The Lemon Fool

As to Buffet,dividends is cash flow. If the markets are up the fund looks great. If they are down he has the cash to buy more income. As I do. The Buffet fund is so big they have a lot of staff buying and as you know they can get it wrong. They did it a few years ago by buying Tesco then unloaded at a loss.

A true loss is when you sell below your purchase cost or when a company goes bust. When we had low interest rates I started to make a big profit on my Pibs and Prefs. I did take some profit out, as the rates rise and the cost goes down I will buy more. The other lossess may be reduced over time, that is supposed to be the way to go, use time. In the meantime I am gaining more income. Even if you only get 6% dividend and growth you double your money in 12 years with compounding.

If you have to sell shares to obtain your income, then when there gone there gone. If the markets swing down and you have to sell disaster.

Bob

taken2often wrote:
If you have to sell shares to obtain your income, then when there gone there gone. If the markets swing down and you have to sell disaster.

And if those markets swing down and the directors declare a dividend to provide that same income what is the difference? You really to need to read, and understand, some finance theory.

taken2often wrote:As to Buffet,dividends is cash flow. If the markets are up the fund looks great. If they are down he has the cash to buy more income. As I do. The Buffet fund is so big they have a lot of staff buying and as you know they can get it wrong. They did it a few years ago by buying Tesco then unloaded at a loss.

I was under the impression that Berkshire Hathaway was an insurance company cum conglomerate. It is certainly not a "fund".

One wonders how "hands on" these days are Warren Buffett and Charlie Munger. They do buy substantial stakes in companies. Tesco was an example which I thought was a Buffett decision.

TJH

dealtn wrote:

taken2often wrote:
If you have to sell shares to obtain your income, then when there gone there gone. If the markets swing down and you have to sell disaster.

And if those markets swing down and the directors declare a dividend to provide that same income what is the difference? You really to need to read, and understand, some finance theory.

One would hope you are not being too harsh to the parent poster.


I don't understand what you are writing.

Besides some collective investments (such as ITs) that keep a reserve to release during lean times, why would a normal company decide to declare a larger dividend to provide the same amount before a market downturn? We've seen companies cutting dividends during the Covid-19 downturn.

Was it common or expected for companies to increase their dividends during a downturn?

Was there a company that looked at the market, saw that there was a downturn, and thus took the conscious decision to increase their dividend payouts for the good of the shareholders so that the shareholders had the same amount of cash flowing to them?

And if you find one example, is it representative of the overall sentiment of the companies in the market, or just one or two sporadic companies that did that?

stacker512 wrote:Was there a company that looked at the market, saw that there was a downturn, and thus took the conscious decision to increase their dividend payouts for the good of the shareholders so that the shareholders had the same amount of cash flowing to them?

And if you find one example, is it representative of the overall sentiment of the companies in the market, or just one or two sporadic companies that did that?

Why on earth would a company do that? If they held their dividend steady, then shareholders would have the same income. If they increased them, shareholders would have more income.

How could the flow of cash be the same with an increased dividend?

TJH

tjh290633 wrote:

stacker512 wrote:Was there a company that looked at the market, saw that there was a downturn, and thus took the conscious decision to increase their dividend payouts for the good of the shareholders so that the shareholders had the same amount of cash flowing to them?

And if you find one example, is it representative of the overall sentiment of the companies in the market, or just one or two sporadic companies that did that?

Why on earth would a company do that? If they held their dividend steady, then shareholders would have the same income. If they increased them, shareholders would have more income.

How could the flow of cash be the same with an increased dividend?

TJH

Oh whoops. Not enough coffee! Egg on my face.

Ok. If the company had less profit or less revenue due to the market downturn, would they still keep the dividends the same?
I think that's what was being implicated, but I was not able to articulate it, and in my haste even made mistakes in my post.

stacker512 wrote:

tjh290633 wrote:Why on earth would a company do that? If they held their dividend steady, then shareholders would have the same income. If they increased them, shareholders would have more income.

How could the flow of cash be the same with an increased dividend?

Oh whoops. Not enough coffee! Egg on my face.

Ok. If the company had less profit or less revenue due to the market downturn, would they still keep the dividends the same?
I think that's what was being implicated, but I was not able to articulate it, and in my haste even made mistakes in my post.

I would suggest that, the profit or revenue achieved by a company, is not affected by a downturn in the market for its shares, rather it is the opposite that is more likely.

That is to say, a downturn in the profit or revenue achieved by a company, might well affect the market for its shares.

Enjoy!


Ian

Well as Dod knows having dividend share provides a steady income that may fluctuate. With good companies, panic market swings have no effect on the day to day running of the company, unless they some how use share price to support loans. Interest rates and inflation have a greater effect. In fact may reduce competition, increasing profits.

