1nvest wrote:In HYP1 case consider PSN with all of dividends reinvested has grown 27x since November 2000. £5K original investment with dividends reinvested = £135K present day nominal value. Since 2000 RPI has seen a 1.8x increase, £75K rising to £135K. So PSN has been the MCD in the HYP1 case. Dump PSN, get all of your original inflation adjusted capital back and with a divisor of zero the remainder provide a infinite dividend yield Maybe reinvest the PSN proceeds into another HYP2 set to start all over again with the added benefit of a 'free' HYP1 running alongside that.
Can we get back to something like reality, please?
I agree that at least as a matter of academic curiosity, it might be interesting to work out how HYP1 would have fared if its owner hadn't taken any dividend income from it, but had instead automatically reinvested all of the dividends it has produced in the shares that produced them.
But it would not have included a holding of Persimmon with all dividends reinvested since November 2000 - because HYP1's holding of Persimmon has only existed at all since 2008 (along with a holding of Pearson), as a result of reinvesting the takeover proceeds of Britannic/Resolution and Scottish & Newcastle!