If being in Jimmy’s situation again, for sure I would do the same. Respect.
Now, any NTD which can be saved will be kept dearly for lesser good times. Locked & stocked.
edit: the rest of the reply was not appropriate.
Purchase a physical gold ounce coin or bar, and put the rest in a gold/silver savings account (paper account)
Purchase a physical gold ounce coin or bar, and put the rest in a gold/silver savings account (paper account)[/quote]
Which banks offer this service? Any reputable ones? Thanks, would love to open one of those. 
Purchase a physical gold ounce coin or bar, and put the rest in a gold/silver savings account (paper account)[/quote]
Which banks offer this service? Any reputable ones? Thanks, would love to open one of those. [/quote]
Bank of Taiwan has a gold passbook trading account. They also have English online banking, it is a breeze to use and very good.
Put it into savings towards a custom fender (~5k US).
[quote=“SillyWilly”][quote=“Tony the Tiger”]
- Invest in a high yield blue chip stock. By high yield, I mean >10%. There are several such companies in Taiwan. I have been slowly accumulating “Nankang (Nangang) (Nangang) Rubber Tire Corp.”(ticker:2101). At the current price, it’s yielding an incredible 23%(mostly in the form of stock dividends).
[/quote]
That would be like “free” money. :bravo: Would you mind showing a source for this?[/quote]
Free money indeed. Sure, I’d be happy to.
In the U.S. dividends are paid in the form of cash on a quarterly basis. In Taiwan, it’s different. Dividends are paid annually in the form of cash or stock, or a combination of both.
The ticker code for Nakang Rubber is 2101. To check the dividend amount for this year, you can go to the Taiwan Stock Exchange website. Go here, type in 2101, scroll to the bottom where it says “Annual dividends” and click on “by the shareholder’s meeting”.
The resulting pop-up shows you the dividend distribution details for this year and the previous years. Here you can see that they are paying a measly cash amount of 0.5nt per share this year. But look at the amount of stock dividends that they are distributing, “stock dividends from retains earnings” = 1.9, and “stock dividends from legal reserve capital surplus” = 0.3. 1.9 + 0.3 = 2.2, so total stock dividends = 2.2.
Now I bet you’re asking, wtf does 2.2 mean?! Good question. It’s a multiplier amount which determines how much stock you receive. In Taiwan, stocks are bought and sold in increments of a thousand, they call it 張, or “sheet”. So 一張(1 sheet) = 1,000 shares. Going back to the multiplier of 2.2, that number means that for every 張(1000 shares) of stock you own, you’ll get a stock dividend of 220 shares. An easier way to do it is to just take the multiplier and times it by 100, in this case it would be 2.2x100=220.
All this info can also be viewed and confirmed on the Taiwanese Yahoo Finance site.
Ok so now that we know the cash amount and the stock amount, we can start to calculate actual dollar figures(we need this to calculate the dividend yield). The closing price of ‘2101’ on Friday was 42.45nt. Let’s assume that we own 一張(1000 shares) of 2101:
-
Cash dividend: 0.5 per share x 1000 = 500nt
-
Stock dividend: We need to calculate the actual dollar amount of the dividend. 220 shares x 42.45 = 9,339nt
The total combined cash value of the cash dividend + stock dividend = 500 + 9,339 = 9,839nt
Now we can calculate the yield. First, we need to determine the value of every 1,000 shares. 1000 x 42.45 = 42,450nt. We plug that number into the denominator, and the numerator is the total value of the dividend which is 9,839nt. The dividend yield = 9839/42450 = 0.2317 =
23%
. Free monies! 
[quote=“Tony the Tiger”][quote=“SillyWilly”][quote=“Tony the Tiger”]
- Invest in a high yield blue chip stock. By high yield, I mean >10%. There are several such companies in Taiwan. I have been slowly accumulating “Nankang (Nangang) (Nangang) (Nangang) Rubber Tire Corp.”(ticker:2101). At the current price, it’s yielding an incredible 23%(mostly in the form of stock dividends).
