My Cunning Plan Is On Hold

Last week I wrote that my cunning plan was working.  This is no longer, strictly speaking, true. 

I had decided to sell my 1,600 shares in MIND CTI Ltd (MNDO) for $2.51 per share.  There's only one problem:  No one wanted to buy at that price.  The highest price the stock has managed to attain since my decision was $2.44.

So I didn't sell.  Since then the ex-dividend date and record date for MIND CTI has passed.  This means that if someone were to buy the stock today then that buyer would NOT get the healthy annual dividend that one could get if one bought the stock before the 12th of March.

Here's a little something I wrote in the previous column:

If I don't sell by then, though, I'm going to cancel my sell order for 1,600 shares, take the dividend on the pay date of March 28th, automatically invest that dividend in 100+ additional shares, and then put in a new sell order for 1,700+ shares (possibly for as low as $2.36 a share). 

That's the plan.  And I was feeling pretty good about the plan.  Until last Friday when MIND CTI closed at $1.88 a share, after an intra-day low of $1.86.  That's not much more than I paid for it.

My plan of selling for $2.36 a share now seems overly optimistic.

I've sat down and done the math.  My break-even point is $1.69 a share.  If the stock is at that price when my dividend is automatically reinvested then I'll get another 170 shares, giving me a total of 1,770 shares.  If I can sell those shares for $1.69 each then I'll make a net profit (after all my trading fees, etc.) of $10.

That's not impressive, but at least I'm not losing money.

The upshot is that my sell order has been cancelled for now.  I'm going to get my additional shares and then re-assess.  If I can sell my shares in MIND CTI Ltd for $2.36 or more then I'll definitely go ahead and cash out.  If the price drops below $1.69 a share then I definitely won't cash out.  At that point I'll just hold on to my shares until next year's dividend, probably.

I don't know what I'll do if the price is halfway in-between.

The dividend should be paid no later than the 29th, and I'll end up taking some kind of action - or inaction - no later than the 30th.  I'll let you know what ends up happening with my cunning plan.

In the meantime I'll try to find something else about which to write between now and then.  Questions and comments are always welcome.