Sat, Oct 1, 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 Exclusive: BlackRock taps Artivest for alternative investment platform partnership[more]

    Bailey McCann, Opalesque New York: BlackRock will be working with New York-based Artivest to provide a platform for broader distribution of BlackRock alternatives funds. Artivest is a technology-driven alternative investment platform that also offers brokerage services. BlackRock has approximatel

  2. Eden Rock buys Gottex stake in ERG Asset Management[more]

    Matthias Knab, Opalesque: Eden Rock Group announced the purchase of Gottex’s stake in ERG Asset Management and so the firm is now wholly owned by Eden Rock. The two firms established the joint venture in 2011 to focus on providing cost effective solutions to funds holding illiquid investments, as

  3. "Hedge fund industry needs to shrink"[more]

    Komfie Manalo, Opalesque Asia: Writing for CNBC, Josh Brown, creator of The Reformed Broker blog and financial advisor for Ritholtz We

  4. Strategy - Voyager Management wants to invest in smaller hedge funds[more]

    From Valuewalk.com: Voyager Management, a $475 million fund of funds, is looking to downsize the hedge fund’s in which they invest, looking for smaller funds with assets under management that enable the fund to be nimble. The fund is looking for noncorrelation and will consider long / short equity

  5. Asia - Quant hedge funds are China's hot new export, Europe banks return to Korean brokerage market; target debt, alternative products[more]

    Quant hedge funds are China's hot new export From Bloomberg.com: Add China’s quant shops to the list of hedge funds branching out across Asian markets. Quantitative money managers from the world’s second-largest economy are opening offshore funds at a never-before-seen pace, according to