Dividend, Share Price. Is there a connection?

[Lucstar]

Hi guys. Just a question out of curiosity. Do dividend payouts affect the share price? For example, if a company were paying dividends today. Is the company's share price likely to go down?

[clowboy]

Yes, generally speaking there is a connection.

Usually a share price will fall the day it goes ex-divedend simply because people are taking a profit. The fall is not usually that great and often reflects the value of the divedend. The share price will also often rise a little leading up to the stock going ex-divedend.

[stefan]

Clowboy is right by saying that there is a connection and that there is a drop in price once the stock goes ex dividend. But the reason is not because of people taking profit. It is because otherwise you would get a free lunch and that just never happens (Or if it does, usually the lunch turns out to be pretty bad).

In short:
If company A is trading at $10 and announces a dividend of $1, the share price will drop by $1 on the first day it is trading ex-dividend. (Check the NAB thread to see my posting regarding exactly that issue.) The price seem to have dropped for no reason if you're not aware that the stock is trading ex-dividend. Why is it falling? To compensate for the dividend paid. If it wouldn't fall, then you would get a $1 for free and that goes back to the story about free lunch...

So for the time until after the pay date, the stock will be trading lower. The only hope is that the market is so strong and the stock so hot, that it will regain the drop BEFORE it is trading "normal" again. In that case, you would be able to get a $1 from your dividend and some minor gains due to an increased share price. This is called "Dividend Capture". It's a strategy whereby the investor buys the stock roughly two weeks before it goes ex-dividend and then sells it about two weeks after it has gone ex-dividend in order to collect the dividend and make a small profit on the trade. On the stock's ex-dividend date, its price will drop by the amount of the dividend. The theory is that the stock's price will work its way back up to the price it was at before the ex-dividend date. This allows the investor to sell slightly above the purchase price. Thus, the investor is able to collect the dividend and realize a small capital gain in about four weeks. Also referred to as a "dividend rollover plan."

Lots of ideas have been posted regarding a way to profit from a dividend payout but it just doesn't work.

Happy trading

Stefan

[Lucstar]

Thanks guys, especially to stefan. Very well explained!!

[clowboy]

Yea by profit taking I meant it in the sense of what Stefan said, thanx for the clarity Stefan, I am not so great at putting thoughts to paper (or text).

[rozella]

Here is an article in todays newspaper

http://www.theaustralian.news.com.au/common/story_page/0,5744,11438484%5E643,00.html (http://http://www.theaustralian.news.com.au/common/story_page/0,5744,11438484%5E643,00.html)

I have just found this forum yesterday & recognise some of the names, & if anyone has seen my posts before on other forums you will know that I use the Dividend Trading Strategy for my prime source of income. I also started a website a few months ago to demonstrate how I do it, although the trading diary/margin trading on the website is based on eod data, but personally I trade intraday to try & extract a few extra dollars.....not everyones cup of tea, but this is my own strategy that I feel comfortable with & have now been making a living from it for a number of years.

If there is anyone interested in this type of trading, I am only to willing to reply.

http://www.exdividendwatchlist.com.au

rozella

[rozella]

As a followup on the above newspaper article:
http://www.theaustralian.news.com.au/common/story_page/0,5744,11438484%5E643,00.html

Someone has emailed me the strategy on the ASX site as follows:
http://www.asx.com.au/markets/l4/WarrantStrategyofWeek_AM4.shtm

As a result I decided to see how this example of QAN compares with margin trading. QAN has a LVR of 70% with most marginlenders

Initial capital $10000
Buy 9891 shares @ $3.37.......................$33332.67
Sell 9891 shares @ $3.41.......................$33728.31
Profit............................................ .........$ 395.64

Dividend 9891 x 0.09...............................$ 890.19
$ 1285.83

Less broker 2 x $33.................................$ (66.00)
Less 49 day holding charges
@ 8.15% p.a. on $23332.67.....................$ (255.28)

Total Return............................................ .$ 964.55

Percentage Return on Investment....................9.64%
not annualised

* franking credits are not included

*** This is 61% more than the warrant strategy***

Let me know if anyone finds a flaw in my calculations.

Cheers,

rozella

[stefan]

Provided that the share price will rise, which in current market conditions is a likely event, then you'll be the winner. I'm just a bit concerned as you do base your investment heavily on margin lending so if it turns against you, the loss will be accordingly. Comes down to the importance of stop loss and close monitoring and you seem to have that all in place. After all in a bull market almost anything works, especially stuff based on margin lending.

Would be interesting to hear more about it from you as you seem to do it on a regular basis.

Happy trading

Stefan

[rozella]

Yes, you can "almost" use a dart board at present stefan, but I have been using this strategy for the last 4/5 years. As in any job, the more experience you gain the more you learn about handling situations, such as Sept 12th.

If there is some interest in this thread, I will post my buys & sells as they happen upfront (not after the event). As some of the posters here are aware, I do this on other forums as well if they are active & there is some response. My trading has been a little quite for the last week, as there are not many new deals for this strategy that fit my criteria atm & still have 13 open trades, but property trusts are just around the corner & have already completed trades recently on SGP, MCW, GAN, & CPA on the lead up to exdiv close to Christmas.....will be re-entering very shortly.

Cheers,

rozella

[stefan]

My trading has been a little quite for the last week, as there are not many new deals for this strategy that fit my criteria atm & still have 13 open tradesIt would be interesting to know what sort of criteria you apply for this strategy. I for one would be keen to follow a few of your trades here to get an idea where you're coming from.

Happy trading

Stefan

[RodC]

Hi rozella,

I've been reading your threads with interest on another forum, I'd certainly be interested in seeing some more info about your strategy posted here.

regards,

Rod.

[rozella]

Thanks stefan & RodC,

AWB just reported this morning, I entered this on 10th November @ 472.0 (section 1 of my strategy) with a margin of 70%. Investment 141.6/share.
Dividend has just been declared @ 11.0 fully franked (same as last year). I usually enter section 2 a day after the announcement giving the market time to digest.

I trade intraday & that is what I will post here, but on my website it is eod trading all entry/exit are last price of the day subject to available volume. I am saying this because I usually am asked why there is a difference between my forum postings & website postings.

The following pages outline the strategy & trades on the website since 1st July 2004. All trades are on margin, & the marginlending page shows the growth of the portfolio position without including franking credits & dividends earned that are not paid, although they are listed but not added in.

Trading Diary (http://www.exdividendwatchlist.com.au/0026/5/trading%20diary_a.htm)

Margin Trading Position (http://www.exdividendwatchlist.com.au/0026/7/trading%20diary%20margin%20loan.htm)

Market has started,

rozella

[rozella]

Sold LNN today @ 794.0. Bought 5th November @ 777.0 with a 70% margin.
Investment 233.1/share.
Gross profit 17.0/share = 7.29% return on investment. 19 day trade.
Exdiv 6th December. Div 15.0/share fully franked
May re-enter, see what happens.

Sold 2 separate parcels of SGB today @ 2456.0 Bought 15th November in 2 separate parcels @ 2410.0 each with a margin of 75%.
Investment 602.5/share
Gross profit 46.0/share = 7.63% return on investment. 9 day trade.
Exdiv 29th November. Div 62.0/share fully franked
I will probably re-enter by Friday close to gain the dividend on this one. This is the 5th completed trade on SGB since 19th October.

rozella

[rozella]

Re-entered LNN today @ 779.0 with a 70% margin. Investment 233.7/share
Exdiv 6th December. Div 15.0/share fully franked

Still waiting to re-enter SGB, last day tomorrow before exdiv day on Monday.

rozella

[rozella]

Misjudged SGB selling on Wednesday, but since today is the last chance to be eligible for the dividend, I re-entered at almost the highest price today in two parcels @ 2480.0 with a margin of 75%. Investment 620.0/share.
Exdiv Monday 29th November. Div 62.0 fully franked.

rozella

[rozella]

Sold LNN @ 805.0 this morning. Bought 25th November @ 779.0 with a 70% margin. Investment 233.7/share
Gross profit 26.0/share = 11.12% return on investment. 4 day trade.
Exdiv 6th December. Div 15.0/share fully franked

AWB & SGB went exdiv today....atm both are approx as expected......AWB is down the full div + fc.

rozella

[suzanne]

Dear Rozella,

I too would be very interested in learning more of your technique.

Cheers

suzanne

[rozella]

It would be interesting to know what sort of criteria you apply for this strategy. I for one would be keen to follow a few of your trades here to get an idea where you're coming from.

Happy trading

Stefan


I missed your post earlier Stefan,

Dividend + Franking Credit as a percentage of the investment must be more than 10% to be put on my watchlist. Then depending how many prospects are available & the cash available, the order of priority of stocks entered are as follows:

Good outlook for the following year
Increased profit from previous year
Increased dividend from previous year
Marginlending LVR no less than 60%
Stock in uptrend

So if all 5 points are met, then there is a good probability of profits in the trade as well as the dividend. When there is less stocks to choose from, I just have to enter the the stocks that meet the most criteria. It is all based on "the lure of the dividend making the price rise"

The Dividend Trading Strategy can be divided into 4 sections.

1. From now until profit announcement date (gamble section)
2. From profit announcement date until exdividend date
3. The dividend and franking credit amount.
4. After the fall on exdividend date until the stock rises to the price you want.

Sometimes I pyramid on each stage, other times just individual sections.

G'day suzanne, it is really a very simple strategy, you just have understand that you will be wrong some of the time, so don't think you know more than the market.....use you stoploss & move on to the next. Most believe they can't be wrong because they have done all the research & finish up losing or having their cash in limbo waiting because they believe in a stock. The best indicator is the price, & the best time factor is now.


rozella

[crashy]

rozella

how do you handle the 45 day rule?

also re SGB

I have noticed a severe negative bias once ex-div. it seems SGB div strippers are the biggest gluttons for punishment on the ASX. Every div SGB pays, the stock will run 3-4x the div amount going into the div, peak a day or two before ex, then tank indefinately afterwards. The peaks always seem to be the cum-div period. A quick glance at SGB chart will confirm all of this.

your thoughts?

also, you may find you get better results trading via self funded instalment warrants for the big blues.

[rozella]

You must be psychic crashy, I was going to mention the 45 day rule on my last post, but I hate reading long posts myself so I don't push them on to others.

Short answer is if you go past the $5k exemption per tax entity you lose them. But if you have joint ownership then you have 2 x $5k for example, a super fund gives you an extra $5k. You can easily achieve $18k dividends per tax entity trading property trusts & partially franked stocks, then you have the other 3 sections of the strategy to really work on.


also, you may find you get better results trading via self funded instalment warrants for the big blues.

To each his own I guess, I just like the flexibility of marginlending & feel very comfortable with it


I have noticed a severe negative bias once ex-div. it seems SGB div strippers are the biggest gluttons for punishment on the ASX. Every div SGB pays, the stock will run 3-4x the div amount going into the div, peak a day or two before ex, then tank indefinately afterwards. The peaks always seem to be the cum-div period. A quick glance at SGB chart will confirm all of this.

I just looked through my trading records & the last 4 divs on SGB were small positive trades as well as recieving the dividend. The worst result was last November when I sold at a small trading profit plus the dividend, but held for 54 days, the other times were between 7 & 22 days

Cheers,

rozella

[RichKid]

Very interesting thread, keep it going Rozella, I'm a bit of a novice and generally just trade basic support resistance short term but this dividend strategy looks good, must get my head around it. I don't use margin so I'll have to see if it works without it. Maybe through CFD's...(although I haven't used those yet). Glad to have you on the forums!

[rozella]

Bought BSO today on the royalty announcement @ 253.0 with a margin of 50%.
Investment 126.5/share.
Sold today @ 263.0/share.
Gross profit 10.0/share = 7.9% return on investment. 1 day trade.
Exdistribution 23rd Dec 50.782/share. huge yield, been there, done that.....takes too long to come back to the buy price. There may be a few trades in it before 23rd Dec.

Bought TEN today @ 424.0 with a 70% margin. Investment 127.2/share.
Exdiv expected 23rd Dec. Last year div was 9.5/share + a special div of 5.5/share = 15.0 fully franked. Can't count on the special div until announced.

rozella

[rozella]

A great day on the market today & certainly made up for yesterday.

