Here is one for you 'yield on cost' guys

[hendi_alex]

It is a totally bogus way to look at things, but sure is very feel good. Today, it is making me feel very good!

A position in TNK was opened May 2014. Since then, I've traded around the edges, sold calls, sold puts, collected dividends, and after this week-end am back down to my core position of 2000 shares. Cost of shares, minus trading gains and dividends equals $1156(market value $13,500). That equals a total out of pocket cost of 57.8 cents for each share. The paltry dividend is 12 cents per share. But calculating your 'yield on cost' that so many love, the yield is now 20.8%. With shipping rates and profits doing very well this year, TNK could easily have a substantial dividend increase.

Like I say, totally meaningless calculation, but ah, surely does feel good!

That gets me to another bogus metric/concept, 'playing with the house's money'. Folks who subscribe to that would say that I'm mostly playing with the house's money at this point, having only $1156 invested in assets that are worth $13,500. I'll smile and enjoy that on this one as well, but at the same time fully realizing that the 2000 shares represent $13,500 of my own money. There is no such thing as 'the house's money' in investing.

[Kerim]

I don't think YOC is inherently bad, evil, or misleading, like some people do. I track it for my investments and enjoy doing so. I do think that it is often misunderstood, and that some investors have a tendency to give it way too much weight or authority.

As to "house money," I completely agree with you. Your money is your money, no matter how you got it, and no matter how quickly or recently. All of your money deserves the same care.

[cannew]

Dividend history for TNK
2008 2.79
2009 1.86
2010 1.28
2011 0.63
2012 0.04
2013 0.12
2014 0.12
2015 0.12 (est)

Glad you made money trading, but not a stock I'd consider a DG stock.

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An example of YOC for me is ENB. I bought it three times in 2007, investing $11,500. Never bought or sold any since that period (in this account). Have received $5,200 in dividends which were reinvested. So my total investment in ENB is now $16,700. My Adjusted Cost is $22.24 per share and the current dividend is $1.86. My YOC is 8.36%.

Enb dividend history:
2003 .42
2004 .46
2005 .51 (2:1 split)
2006 .58
2007 .62
2008 .64
2009 .72
2010 .85
2011 .97 (2:1 split)
2012 1.14
2013 1.26
2014 1.40
2015 1.86 est

Not all my stocks have done this well, but that's the type of DG stocks I seek and it's the growing income I look for. YOC is important to me as it's the income from my investments I seek, not the current value of my holdings. For those interested check current price or look at its 10 year price chart (compare it to TNK for those who don't think price follows DG).

[hendi_alex]

TNK is definitely not a DG stock, is a highly cyclic fair weather holding.