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Stochasticity

switch76 wrote: »

I wasn't advocating doing it. Just pointing out that it is possible to get 1 year's worth of something for only a day or so.

The share price should drop though as soon as it goes ex-div, such that the loss to your invested capital offsets the benefit of the dividend. After brokerage fees, there's no easy profit to be had even getting 1 year's worth of dividend for only a day or two's investment.

switch76

Stochasticity wrote: »

The share price should drop though as soon as it goes ex-div, such that the loss to your invested capital offsets the benefit of the dividend. After brokerage fees, there's no easy profit to be had even getting 1 year's worth of dividend for only a day or two's investment.

I've heard that. Has anyone tested out the theory? It must be difficult to prove with the daily fluctuations in share price.

I was wondering about Antofagasta's and Aggreko's super dividend coming up.

le_loup

Not a theory. It's a fact. The assets of the company are reduced, the value drops, the price should.

switch76

le_loup wrote: »

Not a theory. It's a fact. The assets of the company are reduced, the value drops, the price should.

If you look at the companies that have gone ex-dividend today, more have gone up than have gone down.

jimjames

switch76 wrote: »

If you look at the companies that have gone ex-dividend today, more have gone up than have gone down.

The same happened last week with my Temple Bar shares. I was expecting a drop as a result of them going XD on 31/3 but they have actually risen consistently over the last few weeks as the market rise dragged them up.

le_loup

That's because the market was moving up chaps! How much would the things you have been watching have moved in a static market?
... and before you answer, there is no answer, but:
If you reduce the value of a company's assets by giving some of them away to the owners what is the value of that company?