Don't Fall for the Special Dividend Sucker Punch

Have you noticed the sharp decline in Apple's (NASDAQ: AAPL  ) shares? Several theories are floating about as to what's behind the sell-off, but the most popular may be the company's presumed reticence in paying shareholders a special dividend. Traders appear to be cycling out of Apple in order to capture huge one-time payments elsewhere. Consider:

All of which would be good if greed didn't get in the way.

Too many are bidding up or selling off quality businesses merely for their stance on special dividends. Apple won't pay one? Sell! Las Vegas Sands is paying cash? Woo-hoo!

Please don't be that type of investor. Special dividends mean little in the larger scheme of a Foolish investment thesis, both practically and financially. Click on the video below to find out more.

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Read/Post Comments (6) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

    What about shorting before the ex-div date. I've often been curious of this strategy. Yay or nay? What's the downside here?

  • Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

    *?

  • Report this Comment On December 07, 2012, at 4:55 PM, TMFMileHigh wrote:

    @jordanwi,

    >>What about shorting before the ex-div date. I've often been curious of this strategy. Yay or nay? What's the downside here?

    I know some use this strategy; I find it too risky. There's just no way to know how the computers will react when they detect a stock moving a certain way.

    Sorry I don't have any concrete data or more thoughtful analysis.

    Good luck and Foolish best,

    Tim

  • Report this Comment On December 09, 2012, at 2:51 PM, spokanimal wrote:

    Thanks for this useless "teaser" that you wrote only to serve as a lead-in to 2 of Motley Fool's paid research report...

    ... and I would add that although Travis Hoyum sometimes writes a decent article, almost none of them have risen to the level that I would expect from a seasoned analyst.

    Spokanimal

  • Report this Comment On December 09, 2012, at 8:39 PM, BenKeel wrote:

    Agreed Spokanidiot, oops sorry I mean spokanliberal.

    You're right Motley Fool has not only the worst name in business but also writes the worst articles.

    These guys LOVED US Steel last year at $41.

  • Report this Comment On December 10, 2012, at 12:32 PM, TMFMileHigh wrote:

    @spokanimal,

    >>Thanks for this useless "teaser" that you wrote only to serve as a lead-in to 2 of Motley Fool's paid research report...

    So you're not falling for special dividends? Great! The reader who commented before you had questions and I'm happy to have answered them.

    That's what were about here: educate and enrich, and hopefully amuse.

    Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

    Twitter: @milehighfool

    Tumblr: http://timbeyers.tumblr.com/

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