Finally sold MGW today @ an average of 530.35. Bought 25th October @ 530.0 with a 65% margin. Investment 185.5/share. Div 13.75/share fully franked 5.89/share.
Gross profit 19.99/share = 10.77% return on investment. 38 day trade.

rozella

[crashy]

hi rozella

I was asking how YOU handle the 45 day rule, not how others should handle it. ps I have a DFA.

from what I know of your strategy, you buy FPO stock using leverage, hold for a short period, get the div and hopefully sell the stock at a profit.

Its a good strategy, and although you werent the first to come up with it, you do seem to have turned it into an art form.

But I believe it could be done better.

There are several issues with your strategy:

1. Time delay between ex-div dates and clearing of div cheque.
2. Major time delay between ex-div dates and tax refund time (to make use of the franking credits)
3. Assessable income increases with each div received
4. Unlimited leveraged risk
5. capital losses from ex-div falls must be offset against capital gains elsewhere, cannot be offset against div income

many of these issues can be resolved simply by switching to self funding instalment warrants.

Point 1. Since no div cheque is sent, there is no delay, and no ex-div fall (assuming fpo falls nett div amount)

Point 3. Assessable income decreases with each div "paid", since no div cheque is received, but franking credits still apply. Read the example on my site for more info.

Point 4. Risk is limited to the initial amount paid for the warrant. Trading on margin, if there was another 911, you may find a margin call will wipe out your account in a millisecond. You lose all of your equity plus more if it is a bad drop, and will have no way to recover.
With warrants this cannot happen. Warrants provide similar or better leverage than margin lending (removing the chance of a margin call), and can provide prepaid interest tax benefits.

Point 5. capital losses from ex-div falls dont exist. If the stock recovers over X days as you predict, the result is a simple capital gain. If you have a series of trades where the capital loss equals the nett div, you will find yourself with a capital loss you cant offset, and a large increase to your assessable income. Not good.

So in summary, my mods to your system:

1. decreases risk
2. improves after tax performance
3. far simpler and easier
4. offers better leverage (which will improve annual performance further)
5. you dont have to balance capital gains
6. lowers your marginal tax bracket
7. allows quicker reinvestment of funds (which will improve annual performance further)
8. you will probably save a heap on accountant fees since its a lot simpler

Just my 2c

[crashy]

Another point I would make is regarding your profit claims. You include div payments on quick trades even though you will likely get the cheque 3-4 weeks later, making the effective trade period much longer. Franking credits may not be used for up to a year later. I just feel it is slightly misleading the way you report profits thats all.

[rozella]

G'day crashy,

Many traders/investors use the dividend strategy & have been long before I took it on board. We can thank Mr Keating for the changes with franking credits.

As I said before I am comfortable with this strategy & have made a reasonable living from it for the past 5 years which took in 911..... the next month Oct 01 was & still is the best trading month I have had, well & truly offsetting losses in the Sept.

There are many ways to make a living from the sharemarket & the Dividend Trading Strategy is my way. As most would know on this forum, I have subscribers to my exdividendwatchlist & it is up to the individual to deal with those stocks as they want with any strategy. I provide the list of exdividend dates. I have browsed your website & it has some good ideas, however I personally prefer marginlending.


There are several issues with your strategy:

"1. Time delay between ex-div dates and clearing of div cheque.
2. Major time delay between ex-div dates and tax refund time (to make use of the franking credits)
3. Assessable income increases with each div received
4. Unlimited leveraged risk
5. capital losses from ex-div falls must be offset against capital gains
elsewhere, cannot be offset against div income"

1.& 2.I have no problems with this although it would be nice to receive them earlier.
3. Agree
4. Disagree, a marginlender will contact you to take action if you fall through your buffer. e.g. if you owned AMP or TLS with a marginlender you would have been forced to use your stoploss. Some traders find it difficult to pull the trigger in a losing situation, so if you won't do it, big brother insists.
5. This will depend on whether you have trader status or investor status.

"Another point I would make is regarding your profit claims. You include div payments on quick trades even though you will likely get the cheque 3-4 weeks later, making the effective trade period much longer. Franking credits may not be used for up to a year later. I just feel it is slightly misleading the way you report profits thats all."

This is my website margin trading page where dividends are not added until received, & franking credits are not included at all (but listed)

Margin Trading (http://www.exdividendwatchlist.com.au/0026/7/trading%20diary%20margin%20loan.htm)

Crashy, I think your ideas are good, but I am sure it would be better for you to demonstrate & post your trades on this thread for all to have a better understanding of your strategy. Live examples of your current trades so we can follow them.

rozella exdividendwatchlist (http://www.exdividendwatchlist.com.au)

[crashy]

I wont be adopting your strategy or my mod version of it just to prove a point.

I have "invented a better mousetrap" but sales are slow it seems.

If I get time I might show a hypothetical trade or two as they come up.

My "current trades" are likely to be daytrades on FX, about as distant and irrelevant as you can get.

[rozella]

Sold TEN this morning @ 441.0. Bought @ 424.0 with a margin of 70% on 1st December.
Investment 127.2/share.
Gross profit 17.0/share = 13.36% return on investment. 7 day trade.
exdiv 23rd December for a div of 12.5/share fully franked 5.357/share.
I will enter again if it dips. last year's div was 9.5 div + 5.5 spec.div = 15.0

rozella

[ghotib]

I'm following this with considerable interest. Thanks Rozella and Crashy.

Just wondering, is there normally a bit of a rise in share price immediately a stock comes out of its xdiv period, or is the next divvie too far ahead to have much effect?

Thanks

Ghoti

[rozella]

Ghoti,

If the stock has a good outlook for the future, it usually continues to rise, it is just that blip cut out of it for the dividend that upsets the chart. It depends on the quality of the stock. The stock has given away part of its worth as a dividend, so it immediately is worth that much less. I always allow for a drop of dividend + franking credit. The next dividend does not really have much effect on the price until it gets much closer, unless there is an announcement with lots of promises.

rozella

[crashy]

ghoti

due to the 45 day rule for franking credits, there is often buying occuring for 45 days before the div, and selling for 45 days afterward. Smart investors buy 45 (47) days before the div, and sell ex-div day. Amateurs buy on the cum-div day and sell 45 days later.
Of course this assumes the stock would otherwise be stable, which rarely happens. generally its best to buy ex-div when overall market sentiment is positive.

[ghotib]

Thanks Crashy.

I'm looking to buy into TIM, which I've been investigating for quite a while - since about 60cents ago <grr> - with a view to long term hold. It barely blinked when it went XDIV. It dropped along with the rest of the market over the last couple of days, and I guess I'm wondering if it might drop a bit further even if the rest of the market picks up again this week. Would you still call market sentiment positive if we have another 2 days of falls - and if not why not?

Cheers,

Ghoti

[crashy]

traders far wiser than me suggest that anything more than 3 days down is a change in trend. so tomorrow is make or break.

[rozella]

Re-entered TEN today @ 435.0 with a margin of 70%. Investment 130.5/share.
exdiv 23rd December for a div of 12.5/share fully franked 5.357/share.

rozella

[still_in_school]

Hi Rozella,

just 2 really quick questions, who do you use as your online broker, as your brokerage is really cheap.

but also, im a bit confused, but.. could you please give me an idea on your brokerage rate if possible.

say for:

$10k ?
$20k ?
$30k ?
$40k ?
$50k ?

Cheers,
sis

sorry, i just feel that im been really ripped off by my broker.

[rozella]

still_in_school,

I use AOT (hopefully all will remain the same since Commsec has acquired them....I don't expect so in time)

All brokerage is $33 incl gst. note: you can also have 6 buy trades (or 6 sells) onthe same stock on the same day at different price levels for the single $33

AOT (aotonline.com.au)

rozella

[rozella]

Just as a matter of interest, our website dividend strategy/marginlending using 'end of day data' has just passed the 50% return on investment under the first 6 months of this year.
Brokerage & approx interest has been deducted. Franking credits have been listed, but not included in any profits. All dividends have been credited to the account.

Margin Loan (http://www.exdividendwatchlist.com.au/0026/7/trading%20diary%20margin%20loan.htm)

Trading Diary (http://www.exdividendwatchlist.com.au/0026/5/trading%20diary_a.htm)

rozella

[still_in_school]

Thanks Rozella,

im so surprised by how cheap the brokerage is... but also it allows you more profit margin, on all trades, due to the set brokerage rate, but also the rate my broker has been charging me....definetly i will be changing for sure.

Cut and Pasted from AOT Website.

Using AOT's Integral trading platform, you are able to trade for a flat fee of $33 (inc GST) for trades up to $1 million per confirmation.

http://aotonline.com.au/private/fees.php

Cheers & Many Thanks,
sis

[rozella]

Thanks Rozella,

im so surprised by how cheap the brokerage is... but also it allows you more profit margin, on all trades, due to the set brokerage rate, but also the rate my broker has been charging me....definetly i will be changing for sure.

Cut and Pasted from AOT Website.

Using AOT's Integral trading platform, you are able to trade for a flat fee of $33 (inc GST) for trades up to $1 million per confirmation.

http://aotonline.com.au/private/fees.php

Cheers & Many Thanks,
sis

I forgot to mention, but you probably read it on the AOT site, there is a software/data fee per month, it is split into 2 parts, software $38.50 max, & data $38.5 max. If you have minimum of 8 trades per month (combination of buys & sells) one of the $38.50 is free, but if you have 16 or more trades there is no monthly fees at all.

That may make a difference to the average trade price, mine is generally free, that is why I forgot.

rozella

Cheers

[rozella]

Sold some bank stocks today as they are going nowhere to finance the LPT's coming up.

Sold WBC today @ 1863.0. Bought @ 1879.0 on 2nd November with a margin of 75%.
Investment 469.75/share
Dividend 44.0/share fully franked 18.85/share
Gross profit 46.85/share = 9.97% return on investment

Sold NAB today @ 2790.0. Bought @ 2855.0 on 3rd November with a margin of 75%.
Investment 713.75/share
Dividend 83.0/share fully franked 35.57/share
Gross profit 53.57/share = 7.5% return on investment

Re-entered SGP today @ 589.0 with a margin of 70%.
Investment 176.7/share
exdistribution expected 23rd December.
Last years distrib. was 18.0/share franked to 18.89% 1.46/share

rozella

[rozella]

Sold SGP today @ 600.0. Bought on 13th December @ 589.0 with a margin of 70%.
Investment 176.7/share
Reported yesterday. Distribution 19.3/share Franking TBA. exdiv 23rd Dec
Gross profit 11.0/share = 6.22% return on investment. 2 day trade.
Will re-enter soon. Currently 593/595

My timing was off with selling some of my NAB holdings with the Danske Bank sale....but nothing to do with the dividend strategy......my bad luck.

rozella

[rozella]

Re-entered SGP today @ 594.0 with a margin of 70%. Investment 178.2/share.

Sold another parcel today of WBC @ 1896.0 Bought 8th November @ 1896.0 with a margin of 75%. Investment 474.0/share. Dividend received yesterday 44.0/share fully franked 18.857/share.
Gross profit 62.857/share = 13.26% return on investment. 37 day trade.

rozella

[rozella]

Sold a parcel of ANZ today @ 2033.0 (taking too long to rise) Bought @ 2028.0 with a margin of 75% on 8th November (exdiv day). Investment 507.0/share
Gross profit 5.0/share = 0.99% return on investment. 38 day trade.

Re-entered CPA today on the close @ 132.0 with a margin of 70%. Investment 39.6/share
Ex-distribution 23rd December. div 4.83/share zero franked.

rozella

[rozella]

Sold last parcel today of WBC @ 1915.0. Bought @ 1908.0 on 2nd November with a margin of 75%. Investment 477.0/share. Div received 44.0/share fully franked 18.857/share.
Gross profit 69.857 = 14.64% return on investment. 45 day trade

Sold a parcel today of SGB @ 2484.0. Bought @ 2480.0 on 26th November with a margin of 75%. Investment 620.0/share. Div received today 62.0/share fully franked 26.57/share
Gross profit 92.57/share = 14.93% return on investment. 21 day trade

rozella

[rozella]

Sold last parcel of SGB today @ 2485.0 Bought 26th November @ 2480.0 with a margin of 75% Investment 620.0/share. Div 62.0/share fully franked 26.57/share
Gross profit 93.57/share = 15.09% return on investment. 24 day trade.

