Having sold a dividend yielding counter recently, I was thinking about the age-old problems that plagued me. I was suitably reminded of someone’s analogy (bro8888′s?) that a dividend yielding counter is like a milk cow. Every other time, a milk cow will give off milk, so that you can drink some and sell some, thus giving you a good cash flow. Alternatively, you can sell the milk cow to someone at a good price and get several years worth of ‘future’ milk money now, so that if there’s a mad cow diseases floating around infecting other herds, your future cash stream will be secured because it’s in your hands now. This comes at a cost – you’ll lose your future cash stream and possibly the price of the milk cow might also increase in the future.

To milk or to sell – that is the question

Quite a good analogy to stocks, no? Read more…