Replies to post #326031 on Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

I still am thinking that this dividend will hurt MSFT more than what anyone is acknowledging. The investment income loss of over $1 bil coming from investment of that $30 bil must account for something. The investment income went straight to the bottom line. I got to think that the market will address that sometime before the next earnings report.

That said, $30 bil is a big shot in the arm to the market.

[ajtj99]

Well, let's put this in perspective. With that liquidity you could buy maybe 550-million shares of MSFT, which is about 8-times the average daily volume of MSFT. You could also buy roughly this:

20-million at $40 for DELL (3-times normal volume)
200-million at $27 for MSFT (3-times normal volume)
200-million at $24 for INTC (3-times normal volume)
150-million at $20 for CSCO (3-times normal volume)

Do this over a period of 3-days and you've got basically double the volume on these stocks. Now, since much of MSFT is held in index funds like the S&P, that money will get spread around even more.

Basically, we'll probably have an extra 500-million shares traded over 2-3 days on 3-exchanges. That's only about 100-million extra shares a day over two exchanges (forgetting about the AMEX for now). That's an increase in volume of about 6% or so.

I think the MM's will take that opportunity to sell marked up shares to hot money, then short and flush them for op-ex. That's what I'd do if I was a sinister MM <G>

I guess the only big if for me is would a liquidity ramp stop at 1620-1630 NDX (my preferred) or ramp all the way to extremes at 1735 NDX (repeating early Dec. 2001 almost to a "T".) We'll see.