Bob

Jan-21	4.8239	2.8971
Feb-21	4.3354	2.5797
Mar-21	5.2726	3.1134
Apr-21	5.5981	3.2896
May-21	5.7489	3.3660
Jun-21	5.9389	3.4715
Jul-21	5.8186	3.3951
Aug-21	6.6996	3.8749
Sep-21	7.6902	4.4258
Oct-21	7.7036	4.4291
Nov-21	7.4090	4.2491
Dec-21	7.4800	4.2803
Jan-22	7.7945	4.4536
Feb-22	7.6415	4.3473
Mar-22	8.2402	4.6367
Apr-22	8.5496	4.7892
May-22	8.1831	4.5437
Jun-22	8.3380	4.6186
Jul-22	8.4397	4.6685
Aug-22	8.4724	4.6339
Sep-22	7.9252	4.3058
Oct-22	7.9618	4.3215
Nov-22	8.3345	4.5138
Dec-22	8.3048	4.4882
Jan-23	8.0193	4.3272
Feb-23	8.1115	4.3616
Mar-23	7.7138	4.099
Apr-23	7.4069	3.918

Strong sterling having a noticeable impact on income relative to last year but still up on two years.

Since this started out as a comment on my income portfolio, without changing anything, my income for the first four months of this year is about 5% ahead of 2022. By income I mean dividends so I am content. I never sell capital to create income as it goes against every lesson I have learned in investing. I do not need to think, decide which share to sell or anything else. The income just arrives either direct to my bank account, to an ISA or to my SIPP. I still have the same number of shares in all my holdings and even if the share price drops as they go ex div, the price soon recovers.

Dod

PS I have no idea what the two columns mean in the latest post from ONNHA.

Dod101 wrote:Since this started out as a comment on my income portfolio, without changing anything, my income for the first four months of this year is about 5% ahead of 2022. By income I mean dividends so I am content. I never sell capital to create income as it goes against every lesson I have learned in investing. I do not need to think, decide which share to sell or anything else. The income just arrives either direct to my bank account, to an ISA or to my SIPP. I still have the same number of shares in all my holdings and even if the share price drops as they go ex div, the price soon recovers.

Dod

PS I have no idea what the two columns mean in the latest post from ONNHA.

If your income is mostly from collectives then what you are receiving now is what they received 6 or 12 months ago, while sterling was still weak. Now it has strengthened the income from the big dollar earners, which is where most UK income comes from, is lower.
One column is the dividend from accumulation units and the other is from income units. They reflect what UK companies distributed in April so it is bang up to date with current market reality.

OhNoNotimAgain wrote:

Dod101 wrote:Since this started out as a comment on my income portfolio, without changing anything, my income for the first four months of this year is about 5% ahead of 2022. By income I mean dividends so I am content. I never sell capital to create income as it goes against every lesson I have learned in investing. I do not need to think, decide which share to sell or anything else. The income just arrives either direct to my bank account, to an ISA or to my SIPP. I still have the same number of shares in all my holdings and even if the share price drops as they go ex div, the price soon recovers.

Dod

PS I have no idea what the two columns mean in the latest post from ONNHA.

If your income is mostly from collectives then what you are receiving now is what they received 6 or 12 months ago, while sterling was still weak. Now it has strengthened the income from the big dollar earners, which is where most UK income comes from, is lower.
One column is the dividend from accumulation units and the other is from income units. They reflect what UK companies distributed in April so it is bang up to date with current market reality.

Most of my income is from individual shares so is up to date, at least far as it can be. I know very well how investment trusts work (assuming that is what you mean by collectives) Most recent announcements of Annual Results for 2022 show dividends are up on the previous year. What 2023 will bring? Well who knows.

As for sterling the exchange rate varies so much that I tend to ignore it.

Dod

Dod101 wrote:

OhNoNotimAgain wrote:
If your income is mostly from collectives then what you are receiving now is what they received 6 or 12 months ago, while sterling was still weak. Now it has strengthened the income from the big dollar earners, which is where most UK income comes from, is lower.
One column is the dividend from accumulation units and the other is from income units. They reflect what UK companies distributed in April so it is bang up to date with current market reality.

Most of my income is from individual shares so is up to date, at least far as it can be. I know very well how investment trusts work (assuming that is what you mean by collectives) Most recent announcements of Annual Results for 2022 show dividends are up on the previous year. What 2023 will bring? Well who knows.

As for sterling the exchange rate varies so much that I tend to ignore it.

Dod

Clearly the trend from declarations from listed shares is showing that the current trend is down and that will be reflected in collectives when they distribute this year's income next year.

OhNoNotimAgain wrote:

Dod101 wrote:
Most of my income is from individual shares so is up to date, at least far as it can be. I know very well how investment trusts work (assuming that is what you mean by collectives) Most recent announcements of Annual Results for 2022 show dividends are up on the previous year. What 2023 will bring? Well who knows.

