Dividend Myths That Distort Markets (w/ Sam Hartzmark) | #628

2026-04-24

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Today’s guest is Samuel Hartzmark, a finance professor at Boston College. In today’s episode, Sam explores why dividends are so often misunderstood by investors. He explains the “free dividends fallacy” and how it can lead to inflated valuations and price dislocations. He also examines the tradeoffs between dividends and buybacks and how payout policies influence investor behavior. To close, Sam briefly touches on his research on prediction markets and ESG. (0:00) Starts (1:59) Sam Hartzmark on dividend misconceptions (15:24) Mutual funds juicing dividend yields (27:26) Buybacks, shareholder yield, and reinvesting dividends (39:57) Tax optimization (43:40) Importance of tota...

Today’s guest is Samuel Hartzmark, a finance professor at Boston College.

In today’s episode, Sam explores why dividends are so often misunderstood by investors. He explains the “free dividends fallacy” and how it can lead to inflated valuations and price dislocations. He also examines the tradeoffs between dividends and buybacks and how payout policies influence investor behavior.

To close, Sam briefly touches on his research on prediction markets and ESG.

(0:00) Starts

(1:59) Sam Hartzmark on dividend misconceptions

(15:24) Mutual funds juicing dividend yields

(27:26) Buybacks, shareholder yield, and reinvesting dividends

(39:57) Tax optimization

(43:40) Importance of total return

(52:26) Divestment, prediction markets, and memorable investments

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Past guests include Ed Thorp, Richard Thaler, Jeremy Grantham, Joel Greenblatt, Campbell Harvey, Ivy Zelman, Kathryn Kaminski, Jason Calacanis, Whitney Baker, Aswath Damodaran, Howard Marks, Tom Barton, and many more.