darkness39[at]yahoo.com wrote:

- quote -

While I would never use the occurence or possibility of a split as an
evaluation criteria for an individual stock, this Forbes article
indicates good performance afterwards:
http://www.forbes.com/funds/2007/02/...ml?partner=rss

Actual checking of the academic research to see what it really says is
an exercise left to the reader.

-Will

In article <Sj5%h.218097$My6.159888[at]fe08.news.easynews.com> ,
"The Henchman" <heyhey[at]isforhorses.com.easynews.com> wrote:

- quote -

Right. It is the total value of the stock that matters. You never
want to have more than about 5% invested in any one stock. It
doesn't matter if that is 100 shares at $50 or 200 shares at $25.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:john-936CF7.18152304052007[at]sn-radius.vsrv-sjc.supernews.net...
- quote -

So in other words a stock spilt is just another day at the exchange and it
shouldn't make any factor on portfolio rebalancing...

On May 4, 11:19 pm, Tad Borek <bore...[at]pacbell.net> wrote:

- quote -

If I recall those papers correctly, what they say is the stock tends
to do well in the *lead up to the announcement of the split* and then
not so, afterwards.

Implying that a split signals that things have been good for the
company, but not that they will be good in the future.

"The Henchman" <heyhey[at]isforhorses.com.easynews.com> writes:

- quote -

Splitting a stock doesn't make it cheaper. It makes the per-share
price lower, but the financials - the price/earnings ratio, etc
all stay precisely the same. If it was expensive (ie. overpriced)
before, it's just as overpriced afterwards.

There's very little reason for stocks to split these days.

(Even Washington Post, currently going for $766/share is
not really priced yet such that a small-scale investor
couldn't buy in. The smallest investment would be $766,
but anything smaller than that and the transaction costs
eat you alive anyway).

- quote -

Economically, nothing whatsoever. Financially, it's totally
a non-event.

Practically, however, there have been some studies which
show some short-term movement which relates to splits,
but it's only a short-term thing and, frankly, not very
important.

Do a google search on "stock split price movement".

- quote -

You might as well ignore the split and, if you were planning
on rebalancing, go ahead and do it.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

In article <6VN_h.208516$9i2.10345[at]fe06.news.easynews.com> ,
"The Henchman" <heyhey[at]isforhorses.com.easynews.com> wrote:

- quote -

That is an unanswerable question. It is like asking what the score will
be in next year in the Superbowl. We have no way to know. It could go
way up, it could go way down, it could stay the same, or it could
wander around a bit. That is the whole trick of investing...you never
know what is going to happen in the future.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

The Henchman wrote:
- quote -



Stock splits had a bit more significance when trading in odd lots
(quantities other than 100-share multiples) was difficult or costly.
Those days are gone -- you said in your post that you were able to buy
21 shares and probably didn't think much about it not being an even 100.

It's a non-event...a share-accounting curiosity. If the company has a
total value of $1 billion divided over 1 million shares, and splits 3-1
today, it should still be worth $1 billion tomorrow. Only now that's
divided over 3 million shares, which drop in price accordingly. The
company's total value shouldn't change, because the number of shares
issued is arbitrary. The best that you can say about a split is that the
price has probably risen (which attracts some investors who, for
whatever reason, like to buy stocks that have already gone up) and the
split gets some press attention, so maybe a few people take a look at
the stock. These aren't strong-enough factors to drive pricing much
though - IMO.

There have been numerous studies of price changes around stock splits
and some of them suggest that on average, there is a temporary gain
around the split date. I don't find those studies particularly useful
when applied to an individual stock though, even if they're valid you'd
need to buy every stock that splits to realize those excess gains (the
effect isn't at all universal). The value of your investment is much
more likely to be driven by the price of potash than by trading effects
from this split.

-Tad

First the details:

31, normally a mutual fund holder only, single. Only debt is a 1.97% car
loan (not a lease).

My first and only stock purchase is Potash Corp. Ticker symbol POT but I own
it in Canadian funds on the TSX. Was purchased thru my bank's discount
brokerage. I purchased this stock at an average of $128 a share CDN and now
it's over $200. I own 21 shares. It is not being held in retirement plan so
appropriate taxes are owed for dividends or gains/losses.

So currently it's a $1600 gain which is equal to about my investment
contributions over 2 months

Potash announced a 3-1 spilt to be done later on in May. Quite frankly Cdn
large caps are expensive anyway so I understand the mechanics of the 3-1 to
entice more buyers. They are increasing dividend to 80 cents a share from
60. I did not start a purchase plan for this stock for dividends as I have
dividend mutual funds.

I am asking for other's experience from DIY investors what historically they
found during a stock spilt of this order. What can I expect to the value of
my 63 shares from a historical perspective say 6 months down the road. I'm
asking for historical perspective from people who have had this happen, and
I'm not seeking advice on what to do, although those suggestions might
enhance the thread.

I had been debating about selling when it was $214 and using my gains to
start an ETF portfolio then I read the news of this spilt.