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Strategies & Market Trends : Buying SPLITs and other Strategies
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To: rolatzi who wrote (854)6/16/2006 12:16:00 PM
From: Terry Whitman  Read Replies (1) of 1163
 
I'd be interested to hear your details.

Do have some data now on how the Split Strategies work in a bear market/correction. In a word, poorly.

For the period of May 2 - June 2:

Sample, 40 stocks splitting.
10 day hold: -3.2% avg. rtn/ 16up, 24down
3 day hold: -1.8% avg rtn./ 13up, 27down

If you stuck to the subset of 2:1 or > splits:
Sample size = 26.
10 day hold: -1.2% avg. rtn/ 13 up, 13dn
3 day hold: -1.1% avg rtn/ 8 up, 18dn

The period of May2- 16 was especially bad. If you take those 2 weeks out,
the returns were positive for the 10day, and only slightly negative for the 3day..
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