cherished privacy and actively promoted it.
Finally if there’s a down market, does anyone really think a stock with a PE of almost 300 is going to survive without at LEAST a 50% cut? Apple may get dragged down, but considering when you account for the cash it’s trading at a fPE of about 10, AAPL is the only stock I would put money on. Apple thrived in the last recession, and it’ll thrive in the next one because it products are both a necessity, affordable, and many are now available on a subscription model – whether hardware or services- protecting it against falling incomes or unemployment.
You sold your FB, or not?
If you are accumulating, you want fear Please do so as soon as i unload mine.