Re-entered GAN on 15th Dec @ 165.0 with a margin of 70%. Investment 49.5/share.
Exdistribution 23rd Dec. 5.2/share zero franked.

rozella

[rozella]

Sold last parcel today of ANZ @ 2049.0 Bought @ 2044.0 on 1st November with a margin of 75%. Investment 511.0/share. Div 54.0/share fully franked 23.14/share.
Gross profit 82.14/share = 16.07% return on investment. 50 day trade

Bought DUE today @ 253.0 with a margin of 65%. Investment 88.55/share.
Exdist 23rd December. Dist. 13.5/share zero franked.

rozella

[nto]

Hi Rozella,

I have been following this thread since I joined, your strategy involves margin lending, is it possible to work without a margin loan? I know I wouldnt be able to trade as much. I can see if I lose first go then it will be hard to recover. But it is not really a gamble it is a calculated risk?

Any comments be great

Have a great Christmas
Thanks
Norm

[rozella]

G'day Norm,

Marginlending is just a way of financing so that you are able to have more in the market.

To buy say 3000 ANZ, whether you buy on margin or not will still give you the same dollar profit or loss. Its only the percentage return on investment outlayed that is different.

It is a good idea to start the strategy with 100% of your own cash, then as you feel comfortable with it, start a margin loan account & gradually reduce your own cash invested. It is not much point borrowing money to invest if you are not sure of a strategy. It took me a while to be satisfied & to fine tune my rules, & then I was only prepared to borrow 80% of the credit available. But in the last few years I have become very disciplined with stoplosses & now operate in the buffer zone most of the time. i.e. 102% approx of available credit.

You don't see much evidence of stoplosses in my posts because we are in a great period for the strategy.

rozella

[DTM]

Hi Rozella

I have enjoyed reading your posts. You have an interesting investment method. What are the risks involved? What do you look for when you make the dividend play? What happens to the price of the share after the last date to qualify for the dividend? Do different shares react different when the shares go ex dividend.

Interested to know.

[rozella]

G'day DTM,


What are the risks involved?
If you decide that the stock meets your criteria, you go with it & a disciplined stoploss protects you if you were wrong.


What do you look for when you make the dividend play?
Increased profits, increased dividend, & good outlook statement for the future.


What happens to the price of the share after the last date to qualify for the dividend?
I usually expect for the stock to drop the dividend + franking credit on exdiv day & adjust my last trailing stoploss down by that amount. This is the only time I adjust the stoploss down.


Do different shares react different when the shares go ex dividend.
Yes, but life is not that easy.....I wish I knew which ones......what is a great recovery stock this period, may be a dog the next.

Most of the above is on my website, if you go to Trading Diary, you will see where the initial stoploss is followed a few lines down with the current trailing stoploss as at 17th December. The Margin Trading page will show you the trading position as at 17th December.

exdividendwatchlist (http://www.exdividendwatchlist.com.au)

rozella

[DTM]

Thanks Rozella

Greatly appreciated

[rozella]

Bought DRT today @ 133.0 with a margin of 70%. Investment 39.9/share.
Exdist 23rd December. Dist. 5.2/share zero franked.

rozella

[rozella]

Sold SGP on 24th December @ 589.0 Bought on 13th December @ 589.0 with a margin of 70% Investment 176.7/share. Exdist on 23rd Dec. Distributon of 19.3/share & franking TBA.
Gross profit 19.3/share = 10.92% return on investment. 11 day trade.

rozella

[RichKid]

Hi Rozella,

Watching your thread with interest. Newbies like me are sure to learn.

I'm currently in GoldLink (GLI) and thought it may qualify for your type of strategy (I bought some after it went ex div for a short term trade), might see what I can do next time it approaches ex-div date and buy before ex date like your rather than afterwards (as I did this time).

This is not a tip but GLI may be your type of candidate as it pays regular fully franked divs and rises predicatably (touchwood!!!).

[rozella]

G'day Rich Kid,

I always see GLI pop up near dividend period, but am more involved with others as the LVR for GLI is only 50%, I have just looked at the exercise buying GLI 2 weeks prior to exdiv as follows.

Buy GLI @ 116.0 on 19th November with a 50% margin. Investment 58.0/share. Exdiv 3rd December. Div 5.0/share fully franked 2.14/share.
It reached 122.0 on 2nd Dec, so trailing stoploss is 118.0 at close. Open on exdiv day, trailing stoploss is 118.0 - (div+fc) = 111.0/share. This is ok as exdiv day close is 114.0.

3rd Dec 114.0 trailing stoploss 111.0
6th Dec 115.0 trailing stoploss 111.0
7th Dec 115.0 trailing stoploss 111.0
8th Dec 114.0 trailing stoploss 111.0
9th Dec 119.0 trailing stoploss 115.0
10th Dec 118.0 trailing stoploss 115.0
13th Dec 112.0 stopped out

Sold GLI @ 112.0 on 13th December.
Gross profit 3.14/share = 5.41% return on investment
24 day trade

If we were still holding it was 107.0 on 24th December.

If the LVR was 65% or 70% then I would probably use it. Stoploss must be disciplined for this strategy to be a consistent winner.

All the best in the New Year for everyone & I hope we all have a prosporous one.

Cheers,

rozella

[idribble]

thanks rozella for a brilliant and informative thread.

[rozella]

Bought WDC today @ 1646.0 with a margin of 75%. Investment 411.5/share.
Profit announcement expected in February. Distribution ?

CBA next on the list.....maybe next week

rozella

[Tric]

great thread rozella, thanks.

I also had a look at your website, all very interesting and profitable strategy esp in todays market.

[rozella]

G'day Tric, glad you are interested.

Sold DRT today near the close @ 133.0 Bought 22nd December @ 133.0 with a margin of 70%.
Investment 39.9/share. Div 5.2/share zero franked.
Gross profit 5.2/share = 13.03% return on investment 9 day trade.

Happy New Year to all

Cheers,

rozella

[rozella]

Not a great deal to buy that has declared a dividend, so I have temporarily dropped my yield margin & bought NFD today @ 631.0 with a 70% margin. Investment 189.3/share.
Dividend 10.0/share fully franked 4.29/share. Exdiv 11th January.
I think I will sell prior to exdiv day.....risky trading with takeover offers about, especially if the bidders pull out.

Bought JBM today prior to profit announcement date @ 444.0 with a 50% margin.
Investment 222.0/share.
Last years dividend this period was 20.0/share 50% franked 4.29/share, & the exdiv date was 23rd February.......see what happens on announcement date as to staying for the div.

Put a buy order in for CBA @ 3209.0

rozella

[rozella]

Sold GAN today @ 164.85. Bought @ 165.0 on 15th December with a margin of 70%.
Investment 49.5/share. Div 5.2/share zero franked.
Gross profit 5.05/share = 10.2 % return on investment. 20 day trade.

rozella

[Kimbo2005]

The market is full of anomalies.

Take for example Nylex, (NLX).

It effectively has no assets and has not paid a dividend for years. Even after years of turmoil mamnagement still admits it is too ealry to anticipate a dividend; (the banks will be after further reductions in debt before money flows to shareholders.

Despite this the shares are selling for about 39 cents. Just shows what hype from management can do in terms of supporting the share price and allowing those who got new shares for 25 cents to get out at a hefty profit.

One day, when NLX pays a dividend, shareholders might realise the lack of substance of the company and the share price will take an appropriate dive.

[rozella]

Sold CPA today @ 132.0. Bought 16th December @132.0 with a 70% margin. Investment 39.6/share. Dividend 4.83/share zero franked.
Gross profit 4.83 = 12.2% return on investment. 22 day trade.

rozella

[rozella]

Sold WDC today @ 1697.0 Bought @ 1646.0 on 31st December with a margin of 75%.
Investment 411.50/share.
Gross profit 51.0/share = 12.39% return on investment. 10 day trade.
Will be looking for a new entry if it eases back.

Sold NFD today @ 635.0 on the close. I had hoped for a bit more, but did not want to stay for the dividend. Bought @ 631.0 on 4th January with a 70% margin.
Investment 189.3/share.
Gross profit 4.0/share = 2.11% return on investment. 6 day trade.

rozella

[rozella]

Sold JBM today @ 464.0. Bought @ 444.0 on 4th January with a margin of 50%.
Investment 222.0/share.
Gross profit 20.0/share = 9.01% return on investment. 7 day trade.

Bought DJW today @ 365.0 with a margin of 70%. Investment 109.5/share.
Profit announcement expected around 4th February to go exdiv approx 10th February.
Last years div for this period was 10.0/share fully franked.

rozella

[rozella]

Bought GWT today on the close @ 319.0 with a margin of 65%. Investment 111.65/share.
Expected to report around 3rd February with exdiv approx 11th March. The same period last year div was 10.0/share fully franked 4.29/share.

rozella

[rozella]

Re-entered JBM today @ 455.0 with a 50% margin. Investment 227.5/share.
Last years dividend this period was 20.0/share 50% franked 4.29/share, & the exdiv date was 23rd February.......see what happens on announcement date as to staying for the div.

Bought CBA today @ 3251.0 with a margin of 75%. Investment 812.75/share.
Profit announcement expected 9th February with exdiv expected 14th February.
Last years div this period was 69.0/share fully franked.

rozella

[mime]

I recently got the dividend for NAB then I sold the stock. It was like I got free money. The banks usually drop after the dividend is given but they do recover within a month or 2.

[rozella]

Sold my last LPT today since exdistributions date, DUE @ 253.0. Bought 21st December @ 253.0 with a margin of 65%. Investment 88.55/share.
Distribution 13.5/share zero franked.
Gross profit 13.5/share = 15.24% return on investment. 23 day trade.

rozella

[rozella]

Sold one parcel of TEN today @ 438.0 Bought 20th December @ 438.0 with a margin of 70%.
Investment 131.4/share. Div 12.5share fully franked 5.357/share
Gross profit 17.857/share = 13.59% return on investment.

Re-entered WDC today @ 1697.0 with a margin of 75%. Investment 424.25/share.

Also re-entered another parcel of WDC @ 1699.0 with a margin of 75%.
Investment 424.75/share.
Profit announcement expected in Feb with exdiv date approx 17th Feb

Bought another parcel of CBA today @ 3247.0 with a margin of 75%.
Investment 811.75/share.
Profit announcement expected 9th Feb with exdiv 14th Feb

rozella

[rozella]

Sold my last parcel of TEN today @ 440.0 Bought 10th December @ 435.0 with a margin of 70% Investment 130.5/share. Div 12.5/share fully franked 5.357/share
Gross profit 22.857/share = 17.51% return on investment. 34 day trade.

rozella

[crashy]

bought EUR last night 1.3107 on a breakout. Sold 1.3155 gross profit 47. 36% return on investment. 19 minute trade.

Should have gone to bed with breakeven stop and woken up 260 pips ahead. Oh well.

:p:

[Warren Buffet II]

Sold my last parcel of TEN today @ 440.0 Bought 10th December @ 435.0 with a margin of 70% Investment 130.5/share. Div 12.5/share fully franked 5.357/share
Gross profit 22.857/share = 17.51% return on investment. 34 day trade.

rozella

Rozella can you please explain your numbers to me I do not get them or you are missing some stuff.

Eg:

Initial investment: $10000
Initial Share price: 435.0 = $4.35

Number of shares bought ~ 2299 shares

Dividend paid: $287.375
Sell price: 440.0 = $4.40
Return from sale: $10115.6

So, return = $10115.6 + $287.375 = $10402.975

Profit $10000/$$10402.975 = 0.9612 then (1 - 0.9612) * 100 = 3.88% return

I do not understand much the margin account stuff. Can you please explain that to me? Are you showing in you info how much you pay for your margin account? do you knwo how much it affects your profit?

Additionally, are you considering any tax implication, if you are in the 30% bracket your profit will go down to 2.716% and then you have to add the brokage fee, let say you pay 23.95 per transaction, so profit will be with tax around 2.40%.

Thanks in advanced,

[rozella]

Rozella can you please explain your numbers to me I do not get them or you are missing some stuff.

Eg:

Initial investment: $10000
Initial Share price: 435.0 = $4.35

Number of shares bought ~ 2299 shares

Dividend paid: $287.375
Sell price: 440.0 = $4.40
Return from sale: $10115.6

So, return = $10115.6 + $287.375 = $10402.975

Profit $10000/$$10402.975 = 0.9612 then (1 - 0.9612) * 100 = 3.88% return

I do not understand much the margin account stuff. Can you please explain that to me? Are you showing in you info how much you pay for your margin account? do you knwo how much it affects your profit?

Additionally, are you considering any tax implication, if you are in the 30% bracket your profit will go down to 2.716% and then you have to add the brokage fee, let say you pay 23.95 per transaction, so profit will be with tax around 2.40%.