[/quote]
That would be like “free” money. :bravo: Would you mind showing a source for this?[/quote]
Free money indeed. Sure, I’d be happy to.
In the U.S. dividends are paid in the form of cash on a quarterly basis. In Taiwan, it’s different. Dividends are paid annually in the form of cash or stock, or a combination of both.
The ticker code for Nakang Rubber is 2101. To check the dividend amount for this year, you can go to the Taiwan Stock Exchange website. Go here, type in 2101, scroll to the bottom where it says “Annual dividends” and click on “by the shareholder’s meeting”.
The resulting pop-up shows you the dividend distribution details for this year and the previous years. Here you can see that they are paying a measly cash amount of 0.5nt per share this year. But look at the amount of stock dividends that they are distributing, “stock dividends from retains earnings” = 1.9, and “stock dividends from legal reserve capital surplus” = 0.3. 1.9 + 0.3 = 2.2, so total stock dividends = 2.2.
Now I bet you’re asking, wtf does 2.2 mean?! Good question. It’s a multiplier amount which determines how much stock you receive. In Taiwan, stocks are bought and sold in increments of a thousand, they call it 張, or “sheet”. So 一張(1 sheet) = 1,000 shares. Going back to the multiplier of 2.2, that number means that for every 張(1000 shares) of stock you own, you’ll get a stock dividend of 220 shares. An easier way to do it is to just take the multiplier and times it by 10, in this case it would be 2.2x10=220.
All this info can also be viewed and confirmed on the Taiwanese Yahoo Finance site.
Ok so now that we know the cash amount and the stock amount, we can start to calculate actual dollar figures(we need this to calculate the dividend yield). The closing price of ‘2101’ on Friday was 42.45nt. Let’s assume that we own 一張(1000 shares) of 2101:
-
Cash dividend: 0.5 per share x 1000 = 500nt
-
Stock dividend: We need to calculate the actual dollar amount of the dividend. 220 shares x 42.45 = 9,339nt
The total combined cash value of the cash dividend + stock dividend = 500 + 9,339 = 9,839nt
Now we can calculate the yield. First, we need to determine the value of every 1,000 shares. 1000 x 42.45 = 42,450nt. We plug that number into the denominator, and the numerator is the total value of the dividend which is 9,839nt. The dividend yield = 9839/42450 = 0.2317 =
23%
. Free monies! 
[/quote]
Purchase a physical gold ounce coin or bar, and put the rest in a gold/silver savings account (paper account)[/quote]
Which banks offer this service? Any reputable ones? Thanks, would love to open one of those. [/quote]
Taiwan Bank and Mega Bank both offer paper gold savings account.
I have a Bullion Vault account, which is more accesible world wide, through the internet. I also offers a silver option, which Taiwan doesn’t officially as there is no silver market here any more. Funny really as the old Taiwan dollar used to be pegged to silver. Hmm…wonder where all that silver went eh? 
It’s also worth noting that if you are on Taiwan and are an A.R.C. holder, then there are restrictions to you using any Taiwan gold account in your name if you leave after your visa expires. You must cancel all accounts before this happens, or you are going to have issues taking your money out later.
If you want physical, then I suggest you keep it at home. After all, most physical buyers such as myself, don’t trust that the banks will be stable enough to warrant trusting them entirely with all our savings.
Commodities.
Simple equation. Population and demand rapidly rising all over the world and extremely fast in places like China where the growing consumer culture is expanding. The supply is quickly diminishing and the cost of extraction is rapidly rising. Rising demand, falling supply = simple equation.
Peak oil if it isn’t here already is not far away. Copper, aluminum, gold, silver, steel, the softs, etc… are all being consumed at an increasing pace while extraction is getting costlier and slower. There have already been many proven caches of resources that are not being extracted because it costs too much. It takes commodities to extract commodities so the rising prices have a rolling snowball effect. In the next 5-30 years we will all be adversely affected by the extreme rise in commodity prices. The only reliable hedge, and way to profit from this is by direct or semi-direct investment. We will see worldwide inflation like we’ve never seen. Just look at how much has gone up with the rise in oil over the last decade. Oil goes up and most everything else also rises because the cost of extraction, production and transport go up and this is passed on to consumers.
