History of Dividends

    Corporations with common stocks first appeared in the early seventeenth century when monarchs approved them for trade, exploration and colonization purposes. Stocks were first used by speculators but over time, they became accepted as investments. Speculation returned again and stocks fell out of favor by many people. The East India Company paid dividends of […]

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Joseph Schumpeter – Economist

(Joseph Schumpeter inspired John Burr Williams to write about intrinsic value.)         The central point is that capitalism can only be understood as an evolutionary process of continuous innovation and “creative destruction.”   From Schumpter’s Theory of Economic Development: “Excluding any innovations and innovative activities, we have a stationary start. The hero to the […]

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Four Enduring Takeaways from John Burr Williams

Focus on Dividends, Not Earnings.  The intrinsic value of a company is equal to the present value of its future dividends, not earnings. “Earnings are only a means to an end,” Williams argued, “and the means should not be mistaken for the end.”   Investment versus Speculation.       An investor is “a buyer interested in […]

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Selected material from Searching John B. Williams

Excerpts from The Theory of Investment Value, by          Cornerstone funds blogs April-May, 12014   John Burr Williams’ book, is not about beating the market or getting rich in the market.  It is a wake-up call to the investment elite to offer them a theory of investment value that would encourage more long-term investing and less […]

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Dividend versus Growth

A recent web article compared a total return from 1960 to 1999. A table showed the S&P 500 average annual total return was 12.5% (3.4% in dividends [27.9% of the total] and 9.1% in capital gains). Using the old Dividend-Bond Multiple Rule (via hypothetical market prices based on 120% dividend-bond yield multiples), the annual returns […]

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