Thanks in advanced,

I always show the profit as a gross profit, but I will do it with brokerage & interest below.

with your example:
Buy 2299 shares of TEN @ 435.0 = $10000.65
Marginlender lends 70% = $7000.45
Our money 30% = $3000.20 (our investment)

Dividend 2299 x 12.5 = $287.37
Franking credit = $123.16

Sell 2299 shares x 440.0 = $ 10115.60
Profit on trade 10115.60-10000.65 = $114.95
Total gross profit
$287.37 + $123.16 + $114.95 = $ 525.48
Gross return on investment = 525.48/3000.20 = 17.51%

Brokerage 2 x $33 =$66
Interest @ 8.15%p.a
for 34 days on $7000.45 = $53.14

Net Profit 525.48 - 66.00 - 53.14 = $406.34
Net return on investment = 13.54%

Re tax: If you make profits you have to pay tax, that is another issue.

rozella

[Warren Buffet II]

Rozella,

Thank you very much for that explanation, it is very clear for me now.

Keep posting

Regards

[rozella]

Bought CRG today @ 979.0 with a margin of 65%. Investment 342.65/share.
Profit announcement expected approx 2nd Feb with exdiv approx 16th Feb. Last years div this period was 30.0 fully franked.

rozella

[rozella]

Sold a parcel today of WDC @ 1740.0 Bought on 13th January @ 1697.0 with a margin of 75%. Investment 424.25/share.
Gross profit 43.0/share = 10.13% return on investment. 4 day trade.

Sold another parcel today of WDC @ 1740.0. Bought on 13th January @ 1699.0 with a margin of 75%. Investment 424.75/share.
Gross profit 41.0/share = 9.65% return on investment. 4 day trade.

rozella

[Tric]

rozella,
good gain on your WDC with it being a short time frame profit (chart shows good bull run too).

This conts to be a very interesting thread and I think the way you have presented your trades in explaining the process is great.

thanks again,

:)

[rozella]

Thanks Tric,

This is the 2nd round of trades with WDC on the lead up to the profit announcement.....bit of a gamble period atm, so I take the profits as we go, & will re-enter on a pullback.

rozella

[rozella]

Sold DJW today on the open @ 378.0 Bought on 11th January @ 365.0 with a margin of 70%. Investment 109.5/share. Profit announcement around 4th Feb. Div last year was 10.0 fully franked.
Gross profit 13.0/share = 11.87% return on investment.

rozella

[rozella]

Re-entered WDC today with 2 separate parcels @ 1721.0 with a margin of 75%.
Investment 430.25/share. Profit announcement expected in February.

rozella

[Tric]

posted by rozella: This is the 2nd round of trades with WDC on the lead up to the profit announcement.....bit of a gamble period atm, so I take the profits as we go, & will re-enter on a pullback.

I like the way you showed that, protecting profit & capital, and you were spot on about the pullback. Good example of experience & skill = very classy I think.

[rozella]

Bought AWC yesterday @ 617.0 with a margin of 70%. Investment 185.1/share.
Profit announcement expected around 28th Jan & exdiv around 3rd Feb. Last years div was 10.0/share fully franked.

Tric, I jumped back in on WDC a bit too early in hindsight.

rozella

[rozella]

Bought OST today @ 279.8 with a margin of 65% Investment 97.93/share.
Profit report expected early February. Last years dividend was 5.0/share fully franked.

Bought BLD today @ 719.0 with a margin of 70% Investment 215.7/share fully franked.
Profit report expected early February. Last years dividend 14.0/share fully franked.

Re-entered DJW today @ 368.16 with a margin of 70% Investment 110.45/share.
Profit report expected early February. Last years dividend 10.0/share fully franked.

Sold JBM today on the close @ 472.0 Bought 12th January @ 455.0 with a margin of 50%
Investment 227.5/share.
Gross profit 17.0/share = 7.47% return on investment. 7 day trade.
2nd trade on JBM this month. I will re-enter given the right situation.

rozella

[rozella]

Bought PPX today @ 470.0 with a margin of 70%. Investment 141.0/share.
Profit report expected the end of February. Last years div was 13.5/share zero franked.

rozella

[rozella]

Bought another parcel of WDC today @ 1684.0 with a margin of 75%.
Investment 421.0/share. Profit announcement expected in February.

rozella

[rozella]

Sold a parcel of WDC today @ 1730.0 Bought on 21st January @ 1684.0 with a 75% margin. Investment 421.0/share.
Gross profit 46.0/share = 10.92% return on investment. 4 day trade.

AWC, BLD, & CRG managed to head north again, .....good gains with BLD & CRG, so I will stay with them another day & see what happens.

rozella

[rozella]

Just come back from golf to see lots of green arrows, so re-entered WDC @ 1730.0 with a margin of 75% ( maybe wrong move "U" seller just entered @ 1730.0)
Investment 432.5/share.

rozella

[Bodhi2500]

Hi Rozella,
I was wondering if you could please explain some elements of your posts?

1730 = ?
margin of 75% = ?
Investment 432.5/share =?

Thankyou





Just come back from golf to see lots of green arrows, so re-entered WDC @ 1730.0 with a margin of 75% ( maybe wrong move "U" seller just entered @ 1730.0)
Investment 432.5/share.

rozella

[rozella]

G'day Bodhi2500,

Buy price of WDC was 1730.0 or $17.30/share
I say a margin of 75%, but it is really the LVR given to that stock by the marginlender.

Example:

Buy 3000 WDC @ 1730.0 = $51900.00
LVR is 75% with most marginlenders
so the marginlender puts up 75% = $38925.00
& you put up 25% = $12975.00

Therefore your investment is $12975.00
or 25% of the share price = 432.5 or $4.325/share

My marginlender is 8.15% p.a. so therefore the borrowed part ($38925.00) will cost $8.69 per day.

Cheers,

rozella

[mime]

$8.69 per day??

Isn't that alot?

[rozella]

$8.69 per day??

Isn't that alot?

WDC rose 14 cents today,
so on the example, that is a rise of 3000 x $0.14 = $420.00 - $8.69 = $411.31

Without marginlending using the same invested amount ($12975.00)
This would only buy 750 WDC
Therefore 750 x $0.14 = $105.00 in comparison.

rozella

[Warren Buffet II]

Hi Rozella,

Do you use any stop losses technique? How do you set it up with a Margin Leading strategic?

Regards

[rozella]

Hi Rozella,

Do you use any stop losses technique? How do you set it up with a Margin Leading strategic?

Regards

Yes, the stoploss is the key to protect your capital.....it is easier for me to direct you to my website on the trading diary pages which will explain my stoploss rules & examples

Trading Diary 1 (http://www.exdividendwatchlist.com.au/0026/5/trading%20diary_a_1st%20July%2004%20to%2031st%20De c%2004.htm)

Trading Diary 2 (http://www.exdividendwatchlist.com.au/0026/9/trading%20diary_b_1st%20Jan%2005%20to%2030th%20Jun %2005.htm)

The marginlending is just a way of financing the purchase & does not affect the stoploss.

rozella

[Warren Buffet II]

G'day Bodhi2500,

Buy price of WDC was 1730.0 or $17.30/share
I say a margin of 75%, but it is really the LVR given to that stock by the marginlender.

Example:

Buy 3000 WDC @ 1730.0 = $51900.00
LVR is 75% with most marginlenders
so the marginlender puts up 75% = $38925.00
& you put up 25% = $12975.00

Therefore your investment is $12975.00
or 25% of the share price = 432.5 or $4.325/share

My marginlender is 8.15% p.a. so therefore the borrowed part ($38925.00) will cost $8.69 per day.

Cheers,

rozella


Hi Rozella,

I asked the question before because if you are running your investments with your own capital will be more flexible with the stoploss you use.

Eg:

As your previous example:

3000 WDC @ 1730.0

Let say this share drops 3% = 1678.1

that will give you a loss of around 12.06%

If you are running with your own capital a drop of 3% will give you a loss of around the same percentage, so you are more susceptible because of the risk you have.

So, what I am saying here is that a 3% stoploss with a 75% ML will give you a 12% real loss.

Do you think a 10% or 12% stoploss for own capital is reasonable? Do you have different stoplosses for different kind of shares?

Regards,

[rozella]

Your calculations are right Warren Buffet II, marginlending magnifies losses as well as wins, but you can't win on every trade. With a good strategy you will have more wins than losses. Marginlending just gives you the opportunity to have more in the market, but obviously it must be a winning strategy.

With the stoploss it does not matter per share whether you have marginlending or not. 3% of 1730.0 is 51.9/share. Its just with marginlending you would have a bigger quantity.

The idea is to have a few more rules. My maximum held in any one stock is 15% of the total portfolio, so if my stoploss is 3% per stock, then my total risk on the portfolio is 0.45%

I think 10% or 12% of the purchase price is far too much using the dividend strategy.

rozella

[Warren Buffet II]

Your calculations are right Warren Buffet II, marginlending magnifies losses as well as wins, but you can't win on every trade. With a good strategy you will have more wins than losses. Marginlending just gives you the opportunity to have more in the market, but obviously it must be a winning strategy.

With the stoploss it does not matter per share whether you have marginlending or not. 3% of 1730.0 is 51.9/share. Its just with marginlending you would have a bigger quantity.

The idea is to have a few more rules. My maximum held in any one stock is 15% of the total portfolio, so if my stoploss is 3% per stock, then my total risk on the portfolio is 0.45%

I think 10% or 12% of the purchase price is far too much using the dividend strategy.

rozella

Rozella, thanks for your reply. It is as always very constructive.

I have some more questions for you:

1) As you said, stoploss is the key to protect your capital, do you have any "profit taken" strategy?. What I mean here is:

Eg

Let say 2 day trade without ML.
Buy 1000 ANZ @ 2000.0
Div = 54/share
Profit could be $27 = 2.7% (Buy price = sell price without fees)

So in this case you are targeting a 2.7% profit. Now what if the share price rises 3% or 5%. Do you sell or wait to get the dividends? Any suggestions?

I know the question is a bit open and it has many variable but I really would like to know what you think.

Regards,

[rozella]

Warren Buffet II,

This market is very good, & every now & again it has a rest, & a stock like ANZ does not rise 2% every day, so on the lead up to the dividend, I like to take profits if the stock has risen an amount approx equal to the dividend if it hesitates, then wait for the rest day & go back in. I do not have any formula for this, it is purely discretionary. The exercise is to strip the dividend, so if I can do this 3 or 4 times with the one stock, then I am happy.

Of course the brokerage plays a part & it depends whether it is a negligible amount or not.

In a bear market, you don't usually have the luxury of making much in trading profits, so you are purely stripping the dividend, sometimes not making the full dividend because it may be more fruitful to sell at less than you bought it for & move onto the next deal. When in a bear market I trade as I have shown on my website, the cycles are longer & don't sell until the stoploss is hit, but it still profitable & regular. The website trading took a hit last week & 17 trades hit their stoploss levels, but it is still showing approx 48% return in the last 205 days after brokerage & interest.

Hope this is of some help.

rozella

[rozella]

Bought PTD on Friday 28th January @ 184.0 with a margin of 50%.
Investment 92.0/share. exdiv 8th February, div 8.0/share fully franked.
I am not that comfortable with this one & will exit before exdiv or stoploss of 178.0, whichever is sooner.

rozella

[rozella]

Took profits on 2 parcels of CBA today.
Sold both @ 3357.0

Bought 1st parcel on 12th January @ 3251.0 with a margin of 75%.
Investment 812.75/share
Gross profit 106.0/share = 13.04% return on investment. 19 day trade

Bought 2nd parcel on 13th January @ 3247.0 with a margin of 75%.
Investment 811.75/share
Gross profit 110. /share = 13.55% return on investment. 18 day trade

Before re-entering, see what happens after the RBA announces interest rates on Wednesday.

rozella

[rozella]

Sold OST today @ 286.0 Bought on 19th January @ 279.8 with a margin of 65%
Investment 97.93/share. Last years div was 5.0/share, should report approx 5th Feb.
Gross profit 6.2/share = 6.33% return on investment. 13 day trade

rozella

[rozella]

Sold PTD today on the close @ 190.0 (thought I might get 191.0). Bought on 28th January @ 184.0 with a margin of 50%. Investment 92.0/share.
Goes exdiv 8th Feb, div 8.0/share fully franked.
Gross profit 6.0/share = 6.52% return on investment. 4 day trade.

rozella

[Warren Buffet II]

Sold PTD today on the close @ 190.0 (thought I might get 191.0). Bought on 28th January @ 184.0 with a margin of 50%. Investment 92.0/share.
Goes exdiv 8th Feb, div 8.0/share fully franked.
Gross profit 6.0/share = 6.52% return on investment. 4 day trade.

rozella

Rozella,

Are you changing some of your strategic here? I have seen too many exits these days without picking up the divds? Any thoughts?

