I agree completely. Please watch this video below.
I don't find his arguments compelling.
He is right to say the investor should consider capital gains and dividends as a whole, but he seems to think by giving out dividends the worth of the company and therefore investor is reduced.
This is not true. The value of the investor is not destroyed when the company gives dividends. Rather, the value is transferred to the investor and the opportunity to convert this value into cash, gold, bonds, other equities, etc... In short, dividends gives the investor an opportunity to spread his portfolio.
If you view it this way, then the argument of giving up future value due to effect of compounding no longer holds. It can be shown mathematically that if you take the dividends and invest just those dividends in another stock of equal returns, growth will be the same, but with the added benefit of a more diversified portfolio.
The dividend structure is different for different companies. For example, for capital-intensive companies that are monopolies, they can generate constantly increasing revenue but opportunities for large growth will come infrequently and far apart. There is no point forcing these companies to keep the cash if there is no opportunity to grow at present. Hence it may be better to give dividends to the investor for the reasons above.
