Insurance companies as the biggest scams in the world on an unsuspecting public. I am not surprised that these stocks just keep going higher. Every entrepreneur on the planet should be thinking how to compete in this space. It requires nothing but statistics, modest advertising, and probably a modest amount of seed money to start. Then just rake in the cash by beating the likes of AFL and GEICO State Farm AIG etc etc etcby wide margins, and you still make a fortune. This is one area where capitalism fails. In a truly capitalist economy, insurance companies would be like PC makers or banks, one on every corner it is that profitable and the margins are insane.
What complete hogwash. Now you are saying its okay to own Apple even though it doesn't pay a dividend? Considering what you have consistently said this entire thread, it seems like you are trying to have it both ways. Your argument has no merit.
I wonder how much of corporations stronger earnings in recent years is due not to stronger sales, but simply removing things like pension plans: http://www.time.com/time/magazine/article/0,9171,1929233,00.html
The corporate bond market is what I should have given as an alternative to the common. It is one way you can skirt the stock price altogether. The downgrade of the US should cause everyone's rates to borrow a bit higher, giving the investor more yield. I don't know if this happened or not. It is hard to see because there are so many bonds and so many companies...
Nitro, you are truly one of the most uneducated frequent posters on this site, but its much more clear now what we are dealing with. Three separate ridiculous theories spanning over two years and you haven't learned a thing on any of them. Theory #1 : Your whole Dividends in everything thread here. A dead give away you don't understand that equities represent ownership and what growth stocks really are. Theory #2 : That making 20% per annum on conservative Mutual Funds is easy. Theory #3 : Your model setting a future value on US markets that is obviously deeply flawed. Honestly, the extent that you'll follow these wacky theories is a sight to behold.
<iframe frameborder="0" scrolling="no" marginheight="0" marginwidth="0" width="480px" height="270px" src="http://specials.washingtonpost.com/mv/embed/?title=Lamba%20Expects%20Apple%20Dividend%2C%20Buyback%20in%2012%20to%2018%20Months&stillURL=http%3A%2F%2Fwww.washingtonpost.com%2Frf%2Fimage_606w%2F2010-2019%2FWashingtonPost%2F2011%2F09%2F14%2FBusiness%2FVideos%2F09142011-43v%2F09142011-43v.jpg&flvURL=%2Fmedia%2F2011%2F09%2F14%2F09142011-43v.m4v&width=480&height=270&autoStart=0&clickThru=http%3A%2F%2Fwww.washingtonpost.com%2Fbusiness%2Flamba-expects-apple-dividend-buyback-in-12-to-18-months%2F2011%2F09%2F14%2FgIQA3XD2RK_video.html"></iframe>
The whole notion that you can't innovate without cash is absurd. I have no idea where people get this stuff. It has become its own myth. What cash did AAPL have when it innovated with the Apple 2? A dividend gives investors the chance to buy a put and in essence gives you a synthetic call on a stock. So one can argue that when the company gives a dividend, it is short its own stock. The way around this is to both buy back stock and offer a dividend.
What are you talking about? Companies buy back stock or issue dividends because they have excess cash and want to return it to shareholders. How is declaring a dividend shorting their own stock? Companies short their own stock by offering more of it in the market. They do this because they have to or because they can use the cash to create more wealth.
------------------------------------------------------------------------------ He is saying apple have no problem for the demand of thier products. The problem is to produce enough?
There is one thing that disturbs me. Take AAPL. Clearly they have great products. They don't pay a penny of dividend. If the stock price does not go up, someone with enough resources can come in and buy all outsanding shares, take control of the company, and get all the revenue for themselves. So the fear of takeover MUST drive a stock price to some level. What is strange is, that it is up to the market participants to keep the value of a stock at least in some proportion to the cash flow that a company generates, to Book Value + adjustments. It is almost an honor system, since there is no payment to do so in the absence of a dividend. But the company itself relies on the market to keep value!!! It can buy back stock, but how often is that? I guess I don't understand why the stock of a company trades above its book value and future cash flows - the multiple for those earnings. I understand the notion of future cash flows, but the whole thing is circularly recursive, with no sound basis for any of it.