Even a raging bull market cannot overcome a fundamental supply/demand issue. Typically commodities and equities have a negative correlation, but I think over the next 30 years this will not be the case. People need to eat, need to travel to work, need electricity and the gadgets it powers and factories and businesses need to continue producing. Just in the last decade we’ve seen a huge rise in demand and prices. There is nothing that will stop this beyond a major virus/disease killing off millions of people.
The other tempting option would be to buy up some of these insanely cheap short sales and foreclosures in select US markets. People cannot afford to buy now and the rental market is going strong. Buy up a few condos/townhomes and rent them out. In many cases the mortgage is far cheaper than the rent that can be charged especially at these super low interest rates. Rinse and repeat and slowly build up a little real-estate portfolio that provides monthly income and can be sold for much more in 10-15 years when the housing market is creating its next bubble.
[quote=“Tony the Tiger”][quote=“SillyWilly”][quote=“Tony the Tiger”]
- Invest in a high yield blue chip stock. By high yield, I mean >10%. There are several such companies in Taiwan. I have been slowly accumulating “Nankang (Nangang) (Nangang) (Nangang) Rubber Tire Corp.”(ticker:2101). At the current price, it’s yielding an incredible 23%(mostly in the form of stock dividends).
[/quote]
That would be like “free” money. :bravo: Would you mind showing a source for this?[/quote]
Free money indeed. Sure, I’d be happy to.
In the U.S. dividends are paid in the form of cash on a quarterly basis. In Taiwan, it’s different. Dividends are paid annually in the form of cash or stock, or a combination of both.
The ticker code for Nakang Rubber is 2101. To check the dividend amount for this year, you can go to the Taiwan Stock Exchange website. Go here, type in 2101, scroll to the bottom where it says “Annual dividends” and click on “by the shareholder’s meeting”.
The resulting pop-up shows you the dividend distribution details for this year and the previous years. Here you can see that they are paying a measly cash amount of 0.5nt per share this year. But look at the amount of stock dividends that they are distributing, “stock dividends from retains earnings” = 1.9, and “stock dividends from legal reserve capital surplus” = 0.3. 1.9 + 0.3 = 2.2, so total stock dividends = 2.2.
Now I bet you’re asking, wtf does 2.2 mean?! Good question. It’s a multiplier amount which determines how much stock you receive. In Taiwan, stocks are bought and sold in increments of a thousand, they call it 張, or “sheet”. So 一張(1 sheet) = 1,000 shares. Going back to the multiplier of 2.2, that number means that for every 張(1000 shares) of stock you own, you’ll get a stock dividend of 220 shares. An easier way to do it is to just take the multiplier and times it by 10, in this case it would be 2.2x10=220.
All this info can also be viewed and confirmed on the Taiwanese Yahoo Finance site.
Ok so now that we know the cash amount and the stock amount, we can start to calculate actual dollar figures(we need this to calculate the dividend yield). The closing price of ‘2101’ on Friday was 42.45nt. Let’s assume that we own 一張(1000 shares) of 2101:
-
Cash dividend: 0.5 per share x 1000 = 500nt
-
Stock dividend: We need to calculate the actual dollar amount of the dividend. 220 shares x 42.45 = 9,339nt
The total combined cash value of the cash dividend + stock dividend = 500 + 9,339 = 9,839nt
Now we can calculate the yield. First, we need to determine the value of every 1,000 shares. 1000 x 42.45 = 42,450nt. We plug that number into the denominator, and the numerator is the total value of the dividend which is 9,839nt. The dividend yield = 9839/42450 = 0.2317 =
23%
. Free monies! [/quote]
I love your enthusiasm Tony 
, but are you 100% sure about the whole multiplier?
