JOETRADER

Buying Dividends: Next Week's Ex-Div Stocks

Would you care to share what stocks you buy/sell for dividend exclusion?


On Oct 06 11:29 PM THofler wrote:

> The author does have a point about a rising bull market having a
> positive impact on this technique, but...
>
> Over most of 2007 I had played the monthly dividend payout for Canetic
> Resources, a high dividend CanRoy trust stock. But, I played it by
> SELLING ahead of the ex-div, and re-purchasing afterwards and profiting
> from an oversized drop. I had one miss, but several profitable hits.
> Why did this work? I don't know except to assume that too many fools
> were trying to "buy the dividend."
>
> More recently, I notice that one of my high div. MLPs experienced
> a very large drop after the ex-div. date. I did a 4 year study of
> this stock looking at the 5 trading days ahead of ex-div. and 10
> trading days after ex-div.
>
> One month ago the share price drop was 7.6 times larger than the
> dividend amount. On a 4 year average, the share price drop was 3.8
> times larger than the div. amount. The smallest drop was 1.26X. The
> three largest drops in the 4 year period were 11.9X, 9.5X, and 8.8X.
>
>
> So... yes, anything is possible. But I believe dividend exclusion
> is generally a better bet than dividend capture. Both techniques
> rely on making two very good trades in a row, which is tough to do
> repeatably and consistently.