Friday, July 27, 2012


The most recent activity in my DITM was outwaiting Waste Management's latest foray into the dumper- from its high  near $40 in 2011 to $27 a few months later.  My trade was an egregious example of how to make a loser become a winner, while earning money doing it. I bought it in May of 2011 at $38.40 and sold the 36 ITM Call 6 months out; as it flushed its way downward, I "stepped down" each expiry until finally this week selling the 32-strike for October '12. If called away then, my net will be $430 instead of a loss of $1200 (200 shares).
Other calls that expired worthless in July were MCHP, ETN, and AYR, and if this recent rally pops them above my previous strike price, I shall step down on these as well.
With another month almost over, and with the recent two day rally popping almost all my position above water, my small IRA - the pure microcosm of DITM with no recent deposits or withdrawals- just hit an all-time high again! Now at $41,450, it has risen over $10,000 since my DITM strategy started in May of '09- up 33%. Not bad for a conservative, safety-net strategy designed to beat zero interest rates.

Monday, July 23, 2012


Option expiration Saturday caused a lot of activity in DITM. My NVS "annual" dividend finally rose above the call to get called away 5 months later ( I was hoping for 1 or 2). Still, the annualized return was over 10%. JNJ getting called away was not as lucrative, but better than MMFs, at 5%.
Several stocks had options slip below the call-away strike and expired worthless: MCHP, ETN, WM, SSO, and AYR. (These are not recoms).
 I'll wait for an UP day and write the same call ABOVE the stock price and accumulate the same dividend, call premium, and hope to get called later.

Tuesday, July 17, 2012


Over the past 3 weeks, not much activity has been needed, as I am still fully invested. Action that did occur was Verizon called away - it has been on a tear lately so rolling over was not an "option".
Although rising stocks provide a cushion for stocks held, they are a negative for starting a new position - however, there are plenty of others out there. I also did a Buy/Write on Dow, and more recently QRE energy - a nice dividend with a bit of call premium. This Friday may produce some available cash, although mostly I shall be rolling out the calls (9 positions expiring).
Analysts are complaining about a "dead money" sideways market, so it is nice to be earning $$ every day - either through a laddered dividend payment or decay of the call option (theta).
Especially having a safety net that earns money (DITM calls), although I still watch the market like a hawk!
I just recapped not only the past 6 months in my small IRA - the purest DITM with no GNMAs, MRD (req. distr.) or contributions (retired). As I reported earlier, only a couple of actual trades this year ( including falling off the "CLIFF" CLF). Still, results from when I started the DITM in May of 2009 (42 months) this DITM proxy has earned @7.7% a year , or 0.64%/month. This included trial-and-error and a learning curve ( annual dividends, selling puts, etc.).
The Chronicle just reported that U.S. families from 2007 to 2011 lost $11T in wealth, or 40% of their total assets.
Best estimate for the rest of the year is positive - based on valuation, cycles and seasonality; see more on Election years for incumbents at my column:

Extremely crude drawing available on demand!

Monday, July 9, 2012


One of the great resources for finding stocks with dividends (and much else) is the free website: One can get on its emailing list for Investing For Income and get daily ideas, reviews, etc.
Reproduced below is a partial column from Richard Shaw - showing