In a country where the bank deposit rate is <0.5% per year a 23% yield is not to be scoffed at. However, it raises the unavoidable question: Is it too good to be true?
Using the link for Yahoo Finance Taiwan you provided it appears as if the “stock dividend” is just a NTdollar amount per share and not a multiplier, like you implied and used in your calculations. The cash dividend + the stock dividend = Total, i.e. $0.5+$2.2=$2.7 per share.
If you do the arithmetic on the dividend yield ($2.7 dividend / $42.45 share price) you get a yield of 6.35%.
Now based on the little knowledge I have about Taiwanese companies, I thought this was a little more in line with my expectations so I did a little more research.
If you link to Google Finance reuters.com/finance/stocks/2 … le/2504178
According to Reuters “Nankang Rubber Tire Corp Ltd announced that it will pay cash dividends of NTD 360,223,418
(NTD 0.5 per share)
, distribute stock dividends worth NTD 1,368,848,980
(NTD 1.9 per share)
, and use additional paid-in capital to distribute NTD 216,134,050
(NTD 0.3 per share)
, to shareholders for fiscal year 2011.”
For a total dividend of NTD 0.5 per share + NTD 1.9 per share + NTD 0.3 per share = NTD 2.7 per share.
This reconciles with the Yahoo Finance Taiwan link information perfectly. So unless the Yahoo Finance and Reuters information is wrong, the yield is in fact 6.35% (see above for calculation), and not your stated 23%. BTW, 6.36% is still an awesome return in Taiwan. With inflation at around 1%, you’re getting a real return of 5.36%. Not bad, but certainly not “free” money either.
[quote=“lumka1”]
Bank of Taiwan has a gold passbook trading account. They also have English online banking, it is a breeze to use and very good.[/quote]
Excellent, thanks.
100k of gold is a funny investment; people think it’s somehow more valuable than 100k of something else…
gold will go up and down in value just as much as any other commodity. They will all rise and they will all crash. You might as well buy a 100k of anything. :loco:
[quote=“SillyWilly”][quote=“Tony the Tiger”][quote=“SillyWilly”][quote=“Tony the Tiger”]
- Invest in a high yield blue chip stock. By high yield, I mean >10%. There are several such companies in Taiwan. I have been slowly accumulating “Nankang (Nangang) (Nangang) (Nangang) (Nangang) Rubber Tire Corp.”(ticker:2101). At the current price, it’s yielding an incredible 23%(mostly in the form of stock dividends).
[/quote]
That would be like “free” money. :bravo: Would you mind showing a source for this?[/quote]
Free money indeed. Sure, I’d be happy to.
In the U.S. dividends are paid in the form of cash on a quarterly basis. In Taiwan, it’s different. Dividends are paid annually in the form of cash or stock, or a combination of both.
The ticker code for Nakang Rubber is 2101. To check the dividend amount for this year, you can go to the Taiwan Stock Exchange website. Go here, type in 2101, scroll to the bottom where it says “Annual dividends” and click on “by the shareholder’s meeting”.
The resulting pop-up shows you the dividend distribution details for this year and the previous years. Here you can see that they are paying a measly cash amount of 0.5nt per share this year. But look at the amount of stock dividends that they are distributing, “stock dividends from retains earnings” = 1.9, and “stock dividends from legal reserve capital surplus” = 0.3. 1.9 + 0.3 = 2.2, so total stock dividends = 2.2.
Now I bet you’re asking, wtf does 2.2 mean?! Good question. It’s a multiplier amount which determines how much stock you receive. In Taiwan, stocks are bought and sold in increments of a thousand, they call it 張, or “sheet”. So 一張(1 sheet) = 1,000 shares. Going back to the multiplier of 2.2, that number means that for every 張(1000 shares) of stock you own, you’ll get a stock dividend of 220 shares. An easier way to do it is to just take the multiplier and times it by 10, in this case it would be 2.2x10=220.
All this info can also be viewed and confirmed on the Taiwanese Yahoo Finance site.
