Here's that post...doesn't always work but many times it does...
Posted by: rcaselli Date: Tuesday, February 20, 2007 12:13:34 PM
In reply to: Jim Bishop who wrote msg# 116269 Post # of 184934
did you see this post on yahoot?
cracked me up.....classic stuff.
<snip>
Now the rest of the story... (Not rated) 18-Feb-07 07:32 pm Now that the play is basically over, here is how it was to be traded. Just look at the chart. Keep in mind that this same scenario plays out over and over...
* When a dividend over 25% of the pps is paid it becomes a "Special Dividend." It's actually better described as a cash disperesment than a dividend.
* The first buy is a week or two before the Date of Record. Just find the best opportunity to take your first position.
* Recreational Investors aka. Dumb Money, will buy up the pps the day before the Record Date thinking they will qualify for the divind the next day. At the top of this run is where the Savy Trader sells his shares for a nice profit. Some of us will even short the top of this price spike.
* The day after the Record Date will now have a big sell off as Dumb Money thinks they just scored a big fat dividend and think they are locked in. This is where the Savy Trader comes back and buys the same shares back at a signifigant discount as the Dumb Money sell their shares at a loss and without a dividend. See, the date of record simply attached the right to the cash distribution, but you have to hold those shers on the pay date otherwise the new owner maintains the right to the dividend. Actually, the date you want to focus on is the "Ex-Dividend Date" and not the record date.
* Now the Pay date comes and the price adjusts by the amount of the cash distribution and tons of Dumb Money sits there looking for thier money... Duhhhh, you never took the time to even call your broker for clarification.
* Now the final card is that the adjusted share price almost always goes back up at least half the amount of the cash distribution as many shareholders will take the new cash and buy more shares at the loer price. Notice that we were up 18% at the end of the day Friday.
