Friday, August 10, 2012

23 SKIDOO!! :

Schwab called today to inform me, per usual, that a stock had been "called" away - Seagate Technology (STX) - it was called on Thursday, August 9 since its ex-Dividend date is the 10th. The Call was a Sept. 26, so more than a month compression - the annualized yield (after 4 months holding) is 23.2%. Slightly better ! than MMFs .01% or Treasurys, with less risk. STX is at $33 and climbing. Actually, the yield was more like 16% after finding an error!
Also paying today was QR Energy, which was traded recently with a November call. QRE went ex-D on July 26 with a 11.1% dividend yield, and $.35 extrinsic premium (enough to make the trade worthwhile if immediately called). Hopefully the October 26 dividend will be paid, or the call will be rolled forward to Feb. 2013, depending on future price action. The chart is a typical Wyckoff selloff and Trading Range, enhancing the dividend.
So far this year, despite a lousy 2nd Quarter market, and a rare loser - SVU - the small model IRA is on a 8.6% annualized pace, about even with the S&P 500, without the unhedged risk. BTW - this pure proxy account for DITM is making new all-time highs while the markets are not.
The Ned Davis Research chart, which I wrote about in my Examiner.com column: 
shows that since 1900,  all markets tend to rise into Oct. 1, with the overall trend, and the incumbent-losing trend continuing up until year end - only with the incumbent (Obama) losing, does the market tank precipitously in mid-October, never to rise for the balance of the year.

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