Member Info for LordAdam

The total voting rights figures are out today ... and normally most investors don't pay much attention to them ... but take a look back over the last 6 months and you'll see that the company has quietly created 2m shares with a value of 55m pounds. Now it's not clear exactly where they've gone, but I suspect that they've been used for bonuses. They're not normal rights or placing issues as there's no RNS to that effect. You might think that these are free and don't cost the company anything ... and you would be right ... they don't cost the company anything. It's the existing shareholders who pay by means of the 1% dilution ... so sorry to say that over the last six months this creation of shares has creamed 1% off our shares ... and who ever has the shares now (for zero payment) has been given �55m from the value of our shares. Mike

Your right, and that's the beauty of being income focused ... provided the dividend is maintained then in theory you are not concerned about what the share price is. You get your 6.41% yield or whatever ad infinitum on the money you paid. Cashing out if the current yield drops to about 5% is based on a comparison between what yield can I get elsewhere if I take the money out and reinvest it in another high yielding consistent dividend paying company. By the time the yield has dropped to about 5% a cash out will normally give you the income that you would have had over the next 3-4 years as a capital gain. (ie 15-20%) Generally I stick to larger companies ... not necessarily the 100 but certainly in the top 200-300. Consistency of dividend and past history are very important considerations. The dividend data sites are your friends when it comes to stock picking ... have a look at GCP, MARS, PHNX, SSE, VOD to see the sort of thing that I mean. Mike

We don't want passion ... we don't want excitement ... we don't want the unexpected ... We just want a constant or increasing quarterly dividend yielding 5-6% forever. This is a widows and orphans share ... widows and orphans either live off the dividends or reinvest them for the future. For those of us that have been here a long time the yield on their investment is historically much higher due to the long term dividend growth ... for example I'm getting 7.3% on my original investment. As I don't need the income at the moment that help funds my reinvestment program in other shares. Mike

Grounding ... I'm a long term income driven investor with a couple of max'd out ISAs holding the majority of our holdings. Normally I invest at about the 5.5-6.5% level in companies with long-term dividend consistency and growth. I started getting into GSK in 2015 but came out of them in May 2017 at about the 1650-80 level. I bought back in during early Feb at 1249 for a 6.41% yield. The normal plan is to hold and forget, banking and reinvesting the dividend in whatever is paying the best yield. But if a share rises to the point that the yield drops below 5% then I consider cashing out as the capital gain is then equal to 4 years income and I can both lock in the gain and get a better yield elsewhere (usually). That's what happened the last time around. The magic number for GSK is 1600 ... at that point it's got a 5% yield and I would have made a 350p gain. There are reasons to modify the strategy ... if dividend growth is expected to return the yield to the 6.0% sort of level ... or a bid/merger is expected and further capital gain is anticipated. Mike

Well if it does reach 16+ then I would be selling again -- as I did last time -- as GSK would no longer meet my criteria for holding/investing. Mike

As far as I know it's yet to be declared ... last year it was declared on the 16/5/17 and went ex on 8/6/17. A good trick is to add 364 to those dates to give ... 15/5/18 and exDiv on 7/6/18 (Thursday). Here's the best site that I know of for all things dividend ... https://www.dividenddata.co.uk/ex-dividend-date-search.py?searchTerm=vod Mike

InvestingGenius ... I wish you luck, not only in this but also all your investing decisions. So what's your plan? Mike

Let's just say that we have a sense of dynasty rather than an approach of miner-miner ... Anyway you asked what is the difference between receiving a dividend of 6% with a fall of 6% on the day and no dividend followed by a sale of 6% of your shares. If you are a long term investor the difference is absolutely enormous. It's the difference between long term net wealth growth and simply treading water. You see the problem is not so much what happens on dividend day ... it's what happens on the next dividend day and onwards. Within reason I don't care what happens to the share price -- its actually an advantage for it to fall as that provides opportunity to add more using dividends from other companies to buy in on the exDiv day. If you sell shares you lose any future income or growth. If you're in the right companies then dividend growth year on year and consistent dividend payment yields some amazing returns. And it doesn't take much managing ... I don't do much trading at all. On the subject of dividend tax ... we worked hard over the years to get most of our income yielding shares into the ISA's so the vast bulk of the income is sheltered from tax ... but you have reminded me that I need to do a bit more optimization on that as we'll have broken the new limit by June!

