Forum Archive Index - November 2000

["Geoff Ewert" <gewert@wai.quik.co.nz>]

This issue was discussed at lenght bettween Jeremy and Oli a while back
(opposing views).
You might like to view the archives of sharechat
Cheers G
----- Original Message -----
From: "div" <div@hotmail.com>
To: <sharechat@sharechat.co.nz>
Sent: Friday, November 10, 2000 8:23 AM
Subject: Re: [sharechat] why not?


> Your idea is what is usually called "Dividend Stripping", and is talked
> about in many Share Trading/Investment books.
> You do not need to hold the share for a year, you are entitled to any
> dividends if you hold the share on the "record" date of the dividend, so
> theoretically, you could buy it on the same day (usually a friday.)
>
> However, like any strategy, it is not guaranteed to work.
> The share price will go down after the dividend, and what it does after
that
> is either go up or down!
> up you win, down you lose....just like buying at any other time.
>
> another strategy could be to wait until after the dividend is paid, and
THEN
> buy the share at the cheaper price once it has come down. But as you can
> probably see, from there the share will either go up or down. it makes no
> difference.
>
> In your idea you might pay $5000 and get $500 div straight away.
> In the second scenario you pay $4500 but miss out on the dividend.
>
> The only way you win is when you correctly predict what the share price is
> going to do in the time frame you are investing in....and if you cant
> predict it, you are more likely to succeed the longer you hold them.
>
>
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