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The Daily Dow
LEXINGTON, Ky. (May 13): For all of you Warren Buffett followers, don't panic. Coke wasn't banned from the Olympic Games or found to cause cancer in laboratory rats. The stock simply split 2-for-1 today, so you're just as rich as you were yesterday if you hold KO. (Actually, you're a bit richer since Coke is up a buck a share today - post-split.)
And two of the Foolish Four stocks trade ex-dividend early this week, so the cash totals in our Model Portfolio have been changed to reflect the dividends. DuPont traded ex-dividend today, paying $0.57 per share for the second quarter. Chevron goes ex-dividend tomorrow, paying $0.50 a share.
In a real-dollar portfolio, of course, these dividends wouldn't arrive in your brokerage account for a couple of weeks, although technically the money is yours if you owned the stock today. Even if you sell your position tomorrow, you're still entitled to the dividend if you held the stock on the day it goes ex-dividend. (The term "ex-dividend" literally means "without dividend," meaning the first day you could buy the stock without qualifying for that quarterly pay-out.)
But for the sake of easy accounting, I'm treating dividends in the Model as a sort of account receivable. It's your money; it's just "in the mail" so to speak, so I'm including it in the cash totals when the ex-dividend date arrives. It's easier that way, even though the money isn't actually "in the bank" yet. (In fact, I'm even going to cheat one step further tonight and "deposit" Chevron's dividend for tomorrow so I don't forget it.)
No news today on the Foolish Four, but a powerful market-beating day for three of the four stocks. The fourth, 3M, kept pace pretty well. All in all, a nice way to start the new week.
One other note of interest - the Current Dow Order file in the Dow Statistics Center now includes the updated earnings figures and standings. Enjoy!
Transmitted: 5/13/96
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