Market Volatility

mathjak107 said:
Bull .... dividends have nothing to do with profits ...it is an amount decided to be paid out by the board profits or not .....companies lose money and pay dividends right in to the blue chip graveyard .

Dividends are a withdrawal off your existing share price —end of story..

whatever they withdraw and give you back has the dollars subtracted off your investment before it can trade ...all market action is on the reduced value once it trades .

please stop posting nonsense without first learning about what you are posting..you obviously have no clue as to how dividends work or even what they represent .
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"Dividends are a withdrawal off your existing share price —end of story.."

Another statement that is not true. How can you keep posing your non sense about dividends?

I will try to help you out, if you care which I question. A company has profits..say 1 million for a quarter ..they can pay part of that out in dividends, invest it in equipment, buy their stock, bank it, invest it, etc. ... it DOES NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

I
 

you really don't have a clue .

stocks are no different then a mutual fund dividend ...

you got to sleep with 100k invested , they go ex div and you wake up with 10k in cash and 90k left invested ... if markets go up 10
it is on 90k so you have 99k .

if you reinvest the 10k you have the same 100k back . if it goes up 10% you have 110k .

as far as a payout not reducing the stock price , i assume you can read english .

please , learn , learn learn befor commenting .


FINRA MANUAL :

5330. Adjustment of Orders

(a) A member holding an open order from a customer or another broker-dealer shall, prior to executing or permitting the order to be executed, reduce, increase, or adjust the price and/or number of shares of such order by an amount equal to the dividend, payment, or distribution on the day that the security is quoted ex-dividend, ex-rights, ex-distribution, or ex-interest, except where a cash dividend or distribution is less than one cent ($0.01)
 
Anytime money is paid out it has to effect the share price , the company handed out millions ...that is the only reason a stock can be sold after the record date ....

So FINRA requires an automated roll back in price .

A new buyer does not get the payout so he gets the adjusted price after the payout is subtracted and market action works on the lower price
 

oldmontana said:
"Dividends are a withdrawal off your existing share price —end of story.."

Another statement that is not true. How can you keep posing your non sense about dividends?

I will try to help you out, if you care which I question. A company has profits..say 1 million for a quarter ..they can pay part of that out in dividends, invest it in equipment, buy their stock, bank it, invest it, etc. ... it DOES NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

I
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I will try to help you out, if you care which I question. A company has profits..say 1 million for a quarter ..they can pay part of that out in dividends, invest it in equipment, buy their stock, bank it, invest it, etc. ... it DOES NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

Dividends DO NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

That is a fact that mathjak107 for some reason does not understand. I tried.
 
oldmontana said:
I will try to help you out, if you care which I question. A company has profits..say 1 million for a quarter ..they can pay part of that out in dividends, invest it in equipment, buy their stock, bank it, invest it, etc. ... it DOES NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

Dividends DO NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

That is a fact that mathjak107 for some reason does not understand. I tried.
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I am done with trying to explain it to you ..obviously you have a reading comprehension problem ...I posted the exchange rules which tell you very clearly prices must be reduced before the stock can trade
 
fmdog44 said:
Dividends: There are differences between mutual funds and individual stocks in the forms of taxes, fees, risks/rewards and yields.
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THEY WORK THE SAME MECHANICALLY .....THERE IS NO DIFFERENCE WHEN A STOCK GOES EX DIV OR A FUND IN THE PROCESS ,,...DO YOURSELF A FAVOR LOOK UP WHAT IT MEANS WHEN A STOCK GOES EX DIV..

Here I will do it for you ..

Ex-dividend date: The first day a stock trades without its dividend included in the share price.

https://www.fool.com/knowledge-center/what-is-a-stocks-ex-dividend-date.aspx
 
oldmontana said:
I will try to help you out, if you care which I question. A company has profits..say 1 million for a quarter ..they can pay part of that out in dividends, invest it in equipment, buy their stock, bank it, invest it, etc. ... it DOES NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

Dividends DO NOT reduce the value of the company. If it did stock prices would keep going down..they do not!

That is a fact that mathjak107 for some reason does not understand. I tried.
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This is contrary to what I have learned. I was taught that when a company pays out a dividend, the stock price temporarily goes down. Normally, stocks that are paying dividends will have the price rebound back to where it was prior to the dividend payout.
 
oldman said:
This is contrary to what I have learned. I was taught that when a company pays out a dividend, the stock price temporarily goes down. Normally, stocks that are paying dividends will have the price rebound back to where it was prior to the dividend payout.
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Yes and no .