Ok so now that we know the cash amount and the stock amount, we can start to calculate actual dollar figures(we need this to calculate the dividend yield). The closing price of ‘2101’ on Friday was 42.45nt. Let’s assume that we own 一張(1000 shares) of 2101:
-
Cash dividend: 0.5 per share x 1000 = 500nt
-
Stock dividend: We need to calculate the actual dollar amount of the dividend. 220 shares x 42.45 = 9,339nt
The total combined cash value of the cash dividend + stock dividend = 500 + 9,339 = 9,839nt
Now we can calculate the yield. First, we need to determine the value of every 1,000 shares. 1000 x 42.45 = 42,450nt. We plug that number into the denominator, and the numerator is the total value of the dividend which is 9,839nt. The dividend yield = 9839/42450 = 0.2317 =
23%
. Free monies! [/quote]
I love your enthusiasm Tony , but are you 100% sure about the whole multiplier?
In a country where the bank deposit rate is <0.5% per year a 23% yield is not to be scoffed at. However, it raises the unavoidable question: Is it too good to be true?
Using the link for Yahoo Finance Taiwan you provided it appears as if the “stock dividend” is just a NTdollar amount per share and not a multiplier, like you implied and used in your calculations. The cash dividend + the stock dividend = Total, i.e. $0.5+$2.2=$2.7 per share.
If you do the arithmetic on the dividend yield ($2.7 dividend / $42.45 share price) you get a yield of 6.35%.
Now based on the little knowledge I have about Taiwanese companies, I thought this was a little more in line with my expectations so I did a little more research.
If you link to Google Finance reuters.com/finance/stocks/2 … le/2504178
According to Reuters “Nankang (Nangang) Rubber Tire Corp Ltd announced that it will pay cash dividends of NTD 360,223,418
(NTD 0.5 per share)
, distribute stock dividends worth NTD 1,368,848,980
(NTD 1.9 per share)
, and use additional paid-in capital to distribute NTD 216,134,050
(NTD 0.3 per share)
, to shareholders for fiscal year 2011.”
For a total dividend of NTD 0.5 per share + NTD 1.9 per share + NTD 0.3 per share = NTD 2.7 per share.
This reconciles with the Yahoo Finance Taiwan link information perfectly. So unless the Yahoo Finance and Reuters information is wrong, the yield is in fact 6.35% (see above for calculation), and not your stated 23%. BTW, 6.36% is still an awesome return in Taiwan. With inflation at around 1%, you’re getting a real return of 5.36%. Not bad, but certainly not “free” money either.[/quote]
Sir, I like how you did your own DD and research. You don’t see that type of intiative these days, very commendable 
:bravo:
You have made a most outstanding observation. However, I can assure you that everything I wrote is 100% correct. I have received stock dividends in the past and that’s exactly how it works. For example, I own “2317”(the infamous Foxconn) and their stock multiplier last year was 1.0, so I received 100 shares for every 1000 shares that I owned. As a result of these stock dividends, I now own shares that are not divisible by 1000, i.e 5532 shares. In Chinese, these are called 零股 or “odd lots”.
Looking at the links, in typically illogical Taiwanese fashion, they calculate the dollar amount by using the multiplier as a dollar figure and then they combine that with the cash dividend. So for “2101”, the stock multiplier is 2.2. They take this 2.2 and add it to the cash portion of 0.5 to arrive at a total of 2.7nt a share. Now any sane person would look at this and be like WTF?! Obviously you cannot just take the stock multiplier and magically turn it into a cash amount. It’s incredibly ridiculous that they state dividends this way, but it’s Taiwan. We just don’t understand their culture 
I was initially confused by this too when I first started investing in Taiwan. It just boggles the mind as to why they would state it like that. So I made a spreadsheet and started calculating the true values of the dividends myself.
Another way to look at it is, if the “stock dividend” is indeed just a dollar-per-share amount then how/why is it even called a “stock dividend”?! Wouldn’t it just be a “cash dividend” then? How can you distribute “stock dividends” in the form of cash? It makes no sense.