I tend to be an HYP type investor as well myself (HYP = High Yield Portfolio) ... but you do need to be careful. The aim of the game, from my perspective, is to buy and hold, ideally for ever, collecting the yield until eventually the kids get the shares in that great divi up at the end! But to do that it pays to be a bit cautious ... I look for companies that are not only yielding over 5% (preferably over 6%) but that have maintained or increased their dividend for each of the last 10 years. It's not a cast iron guarantee ... it led me to CLLN ... and also to ISAT ... I got caught with the former and got out of the later ... but at least you're investing in something with a track record. A big help is the site https://www.dividenddata.co.uk/dividend-history.py?epic=VOD which gives you graphs of the last 10-15 years worth of dividends! Mike

DPH123 ... you should receive 860 minus 568 per share less costs. That's �2.92 per share minus a currently undefined sum. At the moment we don't have any idea how much the costs will be ... they could be light (and they should be) as the sale was in bulk to underwriters etc, there's no stamp duty of course on the sale, and the company is in an ideal position to distribute the cash efficiently to the thousands who got caught out in this way. On the other hand they may have farmed the whole thing out to the underwriters or brokers to deal with and they may try to milk it for all its worth. :( Can you do us a favour? When you do find out what you're getting post the number of nil-paid shares that you had and the total amount that the company gave you for them? It would add greatly to the collective knowledge of how these things are being managed by companies. Mike

I must say, that I, probably like you ... do get the impression that the market makers play funny games with this stock. The spread seems to be maintained at an artificially wide level and the price movements often seem erratic and whimsical. My theory is that it's a share that is handled by the 'juniors' on the jobbers desks and when they get bored with things elsewhere they come back here and try to drum up a bit of business/churning by manipulating the price. Back in 15/16 they did that by nudging the price up ... now they do it by nudging it down. So we have good news and if there's not the volume they want from that they depress the price and encourage a bit of too and fro action from the short term holders. Mike

For clarity and to supply a definitive answer ... It is the owner of the share at the opening bell of the market (8.00 am in London) on the day that the share is marked Ex Dividend (usually a Thursday for UK shares) that is entitled to receive the dividend. There fore, unless you have access to pre-market trading (and most of us don't) if you buy on the day of the ExDividend you will not receive the dividend ... rather it will go to the person holding the share at 8.00 am. The record date is a bit of a red herring ... company registrars run a 2-day behind system to keep the companies register of share holders uptodate. Hence those who bought on Wednesday will make it to the register in time ... those who buy on Thursday will not ... the result is the same. Buy on Wednesday get the dividend ... buy on Thursday and you don't. The least time you can effectively own the share and get the dividend is to buy at 4.29pm on Wednesday, sell at 8.01am on Thursday -- that works, I've done it (well more like 20-30 minutes actually). Hope that clarifies the issue. Mike

OK General apologies ... the comment wasn't actually really aimed at any one ... it's just so frustrating to see this old chestnut being roasted again. As you say not everyone knows the details and some times it leads to misinterpretations of the market. The UT trade/auction is a normal part of the daily process that the automated market system goes through to establish the closing price for a share ... there's a less well known auction that goes on as the market opens and another set of potential auctions that can be triggered in technical situations when the market becomes dysfunctional in various ways. Sadly people sometimes get caught out by seeing the UT trade at the end of the day and then expect the market to do something the next day and it doesn't -- leading to bewilderment and disillusionment. As I say, my apologies ... Mike

What next? ... what next? ... maybe some of you people will take the trouble to learn how the market actually operates! 16-Apr-18 16:35:17 103.20 1,779,011 Sell* 103.20 103.80 1.836M UT LOOK at the TIME ... the market was closed, its 16:35 ... well blow me down, that's when the automated end of the day auction runs isn't it? Let's see ... oh yes, the transaction code UT .... umm UT ... umm UT ... oh that's an uncrossed trade isn't it. That must be the market makers adjusting their stock positions between themselves after the days trading. Come on get with it people ... if you're going to play this game spend the time to learn how it works or you'll end up making some serious losses! Mike

