Sun, Aug 30, 2015
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. Investing - Hedge funds suddenly find real money is back in Argentina's debt, Elon Musk buys more SolarCity stock following hedge fund manager short, BlackRock plans to get into rental-home financing[more]

    Hedge funds suddenly find real money is back in Argentina's debt From Bloomberg.com: The real money is back in Argentina. Before the country’s default in July 2014 (its second in 13 years), most long-term investors abandoned its bond market. As they rushed out, Argentina became a favorit

  2. Activist News - Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping, Meet Europe's best activist investor[more]

    Carl Icahn has snapped up a huge stake in Freeport-McMoRan, and the stock is ripping From Businessinsider.com: Carl Icahn has picked his next target: Freeport-McMoRan. Icahn and a group of other investors have snapped up an 8.46% stake in mining company Freeport-McMoRan, according to a j

  3. North America - Hedge fund manager Ray Dalio’s challenge to the Fed[more]

    From Newyorker.com: For some reason, Janet Yellen, the chair of the Federal Reserve, decided to skip this year’s annual Fed conference in Jackson Hole, where monetary policymakers from the United States and abroad get together with some prominent academics to discuss the big issues of the moment. Th

  4. Opalesque Exclusive: Credit-focused hedge fund Numen Capital expects more volatility in Europe in coming months[more]

    Benedicte Gravrand, Opalesque Geneva: A London-based hedge fund, which has just hired two emerging managers, is cautious on Europe. Vassilis Paschopoulos and former Lehman’s colleague Nikos Kargadouris, launched a London-based credit-focused hedge fund called

  5. Performance - Hedge funds bruised by stocks’ meltdown, Capstone’s volatility hedge fund is having a monster month thanks to market mayhem[more]

    Hedge funds bruised by stocks’ meltdown From WSJ.com: Hedge-fund managers like to promise their investors protection from market swings. In the recent stock swoon, many were caught off guard. Billionaire managers such as Leon Cooperman, Raymond Dalio and Daniel Loeb are deeply in the red

 

banner