@Manxx I wanted to pick your brain on today’s price action in the markets. I don’t know how closely you follow the major market indices, but today the market’s sold off pretty good into the close. The Nasdaq especially so.
Here is the interesting thing, the market’s tumbled into the close, yet my buy-and-holds actually rocketed up into the close. I think I figured out why. Today Marco Rubio tweeted about a bill to hit buybacks with the same tax treatment as dividends. I think it will have bipartisan support and pass without effort, because honestly Americans are sick of mega corporations laying off workers, suppressing wages, and then taking that cash and plowing it into buybacks to enrich the shareholders. Long story short, I just don’t think it will have any problem becoming law.
All of my buy-and-hold stocks are companies with high dividend yield (they all range from 5-7% yield). Tech stocks and small caps tend to favor buybacks over dividends. The Nasdaq is a tech heaving index with a lot of small caps. Putting it all together it seems like the reason why the markets(and Nasdaq in particular) tumbled, but all of my holding ended way up, is because there is a big rotation in cash from buyout stocks to dividend stocks.
I am also short the nasdaq while simultaneously long these high dividend stocks, which turned out to be a double whammy today. Once of my most profitable days so far this year.
I am curious if you are following this and what your thoughts are.