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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8751  
Subject: Re: AT&T: Financial Shenanigans Date: 4/25/2013 12:45 PM
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Great points. It is a dilemma to figure out what to do with a stock like GE if it was bought before the bubble. You have endured a brutal share price hair cut and a brutal dividend cut. The flip side is GE today is getting back to what GE does well and has resumed its dividend growth policy.

This is something along the lines of my thought process; though it can be a little scattered.

GE. It's paying a decent and rising dividend, based on the present stock price, though not on my initial purchase price. To be logical my initial purchase price and its dividend yield is now completely irrelevant, though inevitably it's at the back of my mind. Where it must stay. Water under the bridge.

If one of my loser businesses is stable, that is, not in a state of flux or uncertainty, and they are paying a decent dividend based on their current stock price the question is: is there clearly a better place for that money, which in the case of GE is yielding 3.5% from the dividend alone? Of course there is, but in this exuberant market it's not necessarily obvious.

Loser stocks that don't pay a dividend, or have slashed their dividend to the bone because their business has hit a very bad patch calling for them to reinvent themselves, are a different matter. In this up market, if the prospects of the company in question are ill defined and their fortunes could go either way at some point, then it's probably prudent to sell the shares on market exuberance and go to cash if there aren't any obviously much better places to put it.

kelbon
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