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DieWerner

Dividends and last day to trade (LDT)

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Does anyone here know anything about dividends??? I'm thinking about buying shares in companies right before they pay dividends, take the dividends and then sell the shares. Unless the shares are doing well...

 

As in, can I buy shares in a certain company on its Last Day to Trade, wait (+- week and a half) for the pay out date, and sell the shares keeping the money from the dividends as a quick profit???

 

found this list of upcoming dividends: http://www.moneyweb.co.za/tools-and-data/dividend-watch/

 

for example: Invicta Holdings LTD (JSE:IVTP) has a current price of R96.05 per share, and a dividend of R6.31 per share.

- If I buy 100 shares: R96.05 x 100 = R9605,

- wait until 2016/07/11 for the payout of R6.31 x 100 = R631

- sell the shares again.

- getting R631 from the initial amount of R9605 means a growth of 6.3% in a week.

- (ignoring fees etc., and my total lack of how financial maths works...)

 

Can this be done?

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I believe you need to have the company shares for at least 3 days before LDT (could be wrong, but google will assist you) There is a guy who posts the LDT on the shareforum.co.za. Link below (and credit to Patrick from shareforum.co.za)

 

http://shareforum.co.za/shares/ldt/

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I believe you need to have the company shares for at least 3 days before LDT (could be wrong, but google will assist you) There is a guy who posts the LDT on the shareforum.co.za. Link below (and credit to Patrick from shareforum.co.za)

 

http://shareforum.co.za/shares/ldt/

 

Speaking of shareforum.co.za, you can change the leaderboard to show who has the highest Net Worth, or the highest dividends received.

 

This guy http://www.shareforum.co.za/competition/com_holdings_public.php?user_id=2307&year=current is 10th on the leaderboard and has received R250k so far in dividends. Look it his history and current holdings. All his money in Netcare, waiting for the dividend payout on 2016/07/11. He has 24906 shares, but Netcare's dividend is only 36c...

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JSE:LEW actually looks more attractive:

 

for example: Lewis Group LTD (JSE:lew) has a current price of R44.98 per share, and a dividend of R3.02 per share.

- If I buy 100 shares: R44.98 x 100 = R4498,

- wait until 2016/07/11 for the payout of R3.02 x 100 = R302

- sell the shares again.

- getting R302 from the initial amount of R4498 means a growth of 6.7% in a week.

- (ignoring fees etc., and my total lack of how financial maths works...)

 

Although only slightly more than Invicta, but the lower share price means I could buy three times as much and save on the fees...

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I had this same idea!!! I just never perused it, because you need a lot of money for the dividends  to mean anything.

 

This is a very good webinar where he speaks about this briefly if I remember correctly.

 

Video: Dividends in investing

 

[video=youtube]


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All you have to do is own the shares at 17H00 on LDT (not three days before ) - you can sell them the next day if you want - pay date has nothing to do with it. The shares are mean't to drop by the dividend amount the next trading day. sometimes they do, sometimes they don't. Obviously, you not the first one to have this idea - I have oftened wondered how it would play out.

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All you have to do is own the shares at 17H00 on LDT (not three days before ) - you can sell them the next day if you want - pay date has nothing to do with it. The shares are mean't to drop by the dividend amount the next trading day. sometimes they do, sometimes they don't. Obviously, you not the first one to have this idea - I have oftened wondered how it would play out.

 

Wonder if you use the demo money in Easy Equities, if the will show the dividends received in your demo money account....

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Think it would worth trying - there is usually an increase on the day, and decrease the next day - so maybe buy 2 days before/ sell 2 days after. Do that 30 - 40 times and get 2 - 5% compounded every time. Even if only half worked out that would be a pretty good year.

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Checked now, JSE:IVTP isn't on easy equities, only IVT is available, completely different.

 

And with famousbrands, EE is trying to rip you off with the spread again.

 

And the only other higher paying entries (ECS A, B, C etc) also aren't available on EE, only ECS Ltd, again completely different.

 

the rest aren't worth buying now.

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bought R5k each of OMN, LEW, and TFG, which should pay out on 2016/07/25.

 

The LDT for them is the 2016/07/19, but I definitely won't remember to go and buy three weeks from now. But now I need to remember to check if the dividends pay out on the 25th...

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found this list of upcoming dividends: http://www.moneyweb.co.za/tools-and-data/dividend-watch/

 

 

 

This list is useful. Is there perhaps a list of dividends already PAID, so that you can go and have a look what happened before the dividends were paid and after. I'm curious to see how it played out and if you would have made money on it.

 

Would you for example take money from your credit card, buy shares, get dividends, sell shares and repay your credit card? Remember you don't pay interest on a credit card transaction for the first 55 days if I am correct.