Regards,

[rozella]

Warren Buffet II


Are you changing some of your strategic here? I have seen too many exits these days without picking up the divds? Any thoughts?

This is section 1 of my strategy if you are referring to OST & section 2 if you are referring to PTD. I find it is easier to earn some trading profits first as they appear....at least I have that, then on a pullback I can re-enter maybe for some more or stay in for the dividend. There is only so much trading capital, so I try to take the quickest route to the most dollars in the shortest amount of time.

There are a lot of stocks ready to report atm, so there is no shortage of opportunities.

rozella

[rozella]

Bought GUD today @ 777.0 with a margin of 65% Investment 271.95/share.
Exdiv 21st Feb, div declared 23.0 fully franked 9.857/share.

Bought another parcel of AWC today @ 610.0 with a margin of 70%
Investment 183.0/share. Exdiv 7th Feb, div declared 10.0/share 75% franked.
Looking to take what profit if any that I can, & exit before exdiv day. stoploss 592.0.

Sold DJW today @ 379.08. Bought 19th January @ 368.16 with a margin of 70%
Investment 110.448/share. Should be reporting soon. Last years div was 10.0/share fully franked. It is difficult trading low volume stocks, there was only approx 42,000 traded & I wanted to sell 6000, & I eventually sold 238 @ 381.0 at 11:54am & waited until 13:50pm to sell the balance of 5762 @ 379.0 when there was enough on the buy side......but looks like a build up of buyers since.
Gross profit 10.92/share = 9.89% return on investment. 22 day trade. 2nd trade

rozella

[rozella]

Re-entered OST today @ 282.0 with a margin of 65%. Investment 98.7/share.
Last years dividend was 5.0/share fully franked 2.14/share & is expected to report very shortly.

rozella

[Warren Buffet II]

Bought another parcel of AWC today @ 610.0 with a margin of 70%
Investment 183.0/share. Exdiv 7th Feb, div declared 10.0/share 75% franked.
Looking to take what profit if any that I can, & exit before exdiv day. stoploss 592.0.

rozella

Hi Rozella,

I have been following AWC for a while and I found a bit disappointing that they have decreased their dividends from the 10.0/share 100% franked to 10.0/share 75% franked being a company in the commodity industry which is supposed to be booming (Maybe aluminiun is not booming that much). I have seen from that day the price to decrease from 6.25 ..something to around 5.98 today. So my question here is do you take into consideration this kind of information when buying any stock or you just stick to the formula of divds?
I know the answer is yes but I would like to know how?


Regards,

[rozella]

G'day Warren Buffet II,

I sometimes read those statistics, just to have an overall view, but price of the stock is my main indicator.

Tomorrow is the last day before exdiv, so if there is no action then, well a decision has to be made.

Here is an article in the SMH this morning....if it asks you to register, its free.

Higher costs fail to dent Alumina profit (http://www.smh.com.au/news/Business/Higher-costs-fail-to-dent-Alumina-profit/2005/02/02/1107228765240.html?oneclick=true)

rozella

[DTM]

Hi Rozella,

Thought this thread might of interest to you.

http://www.aussiestockforums.com/forums/showpost.php?p=6934&postcount=25

Cheers

Daniel

[Bodhi2500]

Hi Rozella,
Thanks for replying to my previous questions, there is another aspect of your posts that I’m not quite understanding.
You say one of your criteria for selecting a stock is > “The highlighted stocks must meet my criteria which is simply stocks in uptrend that show a yield of better than 10% for the dividend declared/expected plus the franking credit over the investment outlayed.”
Is the ‘10%’ based off the dividend yield, Div/Shr or something else?
Thanks.

[rozella]

Hi Rozella,
Thanks for replying to my previous questions, there is another aspect of your posts that I’m not quite understanding.
You say one of your criteria for selecting a stock is > “The highlighted stocks must meet my criteria which is simply stocks in uptrend that show a yield of better than 10% for the dividend declared/expected plus the franking credit over the investment outlayed.”
Is the ‘10%’ based off the dividend yield, Div/Shr or something else?
Thanks.

Its a formula to compare all the stocks to see which would return the most, so that it can be put on your watchlist.......other criteria may dismiss it.

Take TLS for example (we assume the div will be the same as last year)

Last price (3rd Feb) 507.0
expected div 13.0
franking credit 5.57
LVR (margin lending) 75%

Borrowed amount 507.0 x 0.75 = 380.25
Our investment 507.0 x 0.25 = 126.75

(div + fc) / investment
(13.0 + 5.57) / 126.75 = 0.1465 or 14.65%

So 14.65% is over 10%, so it is worthy of going onto our watchlist......from then on it is subject to your usual trading criteria.

It is nothing more than a comparison, whether you use the franking credit in the formula or not, it is up to you......provided that you do it the same for all.

rozella

[rozella]

Hi Rozella,

Thought this thread might of interest to you.

http://www.aussiestockforums.com/forums/showpost.php?p=6934&postcount=25

Cheers

Daniel

The good thing about the market is that it has a niche for everybody.....I have been making good $$$'s from my current strategy for a few years now & are loathe to change. I guess you do best what you know best. I have tried & backtested various add-ons to enhance the returns & risk, but I am more comfortable keeping it simple as I am doing.

If money tree, wayneL & yourself are making a motza this way, then thats great.....keep it up.

I would like to see some of these trades posted as you buy & sell, so that others can benifit from your knowledge.

rozella

[rozella]

Bought WAN today @ 872.0 with a margin of 70% Investment 261.6/share.
Exdiv 11th March. Div 20.0/share fully franked 8.57/share.

rozella

[rozella]

Sold 1 parcel of AWC on the close today @ 595.0 Bought 2nd February @ 610.0 with a margin of 70% Investment 183.0/share Exdiv Monday 7th Feb.
Gross loss 15.0/share = 8.19% loss on investment

Sold GUD on the close today @ 758.0 Bought 2nd February @ 777.0 with a margin of 65%
Investment 271.95/share. Exdiv Monday 21st Feb.
Gross loss 19.0/share = 6.98% loss on investment

Bought ADB today @ 1099.0 with a margin of 70% Investment 329.7/share.
Exdiv 7th March

rozella

[rozella]

Sold some dead wood today.....ARP. 1st trade was profitable but this one was bought 5th November 04 @ 431.0 with a margin of 50%. Investment 215.5/share.
Dividend paid 20.0/share fully franked 8.57/share. exdiv was 15th November.
Sold today @ 375.0 to fund another purchase.
Gross loss 27.43/share = 12.73% loss on investment. 96 day trade (far too long)

Bought CBA on the close today @ 3443.0 with a margin of 75%.
Investment 860.75/share. Profit announcement expected 9th Feb (tomorrow)
exdiv day expected 14th February. Last years div was 79.0/share fully franked.

Bought another parcel of BLD today @ 679.0 with a margin of 70%.
Investment 203.7/share. exdiv on 23rd Feb, div 17.0/share fully franked, although will sell this parcel prior to exdiv date.

rozella

[Warren Buffet II]

Bought CBA on the close today @ 3443.0 with a margin of 75%.
Investment 860.75/share. Profit announcement expected 9th Feb (tomorrow)
exdiv day expected 14th February. Last years div was 79.0/share fully franked.

rozella

I have checked some comments about this CBA divd and they are expecting a 85.0/share fully franked, I expect a 87.0/share fully franked. Let's wait until tomorrow to se what happens.

[rozella]

I have checked some comments about this CBA divd and they are expecting a 85.0/share fully franked, I expect a 87.0/share fully franked. Let's wait until tomorrow to se what happens.

Lets hope your info is right WBII, I always use last years just as a guide until something concrete has been announced by the company......I'm sure it will increase, but by how much ?......as you said we will know tomorrow, & they usually report before open.

rozella

[Warren Buffet II]

I have checked some comments about this CBA divd and they are expecting a 85.0/share fully franked, I expect a 87.0/share fully franked. Let's wait until tomorrow to se what happens.

CBA 85.0/share fully franked. That is nice as I have kept my investmetn in CBA since the beginning of the year, I bought it for 32.22.

[rozella]

CBA 85.0/share fully franked. That is nice as I have kept my investmetn in CBA since the beginning of the year, I bought it for 32.22.

Easy money WBII, ......if only CBA would behave like that every dividend period !!......up 133.0 today.....I must say I was tempted to sell.

rozella

[Warren Buffet II]

Easy money WBII, ......if only CBA would behave like that every dividend period !!......up 133.0 today.....I must say I was tempted to sell.

rozella

Rozella,

It looks like dejavu today. :)

Regards,

[rozella]

Just arrived back from golf for a pleasant surprise.....CBA up 144.0 atm.

rozella

[rozella]

Sold CBA today @ 3700.0 before exdiv. Bought on 8th February @ 3443.0 with a margin of 75%. Investment 860.75/share.
Gross profit 257.0/share = 29.85% return on investment. 3 day trade.

Bought TLS on the close today with the above proceeds @ 527.0 with a margin of 75%.
Investment 131.75/share. Exdiv 24th March with a div of 20.0/share fully franked 8.57/share.

Bought HIL on 9th February @ 430.0 with a margin of 65%. Investment 150.5/share.
Exdiv 9th March with a div of 12.0/share fully franked.

rozella

[buzzlightyear]

Has anyone used this connection between dividends & share price though trading options?

[dracula]

Hi rozella,

I try to go on your website and it comes up with an error. Is the site down, or my computer playing up again? thx

dracula

[rozella]

Hi rozella,

I try to go on your website and it comes up with an error. Is the site down, or my computer playing up again? thx

dracula


G'day dracula,

Yes it is down atm.....I'm becoming frustrated. The host server is having problems & makes lots of promises, but...... It was up for part of today with old data from October which is old news.

Not much I can do atm....down 2 nights now. I will have to apply pressure tomorrow.

rozella

[dracula]

Hi rozella,

what's your view on QAN?

[rozella]

G'day dracula,

QAN reports tomorrow as you probably know. It is boxed on my exdividendwatchlist which means that based on last years dividend + franking credit as a percentage of todays price using marginlending is greater than 10%, therefore it goes onto my "todays prospects watchlist".

It will depend on the report tomorrow, mainly the outlook for the future, & if the profit has increased & the dividend has increased......well... then toss a coin.

The chart shows a slow incline......I did not want to buy it until the report comes out. stocks are becoming a bit unpredictable, so its time to start sticking more rigidly to the rules, besides I am playing golf in the local comp in the morning & won't be back until midday + its our wedding anniversary.

rozella

[dracula]

Happy anniversary rozella :)

you're patience paid off, QAN it's still going down.
I am following your trades and so far your strategy is very successful.
dracula

[rozella]

Thanks dracula,

22 stocks have declared a dividend today so far....lots of work to do.

rozella

[dracula]

I wasn't in the market @ Sep 11

do you remember
what was the average drop?
how long did it take for the stocks to recover?
thx

[rozella]

I sold almost everything within a few days before the American market re-opened, then bought back in 100% within the next couple of weeks. October 2001 is still my most profitable month ever.

It was 12th Sept for us.

XAO 11th Sept 2001 3183.2
12th 3051.3
13th 3069.4
14th 3040.8
17th 2895.4
18th 2948.5
keeps going down, as we had Ansett collapse as well.
jump to 28th 2988.0
3rd Oct 2001 3061.5
10th 3073.7
17th 3170.0
24th 3182.1
31st 3185.3
30th Nov 2001 3276.9
31st Dec 2001 3359.9
Today 17th Feb 2005 4155.0

rozella

[Warren Buffet II]

Hi Rozella,

If a company declares no divids, does the company still go CD and XD?

Regards,

WBII

[rozella]

Hi Rozella,

If a company declares no divids, does the company still go CD and XD?

Regards,

WBII

Its not applicable & usually says so on the report

rozella

[rozella]

It is a busy period....not much time for posting.

Bought JBM 15th Feb @ 542.0 with a margin of 50%. Investment 271.0/share.
Sold 18th Feb @ 572.0 (day before exdiv)
Gross profit 30.0/share = 11.07% return on investment.

