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Between immediate information on the Internet and minute-by-minute stock quotes at your fingertips, investors appear to be more infatuated with price appreciation than anything else. In contrast, prior to the 1990s, investors primarily focused on earning returns through a cash flow of dividends. Even though there has undoubtedly been a shift from cash-focused investing to a market fixated on price performance, cash flows play a critical role in assessing company valuation.

In this episode, Greg examines wisdom from "The Ownership Dividend: The Coming Paradigm Shift in the US Stock Market." Through several excerpts, he exposes how important dividends are to the structure of the market, investor goals, and company valuation. In the second half of the episode, Greg looks at Williams-Sonoma which has appreciated 200% since we first bought it two years ago. He analyzes whether its recent outperformance should warrant selling it to lock in gains.

EDIT: In the episode, Greg comments that our Williams Sonoma position has appreciated 300%, however, it has only appreciated 200%. The stock prices were given, so simple calculations could identify this error.

Disclaimer: This discussion is for educational purposes only and not investment advice.

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Brit Prawat

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