We _do_ know to sell shares [LWN.net]

We _do_ know to sell shares

Posted Jun 16, 2004 1:52 UTC (Wed) by lakeland (subscriber, #1157)
In reply to: We _do_ know to sell shares by djabsolut
Parent article: Red Hat's Red Flags (Motley Fool)

Er, yes? Your point? Trying to second guess the mob is a dangerous game.
Made more so since they are all trying to second-guess you. If you are
relying on the mob continuing to live a delusion and suddenly reality
rears its head then you're in for serious trouble -- especially if you're
a little slow.

Of course, instead of making a profit on the share price you can make a
profit on dividends and ignore the share price. This is certainly a much
more stable income and does not present any of the moral or ethical
dilemmas inherant in out-guessing the mob. But as the Fool article
states, RHAT is already grossly overvalued in terms of dividend payout so
I can't imagine why any investors would own shares in Redhat for the
dividends.

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Sure you can rely on dividends ...

Posted Jun 16, 2004 18:30 UTC (Wed) by smurf (subscriber, #17840) [Link]

... assuming that the company will in fact pay a dividend, which is by no means certain.

Besides, the stock price is automagically valued down when the dividend is paid, so the company is either going to be worthless somewhen in the future, or they'll make more money. Which you can't count on either.

The bottom line is, in case some reader doesn't know it already, that there's no magic way to make money on the stock market. :-/