Let’s say you have 100k invested and have 1000 shares at 100 each .

you get a 10% dividend ....the stock goes ex div and you get 10k in pocket and the exchange rolls back the share price to 90 a share so it can trade .

well next day is a great up day and markets go up 10% ......that 10% is on only 90k .. so yes the share price recovers but all compounding was on a 90k starting value made up of 100 shares at 90 a share not 100k .your new balance is 99k.

had you reinvested the 10k back in ,well then you would have the same 100k you had before they gave you 10k and you gave it back ..so now the 10% gain is on the 100k and your balance is 200k
 
oldman said:
This is contrary to what I have learned. I was taught that when a company pays out a dividend, the stock price temporarily goes down. Normally, stocks that are paying dividends will have the price rebound back to where it was prior to the dividend payout.
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That is true..the thing is the stock price temporarily goes down. but Dividends DO NOT reduce the value of the company. If it did stock prices would keep going down..they do not! Why does that poster not understand that?

My post was not about x-dividend.
 
Well, maybe I’m wrong, but if dividends are paid out of profit, then I wouldn’t think that the company’s value would be reduced, unless the company “borrowed” the money to pay the dividends hoping that by paying a dividend, it would attract investors. Yes or No?
 
oldman said:
Well, maybe I’m wrong, but if dividends are paid out of profit, then I wouldn’t think that the company’s value would be reduced, unless the company “borrowed” the money to pay the dividends hoping that by paying a dividend, it would attract investors. Yes or No?
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Anytime you pull millions out of a company and give it away , profit or not that stock can’t start trading to the next person at that same price since millions are gone .....

also companies don’t have profits every year but they still pay ,some right up to the grave .

so the exchanges are automated to subtract out any dollars paid from the share price ....that offsets the fact those millions are no longer held by the company for the next buyer .

I posted the exchange rules above when it comes to dividends and price resets
 
mathjak107 said:
Anytime you pull millions out of a company and give it away , profit or not that stock can’t start trading to the next person at that same price since millions are gone .....

also companies don’t have profits every year but they still pay ,some right up to the grave .

so the exchanges are automated to subtract out any dollars paid from the share price ....that offsets the fact those millions are no longer held by the company for the next buyer .
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I can understand the reasoning.
 
oldman said:
I can understand the reasoning.
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Great ... see learning can be interesting.....yet so many fight learning and they just go on believing their own bull sh#t.

what confuses people is they lose track of the fact that all compounding is on your opening balance ....of course if the stock price goes up after it paid a dividend , it recovers what was paid out , but compounding as you saw in my example is on a reduced starting amount.

An investment with 100k invested paying a 4% dividend gives you 4K in hand and 96k at the ring of the bell . that stock having market action gaining 10% is going to recover what was paid out but it only has 96k left for markets to compound that 10%. on . that gives you balance of 105,600 .... had the dividend not been paid and market action took the full 100k up 10% you would have 110k .

so the "withdrawal" of 4K as that dividend always is reflected in your balance with each payment .



just think of it as a forced withdrawal off your already existing share price that already reflects all gains or losses in the stock
 
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OK, so here’s another issue. I will ask the question, but will not be able to read the answer until tomorrow.

If I understand short-selling, the investors that use this strategy of investing are probably gearing up to make a lot of money, correct? If they bought shares say 10-14 sessions ago, they should be home counting their money, correct?
 
oldman said:
OK, so here’s another issue. I will ask the question, but will not be able to read the answer until tomorrow.

If I understand short-selling, the investors that use this strategy of investing are probably gearing up to make a lot of money, correct? If they bought shares say 10-14 sessions ago, they should be home counting their money, correct?
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Only if they replaced the borrowed shares .

a short seller typically sells a stock they don’t own ..... the broker loans it to them and charges margin interest until they get the shares back .

So the short seller can buy in a drop and replace it to the broker or they can wait for an even lower price and pay interest waiting ......but if it moves up the short seller has to pay the higher price to replace it ...losses can have no limit since as high as it goes while you wait is what it can cost you if it does not go lower.

short sellers that borrowed these shares over the last month got a great opportunity to pay them back today
 
mathjak107 said:
Only if they replaced the borrowed shares .

a short seller typically sells a stock they don’t own ..... the broker loans it to them and charges margin interest until they get the shares back .

So the short seller can buy in a drop and replace it to the broker or they can wait for an even lower price and pay interest waiting ......but if it moves up the short seller has to pay the higher price to replace it ...losses can have no limit since as high as it goes while you wait is what it can cost you if it does not go lower.

short sellers that borrowed these shares over the last month got a great opportunity to pay them back today
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That’s the way I used to trade as a day trader. For example; if I would have shorted Apple on Friday and sold those shares and then yesterday bought the shares to replace the shares I had borrowed, I would have made money. I don’t do shorts anymore due to so much market volatility.
But, I have a friend that trades options and he is very good at it. He just has a nose for it. Some people are like that.
 

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