Watching Costco...But Not for a Trade
I own Costco long term. After I spent $300 there on my first shopping trip, without even realizing it, I knew they had a winning game plan. I'm a tough consumer and it's really hard to gain my loyalty-but Costco did just that.
This morning I just received my $7 dividend and the stock adjusted accordingly. Now it's time to watch and see if selling pressure mounts or if Costco can continue on its merry way. Costco was on of the first to announce a special dividend. It paid a large special dividend and was one of the first to distribute. This is exactly why we are watching Costco. It's not only about the stock. It's going to be an indicator about long term investor behavior in my opinion. Were people holding for the special dividiend? Or are they really long term players?
IF Costco remains stable it could mean that the impact of going over the fiscal cliff (which I beleve is where we are going) could have little impact on the overall health of strong companies like a Costco, Coke, Walmart, etc.
However, if a selloff begins watch out below. Speculative names will lead the decline with blue chips still seeing a bit of pain. But once a deal is reached it could spell the best buying opportunity for all of 2013 following that downturn.
Just my opinion and I don't pretend to be right all the time.