The Meb Faber Show - Better Investing Audiobook - Shareholder Yield: A Better Approach to Dividend Investing - 2nd Edition | #565
Dive into the intriguing concepts of shareholder yield versus traditional dividend investing. The discussion uncovers how strategic capital allocation can significantly impact investor returns. Emotional ties to dividends are dissected, revealing why many investors resist change. Explore the benefits of reinvesting dividends and stock buybacks through enlightening historical data. Learn practical strategies for identifying shareholder yield stocks and adapt to evolving market conditions for superior returns.
02:12:31
Dividend Reinvestment Importance
- Reinvested dividends are crucial for total equity return.
- Price fluctuations heavily influence short-term returns, but dividends drive long-term growth.
High-Yield Dividend Stock Performance
- High-yield dividend stocks have historically outperformed the market.
- This is likely due to their value tilt and avoidance of expensive stocks.
Dividends and Buybacks
- Dividends are only one part of shareholder return.
- Companies now pay less in dividends but use buybacks, so consider both.
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Intro
00:00 • 4min
The Crucial Role of Capital Allocation in Investment Success
04:25 • 2min
Dividends vs. Buybacks: Understanding Shareholder Returns
06:49 • 1h 53min
The Emotional Branding of Dividend Investing
02:00:15 • 5min
Navigating Shareholder Yield Strategies
02:04:58 • 5min
Shareholder Yield
A Better Approach to Dividend Investing
Meb Faber
What works on Wall Street
The Classic Guide to the Best-Performing Investment Strategies of All Time
James P. O'Shaughnessy
In 'What Works on Wall Street', James P. O'Shaughnessy provides an in-depth analysis of over 90 years of stock market data to identify the most effective investment strategies.
The book examines various factors such as price-to-earnings ratios, price-to-sales, price-to-book value, dividend yields, and more.
It challenges conventional wisdom and offers multifactor strategies that have historically generated the best returns.
The book is designed to help investors of all levels, from conservative to aggressive, in selecting the best strategies for their investment objectives.
Triumph of the Optimists
101 Years of Global Investment Returns
Elroy Dimson
Mike Staunton
Paul Marsh
This book provides an authoritative account of a century of investment returns in sixteen countries, including the U.S.
, U.K. , Japan, France, Germany, and others.
The authors present a clear and consistent analysis of total returns, including reinvested income, and address issues such as survivorship bias and the long-term equity risk premium.
The book is essential reading for investment professionals, financial economists, and investors, offering insights into the broader tendencies of equity markets over the long term.
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success
William Thorndike
In this book, William Thorndike Jr. presents a counterintuitive look at eight CEOs whose firms outperformed the S&P 500 by a factor of twenty.
These CEOs, leading companies such as Berkshire Hathaway, The Washington Post Company, and General Dynamics, were characterized by their humility, frugality, and avoidance of the spotlight.
They shared traits such as a laser-sharp focus on per share value, exceptional capital and human resource allocation, and a belief that cash flow determines long-term value.
The book extracts lessons and reveals an alternative model for leading companies and investing, emphasizing relentless rationality and a focus on long-term success.
High Returns from Low Risk
A Remarkable Stock Market Paradox
Pim van Vliet
Jan de Koning
High Returns from Low Risk argues that the conventional view of risk and return is flawed.
Using historical stock market data dating back to 1929, the authors demonstrate that low-risk stocks can achieve higher returns than high-risk stocks.
The book provides strategies for constructing low-risk portfolios, selecting the right ETFs or funds, and explains why this approach continues to work even as more investors adopt it.
It also delves into the psychological and behavioral aspects of investing, making it a practical and insightful guide for investors.
Buyback Derangement Syndrome
Buyback Derangement Syndrome
Clifford S. Asness
Todd M. Hazelkorn
Scott A. Richardson
The article addresses several myths surrounding share repurchases, including the notion that they are at historical highs, stifle aggregate investment, or are the primary cause of recent stock market gains.
