Friday, November 16, 2012


If PRO is the opposite of CON, what is the opposite of PROgress?
Even Bowles and Cranston are leery of avoiding the Jan.2 deadline, and the dividend tax hike is taking its toll, as well as yearend institutional window dressing of funds.

The DITM portfolio is nervously, but only slightly, under water - so I am holding onto all my positions at this level. I expect (as with today's Thanksgiving tongue-biting appeasement by both parties- why do they call them parties?- ) that stocks will rally before Dec.31.

Still, the only real flaw of DITM is a Bear market, of which there have been either 1 or 2 each decade since 1900. Tomorrow I give a talk on hedging for this possibility to the S.F. Options Group.

November option expiry only saw one Call expiring - others have been rolled out- as is the case with WMB. I rolled down a call from 30 to May 29 (after rolling it up from 28 earlier. If called away then, it will have been a 14 month hold, for an (annualized) gain of 12.35%. WMB still looks like a stable stock in a good Sector.

Although VNR and PWE looks exceptionally ugly, I sold puts today to take on more stock before their ex-dividend date. 

Wednesday, November 7, 2012


Despite a January Call sold on AHGP ( Alliance Holding) - it was called away along with Mitt Romney.  Annualized for the 3 months holding, I received 14.19%.
Carly Fiorina summed up the future pretty well last nite - Same-old,Same-old. Dems in the Pres. and Senate, Repubs with the no-tax pledge in the House - looks like a lot of the Fiscal Cliff might happen- Obamacare, etc. I would be hedged or out of the markets for 2013-14, even with DITM.

Monday, November 5, 2012


It has been awhile since the last update, with seasonal vacations taking priority. But during that spell the DITM-model "small" IRA set a new high (adjusted for withdrawals before DITM started). This, despite 3 of my 6 current positions slightly under water with October's malaise - while taking dividends and rolling out call positions.
Most recent was the "calling" away of APL before the next dividend. Annualized return after exactly 6 months was...23.88%. This helps make up any rare plungers such as Vale, CLF, With well over a hundred trades in the past 3 1/2 years, only a handful of these plungers (BP, UVV, come to mind) lost money, with a couple I could have ridden out.
APL, with a cost of $7169 in May 1 (200 shares) returned $810 in call premium and $224 in dividends, for  a net of $856 (divided by 7169 to annualize). Not bad considering the safety net of the lower call. 
Other callaways were QRE for 14.876% and LINE for only 8.24%; IRM was only 5.6% but HUN gained 40% (annualized) over a 3 month holding.
With the sideways markets there have been mostly rollouts, so not enough data to provide a recap of 2012 yet. Stay tuned.