Dividend, Share Price: Is there a connection?

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought AFI today @ 371.0 with a margin of 70%
Investment 111.3/share
Expected profit announcement 27th July, expected exdiv date 3rd August.
Last years dividend was 8.75/share fully franked.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought WES today @ 3931.0 with a margin of 70%
Investment 1179.3/share
Profit announcement expected early August, exdiv date expected around 16th August.
Last years dividend 92.0/share fully franked.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold GAN today on the open @ 172.0
Bought 22nd June @ 171.0 with a margin of 70%
Investment 51.3/share
Exdist 24th June. distribution 5.31/share, zero franked.
Gross profit 6.31/share = 12.30% return on investment.
13 day trade

Sold CNP today @ 610.0 I don't want to be involved with the spin off trust, goes ex tomorrow....but looks like more in it today.
Bought 23rd june @ 610.0 with a margin of 70%
Investment 183.0/share
Exdist 24th June, distribution 17.6/share, zero franked.
Gross profit 17.6/share = 9.61% return on investment.
12 day trade

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold MAP today @ 361.0
Bought 17th June @ 360.69 with a margin of 70% Investment 108.207/share.
Exdistribution 24th June, dividend declared 11.0 zero franked.
Gross profit 11.31/share = 10.45% return on investment.
18 day trade.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold WES today @ 4033.0
Bought 1st July @ 3931.0 with a margin of 70%
Investment 1179.3/share
Profit announcement expected early August, exdiv date expected around 16th August.
Last years dividend 92.0/share fully franked.
Gross profit 102.0/share = 8.65% return on investment.
4 day trade

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought CBA today @ 3793.0 with a margin of 75%
Investment 948.25/share
Profit announcement expected 10th August, exdiv date expected 15th August.
Last years dividend was 104.0/share fully franked.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Re-entered WES today @ 4008.0 with a margin of 70%
Investment 1202.4/share
Profit announcement expected early August, exdiv date expected around 16th August.
Last years dividend 92.0/share fully franked.

 

[sam21poddy]

Re: Dividend, Share Price. Is there a connection?

rozella,

How do you decide how far ahead of the dividend announcement that you enter the trade? I have been reading the dividend reaping strategy using instalment warrants on the ASX website and they say buy on the announcement - not ahead of it. What makes you decide "today is the day"?

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day sam21poddy,

Buying on the announcement is what I call my section 2 of my strategy, which is the safest as we know what the results are.

Section 1, prior to the announcement, is more of a "gamble" as although we know basically when they report but to some extent we are flying blindly......but some nice dollars can be made here.

What makes you decide "today is the day"?

Just market behaviour, but it can be all over the place. My idea here is to try & have 3 or 4 trades prior to exdiv day, then when I finally re-enter for the dividend, I only need to return to my buy price after exdiv, then I am out & move onto another. WES can be a good one for this.....but don't get out of synch......if you are watching it atm you will know what I mean.

rozella

 

[sam21poddy]

Re: Dividend, Share Price. Is there a connection?

rozella,

I'm still holding onto shares that I bought before they went ex-div and the price never recovered to what I paid after they went ex-div. I am still holding them and some are coming up for another dividend. I never intended to keep them this long because the holding costs add up. Some of them are AMP, CML, LNN, NAB, PPT, TLS. Nearly all my capital is tied up so I can't buy anything much now but even if I had the cash I feel the market is so high. The last time I bought WES it was at $32 and I thought it was high then so now at around $40 I worry it is too high. Anyway, that is why I have been reading about the dividend strategy using instalment warrants so that I don't have so much money tied up all the time. Somewhere earlier on this thread someone said using instalment warrants is more expensive than using gearing but I don't really understand why. If my shares have a run up prior to going ex-dividend I am tempted to sell them (and not take the dividend) and recover my money and start over again.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day sam21poddy,

Every dividend trade is definitely not a winner, so you need to identify when to pull the plug. You must have a stoploss in place & act on it before you get in too deep. I use a trailing stop of 3%, & have a minimum of 10 different stocks, & a maximum of 15 (there may be more than 1 parcel of the same stock).

