The DC Today - Monday, December 18, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 18 December 2023
⏱️ 16 minutes
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Summary
Today's Post - https://bahnsen.co/3NuO33W
When one buys stock in the secondary market they are buying from Mr. Jones and Mrs. Smith, and the money is not getting to the company – that is correct. But there is a very important thing being missed when one concludes that therefore no money is being productively deployed. Namely, the existence of a secondary market is why a public market can raise money to begin with for primary productive purposes. When investors buy equity in a company that does go to the company for growth capital, productive use, etc., they do so with the knowledge, intent, and awareness that the money is going into a liquid, secondary market. That reality impacts the attraction of capital and it impacts the valuation of capital. Take away the ability for Mr. Smith to sell to Mrs. Jones, and you take away the marketplace for BIG INVESTOR to invest directly in BIG COMPANY.
Supplementally, many times companies are doing secondary offerings in the public market where money is coming straight to the company. And finally, dividends are paid to investors who often do directly productive things with them. Where do these dividends come from? The productive profit-making activities of the underling company. Rinse and repeat.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:13.4 | Well, hello, and welcome to the special edition of DC Today that is every Monday going through a handful of different categories. |
| 0:23.0 | A number of things I think are important across those familiar categories of the Fed and |
| 0:28.5 | housing and the economy and all that fun stuff. |
| 0:32.5 | Let me start by saying that there are links at the DC Today.com to the dividend cafe from Friday, |
| 0:41.9 | which dealt with the subject of housing, particularly housing supply. So the link there to the actual |
| 0:49.4 | written dividend cafe as well as the video and the podcast. I also was on Charles Payne Show on Fox Business |
| 0:56.6 | Friday afternoon talking about dividend growth and the link is there as well. Let me get today's |
| 1:03.1 | market action out of the way. It was how boring of a day was it? The Dow was up 0.00% dead flat to the basis point on our percentage basis. |
| 1:20.1 | Futures last night were up 50 or 60 points. |
| 1:23.7 | And then the market opened up about 50 this morning. And then it kind of zigged and zagged a little, |
| 1:30.9 | up a tiny bit, down a tiny bit, and then by the end of the day, just ended totally flat on the Dow. |
| 1:36.9 | Now, the S&P was up 45 basis points, the NASDAQ was up 61. |
| 1:42.2 | So let's call it half a percent for both of the other two indexes, largely because |
| 1:47.4 | communication services was up, let's see, 1.89%. |
| 1:53.0 | So a big move up there. |
| 1:55.1 | Interestingly, consumer staples were also up over 1%, but then you had real estate and utilities down a tad. |
| 2:05.5 | So a little bifurcation within some of the defensive sectors today. |
| 2:11.0 | But again, on a dead flat day, none of this is exactly earth shattering. |
| 2:15.8 | Speaking of not earth shattering, same in the bond market. |
| 2:18.9 | The 10-year yield closed at 3.94%. |
| 2:22.3 | That was up 1.7 basis points on the day, so basically flat on the long bond as well. |
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