As for sterling the exchange rate varies so much that I tend to ignore it.

Dod

Clearly the trend from declarations from listed shares is showing that the current trend is down and that will be reflected in collectives when they distribute this year's income next year.

We'll see.

Dod

OhNoNotimAgain wrote:
Clearly the trend from declarations from listed shares is showing that the current trend is down and that will be reflected in collectives when they distribute this year's income next year.

In my HYP the trend in income per unit, in the year to April 2023, is most definitely upwards.

Dividend declarations for May, June and July so far show this upward trend continuing.

(The same is true of my IT portfolio, although I accept this year's trend in dividends won't show up in IT's for some time ahead).

Looking back 12 months, the only dividend cuts I have seen are from the miners (Eg RIO, BHP), who have cut back from their extraordinary highs last year.

So I am not sure what you are on about?

FD

funduffer wrote:

OhNoNotimAgain wrote:
Clearly the trend from declarations from listed shares is showing that the current trend is down and that will be reflected in collectives when they distribute this year's income next year.

In my HYP the trend in income per unit, in the year to April 2023, is most definitely upwards.

Dividend declarations for May, June and July so far show this upward trend continuing.

(The same is true of my IT portfolio, although I accept this year's trend in dividends won't show up in IT's for some time ahead).

Looking back 12 months, the only dividend cuts I have seen are from the miners (Eg RIO, BHP), who have cut back from their extraordinary highs last year.

So I am not sure what you are on about?

FD

RIO accounts for about 5% of the dividend income to the UK market so any reduction will have an impact.

OhNoNotimAgain wrote:

funduffer wrote:
In my HYP the trend in income per unit, in the year to April 2023, is most definitely upwards.

Dividend declarations for May, June and July so far show this upward trend continuing.

(The same is true of my IT portfolio, although I accept this year's trend in dividends won't show up in IT's for some time ahead).

Looking back 12 months, the only dividend cuts I have seen are from the miners (Eg RIO, BHP), who have cut back from their extraordinary highs last year.

So I am not sure what you are on about?

FD

RIO accounts for about 5% of the dividend income to the UK market so any reduction will have an impact.

Last year there were special dividends from other companies, in my case from TATE and Aviva (B-shares), plus a small one from RIO.

Ignoring those, Companies have declared over 90% of the dividends paid in 22-23 to be paid in the months from April-June this year, 23-24. There have been sizeable reductions from RIO, South32, GSK, Admiral, and a slight reduction by Tesco. Last year RIO was providing over 11% of my portfolio income. Now it is about 8%. It's not only miners that can reduce dividends.

TJH

All May dividends are now in and I am up for each month of 2023 so far. Obviously the big drop in the Admiral dividend, paid this morning, will not help June figures, but I am hoping that the increased dividend from HSBC will more than cover that shortfall. I hold only Admiral and GSK from the list produced by TJH. If you are dependent on dividends to live off, it is amazing how it concentrates the mind.

Dod

Not sure what you mean by up for each month, cf last year or what?

A better guide is a rolling historic 12 month figure which smoothes out timing differences.
This year is doing well but still below the peak of November 2019. First column is Acc and the second is Inc units.

Jan-20	8.1041	5.1109
Feb-20	8.3283	5.2141
Mar-20	7.6698	4.7740
Apr-20	7.1552	4.4443
May-20	6.6199	4.0918
Jun-20	6.2665	3.8654
Jul-20	6.4327	3.9605
Aug-20	5.5502	3.3791
Sep-20	5.3682	3.2591
Oct-20	4.9746	3.0122
Nov-20	4.7582	2.8656
Dec-20	4.8383	2.9073
Jan-21	4.8239	2.8971
Feb-21	4.3354	2.5797
Mar-21	5.2726	3.1134
Apr-21	5.5981	3.2896
May-21	5.7489	3.3660
Jun-21	5.9389	3.4715
Jul-21	5.8186	3.3951
Aug-21	6.6996	3.8749
Sep-21	7.6902	4.4258
Oct-21	7.7036	4.4291
Nov-21	7.4090	4.2491
Dec-21	7.4800	4.2803
Jan-22	7.7945	4.4536
Feb-22	7.6415	4.3473
Mar-22	8.2402	4.6367
Apr-22	8.5496	4.7892
May-22	8.1831	4.5437
Jun-22	8.3380	4.6186
Jul-22	8.4397	4.6685
Aug-22	8.4724	4.6339
Sep-22	7.9252	4.3058
Oct-22	7.9618	4.3215
Nov-22	8.3345	4.5138
Dec-22	8.3048	4.4882
Jan-23	8.0193	4.3272
Feb-23	8.1115	4.3616
Mar-23	7.7138	4.099
Apr-23	7.4069	3.918
May-23	8.2626	4.3889