The authors argue that these criticisms are unfounded and that share repurchase activity, when properly measured, is not a significant factor in earnings growth or market strength.
Teledyne Technologies, a conglomerate phoenix that rose from the ashes with Henry Singleton's corporate DNA intact
Teledyne Technologies, a conglomerate phoenix that rose from the ashes with Henry Singleton's corporate DNA intact
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Christian Hald Mortensen
Taxation, Dividends, and Share Repurchases: Taking Evidence Global
Martin Jacob
Marcus Jacob
This article compiles a comprehensive international dividend and capital gains tax data set to study tax-based explanations of corporate payout for a panel of 6,035 firms from 25 countries over the period 1990–2008.
The authors find robust evidence that the tax penalty on dividends versus capital gains influences firms’ propensity to pay dividends and repurchase shares, as well as the amount of dividends and shares repurchased.
The study provides insights into how tax policies affect corporate financial decisions globally.
The success equation
Untangling Skill and Luck in Business, Sports, and Investing
Michael Mauboussin
In this book, Michael Mauboussin helps readers understand the interplay between skill and luck in achieving successes and failures.
He provides a framework to analyze the relative importance of skill and luck, offering concrete suggestions for applying these insights to improve decision-making.
The book covers various concepts such as the continuum of activities from pure luck to pure skill, the importance of sample size, and the use of tools like checklists to enhance performance.
Mauboussin draws on examples from sports, business, and investing to illustrate his points, making the book a valuable resource for anyone seeking to make better decisions in both professional and personal life.
Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay
Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay
Eugene Fama
Kenneth French
The study by Fama and French analyzes the significant decline in the percentage of firms paying cash dividends from 66.
5% in 1978 to 20. 8% in 1999.
They attribute this decline to two main factors: the changing characteristics of publicly traded firms, which now include more small firms with low profitability and strong growth opportunities, and a lower propensity to pay dividends among firms regardless of their characteristics.
The authors provide evidence that firms become less likely to pay dividends over time, even when controlling for firm characteristics such as size, profitability, and growth opportunities.
Distant Force
A Memoir of the Teledyne Corporation and the Man Who Created It
George A. Roberts
Robert J. McVicker
This book is a detailed account of how Henry Singleton created and built the Teledyne Corporation.
Written by George A. Roberts, who was with Singleton every step of the way, it describes the first decade of aggressive acquisitions and diversification, the addition of financial institutions to the company's technical mix, and the controversial program of aggressive stock buy-backs.
The memoir also covers the spin-off of certain entities to shareholders, whistle blower suits, hostile takeover attempts, and the friendly merger with Allegheny Steel Company.
The book includes a CD with stories intended to explain the company's technologies to non-technical shareholders.
In this special episode, I’m releasing the full audiobook of Shareholder Yield: A Better Approach to Dividend Investing. While you can purchase the audiobook on Amazon, podcast listeners can listen here for free! Check out the description and times of each chapter below.
About The Book
For decades, both professional money managers and retail investors have revered dividend stocks. However, an objective examination of historical data reveals a surprising truth: these investors may have been shortchanging themselves.
In this eye-opening exploration, Meb Faber unveils a more holistic market strategy beyond dividend investing - shareholder yield. Utilizing market studies, historical data, and insights from some of the world’s most successful investors, Faber guides readers through the numerous benefits of this broader approach.
Discover why focusing on total shareholder value - encompassing dividends, buybacks, and debt management - offers a superior method. Join Faber as he presents compelling data, debunks misconceptions, and demonstrates how to implement these concepts in your portfolio.
(1:07) Opening
(1:55) Introduction
(7:00) Chapter 1
(10:50) Chapter 2
(13:36) Chapter 3
(18:00) Chapter 4
(32:42) Chapter 5
(1:11:54) Chapter 6
(1:37:50) Chapter 7
(1:52:20) Chapter 8
(1:58:00) Chapter 9
(2:00:28) Chapter 10
(2:04:54) Chapter 11
(2:06:13) Chapter 12
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Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com/)
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