Portfolio of the Week

[Mary]

my pick

If you don't wish to pay a five percent penalty, and your name is on this list, you have until 3:59 p.m. to take a position.

An2n33, B.J, Bean Stocks, Bjdj, BoSox Jon, Dakat69, Diogenes, Eliaskane, Gerihearne, Grebnet, Jim Smith, Karel, Mary, MickyMouse, Ninner, NY4Ever, ParkTwain, Runner, Sekto, Shadow, Sisterwin, SledDawg, Sowers, StkyTreat, Stock Girl, TFred, The Photon

Please start me in DLIA long, please. Thanks.

[Karel]

Long PCCC

Congratulations DMK!

And I am still long PCCC, but I was unable to enter it earlier. No problem.

Regards,

Karel

[ParkTwain]

Long FTGX

Playing with a jumping bean this week.

[New-born baby]

I don't understand how you figure this creates an unfair advantage. Could you provide an example?

I can't speak for everyone, but here's the way the meaning of those smiley faces comes across to me:

= smiling
= laughing (which, in some contexts seems inappropriate)

Sure, Rob. Here is an example.
IF I were to short WLT today at $49.35, on Dec 6 the stock pays a divy of 1.68 shares of MWA. MWA is currently $15.62, so the divy will be $26.21. WLT's share price will be adjusted downward $26.21. So WLT will be $49.35-$26.21=$23.14 on DEC 6. Looks like a winnah for BillyJoe. BUT in real life, if Billy were to short WLT today, he would have to pay the owner of those shares $26.21, and so he would not really have a winner at all since the drop in price on WLT would be offset by his payment of the missing divy to the guy who owns those shares.

See what I mean?

[peanuts]

Sure, Rob. Here is an example.
IF I were to short WLT today at $49.35, on Dec 6 the stock pays a divy of 1.68 shares of MWA. MWA is currently $15.62, so the divy will be $26.21. WLT's share price will be adjusted downward $26.21. So WLT will be $49.35-$26.21=$23.14 on DEC 6. Looks like a winnah for BillyJoe. BUT in real life, if Billy were to short WLT today, he would have to pay the owner of those shares $26.21, and so he would not really have a winner at all since the drop in price on WLT would be offset by his payment of the missing divy to the guy who owns those shares.

See what I mean?

Rob could always adjust the closing price to reflect the dividend, too. This should also happen on the flip side... if a trader was long, then the gap down should be filled with CA$H

[New-born baby]

Rob could always adjust the closing price to reflect the dividend, too. This should also happen on the flip side... if a trader was long, then the gap down should be filled with CA$H

I agree. That would be the fair and real-to-life approach, but it also makes a lot of extra work for the man.

[ParkTwain]

Regarding adjusting a share price in the contest due to dividends, I say that Rob should do nothing. I own a stock, ACAS, that went ex-dividend today. Predictably, its pps declined today after the open, but has drifted up since then. That is, the market is making its own decision about the relative impact of the dividend versus the future prospect for the stock. The dividend $ changing hands is to some extent extraneous, and the market will accommodate its significance in how the shares are priced in real time.

Don't ask Rob to turn the POTW into an "index" for Pete's sake!

Do nothing!

[peanuts]

Regarding adjusting a share price in the contest due to dividends, I say that Rob should do nothing. I own a stock, ACAS, that went ex-dividend today. Predictably, its pps declined today after the open, but has drifted up since then. That is, the market is making its own decision about the relative impact of the dividend versus the future prospect for the stock. The dividend $ changing hands is to some extent extraneous, and the market will accommodate its significance in how the shares are priced in real time.

Don't ask Rob to turn the POTW into an "index" for Pete's sake!

Do nothing!

I was just giving options... I think we should leave it up to the man.

[Rob]

IF I were to short WLT today at $49.35, on Dec 6 the stock pays a divy of 1.68 shares of MWA. MWA is currently $15.62, so the divy will be $26.21. WLT's share price will be adjusted downward $26.21. So WLT will be $49.35-$26.21=$23.14 on DEC 6. Looks like a winnah for BillyJoe. BUT in real life, if Billy were to short WLT today, he would have to pay the owner of those shares $26.21, and so he would not really have a winner at all since the drop in price on WLT would be offset by his payment of the missing divy to the guy who owns those shares.

See what I mean?

Yes, I do see what you mean. So that's the way it works, huh? I guess that's never happened to a stock that I was holding.

It seems to me the fair thing to do in that case would be to figure the cover price (assuming the cover occurs after the dividend) like this: WLT*1 + MWA*1.68. Make sense?

[billyjoe]

Rob,
I thought at one time it was stated that dividends are not figured into the stock price in the POTW although it isn't in the rules. If our own Elliot Spitzer eagle eye Newborn hadn't noticed it I'd be free and clear after covering Wednesday morning. I'd like IIC and Jiesen in on this discussion as I remember someone playing a .0001 stock very early in the POTW and coming up with a 50% gain. Can't I get points for creativity ?

------------billyjoe


p.s. And what if I don't cover?

[IIC]

I'd let it slide and forget the divvy...It's not like there's any real $$$ at stake here...Doug

[Rob]

I thought at one time it was stated that dividends are not figured into the stock price in the POTW although it isn't in the rules.

BillyJoe, I liked it better when you said:

I will abide to the ruling of Rob [. . .]

If our own Elliot Spitzer eagle eye Newborn hadn't noticed it I'd be free and clear [. . .]

So, by your own admission you were trying to pull a fast one on us.

Can't I get points for creativity ?

Sure. Brownie points. I do recall the question about dividends coming up before, but we were talking in a completely different context. The numbers we were talking about weren't anything approaching those here.

p.s. And what if I don't cover?

Impossible. You have to cover by 4:00 Friday.

I've just come up with a new moniker for you. I think I'll wait till Friday to unveil it though.

[jiesen]

Rob,
I thought at one time it was stated that dividends are not figured into the stock price in the POTW although it isn't in the rules. If our own Elliot Spitzer eagle eye Newborn hadn't noticed it I'd be free and clear after covering Wednesday morning. I'd like IIC and Jiesen in on this discussion as I remember someone playing a .0001 stock very early in the POTW and coming up with a 50% gain. Can't I get points for creativity ?

------------billyjoe


p.s. And what if I don't cover?

Yeah, I remember that discussion- but it was on the POTY thread, and Doug ruled that dividends are irrelevant to his contest (and this is stated clearly in the POTY rules up front). While I disagree in principle on ignoring the dividend, it's his contest and he can do it however is easiest for him.

[billyjoe]

Rob,
Don't call me slick Willy. I'm just trying to liven things up around here. Do I really have to cover or is it just like the long picks where they are "sold" automatically at 4pm Friday. Actually I'm not taking a cash dividend , but stock which would give me essentially 2 stocks which is not allowed in this contest. I think everyone's mad they didn't think of it first. You could call me the Sergey Brin of the POTW.

----------billyjoe

[billyjoe]

Rob,
I still will abide by the ruling of the scorekeeper, but only if I'm allowed to stamp my foot and pout like Shirley Temple.

http://www.youtube.com/watch?v=2pD-r12qQEY&mode=related&search=

--------billyjoe