Hope this helps. I like your inquisitiveness.
[quote=“Tony the Tiger”]
Sir, I like how you did your own DD and research. You don’t see that type of intiative these days, very commendable :bravo:
You have made a most outstanding observation. However, I can assure you that everything I wrote is 100% correct. I have received stock dividends in the past and that’s exactly how it works. For example, I own “2317”(the infamous Foxconn) and their stock multiplier last year was 1.0, so I received 100 shares for every 1000 shares that I owned. As a result of these stock dividends, I now own shares that are not divisible by 1000, i.e 5532 shares. In Chinese, these are called 零股 or “odd lots”.
Looking at the links, in typically illogical Taiwanese fashion, they calculate the dollar amount by using the multiplier as a dollar figure and then they combine that with the cash dividend. So for “2101”, the stock multiplier is 2.2. They take this 2.2 and add it to the cash portion of 0.5 to arrive at a total of 2.7nt a share. Now any sane person would look at this and be like WTF?! Obviously you cannot just take the stock multiplier and magically turn it into a cash amount. It’s incredibly ridiculous that they state dividends this way, but it’s Taiwan. We just don’t understand their culture
I was initially confused by this too when I first started investing in Taiwan. It just boggles the mind as to why they would state it like that. So I made a spreadsheet and started calculating the true values of the dividends myself.
Another way to look at it is, if the “stock dividend” is indeed just a dollar-per-share amount then how/why is it even called a “stock dividend”?! Wouldn’t it just be a “cash dividend” then? How can you distribute “stock dividends” in the form of cash? It makes no sense.
Hope this helps. I like your inquisitiveness.[/quote]
I guess Reuters (like everyone else outside of Taiwan) have no idea how to calculate total dividends for Taiwanese companies. I’m going to have to take your word for it. You seem to have experience with this . I’ll have to talk to a broker buddy of mine to figure this shit out. Thanks for the education.
[quote=“SillyWilly”]
I guess Reuters (like everyone else outside of Taiwan) have no idea how to calculate total dividends for Taiwanese companies. I’m going to have to take your word for it. You seem to have experience with this . I’ll have to talk to a broker buddy of mine to figure this shit out. Thanks for the education. [/quote]
No problem, good luck
There could be a few things going on here
-
the dividends could be deliberately constructed this way to avoid general public knowledge of capital gains and therefore pressure for capital gains tax. It could be similar to how they pretend properties are worth less than they actually are
-
is this stock multiplier just split stock, IE newly issued stock? If so it stands to reason the shares worth will be diluted. Now if the shares aren’t diluted at the same percentage then it simply means the shares are doing well due to current company valuation. We need to see the history of the given stock, say over five years.
I simply do not believe you can get such a high annual return, 23% , without a high risk being attached, I will look into it myself.
I have looked at the five year chart on google finance, overlaid with the dividends and stock splits.
-
paid out dividend three of the last 5 years, did not pay in 2009 and 2010. With each dividend payment you can see the stock split. Prior to the payment you can see a ramp up in share price in 2011 in particular and then a big crash from 60 to 40.
-
each time the stock price drop ia quite large following split and dividend payment, it seems to be fairly stable overall though if the price is looked after over a period of a few years.
This one you wouldn’t want to buy too close to dividend payment date, thats what I get out of this. The dividend has not been paid out yet in 2012 so I expect the stock price will drop by a large amount on the issuance date.
How long do you have to hold a given stock to be entitled to dividend, no restriction?
Firstly, I’m actually really shocked by comments from people here that 1) they’ve never had 100,000NTD in their lives, 2) they can’t save 100,000NTD/year. Wow! Doesn’t this worry the hell out of you guys? What are you going to do in twenty, thirty, etc. years? What are you going to do when you’re too old to work, especially given the nature of the EFL industry here (where too old often means 40 onwards and where student numbers are dropping)?
