The Truth about YoC (Yield on Cost): The Only Metric That Matters for Long-termers

1. Illusion of Current Yield

Stock apps show yield based on 'Current Price'. If price doubles, yield halves. It misleads long-term holders. A buyer at $40 and a buyer at $80 see the same 2% yield on the app, but their reality is different.

2. Defining YoC

Yield on Cost uses your **'Purchase Price'** as the denominator. Your cost basis never changes regardless of market fluctuation.

• 📉
  Current Yield

  Drops when price rises. Relevant for new buyers.

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  YoC (Yield on Cost)

  Rises forever with dividend growth. The metric for Holders.

3. Case Study: Buffett's Coke

Buffett bought Coke in 1988. Today, his YoC is estimated at **50-60%**. He recovers >50% of his initial investment annually just from dividends. He recovers full principal every 2 years. Price crashes don't hurt him.

4. The YoC Trap

High YoC isn't always good. Consider a stock flat for 10 years with 5% YoC vs. a Tech stock up 10x with 0% yield. Don't forget **Opportunity Cost**. Always utilize SO Dividend to analyze YoC alongside Total Return.