Enbridge Inc T.ENB

May 12th is a significant day for ENB shareholders

[Marner16]

I typically sell all or a significant percentage of my ENB holdings a day or two before the shares trade ex-divided.  The strategy has proven to be very effective as I typically pick up an extra dollar or sometimes two dollars above and beyond the dividend by selling and then buying back after the ex-dividend date.

The strategy is pretty much fool proof which you can check out yourself by looking at the share price a day or two before the ex-dividend date and comparing them to the share price a day or two after the ex-dividend date. 

The market is pretty efficient at eliminating inefficiencies, so why does this cycle continue to repeat:

1) Institutional funds don't bother with jockeying for an extra dollar or two and they also use the dividends to cover the cost of their managemenet fees. 
2) Long term holders don't trade because they don't want to trigger capital gains taxes.  The average age of shareholder of a company like ENB is pretty high as us old guys typically place a premium on dividend income
3) Tying in with 2) is the fact that "dividend piggies" love to jump into a stock just before it goes ex-dividend and then hold until the share price returns to its pre-ex-dividend price before selling and jumping into another company that is about to go ex-dividend.  The strategy doesn't make sense, but this type of investor loves a company like ENB because they can be almost certain that they will not get hurt if they have to hold for awhile.

So.....ENB's share price almost always ramps up before it goes ex-dividend due to an unnatureal imbalance of demand over supply.  Then, the share price almost always discounts more than the dividend in the following day or two as the dividend collectors exit.  The market should be efficient, but the pros have it figured out.  If I was able to figure it out, trust me, they pros are on top of it.  So what do the pros do?  The work the game.  

ENB trades ex-dividend on May 13th, which means I would normally sell before the close of business on May 12th to get in front of the game (as a childish side note, of course the BiBiot had my strategy completely wrong).  But May 12th is special as it is Gretchen's "threat" day. 

The market is fairly certain that ENB will keep the pipes open on the 13th, but based upon the MOC and LOC trades on Wednesday (21mm at 3:59 and another 3mm in the after hour market) and another 25mm MOC and LOC trades on Thursday and then another 10mm today (split between the pre-market cross which drove the share price down $1.50 and the MOC/LOC trade), there is obviously uncertainty.  Kudo's to 1ht for recognizing and capitalizing on the opportunity.  

So, May 12 presents a bit of a sticky situation because it coincides with the Line 3 High Noon showdown at the Mackinac corral. 

If one sells on the 12th and ENB continues to pump oil without any "noise", the market could easily offset the normal share price drop associated with being ex-dividend as the market will reward ENB for winning based upon the knowledge that the decision will likely be tied up in court until ENB builds the tunnel. 

If ENB does shut down Line 5 on the 12th or the state troopers show up at midnight, the ENB share price could get punched in the mouth on the 13th as the market always over reacts. 

1ht chose to sell and wait to see what happens.  I assume she already knew that ENB's share price drops on every ex-dividend day because she obviously studies the trading, which would have made her decision easier

This post will be a waste of time for the likes of Sarge who knows that buy and hold is how smart people like him invest.   I hope that sharing my thoughts on this topic will be of interest to some.  If not, I guess I wasted 15 minutes.

For those wondering why I'm so prickly this week, I decided that it was time to answer the nitwits who think they can just write craap and get away with it without being held accountable.  I don't normally respond because it is like having an arm wrestle with an infant and where is the fun in that.

It could be an interesting week next week with the Line 5 situation and perhaps some illumination on institutional holdings.  

To those that have made it this far, thanx for reading and have a great weekend.

[Quintessential1]

Well that was a lot of lonely old man for sure.  Shiddy was right about you being a long winded BSer. Perhaps Sarge will catch on to your bought in at 34 but sell all your shares before exdiv day bs.  For me its just one too many win wins in an industry where no one wins all the time.  You and Sarge at least have that in common.  I'll just slip you and backinback onto

[SargeX]

Hey Quin Just for the record, we got into ENB with the ENF roll-up and have added some additional shares along the way. Our ACB is $43.55. We have traded some extra shares a couple times but haven't ever sold a single share of our core position. I don't mind a lot of stuff but it sure hurts to be mentioned in the same breath as Midiot. As I've said, I've never made it through a

[Quintessential1]

Hey Sarge,         Message received and point taken.  I am just here to pick up some of the scraps of information that may fall by the wayside as I go about trying to absorb it all. I don't mind the useless speculation on the whole as even with facts and figures,  it seems that is all any of us are doing.   As you would say: Taker easy. Go Enbridge! ;-)

[CHECKMATE77]

Very interesting trade idea. xdiv days are funny, sometimes the stock goes south as expected some days it goes up for various reasons i sold all my enb friday i am very concerned with the 12 i bought may 28 calls at 59 just in case enb gets some kind of court win. if so I expect the stock to have a short term bump and the calls will be sold we will see 

[wannabebuffet]

Good plan. Thanks for sharing. I don't trade in and out for captial gains reasons. I don't want to give my ex-wife more child support. Many years ago I noticed a pattern of trading on a up and coming copper mining company. The stock would go from .8 to 1.2 and then fall back to .8. I watch it do this a number of times and thought heh I can trade that pattern. So I sold at 1.2. It then

[Fantome]

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[wannabebuffet]

We do learn from our mistakes. Hopefully we can help others to avoid the same puddles we stepped in. Now I just collect a big fat divy every quarter and watch the share price rise. Where can you get a 7 percent yield and a 10 percent yearly price increase? Works for me. I do have a lot of copper stocks which are amazing. Robert Friedland 'you will need a telescope to see the price of copper&