Bought QAN on 18th Feb on the close @ 350.0 with a margin of 70%. Investment 105.0/share.
exdiv 3rd March, div 10.0/share fully franked 4.29/share.

Bought CRG on 31st Jan @ 970.0 with a margin of 65%. Investment 339.5/share.
Sold 15th Feb @ 940.0 (exdiv 21st Feb)
Gross loss 30.0/share = 8.83% loss on investment.

Bought ASX on 15th Feb on the open @ 2170.0. Investment 651.0/share.
Exdiv 24th Feb, div 44.2/share fully franked 18.94/share.

Bought HIL 9th Feb @ 430.0 with a margin of 65%. Investment 150.5/share.
Exdiv 8th March, div 12.0/share fully franked 5.14/share
Sold on 15th Feb @ 441.0
Gross profit 11.0/share = 7.31% return on investment
Re-entered HIL on 18th Feb @ 431.0 with a margin of 65%. Investment 150.85/share.

rozella

[rozella]

Bought AGL yesterday on the close @ 1395.0 with a margin of 70%. Investment 418.5/share. Exdiv 7th March

rozella

[rozella]

Sold HIL today @ 443.0 Bought on the close 28th Feb @ 430.0 with a margin of 65%. Investment 150.5/share. Exdiv 8th March, div 12.0/share fully franked.
Gross profit 13.0/share = 8.63% return on investment. 2 day trade.
2nd trade before exdiv.....1st was 11.0/share GP

rozella

[rozella]

Sold TLS today @ 541.0 Bought on 11th Feb @ 527.0 with a margin of 75%.
Investment 131.75/share. exdiv 24th March with a div of 20.0 fully franked.
Gross profit 14.0/share = 10.62% return on investment. 19 day trade.

rozella

[rozella]

Bought another parcel of AGL today @ 1431.0 with a margin of 70%.
Investment 429.3/share. Exdiv 7th March, div 61.0, 90.168% franked 23.57/share.

rozella

[rozella]

Sold ADB on the open today (exdiv day) @ 1118.0 Bought on 4th February @ 1099.0 with a margin of 70%. Investment 329.7/share. Div 24.0/share fully franked 10.29/share.
Gross profit 53.29/share = 16.16% return on investment. 31 day trade

rozella

[rozella]

Sold my last parcel of AWC today @ 617.0 Bought 18th Jan @ 617.0 with a margin of 70%.
Investment 185.1/share Div 10.0/share 75% franked 3.21/share
Gross profit 13.21/share = 7.13% return on investment. 49 day trade.

rozella

[rozella]

re-entered TLS today @ 534.0 with a margin of 75%. Investment 133.5/share.
Exdiv 24th March with a div of 20.0/share fully franked 8.57/share.

rozella

[rozella]

Bought another parcel of TLS today @ 533.0 with a margin of 75%.
Investment 133.25/share.
Exdiv 24th March with a div of 20.0/share fully franked 8.57/share.

rozella

[rozella]

Bought SMS today @ 1895.0 on the close with a margin of 70% Investment 568.5/share.
Exdiv tomorrow 18th March. Div 70.0/share franked to 54%.

rozella

[rozella]

Bought PMN today @ 499.0 with a margin of 70%. Investment 149.7/share.
Exdiv 29th March, dividend 12.0/share fully franked 5.14/share.

rozella

[rozella]

I have done very little this month, only 5 buys. AGL, 2 X TLS, SMS, & PMN. (these are already on the thread)

I sold 4 stocks after breaching stoplosses as follows.

Sold WAN @ 823.0 on 23rd March. Bought @ 872.0 on 4th February with a margin of 70%.
Investment 261.6/share. div 20.0/share fully franked 8.57/share.
Gross loss 20.43/share = 7.81% loss on investment.

Sold BLD @ 623.0 on 23rd March. Bought @ 679.0 on 8th February with a margin of 70%.
Investment 203.7/share. div 17.0/share fully franked 7.28/share.
Gross loss 31.72/share = 15.57% loss on investment.

Sold another parcel of BLD @ 626.0 on 24th March. Bought @ 719.0 on 19th January with a margin of 70%. Investment 215.7/share. div 17.0/share fully franked 7.28/share.
Gross loss 68.72/share = 31.86% loss on investment.....ouch.

Sold SMS @ 1784.0 on 23rd March. Bought @ 1895.0 on 17th March with a margin of 70%.
Investment 568.5/share. div 70.0/share 54% franked 16.2/share
Gross loss 24.8/share = 4.36% loss on investment.

I let these all go a bit too far, but not too much damage......still just under 60% return on investment YTD.

rozella

[rozella]

Bought APN on 1st April (exdiv day) @ 492.0 with a margin of 70%. Investment 147.6/share. Stoploss 477.0

I will be looking for possible entries into the banks & LPT's on the lead up to their announcements. ANZ being the 1st major.

rozella

[rozella]

Bought AGL yesterday @ 1430.0 with a margin of 70% Investment 429./share.
Return of capital 50.0/share. Exdistribution date 7th April if approved at todays meeting.

rozella

[rozella]

Bought ENV on 6th April @ 115.0 with a margin of 65% Investment 40.25/share.
Exdistribution date 11th April. Distribution 3.8/share zero franked

Sold AWB, my longest holding today on the close @ 497.0, which has spanned two dividends totalling 25.0/share 100% franked 10.71/share.
Bought 9th June 2004 @ 493.28 with a margin of 70% Investment 147.98
Gross profit 39.43/share = 26.64% return on investment. 302 days
(not the best return for the length of time)

rozella

[TjamesX]

Does it get lonely in here rozella?...... echoo ..echo. cho..oo

Now I'm just being cheeky :D , I think it is great that someone posts all their trades along with their strategy...Good Stuff

I have a question for you - I have owned WAM (Wilson Asset Management - LIC) for a few months and it has gone nowhere.... No biggie. But its ex div date is coming up in a few days (14th I believe) and this one pays out pretty big 6c on a price of $1.56 (on full year divs its about 7% yield). I was planning to sell these after they go ex div - but now I'm wondering whether to maybe I should add some more to take advantage of the sluggish SP.

I am fully expecting a drop after ex div date...... but historically WAM has traded at a premium to its NTA - currently its at a slight discount to NTA (from last months figures)

Good Value for the short term div????

TJ

[rozella]

G'day TjamesX,

I'm used to nobody talking to me......

Yes, WAM goes exdiv on the 14th & has been going sideways for awhile. Its off my radar as the volumes are not that great & the best margin I can get is only 50%. In the last 10 days 23 trades was the biggest day & 2 days there were no trades at all.

I finally have someone to talk to & I have nothing much to say.

Good dividend though.

Sorry can't add much to that.

rozella

[Stan 101]

I'm listening... keep posting


I just have nothing worthwhile to respond with

[DTM]

G'day TjamesX,

I'm used to nobody talking to me......


rozella

Sorry Rozella, always reading but nothing worthwhile to add. Enjoy your thread though... :)

Keep up the good posts :xyxthumbs

[rozella]

Thanks DTM & Stan 101

Bought ANZ today @ 2085.0 with a margin of 75% Investment 521.25/share.
Profit announcement expected 27th April with exdiv date expected 16th May. Last years dividend was 47.0/share fully franked 20.14/share.

Good day, all my stocks on the move upwards.

rozella

[markrmau]

Hi Rozella,

Can you please give a brief explanation of your strategy? Or do you have a link to it?

[rozella]

Hi Rozella,

Can you please give a brief explanation of your strategy? Or do you have a link to it?

G'day markrmau,

The link is exdividendwatchlist (http://www.exdividendwatchlist.com.au) but briefly, the idea is to buy the stock, collect the dividend, then sell at buy price or better. Normal trading rules apply for risk management & stoploss. I use a 3% trailing stoploss on each stock. My ideal portfolio is a minimum of 10 stocks & maximum of 15, with no stock having a greater holding of 15% of portfolio. i.e. if a large holding of 15% was to drop to stoploss level, then it would only be 0.45% of portfolio.

You can follow the trades & calculations on my website under Trading Diary & Margin Trading. I have used end of day data on the website so that it can be easily verified. Since the market has become a little more volatile, I have been updating the website buys & sells daily. It will be up-to-date prior to 7.00pm AEST tonight.....atm yesterday is there.

The website portfolio took a bit of a hit during March & were stopped out many times, however, we are still up 51.24% return on investment for the last 281 days from 1st July 2004, after today we will probably be approx up 55%.......we were in the low 60% range.

rozella

[rozella]

Started buying into the LPT's today.

Bought SGP today @ 570.0 with a margin of 70%. Investment 171.0/share.
Profit announcement expected 17th June with exdist expected 24th June.
Last years distribution was 19.0/share franked to 21.579%

Bought CNP today @ 519.0 with a margin of 70%. Investment 155.7/share.
Profit announcement expected 21st June with exdist expected 24th June.
Announcement today expects dist to be 17.4/share zero franked.

Bought GAN today @ 155.0 with a margin of 70%. Investment 46.5/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 5.06/share zero franked.

rozella

[rozella]

Bought DRT today @ 127.91 with a margin of 70% Investment 38.37/share.
Profit announcement expected 21st June with exdist expected 24th June.
This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2

Bought SGB today @ 2390.0 with a margin of 75% Investment 597.50/share.
Profit announcement expected 3rd May with exdiv date expected 14th June.
Last years dividend was 60.0/share fully franked.

rozella

[rozella]

Bought another parcel of CNP today @ 516.0 with a margin of 70%
Investment 154.8/share.
Profit announcement expected 21st June with exdist expected 24th June.
Announcement on 19th April expects dist to be 17.4/share zero franked.

Down overall today atm, but hardly a blip.

rozella

[RichKid]

Hi Rozella,

Great thread, and very diligent record keeping by you too!!

Does your strategy mean that for some periods of the year you don't trade at all? or are there always co's doing ex div out there? As I understand it you should at least get a few months break once the bulk of the exdiv dates are past. Never occurred to me that there would be a continuing reporting period, I guess there are a lot of co's out there. But I expect your margin system means that you wouldn't be able to borrow for all stocks.

BTW For those who are interested, I had a look at Crashy's site to see how the tax on div's works, he has some free sample examples http://www.********.8k.com/ Not a plug for Crashy, just found the strategy interesting, I'll probably have to check the tax rules to see if they are accurate though as the ATO changes things all the time.
I get a bit confused with franking and grossing up etc but will have to work it out properly soon.

Checked out your website Rozella, looks great! BTW, what are those blue boxes around the figures in your watchlist?

[rozella]

G'day RichKid,


Does your strategy mean that for some periods of the year you don't trade at all? or are there always co's doing ex div out there? As I understand it you should at least get a few months break once the bulk of the exdiv dates are past. Never occurred to me that there would be a continuing reporting period, I guess there are a lot of co's out there.
Normally at this time I am working my way with stocks in various parts of the strategy cycle, however most were stopped out in the last couple of weeks, but that was to be expected. So now I am buying into section 1 of the strategy, which is prior to the profit announcement for some of the banks & LPT's. ANZ is the 1st to report on 27th April, which is next Wednesday, so then it starts all over again.


But I expect your margin system means that you wouldn't be able to borrow for all stocks.
I only trade those stocks that I can have an LVR of 60% or better, usually 70% or 75%


BTW, what are those blue boxes around the figures in your watchlist?
They are the prospects that have met with the 1st bit of criteria.....i.e the sum of the dividend & franking credit divided by the investment amount must be over 10% to go onto my daily prospect list.....from then on its normal trading criteria rules for the final selections.

An hour in the market can change results dramatically.....my previous post said
Down overall today atm, but hardly a blip.
Well this changed to a nice profitable day.

rozella

[rozella]

Bought WBC today @1845.0 with a margin of 75% Investment 461.25/share.
Profit announcement expected 5th May with exdiv date expected 1st June.
Last years dividend was 42.0/share fully franked.

rozella

[rozella]

ANZ reported today & I bought another parcel on the open @ 2063.0 with a margin of 75%
Investment 515.75/share. Dividend declared today 51.0/share fully franked 21.857/share
Exdiv date 16th May.

rozella

[rozella]

Sold ANZ in previous post @ 2114.0 today. Bought @ 2063.0 with a margin of 75%.
Investment 515.75/share.
Gross profit 51.0/share = 9.89% return on investment. 0.5 day trade
Wait for another entry

rozella

[rozella]

Its been a good week for me although the market overall is looking sad. LPT's & banks are up.

