03-03-2015, 10:44 PM
(03-03-2015, 09:59 PM)CityFarmer Wrote: [ -> ](03-03-2015, 09:46 PM)weijian Wrote: [ -> ](03-03-2015, 10:36 AM)CityFarmer Wrote: [ -> ]I am always skeptical on those measured dividend yield by cost, rather on current price. It might distort your view, and make irrational decision amid better opportunities.
Just endure me extending the OT-ness.
Try asking folks who are sitting on 30-50% paper losses to use dividend yield by cost? In other words, has anyone consistently applied the same methodology (dividend yield by cost) on all the companies in their portfolio, especially that 'stinking dead fish' that is deep in the red? My back of envelope guess is that it is rare to find one.
IMHO, using dividend yield by cost serves no purpose at all. It is simply an additional injection of ego boasting confidence into the neural system for one to feel good when his/her accquired stock rises in price. In additional to having one's view distorted to make irrational decisions in the midst of better opportunities, the more deadly result is to risk making yourself think you are better than what you really are.
It is not rare to find the "methodology" around me, and even within VB.
Similar "methodology" as "zero cost, because dividends already paid back the invested cost" are also not rare around.
The more absurd would be selling half of one's stock which has gained 100%, and then claiming the remaining as free! This is essentially a future painkiller when the 'free stock' starts to drop in price (hey! it is free, what can i lose?)..I bet folks who are using such methodology will feel more pain if the stock drop 10% from their buying price, compared to dropping 20% from a price that has risen 50% from their buying price (well, i have to admit subtly I still do)
ok...time to stop hijacking with this OT (promise this to be the last post on biases here) The guys in the other room are talking about their Emperor Penguin.