No Dividends From Maui

We're in Maui for a few days.

The FT senses some cracks in Strategy (MSTR) versus Bitcoin. The last three months was rough on a relative basis. They issued stock to pay preferred dividends and they also are diluting the common a little more aggressively in terms of ratios they would consider than they said they would. 

The company owns just under 4% of Bitcoin and has said it will keep buying. The stock has become a leveraged play on Bitcoin but the last three months' price action was a sort of delevering. For the life of me, I don't know why anyone would want to touch this thing.

Both the Wall Street Journal (gift link) and Yahoo Finance had some Gen-X doom. This is different doom than what we wrote about a few days ago. The WSJ was about student debt doing in Gen-X and Yahoo seemed to blame a transition period from defined benefit to defined contribution plans causing Gen-X to get left behind. 

Younger Gen-X would seem to be more vulnerable to higher student loan balances and when I started at Schwab in early 1993 at 26 years old, "ok, and here's your 401k," pensions were only for public service and manufacturing jobs as I recall. 

This comment (always read the comments) on the Yahoo article caught my eye. 

Nobody thinks they need $1.6 million to retire lol. They must have done that poll in Beverly Hills. Most people I know think they will need around $300-$400k. Especially if you have your house paid off. I don't know one person in retirement, that has more than that and all our living great.

What is interesting about it is the idea that maybe the number doesn't need to be that huge but also it's enough to create a useful income stream. The income stream generated from $300,000-$400,000 may or may not be sufficient but it can be meaningful. 

Frequently, we say dividends, being taxed as ordinary income, are not optimal. This article from Aptus Capital is a great primer for what the logic is. I'm not anti-dividend but have never been a fan of the dividend-only type of approach that is/was preached at Seeking Alpha. A total return approach that includes a little bit of selling to meet income needs is valid and as Aptus goes into great deal on, far more efficient. 

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