ResMed’s dividend drought
Why would I buy, on a PE of 22.3, shares in a company which has $1,000,000 in cash but doesn't pay a dividend? (How ResMed is still hitting sixes, May 1).
Roger’s response: My column was more a suggestion for members to conduct some research rather than buy shares in the company as such. You might like to think about Berkshire Hathaway, which hasn't paid a dividend since 1967 yet its shares have risen from $US18 to $US160,000 since then because it has retained all of its earnings and compounded those retained earnings at a high rate of return on equity. Despite generating $24 billion in cash annually today, it pays not a cent in dividends. If you need an income you could sell a Berkshire share and if you wanted to have a good year, you could sell two! Be sure to seek and take personal professional advice before trading any securities.
Leveraging a lower dollar
I was interested to read Robert Gottliebsen’s article, The big risks markets are ignoring, and his comments on the Australian dollar. What investments can we invest in to take advantage of a falling Australian dollar?
Editor’s response: You may find Ian Verrender’s article, Winners from a dollar demotion, of interest.
Collecting the wisdom
I enjoy the Collected Wisdom column, and would be very interested to know the number and identity of 'Australia's best-known investment newsletters' referred to throughout.
Editor’s response: Thanks for your comment. Collected Wisdom looks at a combination of analyst reports, broker calls and business news sites each week to determine suitable stocks to analyse and the appropriate call for each one.
Adam Carr is a breath of fresh air. His positive attitude combined with his knowledge is something that the other doom and gloom "experts" should look at. Well done Adam.
Downside to low interest rates?
I would be interested to see an article in Eureka Report on the economic downsides of lower interest rates in the longer term. The mantra today in low confidence is lower interest rates but how low can they go and at what cost?