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I think I have seen this in action with regards to Sasol shares a few times.

 

A few days before they will pay out dividends, share price jumps up, after dividends payout day, shares usually drops as the people that wanted a quick dividend grab sells off the shares to make some more profit on the raised share price (and other people as well).

 

Stupid question, does Google finance maybe give info on when a company will pay out dividends?

 

Regards

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According to this article:

"[...]In practice, the stock actually drops in price by the amount of the dividend once the ex-dividend date passes. If you sell the stock at that time, you do get your dividend, but you get less for the stock because the dividend is subtracted from the stock price.[...]"

 

So if you know that the price will drop after the dividend pays out, could you then theoretically wait for the drop, and grab the shares at a discount while the price goes back up to its pre-dividend price, and then sell for a quick profit? Instead of buying for the dividends, buy for the discount?

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The keyword in that quote of yours is "in practice", which means it is not guaranteed that the price will drop after dividends, or drop very significantly.

 

But yes, you can monitor the stock to see what happens after dividend payouts, just as you can monitor any stock for dips and rises.

 

Heck, you could also do the reverse if you feel confident in the calculated risk, i.e. buy shares now before the dividend payout (which will be in a while), and then hopefully sell the shares before/on dividend payout day, when/if it climbs to acceptable profit levels.

 

All in all, as always, since it a stock market, there will always be risk involved, just because the trend happen in the past, not guaranteed to happen again.

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JSE:LEW actually looks more attractive:

 

for example: Lewis Group LTD (JSE:lew) has a current price of R44.98 per share, and a dividend of R3.02 per share.

- If I buy 100 shares: R44.98 x 100 = R4498,

- wait until 2016/07/11 for the payout of R3.02 x 100 = R302

- sell the shares again.

- getting R302 from the initial amount of R4498 means a growth of 6.7% in a week.

- (ignoring fees etc., and my total lack of how financial maths works...)

 

Although only slightly more than Invicta, but the lower share price means I could buy three times as much and save on the fees...

 

So dieWerner, did you do it?

 

I also want to try it, but it is not worthwhile if you have a big capital account to start with...

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bought R5k each of OMN, LEW, and TFG, which should pay out on 2016/07/25.

 

The LDT for them is the 2016/07/19, but I definitely won't remember to go and buy three weeks from now. But now I need to remember to check if the dividends pay out on the 25th...

 

Did the dividends pay out? Do it pay out to you normal cash account at the broker?

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Sorry for the late reply, I didn't get an email notification for this thread like I usually do?

 

On the 14th July I decided to go all in with my Demo account on EE, sold all the kark that I had and bought as much as I could in LEW, and the share did well, guess other investors had the same idea, on the LDT I was up by 4% or something in a week and a half.

 

The morning after the LDT, the damn price fell by 7.5%, like stated in the article mentioned.

According to this article:

"[...]In practice, the stock actually drops in price by the amount of the dividend once the ex-dividend date passes. If you sell the stock at that time, you do get your dividend, but you get less for the stock because the dividend is subtracted from the stock price.[...]"

If I had remembered I would have sold everything at 9:01 that morning (while the price was falling) like I said I would... Sold this morning (at a loss, but if I get the dividends it should balance it out) and put everything in JSE: PGR, as their LDT is 1st Aug, trying my luck... so far I'm -1.67% loss...

 

Anyway, NO, NO DIVIDENDS HAS BEEN PAID INTO MY ACCOUNT OR REINVESTED automatically, I emailed them this morning asking WTF, but no reply yet, only getting spam from them trying to sell me a Fully managed account... with some kind of Fee freeze for the rest of the year...

 

BUT I have DIVTRX in my TFIA, and those dividends got paid into my account, not reinvested automatically... screenshot attached:

1198822624_divsfromTFIA.thumb.PNG.7a6b1497316c53f100edf04ee58c20b6.PNG

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Don't think they pay out dividends to the DEMO account on EE... which is a shame actually as you will not see the real growth.

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Don't think they pay out dividends to the DEMO account on EE... which is a shame actually as you will not see the real growth.

 

I asked that in my email, but still no reply.

 

Think I'll resend the same email every hour until someone answers...

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Don't think they pay out dividends to the DEMO account on EE... which is a shame actually as you will not see the real growth.

 

I asked that in my email, but still no reply.

 

Think I'll resend the same email every hour until someone answers...

Haha you spammer!!

 

Sent from my SM-A700F using Tapatalk

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Haha you spammer!!

 

Sent from my SM-A700F using Tapatalk

 

 

Lol, spamming myself with their Autoreplies!

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Don't think they pay out dividends to the DEMO account on EE... which is a shame actually as you will not see the real growth.

 

got a email from them just now, confirmed that dividend functionality is not available on the demo account...

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