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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (93099)	11/17/2001 4:02:40 PM
From: umbro	Read Replies (2) of 132070

Knighty/others, I read a paper long ago, that studied the effect of buying big div. stocks on the open of the ex. div. date, and they showed superior returns to some other strategies which I don't recall. The idea behind it was that there is selling pressure on ex-div. day partly because institutions routinely play the div. capture game, and after making the capture, they sell the stock, and the additional selling pressure pushes the stock lower than just the effect of the div. Did I get the theory right? Do you think it is a significant effect? What're some of the other div-related plays? Final question: do companies still pay dividends? Hard to tell, these days. :)

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