Sold 3 parcels of AGL today
1. sold AGL @ 1430.0 Bought 22nd February @ 1395.0 with a 70% margin.
Investment 418.75/share. Exdiv 7th march, div 61.0/share 90.168% franked 23.57/share,
return of capital 50.0/share.
Gross profit 169.57/share = 40.49% 66 days

2. sold AGL @ 1431.0 Bought 2nd March @ 1431.0 with a 70% margin.
Investment 429.3/share. Exdiv 7th march, div 61.0/share 90.168% franked 23.57/share,
return of capital 50.0/share.
Gross profit 134.57/share = 31.34% 58 days

3. sold AGL @ 1430.0 Bought 5th April @ 1430.0 with a 70% margin.
Investment 429.0/share.
return of capital 50.0/share.
Gross profit 50.0/share = 11.65% 24 days

rozella

[rozella]

Bought WBC today @ 1939.0 with a margin of 75% Investment 484.75/share.
Profit announcement expected 5th May. Last years div was 42.0/share fully franked 18.0

Bought SGB on the close @ 2475.0 with a margin of 75% Investment 618.75/share.
Profit announcement expected 3rd May. Last years div was 60.0/share fully franked 25.71

rozella

[rozella]

Bought another parcel of DRT today @ 130.0 with a margin of 70% Investment 39.0/share
Profit announcement expected 21st June with exdist expected 24th June.
This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2

Bought another parcel of SGP today @ 584.0 with a margin of 70% Investment 175.2/share
Profit announcement expected 17th June with exdist expected 24th June.
Last years distribution was 19.0/share franked to 21.579%

rozella

[rozella]

Bought another parcel of GAN today @ 158.0 with a margin of 70%
Investment 47.4/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 5.06/share zero franked.

rozella

[rozella]

Bought CPA today @ 126.0 with a margin of 70%
Investment 37.8/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 4.8/share zero franked.

rozella

[rozella]

Topsy turvy week again, but finished on a good note today.

Took some profits on banks today.

Sold ANZ @ 2187.0 Bought 8th April @ 2085.0 with a margin of 75%
Investment 521.25/share.
exdiv date 16th May. Dividend 51.0/share fully franked 21.85/share.
Gross profit 102.0/share = 19.57% return on investment. 28 day trade.

Sold SGB @ 2495.0 Bought 20th April @ 2390.0 with a margin of 75%
Investment 597.50/share.
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share
Gross profit 105.0/share = 17.57% return on investment. 16 day trade.

Sold WBC @ 1935.0 Bought 22nd April @1845.0 with a margin of 75%
Investment 461.25/share.
exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share
Gross profit 90.0/share = 19.51% return on investment. 14 day trade.

I will re-enter for the div if prices drop back.

rozella

[DTM]

Topsy turvy week again, but finished on a good note today.

Took some profits on banks today.

Sold ANZ @ 2187.0 Bought 8th April @ 2085.0 with a margin of 75%
Investment 521.25/share.
exdiv date 16th May. Dividend 51.0/share fully franked 21.85/share.
Gross profit 102.0/share = 19.57% return on investment. 28 day trade.

Sold SGB @ 2495.0 Bought 20th April @ 2390.0 with a margin of 75%
Investment 597.50/share.
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share
Gross profit 105.0/share = 17.57% return on investment. 16 day trade.

Sold WBC @ 1935.0 Bought 22nd April @1845.0 with a margin of 75%
Investment 461.25/share.
exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share
Gross profit 90.0/share = 19.51% return on investment. 14 day trade.

I will re-enter for the div if prices drop back.

rozella

Nice trades Rozella. Were you using a strategy of buying before the news or was it purely a dividend play?

[rozella]

G'day DTM,

These buys were section 1 of my strategy plus a bit of section 2:

I believe the Dividend Trading Strategy can be divided into 4 sections.

1. From now until profit announcement date.
2. From profit announcement date until exdividend date.
3. The dividend and franking credit amount.
4. After the fall on exdividend date until the stock rises to the price you want.

The market is jumping all over the place, so I felt it was best to take the profits while they are there. I should have done it on 3rd May when SGB announced, in the 1st half hour, but I was asleep or too greedy (the latter I think & missed the boat), the above would have been my second bite then.

Cheers,

rozella

[markrmau]

You don't think ANZ has further upside going up to ex div date? Or do you think the banks have had their run. (held anz since approx 2050 at end of march)

Does seem to be big resistance at 2200 (approached it about 5 times)

[rozella]

You don't think ANZ has further upside going up to ex div date? Or do you think the banks have had their run. (held anz since approx 2050 at end of march)

Does seem to be big resistance at 2200 (approached it about 5 times)
G'day markrmau,

ANZ is the first bank to go exdiv, so as the other banks come closer to their div date, it usually pulls ANZ's price up after exdiv in their slipstream, but don't hold me to that......its happened quite a few times for me in the past that it returns to pre exdiv prices in 2 or 3 days.

Your question, I can't answer......but I hope so. ANZ usually has a trading range of 30.0 cents daily. The way the market is behaving lately, I sold at a near high yesterday expecting a slump day by next Wednesday, then I will re-enter......if it does not slump then I will probably re-enter anyway.....I sold because "a bird in the hand......"

NAB reports Wednesday, which is a worry & a mystery atm, so there will be a feast or a famine.....whichever way it should be worth buying back into ANZ, SGB & WBC.....I already hold NAB & it depends on the result whether I dump it pre exdiv.

rozella

[rozella]

Sold one parcel DRT on 6th May @ 133.5 Bought 20th April @ 127.91 with a margin of 70% Investment 38.37/share.
Profit announcement expected 21st June with exdist expected 24th June.
This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2
Gross profit 5.59/share = 14.57% return on investment. 16 day trade.

rozella

[rozella]

Re-entered ANZ today @ 2170.0 with a margin of 75% Investment 542.50/share
exdiv date 16th May. Dividend 51.0/share fully franked 21.85/share.

Re-entered WBC today @ 1910.0 with a margin of 75% Investment 477.50/share
exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share.

rozella

[rozella]

Sold last parcel of DRT today @ 134.0 Bought 2nd May @ 130.0 with a margin of 70% Investment 39.0/share
Profit announcement expected 21st June with exdist expected 24th June.
This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2
Gross profit 4.0/share = 10.25% return on investment. 8 day trade.

Re-entered DRT today @ 131.5 with a margin of 70% Investment 39.45/share.

Sold CNP today @ 532.0 Bought 21st April @ 516.0 with a margin of 70%
Investment 154.8/share.
Profit announcement expected 21st June with exdist expected 24th June.
Announcement on 19th April expects dist to be 17.4/share zero franked.
Gross profit 16.0/share = 10.33% return on investment. 21 day trade.

Re-entered SGB today @ 2474.0 with a margin of 75% Investment 618.50/share.
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share

rozella

[rozella]

Another magic day on the market......back to old times....just watching all our stocks rise. No buys & no sells......tempted to take profits, but.....

rozella

[rozella]

Took some more profit today on WBC, being Friday 13th.
Sold @ 1960.0.
Bought 9th May @ 1910.0 with a margin of 75% Investment 477.50/share
exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share.
Gross profit 50.0/share = 10.47% return on investment

Will do my best to find a low today to re-enter, 1949.0 now as I type.

rozella

[DTM]

Hi Rozella,

Nice trade, but WBC doesn't seem to be that strong a share in my opinion. Also getting divergence in oscillator and macd. Could fall further.

:2twocents

Then again, I said that about AMP and it has jumped 30 cents in the last few days. :o

[DTM]

And now to follow through on my advice, I bought the May $19.50 puts when

sp was $19.56 and knowing my luck, it will follow AMP. :eek:

[rozella]

I said the same about AMP too, but it is probably the 40c return on capital that has made it jump....still don't trust it.

WBC has been okay so far, 2 completed trades recently profits of 90.0 + 50.0, but I agree it has not been as good as the others.

Last day to buy ANZ today.....but I have enough.

rozella

[DTM]

I said the same about AMP too, but it is probably the 40c return on capital that has made it jump....still don't trust it.

rozella

I think that the new Super fund for the government being set up also helped the price rise as AMP are the second largest fund manager in Australia. They they should get a sizeable cut of the business.

[rozella]

Re-entered DRT today @ 131.5 with a margin of 70% Investment 39.45/share.
Profit announcement expected 21st June with exdist expected 24th June.
This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2

rozella

[rozella]

Re-entered WBC today @ 1938.0 with a margin of 75%
Investment 484.5/share.
Exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share.

rozella

[rozella]

Sold a parcel of GAN today @ 160.5 Bought @ 155.0 on 19th April with a margin of 70%.
Investment 46.5/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 5.06/share zero franked.
Gross profit 5.5/share = 11.82% return on investment. 30 day trade

rozella

[RodC]

G'day Rozella,

Quick question on your 3% trailing stops. Is that from the high of the day or from the closing price?

Rod.

[rozella]

G'day Rozella,

Quick question on your 3% trailing stops. Is that from the high of the day or from the closing price?

Rod.
Closing price, Rod

[rozella]

Sold 2 separate parcels of DRT today @ 136.5 Bought 10th May & 13th May @ 131.5 with a margin of 70%
Investment 39.45/share.
Profit announcement expected 21st June with exdist expected 24th June. This period last year the trusts had not merged (DDF, DOT, & DIT), but I expect the distribution to be around 5.1 to 5.3 per unit zero franked. June was 5.2

Gross profit 5.0/share = 12.67% return on investment. 7 & 10 day trades.

In hindsight should have waited another 20 mins, went to 138.5 briefly for a smaller quantity, but.....now a U buyer on 136.5...ho-hum

Good earner this one, 4 completed DRT trades since buying 20th April.

rozella

[rozella]

Sold my last parcel of GAN today @ 163.0
Bought on 3rd May @ 158.0 with a margin of 70%
Investment 47.4/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 5.06/share zero franked.

Gross profit 5.0/share = 10.55% return on investment. 20 day trade.

I will watch for a re-enter on a low day.

rozella

[rozella]

Bought LNN today @ 713.0 with a margin of 70% Investment 213.90/share.
Exdiv date 30th May, dividend 15.0/share fully franked 6.43/share

rozella

[rozella]

Took profits on 2 parcels of SGB today

Sold SGB today @ 2557.0
Bought 10th May @ 2474.0 with a margin of 75%
Investment 618.50/share.
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share
Gross profit 83.0/share = 13.42% return on investment. 14 day trade.

Sold SGB today @ 2553.0
Bought 29th April @ 2475.0 with a margin of 75%
Investment 618.75/share.
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share
Gross profit 78.0/share = 12.60% return on investment. 25 day trade.

Will re-enter if the situation permits for the dividend.

rozella

[rozella]

Sold SGB bit early as it has been to 2575.0 today, but still have 3 weeks to exdiv day, something may happen between now & then.

Bought AWB this morning @ 430.0 with a margin of 70%
Investment 129.0/share
It reported this morning with an increased dividend of 16.0/share fully franked 6.85/share
Exdiv date 10th June

rozella

[rozella]

PMN announced today that it had received a favourable ruling from the ATO on its proposal of a capital return that was approved by shareholders on 29th April.

I hold a parcel bought on 22nd March @ 499.0 with a margin of 75%
Investment 149.70/share.
I have received the 12.0/share dividend fully franked 5.14/share on 2nd May.

I bought another parcel on the close today @ 500.0 with a margin of 70%
Investment 150.0/share.
The capital return is 23.0/share, ex-date for return of capital is 3rd June, & payment is 20th June.

rozella

[rozella]

Sold LNN today @ 713.0 Bought 23rd May @ 713.0 with a margin of 70%
Investment 213.90/share.
Exdiv date 30th May, dividend 15.0/share fully franked 6.43/share

Gross profit 21.43/share = 10.02% return on investment. 7 day trade.

rozella

[rozella]

Bought CSR today on the close @ 252.0 with a margin of 70%
Investment 75.60/share
Exdiv 7th June, dividend 6.0/share fully franked 2.57/share

rozella

[rozella]

Sold AWB today @ 450.0 Bought 25th May @ 430.0 with a margin of 70%
Investment 129.0/share
Dividend of 16.0/share fully franked 6.85/share
Exdiv date 10th June

Gross profit 20.0/share = 15.50% return on investment. 7 day trade.

rozella

[rozella]

An update to 1st June 2005 for the Dividend Trading Strategy is posted at:

Trading Diary 2 (http://www.exdividendwatchlist.com.au/0026/9/trading%20diary_b_1st%20Jan%2005%20to%2030th%20Jun %2005.htm)

Margin Trading 2 (http://www.exdividendwatchlist.com.au/0026/8/website%20margin%20position_2.htm)

Summary is:
commencing trading capital $75000 1st July 2004
portfolio increase $48269.97
portfolio value as at 1st June 2005 $123269.97
percent increase 64.36% in 336 days
cash in hand $ 30021.57
number of purchases 170
wins 109
losses 43
open trades 18 with 11 different stocks
dividends pending payment $2164.07
franking credits have been excluded from the calculations

All trading has been done with end of day prices.

rozella

[rozella]

Sold 1 parcel of WBC today @ 1940.0
Bought 16th May @ 1938.0 with a margin of 75% Investment 484.5/share.
Exdiv date 1st June. Dividend 49.0/share fully franked 21.0/share.

