It's not my first post about dividends, but I feel like it's my duty to be one of the few people who writes publicly against the importance given to dividends.
Everytime someone writes that he received a certain amount of dividend over a specific period of time, they don't tell us how the stock performed over the same period of time. And nobody becomes rich because of dividends. People become rich because of capital appreciation.
If you like a business because of it's dividend, it's exactly like liking a business because it gives you some money every quarter. But does the business performs well? The dividend doesn't tells you nothing about that.
Actually, a high dividend shows that a business cares more about it's shareholders than about itself.
Yes, that's great to receive money. But what about the company? Does it grow? Will it be much bigger 10 years from now or will it stay the same size? If it stays the same size because it gives all it's money to you and other shareholders, you won't get much richer. You'll just have a sideline revenue that allows you to pay for some luxuries like a few lobsters every quarter. You won't buy a Ferrari with your dividends except if you own 50 000 shares of your favorite canadian bank.
For fuck's sake, chose your stocks among the stocks that have the best growth perspectives, the best profit margins, the best ROE or if it's a monopoly or oligopoly. Don't buy a business because it gives you 200$ every quarter.
I never talk about dividends with Vicario and that guy, besides being highly desirable, knows what's important to consider.
Be Smart Rich is desirable too but he doesn't like when I show him my appreciation.