Asked by Anonymous
Asked on 26 Feb 2019
Is it based on real-time profit of a set xx% (for e.g. 15%) that you set internally or is there a simple process to follow or to weigh divesting vs keeping share for dividends.
I would divest when the company faces issue maintaing its dividend i.e. payout ratio higher than 100% or is eroding into its assets / constantly having to dilute its company in order to raise more capital for funding. I've faced instances where I held onto high yielding (10%) yielding companies which eventually went bust simply because they couldn't sustain their dividends.
Either that or when I truly require the money.