Gross profit 72.0/share = 14.86% return on investment.

rozella

[rozella]

Sold 2 parcels of PMN today to finance some more buys.

Sold PMN @ 499.0 today. Bought 22nd March @ 499.0 with a margin of 70%.
Investment 149.7/share.
Exdiv 29th March, dividend 12.0/share fully franked 5.14/share.
Return of capital 23.0/share, ex-date for return of capital 3rd June.
Gross profit 40.14/share = 26.81% return on investment. 76 day trade.

Sold PMN @ 499.0 today. Bought 25th May @ 500.0 with a margin of 70%
Investment 150.0/share.
Return of capital 23.0/share, ex-date for return of capital 3rd June.
Gross profit 22.0/share = 14.67% return on investment. 12 day trade.

Re-entered AWB today @ 447.0 with a margin of 70%
Investment 134.1/share.
Exdiv 10th June, dividend 16.0/share fully franked 6.86/share.

rozella

[rozella]

Sold CPA today @ 132.0 Bought 3rd May @ 126.0 with a margin of 70%
Investment 37.8/share.
Profit announcement expected 21st June with exdist expected 24th June.
Last years distribution was 4.8/share zero franked.
Gross profit 6.0/share = 15.87% return on invesment. 34 day trade.

rozella

[rozella]

Sold CSR today on the open @ 261.0
Bought 31st May @ 252.0 with a margin of 70%
Investment 75.60/share
Exdiv 7th June, dividend 6.0/share fully franked 2.57/share
Gross profit 17.57/share = 23.24% return on investment. 7 day trade.

rozella

[rozella]

Finally re-entered SGB on the close today @ 2605.0 with a margin of 75%
Investment 651.25/share
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share

Bought AWB yesterday @ 447.0 which fell like a stone today.
Stoploss is 433.0, closed @ 429.0 exdiv is this Friday so I decided to see how the open is tomorrow......wrong decision I think, going against the rules.....reason is it fell to 419.0 & recovered to 429.0

[rozella]

Sold a parcel of WDC today @ 1726.0
Bought 18th January @ 1721.0 with a margin of 75% Investment 430.25/share
Dividend 52.03/share franked to 8.6% 1.62/share
Gross profit 58.65/share =13.63% return on investment. 141 day trade.

While typing sold another parcel of WDC today @ 1730.0
Bought 18th January @ 1721.0 with a margin of 75% Investment 430.25/share
Dividend 52.03/share franked to 8.6% 1.62/share
Gross profit 62.65/share =14.56% return on investment. 141 day trade.

One more parcel to go that I bought on 27th January @ 1730.0......order not in yet.

rozella

[rozella]

Sold last parcel of WDC today @ 1744.0 Bought 27th January @ 1730.0 with a margin of 75%. Investment 432.50/share.
Dividend 52.03/share franked to 8.6% 1.62/share
Gross profit 67.65/share =15.64% return on investment. 141 day trade.

end of a long saga

[rozella]

Just bought another parcel of SGB @ 2623.0 (now 2619...always the way) with a margin of 75%. Investment 655.75/share. Goes exdiv next Tuesday 14th June....last day to buy today. Dividend 67.0/share fully franked 28.71/share.

[rozella]

Sold my last parcel of WBC today @ 1967.0 Bought 29th April @ 1939.0 with a margin of 75% Investment 484.75/share.
Exdiv date 1st June
Dividend was 49.0/share fully franked 21.0
Gross profit 98.0/share = 20.21% return on investment. 47 day trade.

[Warren Buffet II]

Sold my last parcel of WBC today @ 1967.0 Bought 29th April @ 1939.0 with a margin of 75% Investment 484.75/share.
Exdiv date 1st June
Dividend was 49.0/share fully franked 21.0
Gross profit 98.0/share = 20.21% return on investment. 47 day trade.

Hi Rozella,

Excellent thread and fantatic performance, I think you are the one doing the best strategy in this forum. I have followed your entries every time so keep posting.

I have one question for you, I know you use a Margin Leading account and I do not know much about it but I was wondering if you take a Margin loan say for $50.000 and you use only $20.000, do you pay interest on the whole loan or just what you have used? Do you have to pay a fee everytime you use you loan money?

Regards,

WBII

[rozella]

G'day Warren Buffet II,


I was wondering if you take a Margin loan say for $50.000 and you use only $20.000, do you pay interest on the whole loan or just what you have used?
Only what you use.....marginlenders vary a little with the interest & the two I use are 8.4% p.a. All my brokerage & interest is capitalised to the margin loan.


Do you have to pay a fee everytime you use you loan money?
Not a cent extra, although some brokers want to charge you extra. I believe Comsec adds another $10 to the brokerage if you use a margin loan.

rozella

[RodC]

That's right, Comsec charge $10 for each transaction on the margin loan. But having the margin loan gives you their discounted brokerage rate ($19.95 for less than $10K), so it works out about the same.

Rod.

[rozella]

Bought MAP today @ 360.69 with a margin of 70% Investment 108.207/share.
Exdistribution 24th June, dividend declared 11.0 zero franked.

[rozella]

Bought MIG today @ 420.0 with a margin of 70% Investment 126.0/share
Exdistribution 24th June, distribution 13.75 franking TBA.

[rozella]

Sold a parcel of SGB today @ 2626.0 Bought 7th June @ 2605.0 with a margin of 75%
Investment 651.25/share
exdiv date 14th June. Dividend 67.0/share fully franked 28.71/share
Gross profit 116.71/share = 17.92% return on investment

[rozella]

Bought DRT back again today (higher than expected) @ 144.5 with a margin of 70%
Investment 43.35/share.
Exdist 24th June, distribution 5.3/share, zero franked.

[rozella]

Bought back into CPA again @ 135.5 with a margin of 70% Investment 40.62/share
Exdist 24th June, distribution 4.8/share, zero franked.

[rozella]

Bought another parcel of DRT today @ 143.0 with a margin of 70%
Investment 42.9/share
Exdist 24th June, distribution 5.3/share, zero franked.

Re-entered GAN today @ 171.0 with a margin of 70%
Investment 51.3/share
Exdist 24th June. distribution 5.31/share, zero franked.

Bought MCW today @ 201.0 with a margin of 70%
Investment 60.3/share
Exdiv 24th June, distribution 7.4/share, zero franked.

Bought TEN today @ 400.0 with a margin of 70%
Investment 120.0/share
Exdiv 27th June, dividend 9.0/share, fully franked.

[rozella]

Bought TSO today @ 219.0 with a margin of 65% Investment 76.65/share
Exdist 24th June, distribution 9.25/share, zero franked.

[rozella]

Sold AWB on the close @ 450.0
Bought 6th June @ 447.0 with a margin of 70%
Investment 134.1/share.
Exdiv 10th June, dividend 16.0/share fully franked
Gross profit 19.0/share = 14.17% return on investment (franking not incl). 17 day trade.

Bought CNP on the close today @ 610.0 with a margin of 70%
Investment 183.0/share
Exdist 24th June, distribution 17.6/share, zero franked.

[rozella]

What a day to have 11 stocks go exdiv......none have hit stops yet after dividend adjustment, but MAP & CPA are close....all are LPT's. XAO down 34.0 points atm

Got lucky & sold a small parcel of SGP today @ 570.0 (pays to have orders in first thing on exdiv day & don't be greedy....sometimes you can catch a blip)
Bought 19th April @ 570.0 with a margin of 70%. Investment 171.0/share.
Exdist today
Distribution 19.6/share franking TBA
Gross profit 19.6/share = 11.46% return on investment. 66 days

[rozella]

Sold MIG today @ 422.0
Bought 17th June @ 420.0 with a margin of 70%
Investment 126.0/share
Exdistribution 24th June, distribution 13.75 franking TBA.
Gross profit 15.75/share = 12.5% return on investment. 12 day trade

[rozella]

Sold my last parcel of SGB today @ 2627.0
Bought 10th June @ 2623.0 with a margin of 75%.
Investment 655.75/share. Exdiv 14th June.
Dividend 67.0/share fully franked 28.71/share.
Gross profit 71.0/share = 10.83% return on investment, excluding franking.
20 day trade

[rozella]

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]

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]

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]

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]

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]

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-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]

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]

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]

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]

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]

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]

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]

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]

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. :2twocents (hoping)

[rozella]

G'day DTM,

The DOW was initially down, then rebounded.

Moving the Market (http://www.nasdaq.com/briefing/stock_summary.stm)

rozella

[rozella]

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]

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]

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-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.

[rozella]

Bought ADB today on the close @ 1155.0 with a margin of 70%
Investment 346.5/share
Profit announcement expected late July, exdiv expected approx 23rd September.
Last years dividend was 25.0/share fully franked 10.71/share.

Missed a sell on WAN today......reached 843.0 then dropped back to 824.0 before closing at 830.0. Took my off the ball for a while.....weather is too good.

[rozella]

Bought ADB today on the close @ 1155.0 with a margin of 70%
Investment 346.5/share
Profit announcement expected late July, exdiv expected approx 23rd September.
Last years dividend was 25.0/share fully franked 10.71/share.

Missed a sell on WAN today......reached 843.0 then dropped back to 824.0 before closing at 830.0. Took my eye off the ball for a while.....weather is too good.

[rozella]

Bought ADB today on the close @ 1155.0 with a margin of 70%
Investment 346.5/share
Profit announcement expected late July, exdiv expected approx 23rd September.
Last years dividend was 25.0/share fully franked 10.71/share.

Missed a sell on WAN today......reached 843.0 then dropped back to 824.0 before closing at 830.0. Took my eye off the ball for a while.....weather is too good.

[rozella]

Bought ADB today on the close @ 1155.0 with a margin of 70%
Investment 346.5/share
Profit announcement expected late July, exdiv expected approx 23rd September.
Last years dividend was 25.0/share fully franked 10.71/share.

Missed a sell on WAN today......reached 843.0 then dropped back to 824.0 before closing at 830.0. Took my eye off the ball for a while.....weather is too good.

[rozella]

Bought ADB today on the close @ 1155.0 with a margin of 70%
Investment 346.5/share
Profit announcement expected late July, exdiv expected approx 23rd September.
Last years dividend was 25.0/share fully franked 10.71/share.

Missed a sell on WAN today......reached 843.0 then dropped back to 824.0 before closing at 830.0. Took my eye off the ball for a while.....weather is too good.

[rozella]

Sorry Joe, I guess my fingers are stuttering :eek:

rozella

[RodC]

Hi Rozella,

Great thread,

It's interesting how often your buys/sells in your personal trading are almost the opposite of the ones on your website.
eg: you've bought both WAN and ADB in the last 2 days whereas both were sells yesterday after hitting stops.

I guess that comes with experience.

Rod.

[rozella]

G'day RodC,

The basic strategy is the same for both, except that on my forum posts, which are my personal trades & are intraday, I take profits when I reach an amount approximately equal to the dividend, then if we have a low day, I re-enter

On the website trading diary, I only sell when a stop is hit, & only use EOD data.

With WAN & ADB, I am on a different rung of the ladder than the website, if you follow my reasoning.

It is very slow atm with the strategy, but that will change starting next week with the reporting season starting.....its good to have a rest & be partly cashed up anyway.

rozella

[RodC]

Hi Rozella,

thanks for the reply,

I suspected that was the case, I just found those 2 to be an interesting contrast.

You're quite right, the reporting season should make things more interesting.

Rod.

[rozella]

Sold WAN today @ average of 847.512
Bought 19th July @ 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.
Gross profit = 23.512/share = 9.51% return on investment . 2 day trade