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Subject:  Re: Congratulations to Dems! Date:  11/15/2012  8:11 AM
Author:  BrianMotleyFool Number:  65464 of 95183

>> Quiet on this board. Too quiet. Let's see if we can stir it up.

Actually, I was thinking that it had been pleasantly on topic for a change and I'm sorry to see this stuff coming up here again. Not that some of it isn't potentially interesting; it just belongs somewhere else. <<

OK, fair enough. All politics onto another board.

So, peripheral to politics, but focusing on investments, dividend payors have been getting beat up more than the market in general since beginning Nov. I am particularly interested in CODI. Business development company with a number of small to mid size firms it is working on growing. 3Q press release:

At $15 a few weeks ago, it was a bit rich for me, but is now falling to $13.5ish, which is kind of interesting (10.7% yield). However, if dividend income is treated as regular income in the new tax laws, then maybe it needs to go down a bit further before becoming a buy. I.e., if previously a $1.44/yr dividend was 9.6% gross at $15, or 8.2% net after 15% tax rate, then price needs to go to $10.6 with $1.44 annual dividend for a gross rate of 13.6% to get a net rate of 8.2% at a 39.6% marginal tax rate. On the other hand, President Obama has expressed support for corporate tax reform, including lowering the top rate from 35%. If that happens, suddenly the portfolio companies become more profitable, and can pass through more to dividends, so the dividend increases, before losing more in income taxes.

Not really sure it is a new paradigm, but all these changes, if enacted, will mean new ways of thinking about all these companies, and there may be opportunity where the market throws out some good operators along with the bad ones.

Which is a long way of asking - any opinion on CODI? Is there something there?

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