I tried to steer Zak Mir away from the dark side of Technical Analysis and towards the true shining path of fundamental research last night. Of course I failed. Zak explained that as a semi-literate Old Harrovian he had to stick to charts. Words fail me. Or rather they fail him. That is the problem…. But, during the course of our discussions, he sent over a table of the highest yielders in the FTSE 250 Index and it is illuminating. The three highest yielders (Cable & Wireless, First Group and Man Group) offer such moth watering yields that they are too good to be true. The yield tells you that the dividend must be cut.
Below that trio, there are only 11 stocks (out of the 247 that remain) that offer 6% or more. Frankly, I would not be terribly sure that all of them will hold their payouts. As a value investor this is pretty alarming.
on SpreadBetMagazine | Comments