292p max ... and there will be dealing costs ... I wouldn't be surprised if the costs were not of the order of the old brokerage days at their worst ... perhaps as high as 2% with a minimum of �15 sort of thing. As I say, I'll be very interested to hear what actually happened from anyone who got caught in this way. As you say Poleaxe, the mid-afternoon dip may well be the underwriters shifting those shares that they got at 860 straight onto the market for a risk-less gain (at the PI's expense of course!). Mike

I did warn of course of the relative disadvantages of allowing rights to lapse ... but not every one reads this board ... and even less take what I write seriously! You're right Londoner ... they won't be sold for 568 ... but they will sell at a discount to ensure that they get away and there will be little control or reason for restraint on the cost element. It would be interesting to hear from some one who accidentally let their rights lapse how it actually worked out in practice. Mike

These small company shares are not widely followed by brokers and funds etc ... so I wouldn't expect to see the real market reaction to today's news until Mon/Tue of next week. What I think we are seeing today is mostly the manipulation of the market makers to encourage 'churning' so they can make money on the transactions. Mike

It's trading days ... normally the 3rd Thursday after the dividend was paid. So for the divi on 11/1/18 when the sp was 1334 ... buy on 1/2/18 when the price is 1312 ... not such a big gain on that one. The one before ... divi on 12/10/17, sp at 1523 ... buy on 2/11/17 for 1350 ... for a much better price than on the day. The one before that ... 13/7/17 sp at 1623 ... buy on 3/8/17 for 1524 ... again a good saving. Before that again ... 13/4/17 sp at 1641 ... buy on 9/5/17 for 1594 ... again a useful saving. I do have an improved algorithm which is based on a 5-day moving average to look for a local dip/turnaround after the 15 day delay ... that performs better but is more complicated to manage. The prices for those are 1334 on the day leads to 1291 on 9/2/18, 1523 leads to 1290 on 30/11/17, 1623 leads to 1494 on 18/8/17, and, 1641 leads to 1626 on 11/5/17 (Not as good as the simple 15-day rule!). Of course this time around and any subsequent time the chicken innards may look totally different! Mike

I thought that the analysis of whether to invest before, on, or after the day would be so interesting that I decided to take the morning out and do it myself. Extremely interesting in that yet again the numbers when crunched show instinct to be not necessarily correct! (Well not my instinct at least.) Just a quick description of what I did ... got the GSK dividend dates and data for the last two years, got the GSK and FTSE-100 OHLC data for the period. Averaged the OHLC to remove the worst of the daily swings. Used the 5 day average from D-15 to D-10 (where D is the dividend date) as the basis for comparisons. Used the FTSE100 to remove market variations from the GSK price. General conclusion ... It's not worth buying in the 2-3 weeks leading up to the dividend payment date as the price seems to generally decline after the day. For the last 6/7 dividend payments you would have been significantly better off buying _after_ the payment date than on it. Now the results, with the systemic market movements removed. Assuming you bought 15 trading days after the dividend payment the price you would have paid relative to the price on the actual dividend date would be: Jan 18 -0.36% Oct 17 -11.05% Jul 17 -6.14% Apr 17 -2.76% Jan 17 +0.87% Oct 16 -5.20% Jul 16 +1.99% So some of the reductions/savings are very significant ... on the contrary side, the increases are very small ... so overall, if you are going to reinvest in GSK then doing it 15 days after the dividend is paid seems like a good ploy. BUT ... as always with these number based strategies ... they can go wrong, (some times seriously wrong) ... so do your own research, make your own choices ... and don't blame me for anything! Mike Jan 18

Everyone makes their own choice I suppose ... but myself I don't like automatic reinvestment, either by the broker or by manually trading on the day ... I'm convinced that the market makers know that there is this automatic and knee-jerk purchasing going to take place and increase the price accordingly. Personally I think the best plan is to either run several shares and cross-invest their dividends so that they are out of phase with each other ... or simply delay the purchase by a week or two. Perhaps someone can do a study of past prices on dividend payment days to see how if there's any validity to my ideas? Mike