Foreign companies with zero country withholding:
Ticker Company name  Country:
YPFYPF SA (ADR)Argentina TEOTelecom Argentina S.A. (ADR)Argentina TKTeekay CorporationBermuda PREPartnerRe LtdBermuda NATNordic American Tanker LtdBermuda FROFrontline Ltd.Bermuda MRVLMarvell Technology Group Ltd.Bermuda ALTEAlterra Capital Holdings LtdBermuda ENHEndurance Specialty HoldingsBermuda AXSAxis Capital Holdings LimitedBermuda GLNGGolar LNG LimitedBermuda AHLAspen Insurance Holdings LtdBermuda AGOAssured Guaranty Ltd.Bermuda SFLShip Finance International LimBermuda LAZLazard LtdBermuda TGPTeekay LNG Partners L.P.Bermuda SDRLSeadrill LtdBermuda TOOTeekay Offshore Partners L.P.Bermuda VRValidU.S. Holdings, Ltd.Bermuda BIPBrookfield Infrastructure PartBermuda TGHTextainer Group Holdings LtdBermuda TNKTeekay Tankers Ltd.Bermuda ELPComp. Paranaense de EnergiBrazil SIDComp. Siderurgica NacionalBrazil BAKBraskem SA (ADR)Brazil ABVCompanhia de Bebidas dasBrazil VIVTelefonica Brasil SA (ADR)Brazil GGBGerdau SA (ADR)Brazil UGPUltrapar Participacoes SA (ADRBrazil PBRPetroleo Brasileiro SA (ADR)Brazil CIGCompanhia Energetica MinasBrazil FBRFibria Celulose S.A. (ADR)Brazil BRFSBRF Brasil Foods SA (ADR)Brazil OIBROi SA (ADR)Brazil VALEVale SA (ADR)Brazil SBSComp. de Saneamento BasicoBrazil ITUBItau Unibanco Holding (ADR)Brazil BBDBanco Bradesco SA (ADR)Brazil GOLGol Linhas Aereas InteligentesBrazil CPLCPFL Energia S.A. (ADR)Brazil TAMTAM S.A. (ADR)Brazil CZZCosan Limited(ADR)Brazil BSBRBanco Santander (Brasil) (ADBrazil HLFHerbalife Ltd.Cayman Islands CIBBancolombia S.A. (ADR)Colombia ECEcopetrol S.A. (ADR)Colombia CHLChina Mobile Ltd. (ADR)Hong Kong CEOCNOOC Limited (ADR)Hong Kong FMCNFocus Media Holding Ltd (ADRHong Kong ASRGrupo Aeroportuario del SuresMexico CPACopa Holdings, S.A.Panama BTBT Group plc (ADR)United Kingdom ESVENSCO PLCUnited Kingdom GSKGlaxoSmithKline plc (ADR)United Kingdom RIORio Tinto plc (ADR)United Kingdom BCSBarclays PLC (ADR)United Kingdom VODVodafone Group Plc (ADR)United Kingdom ULUnilever plc (ADR)United Kingdom BTIBritish American Tobacco PLCUnited Kingdom AZNAstraZeneca plc (ADR)United Kingdom DEODiageo plc (ADR)United Kingdom HBCHSBC Holdings plc (ADR)United Kingdom BPBP plc (ADR)United Kingdom NGGNational Grid plc (ADR)United Kingdom AAUKY.PKAnglo American plc (ADR)United Kingdom PUKPrudential Public Ltd Comp.United Kingdom TSCDY.PKTesco PLC (ADR)United Kingdom PSOPearson PLC (ADR)United Kingdom CUKCarnival plc (ADR)United Kingdom WSHWillis Group Holdings PLCUnited Kingdom IHGInterContinental Hotels GroupUnited Kingdom BBLBHP Billiton plc (ADR)United Kingdom XRTXXyratex Ltd.United Kingdom RDS.BRoyal Dutch Shell plc (ADR)United Kingdom

Monday, July 2, 2012


As I reported recently the closed trades from 2011 (opened in 2011), I was also going to post the same for the first half of 2012 - until I realized I only closed two trades: one being the dis-ass-ter of Cliff Resources (CLF), and the other profitable. Seems I've been rolling out positions into future months - mainly due to a sluggish market.
In Barron's this weekend, Buckingham of the Prudent Speculator (the late Al Frank's fund), who is also a Fundamental guru, named his most undervalued stocks - many of which, I happily state, are in my 24-stock portfolio: HAS, ETN,EXC,TOT,WM,AND NM. Food for thought.