I grade my stocks, with the very best having no greater than 15% of total portfolio, others may be 5% to 15%. So if a (15%) stock hits its stoploss, this is only 0.45% of total portfolio, therefore there is room for some discretion if required, & not much damage can be done. What I am getting at is you need to have some risk management in place, not only just a stoploss, so you need to adjust your trade size accordingly. When you have 10 to 15 stocks, they are in different parts of the strategy cycle, so there ias always something happening & you don't become bored either.

Don't be alarmed at the position you have found yourself in as most traders have been there.....especially me over the years. These are the best lessons you can have, its called pocketloss. I don't stray from my rules very much now, but now & again I do because I think I know better than the market....big mistake & almost always come undone, & I should know better.

The problem this leaves you with is, that your money is not going anywhere atm...stagnant. I find that if found in this situation, look at each stock individually, & say would I buy it at the price it is atm. If the answer is no, then sell it immediately, .....you could sell it for whatever it is worth now, & be in a stock going in the right direction.

If yes, then keep holding it as though you have just bought it putting stops into place.

This is not advice, I just want to give you something to think about, the decision is yours.

rozella

 

[sam21poddy]

Re: Dividend, Share Price. Is there a connection?

Thanks for replying rozella,

I don't have a system in place - the only rule I pretty much stick to is to buy only blue chip stocks. There is one thing that hasn't been working for me - I read it in a lot of books on trading - the rule about "let your profits run". When my trades are in profit and I am tempted to take a profit, I try to follow the "let your profits run" advice and I don't sell but then I lose my opportunity to sell at a profit and end up holding onto the shares for many months. Years ago before I read all the trading books, I used to take small profits regularly and it worked for me but then I tried to improve things and I went backwards. So I think if I can recover my capital, I am going back to what I was comfortable with - taking small profits regularly.

 

[RodC]

Re: Dividend, Share Price. Is there a connection?

hi rozella,

Just been looking at some your site again, and have thought of a question.

Do you ever re-enter stocks that you've been stopped out of?

I note that in the lead up to the ex-div date you'll often try to take several trades buying back in on a retracement. Would you do this after being stopped or does being stopped out, make that stock a "no go" until the next dividend period?

thanks,

Rod.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day RodC,

Yes, if the criteria still fits. I can't quickly identify some examples, but I will check through the trades later.

I just found one
Buy WES 4th August 2004 @ 2970.0
Sell WES 9th August 2004 @ 2875.0 stoploss 2881.0

Buy WES 10th August 2004 @ 2847.0
Sell WES 20th August 2004 @ 2947.0 after reaching trailing stop
exdiv 16th August 2004, dividend 92.0/share fully franked 39.43/share
Gross profit 231.43/share = 27.1% return on investment.

Seems ironic that I just closed out WES last night as it hit the stoploss after holding for 6 days, re the website EOD trading.

My personal buy of WES that I re-entered on the 6th July this month is looking awefully shakey ......the matchout opening price atm is 3875.0, & my stoploss is 3887.0 I collected 102.0 from it on 5th July, but this is a whole new deal.

rozella

 

[DTM]

Re: Dividend, Share Price. Is there a connection?

Sold out of my WES puts yesterday as it was on my support line. I think it may bounce today if its an up day for the market. The attack may cause a positive response for the markets. (hoping)

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day DTM,

The DOW was initially down, then rebounded.

Moving the Market

rozella

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold AFI today @ 383.0
Bought 1st July @ 371.0 with a margin of 70%
Investment 111.3/share
Expected profit announcement 27th July, expected exdiv date 3rd August.
Last years dividend was 8.75/share fully franked.
Gross profit = 12.0/share = 10.78% return on investment. 12 days

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought DJW today @ 386.0 with a margin of 70%
Investment 115.8/share
Profit announcement expected 1st August, exdiv date expected 8th August.
Last years div was 11.5/share fully franked 4.93/share

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold WAN today @ 845.0
Bought 7th July @ 810.0 with a margin of 70% Investment 243.0/share
Profit report expected around 5th August, exdiv expected 12th September
Last years dividend was 21.0/share fully franked 9.0/share
Gross profit = 35.0/share = 14.40% return on investment.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Re-entered WAN today @ 824.0 with a margin of 70%
Investment 247.2/share
Profit announcement expected 5th August, exdiv date 12th September.
Last years dividend was 21.0/share fully franked 9.0/share.

Reporting season gets into swing during next week....should be plenty of action.