Market Overview

It Stinks You Heard NONE of this Seeing as December is So Near

Costco truly jumped out of character with its special dividend, so much so that it decided to hold a conference call to explain the glorious news to shareholders and interested analysts (oh, you know this question will be asked: "Hi, thank you for taking the question. So, how do you and the board think about the go forward capital allocation strategy?"). However, it's clear the new CEO has opted to finally put his stamp on the company as we enter the year.

That said, I wanted to focus on bigger stuff, namely the teaching of market psychology (which I love to do). These special dividend paying companies we have seen of late (thanks to the looming fiscal cliff, which is causing management teams to wet the beaks of their shareholder bases with strong cash payouts…don't want them flying away) are making it very hard NOT to own their stocks into the December (for Costco, it's mid-December) record date in spite of sub-par operating results (in some cases) and with fiscal cliff threat front and center. So, it's the unlocking of value held on corporate balance sheets and the free market versus the daily headlines from the government which have proven chock full of twists and turns. Boy, what a fun battle it will be next month!

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Markets Trading Ideas

 

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