Mon, Jun 27, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Warren Buffet - Dump your equities and keep the dividends

Thursday, September 05, 2013

amb
Jad Comair
This open letter to Warren Buffet is from Jad Comair, Founder and CIO Melanion Capital, Paris.

In finance, a dividend future is an Exchange-traded derivative contract that allows investors to take positions on future dividend payments. Dividend futures settle on the amount of dividend paid by the company during the period of the contract.

One day soon, all investors will know what a dividend future is. Indeed, because they're simple, easy to understand and because dividends are so familiar, the time required to educate investors is minimal, hence the immense potential crowd available to vote in their favour.

I would go further. One day soon, investors will convert all their equity holdings into dividend futures. When you think about it, equities are so difficult to price and trade. According to Benjamin Graham’s bible for serious investors, a company’s market price is interesting if it is at a discount to its intrinsic value. If you take some basic intrinsic valuation models like the CAPM or the DDM (which, by the way is considered as rocket science in our industry, but has in fact no scientific basis whatsoever, but that's another story...) to assess the price of an equity: you need to be able to forecast a company’s cash flow for (at least!) the next ten years (personally, I don't even know how many eggs I'll have for breakfast tomorrow morning!) then you need to discount these cas......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Global markets fell, hedge funds gain in mid-June on Brexit, Fed rate concerns[more]

    Komfie Manalo, Opalesque Asia: Global financial markets declined through mid-June, as uncertainty associated with the upcoming Brexit referendum and expected U.S. Fed interest rate hike contributed to increases in volatility across asset classes, data provider