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I am not trying to "wind you up"; what would be the point? This thread began when I queried the logic which you were offering to other readers in an attempt to get you thinking properly about financial transactions. Obviously I have failed and you are unable to accept that I (a qualified accountant and a chief accountant for 25 years) have a better understanding of profit measurement than you do. I don't know what "filter" means but no matter.
Incorrect Eccles.
I'm not going through it again. Even A ten year old should be able to get it.
We have the same number of DLG shares at the start, and at the end, 4858 shares , except I made twice as much return as you by trading the ex-divs. Simple stuff.
Don't be put out or try an bamboozle with dodgy figures. Nobody will be fooled by that last attempt at a post.
I think you're just trying to wind me up, or annoyed that a trader made more than you by holding.
No idea, as anybody who reads this thread will be see clearly your hopeless attempts at trying to somehow justify making less money is actually making more. Maybe a political advisor would have been a better career for you.
Anyway. Whatever it is. No matter anymore, I'm putting you on filter.
Dear oh dear of dear, Gav you are making the same fundamental mistake as many do who do not understand how to correctly measure profits, i.e., you are mixing up profits and cash which are not the same thing. Profits may result in an equal amount of cash but not necessarily so. Your figure of £1584 includes £1000 cash from the difference between £15k got from DLG and £14K put into Sabre. Surely you can see that??? As for deducting £473 made from the separate Sabre deal from your figure of £1584, well that totally defies accounting logic so I now give up.
Interesting. I see what you did. Thanks.
Eccles. As a accountant the you should be able to count, read and add up.
As below.
My profit is from 5 trades , buy DLG, sell DLG, Buy Sabre , Sell Sabre, then buy DLG.
Where we both start and finish with the same number of DLG trades.
Total profit = £1584
Sabre trades netted £473
Total profit from the DLG dealings = £1584 - £473 = £1111, which is actually 55% more than you made given we both start and end the same.
Deary me, eccles, you just conjured up an extra 14000 capital in your answer.
You must have been one of those creative accountants, or just bad at applied maths.
Sorry old chap but you are talking to a retired chief accountant here and I know how to correctly measure profits. You did two separate deals making profits of £572 on one of them and £473 on the other which total £1045. If I keep the DLG shares, I get a profit of £714 I decide to copy your deal with Sable which I could easily do with £14k which I happen to have I also get the £473 profit so my total would then be £1187 which is £142 more than you made. Simple isn't it.
VikingRa.
Of course. That's part of what helps create the trading opportunity in the first place.
Read back below to understand.
Market makers account for people taking advantage of selling shares on ex-dividend day by drop the price of the share by the amount of the dividend awarded on the day. Are ye accounting for this in your method?
Eccles.
Incorrect. If Only looking at DLG, I profited twice. First by selling day before ex-div at a higher price than buying, then
again by buying back the DLG shares at a lower price. I made more than a 40% than your dividend. But it was even better.
The two trades were linked because both were part of the same plan. To trade the two shares on their ex-div's within a month.
There was nothing fortuitous about it. It was planned.
A profit is a profit as they say.
Not sure what you problem with is with a plan that makes a larger return than the dividend.
Hi Morbox.
With DLG I sold the morning of the day before ex-div but missed out on around 2p which it hit late afternoon.
With Sabre, I kept an eye on the live chart and sold at the top, 3pm day before ex-div.
It's bound to be different with every share depending on market forces, but I would look to trade the day before ex-div.
Gavster, Well yes I see all that but you only got £572.97 from the sale of 4858 DLG shares vs the £714.13 which I got. The Sabre deal was a quite separate deal on which you fortuitously made £473.03 and not linked to the DLG sale at all except that you chose to suggest that it was. So you got £572..97 if you will vs my £714.13 I could have got £14k from somewhere, it matters not where and done the same as you but to claim that it was anything to do with DLG shares would not be true would it?
Hi Gavster, interesting I’ve been studying this actual subject, it seems that the optimum selling point prior to x-div date is D-2, when do you see the best time to sell? At the moment I keep a large chunk invested in div shares but also have some for trading, here and others. What I’m now thinking is only keeping in the market for short periods as the US I’m sure is going to do a big correction thus having an impact on the world markets.
Hi Eccles.
OK Let me break it down.
Lets you and I both start with the same investment of 4858 shares, and focus on the SP at 307p, the day I bought in. Let's say we both have £15000 worth of shares.
YOU : £15,000 at 307= 4858 shares. Take the dividends (14.7p a share)-
You end up with the 4858 shares and a cash profit of £714.13
ME : £15000 at 307= 4858 shares, sold before ex div £15,572.97- reinvested £14000 in Sabre, 5388 shares then sold before ex-div. £14,473.03, my total cash is now £16046 - I buy back the 4858 shares of DLG at 299 = £14462.
We both end up with 4858 shares in DLG, but my cash profit is £1584.
I did this because I have noticed that most share prices drift after ex-div. including DLG. Admittedly I had to oversee and research the strategy but as you can see, it has worked out in my favour this time. As I said, the worst that could have happened was that there was no great rise towards ex-div and I would have been stayed invested in DLG with a yield of 7%.
(My actual money is currently now in two other shares awaiting rises to Ex-Div, but I may well get back into DLG some point later)
Cheers and GL.
Gav: Yeah I see that but if one holds the shares and takes the div (I did), the "impact" is virtually zero so I still don't really understand as you will have incurred trading costs and I will not.
Hi Eccles. Ex-Dividend is next week, with around a 4.5% impact.
So for a trade I bought DLG at 307 sold at 321 before ex-div, SBR bought at 258, looking to sell late 260s or higher.
That's the plan, but in case it goes sideways, I'll hold through or sell and buy back DLG around 301/302. TBH Don't mind being mid to long in either as economy grinds back into motion.
Gavster:- Don't quite understand advantage of Sabre over DLG when yield is far lower. Am I missing something?
Nice trading. I opted not to buy back in at 302 in the end, but to buy Sabre Insurance, same sector instead, to do sell into a dividend rise (around 4.5% ex-div 22nd April), and still have the option to collect the div and/or reinvest etc.
Just click on News on the Direct Line share page on the Hargreaves Lansdowne website - any purchases are shown under company announcements. Daily at the moment.
Final Ex-Dividend Date 08-Apr-2021
Final Dividend Payment Date 20-May-2021
and having the shares in an ISA or SIPP wrapper removes any CGT or tax on dividends.
In ye olden days their was no capital gains tax so that those with plenty of readies could make gains before ex div due tothe SP tending to reflect the upcoming div then sell without paying any tax whereas divs when they arrived were taxable income. Even now there is still some advantage to the practice because capital gains tax starts at £12.5k and divs are taxed starting at £2k but the advantage is far less than in ye olden times.
gav - sorry, div is 14.7p per share.
gav - could you please explain the logic of selling before xd and then buying after xd? If you sell before xd you miss the div - 14.4p per share - and after xd the sp is likely to drop 14.4p - so what is the advantage? Would it not be better to take the div than wait to see how much the sp drops after xd - it could be less than the divi?
Yes and it looks like some folk are beginning to understand that the buy backs are bound to enhance the SP.
I expected a bit more upwards movement towards ex-div.
Need to transfer to ISA, so currently my plan is to sell before and reinvest in the ISA trading my shareholding higher after the ex-div drop. Best laid plans etc...
Anyone keeping track how much has been spent in the buyback or is there a way to see this ?