You beat me to the punch here, though I would take it one step further. I wouldn’t even look at the stock valuation when considering dilution. The stock valuation is only a short term measure. I would look at the underlying valuation (i.e. assets minus liabilities). If that hasn’t increased at a faster rate than the stock dilution, I’d be very worried. Indeed, the issuance of more shares by a company should almost always be a warning bell. Good companies buy shares back (when it’s prudent to do so), not issue more. Issuing shares is the equivalent to a country turning on the printing presses (with all the connotations).
Well, it depends. Berkshire Hathaway has returned just over 20% p.a. for more than 40 years. There are others too. Fairfax financial has returned 20+% for more than two and a half decades. Peter Lynch returned just shy of 30% for thirteen years when he was running the Magellan Fund.
So my answer would probably be to invest in a company like Berkshire Hathaway or Fairfax Financial, though it would depend upon the current share prices. Or, if I had a good idea for a business, I’d put it into that.
As to the bigger picture for some posters here, whilst 100,000NTD isn’t a lot of money, we all have to start somewhere. Taking the first step is the hardest thing. Then you need to make it into a habit. Saying it’s only 100,000NTD, a person will never begin investing and building a nest egg. If people wait for a large amount of money to arrive…then they either won’t need to invest at that point, or they’ll be waiting a very long time for said money to arrive (most likely the latter).
I’ve read over the above comments again and the stock split / stock dividend ex-dividend date price drop seems fairly standard.
Looking at the figures at Yahoo Finance Taiwan http://tw.stock.yahoo.com/d/s/dividend_2101.html again, if I understand this correctly, if I had bought 1000 shares in 2004 for say $33 per share and a total investment of $33,000, the next 3 years stock dividends were paid out at multiples of 1.4 (year 94), 1.469 (year 95), and 1.3 (year 96). So after year 96 (Taiwan calendar) and almost 4 years of investing in 2101, my initial investment would have grown to $89,713 (at the ex-dividend low for year 96), for a total gain in under 4 years of 172%. :discodance: That is phenomenal! That’s a 43% annual gain. (BTW, this is all excluding the minuscule cash dividend)
Then we enter the global recession of 2008-2009 (97-98) and no dividends were paid.
Then in year 99 a 1.063 multiplier is used and in year 100 (2011) a 1.22 multiplier for a grand total of 3262 shares of stock after about 8 years, with a current market value of $138,472 @$42.45 share price. I.e. my initial 1000 shares have now grown to 3262 shares, without personally buying more stock.
This is an amazing gain of 320% over 8 years, or about 40% annually. (again, without including cash dividends)
Phenomenal!
Now, I don’t know what the taxes are on this sort of gain in Taiwan, but no matter, it’s still an outstanding return from a seemingly mature company (they make tires!!!).
@Tony: Now I know why you’re steadily accumulating this company’s stock. You can sit back and relax while the company potentially makes you rich. But you’re assuming the future equals the past = risk!
Questions:
- Were my calculations correct? I assumed for every 1000 shares I would receive x amount of new shares as stock dividends. (data from Yahoo Finance Taiwan)
- How many companies do this kind of stock dividend distribution? Acer? Asus? HTC?
- If this is such easy money, why doesn’t everyone take advantage of it?
- What guarantee do you have that this stock dividend policy will continue into the future?
Let me know if I missed anything.
This gives a whole new meaning to the phrase “buy and hold.” In the West we buy and hold in the hopes that our stocks increase in value, from say $10 to $50, but here it seems that the hope is for huge stock dividends, while prices remain largely flat. How’s that for a sweeping generalization?
Certainly I’d like to get the answers to your questions too, well laid out.
The company has obviously been doing very well over the last few years. I know they also have a large land bank in Nangang and probably other places which is also worth a fortune.
I would add the question
- why was the dividend cash and stock amount signposted so clearly in 2012 but the date has not been assigned yet?
Taiwans stock market us rife with insider trading, I hope people can see it is a loaded game but you can still make money with a long term strategic approach or a bet against the herd mentality approach.