[ROCKMAN]

Starvid,

A question about investing in ExxonMobil or any other public oil: what are you're primary goal? To earn dividends or sell the stock for more than you paid for it? XOM et al generally pay the same dividends year after year. This is why fund managers like such "blue chip" companies. It doesn't really matter how profitable XOM is...they pay the same % dividend. And that's a % of the stock price. If a public company's assets decrease in volume year after year (the PO effect for public oils) then Wall Street investors will turn away from it. Stick value is almost always based on the expectation of growth...no growth expectation: no expectation to sell the stock for more than you paid for it. Of course, there are times in the life of every public company when the story varies. But you have to remember: not one shareholder of XOM has received $1 dollar of the huge profits. They only get the dividends which is a % of share price. Share price goes up they get more $'s...goes down they get less. I've many investors make nice returns based upon dividends to only loose all those dividends plus some when they sold the stock for a lot less than they paid for it.

I know it might not make sense but I've seen companies do some things that seem very foolish in the long

[Starvid]

I like dividends because they are practical, and because it's just such a nice feeling to get a check sent into your bank account without having to work for it.

But from a financial point of view, they don't matter. Sharevalue minus dividends equal share price. If you give a $2 dividend per share the share price will fall by $2, ceteris paribus.

Your holdings in a company which doesn't give out dividends will be worth the same as in a company which does give out dividends, if you reinvest said dividends in new shares.

So, I don't care if I get $500 value increase and $500 dividends or just $1000 value increase when I sell my Exxon shares in 5+ years from now.

And share price increases aren't dependent on market views of future growth (in production) but on future profit growth. At least in every industry I've ever come across, except oil&gas. Insane.

[joeltrout]

$this->bbcode_second_pass_quote('Starvid', 'I') like dividends because they are practical, and because it's just such a nice feeling to get a check sent into your bank account without having to work for it.

[Starvid]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('Starvid', 'I') like dividends because they are practical, and because it's just such a nice feeling to get a check sent into your bank account without having to work for it.

[joeltrout]

$this->bbcode_second_pass_quote('Starvid', ' ')You made me laugh there. Did I tell you capital gains taxes are 30 % here, and total tax pressure is just south of 50 % of GDP? (Corporate taxes are 27 or 28 % though.)

[Starvid]

$this->bbcode_second_pass_quote('joeltrout', '
')The biggest threat is if you have enough dividend income that it could bump up your income tax bracket to the next level thus increasing your tax amount. However it is probably different there.

joeltrout

[joeltrout]

I am your typical "american"

I sometimes (like I just did) assume everyone here is a US citizen. I apologize.

joeltrout

[Tanada]

To get this thread back on topic why don't we discus this simple fact? If Sandy had hit Louisiana instead of New York a good chunk of the state of Louisiana would have been carried out to sea by flood waters leaving the shore of the GOM much closer to New Orleans.

I found this image of Louisiana after a 1 meter surge.

People have completely forgotten Katrina's effects and it has not even been a decade. Sea level rise has added over an inch to the GOM level since 2005, and the subsidence of the sea coast has continued 24/7/365 since then. New Orleans is more vulnerable ever single day to the next storm and it is bound to get hit again sooner or later. Sandy wasn't even a particularly large storm and it had a meter of storm surge at the minimum and much higher at the maximum. If a 1 meter storm surge sends sea water as far inland as this image shows what do you think 2-5-12 meters would do?

The sad thing is the levees on the banks of the Mississippi are so high and tough that the prediction is they would hold all the way to the delta, but all the low lands they were built to protect from river flooding would be under water.

Its about time the government exercised eminent domain, proclaim the 2 meter and lower zone a Federal Reserve and buy everyone out so they can relocate.

[Subjectivist]

While I am not fond of the government wasting taxpayer money I think this idea has some merit, because in the long run we won't need to pay evacuation and emergency search costs if we do this.

The problem is politically its never going to get off the ground because people hate eminent domain and would fight losing their homes even if you and I and everyone on here thinks it would be a good idea.