More "prognosticators" wrong about Tiger's effect (trading, dividend, investor)
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About a month ago someone started a thread about how some "advisors" or TV yakkers were saying that Tiger's marital problems were going to spell big trouble for the companies he's closely tied to.
WRONG. But no suprise there. The company with which he's most closely related Nike (symbol NKE) has reached new highs since then.
In October of '09, 6 weeks before the auto accident, NKE was trading at $63 and change, since then it's dropped into the $61.50 +/- range EXACTLY TWICE. Both of those drops corresponded with drops in the overall market.
However, it's EARNINGS, not peccadillos that drive the value of a company. NKE has had record earnings and is currently trading at about $75.00 per share.
Coincidentally, Jim, "stick with me and you'll go broke", Cramer was pooh poohing NKE back in early December, but once the earnings numbers came out he predicted that "Nike will hit $100 in the future".
Haven't followed their stock price, but NIKE was smart to stick with him. Other companies that dropped him are gonna regret it down the road. I have a feeling he won't take back those firms that dropped him either.
Hey golfgod, do splits effect the value of your shares, when they split the shares the price splits also doesn't it?
Yes, in the case of my NKE I bought my shares (let's say I bought 10 shares) at approximately $15.50/share. Over the years it did a 2:1 split in I think '90 (20 shares), another in '95 (40 shares), one in '96 (80 shares) and another in '07 (160 shares).
In theory a 2:1 split (all else being equal) causes the stock price to drop by 1/2, except that generally a smart board accompanies the split with an increase in dividend. So, if the dividend had been $0.20/share and splits 2:1, and the board doesn't increase the dividend the amount of dividend you receive next time will be FORTY CENTS per share.
This is the real beauty of splits! I'm now receiving more than 10 times the dividends that I was 13 years ago.
If the board increases the dividend the stock will not drop by 1/2, but will drop by less than 1/2.
Quite often boards do a split to keep the price in an "attractive" range to "average" investors. Not sure why "google" has kept theirs so high.
Ooops, my bad. I was doing some end of tax season filing and found my original purchase memo from Schwab. In June '86 I paid $17.88/share, so my split adjusted price is $1.12/share. That's a 67 bagger in 24 years.
NKE started paying dividends in '87, didn't reach ONE CENT per share until the '90s sometime. Last year the dividend went from $0.25 to $0.27/share.
The only reason I follow it is because I own it, at a split adjusted $0.97 per share.
That's right, NINETY SEVEN CENTS. I bought it in about '85 or so and with splits I have SIXTEEN TIMES the number of shares that I purchased.
Dang, all you need is one 'great' investment.
It was known that Michael Jordan was unfaithful and he is still known as the greatest. Personal problems tend to fade from everyday peoples eyes with time
Hey golfgod, thanks for the info about stock splitting. I didn't take into account the dividend increases. Good to know.
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