Here are three ideas of interest to DITM (Do It To Me) readers:
In one of the family accounts I manage I did a trade earlier this month on Siemens (whose earnings came out today), which pays an Annual Dividend - one of the fine tuning ideas I discussed at the SF Options Group last Saturday-
Bot SI $96.10; STO the April 90 call for $809 (plenty of downside protection)
ex-D was Jan.20 for $404. If/when SI is called in April (3 months)net profit is $585. Dividing net by initial price of stock is 6.08%, or over 24% annualized -for a relatively safe trade; no Hope and very little Fear required.
On Bloomie yesterday an old veteran Technician, Joe Granville, predicted a gloomy 2012: DJIA would drop 1,000 points of Dark every quarter, for a total of 4,000 points, landing the Dow at 8,000 for the year. How to handle this gloomy scenario?:
If you buy the DIA and sell the call 10% lower, you could "Step Down" every quarter to each level and make 100% of your estimated profit. E.g., with the DIA at 126, sell the call $12 lower (114), then the 102 when the DIA hits 114 - then the 90, then the 78! Pretty good risk management for a doomsday scenario.
Finally, I mentioned SeekingAlpha as a good source of dividend stocks. Today's email listed the 2012 Dogs of the Dow:
http://static.seekingalpha.com/uploads/2012/1/22/893960-13272811994744-Zvi-Bar_origin.png
Tuesday, January 24, 2012
Monday, January 23, 2012
DITM (DO IT TO ME):
I was very pleased with the Saturday SF Options Group presentations this past weekend at Fort Mason: a packed house, in spite of the conflict with the TSAA meeting with the Martin Pring group at GGUniv. I, and 3 other DITM adherents, spoke with minimum redundancy (I hope) and conveyed the great record of safety and return from each speaker. SFOG fellow members Don Blesi and Bob Price related their experiences with DITM and John Chernicky talked on some related information. All of the information will be posted soon at the SFBAOG Yahoo website for members -
This past option expiry saw some activity in my accounts:
I had another infrequent loser (my six in 3 years) with TOT, it being both European and an oil company, I bailed by rolling out to lower calls, finally called away Friday for a $365 loss (plus $200 from a put spread hedge).
NOC got called away - not worth rolling out- for an 8% annualized profit over 8 months; CVX ran away from me, but gave me a 10.77% gain, also 8 months.
As mentioned in my talk, my small IRA,the purest DITM account of the 5 family ones I invest in, finished 2011 with a 12.87% REAL (not annualized) gain; my brother's IRA, despite his MRD (minimum required distr.) still gained 9.4%.
My loser #5 - BTE, a Canadian oil company which I gave up on (and shouldn't have), I bought at just over $55 and sold at $43.70, but with the dividend and calls, only lost less than $700 per buy/write, rather than $1200 - after selling it in Sept. (see previous DITM blog) it rallied back to today's $57.28 - higher than when I bought it. Another trade I did (outside of DITM, as it didn't qualify with less than 2% dividend) was CAT - I caught the very top at $111, sold a 105 put to scalp some $$, and it dropped to below 70!! Not giving up, I rolled the puts - bot at $2100, resold at $2200, and 4 more rollouts, until the 105 put expired with CAT at 105.67 Friday. Forget IBD's 8% stop price - Buy And Wait (Not Buy And Hold).
Things should even get better - Barron's cover story this week was The Magic 4%; the belief that stocks have to raise dividends this year, due all the corporate cash and nowhere to put it!
This past option expiry saw some activity in my accounts:
I had another infrequent loser (my six in 3 years) with TOT, it being both European and an oil company, I bailed by rolling out to lower calls, finally called away Friday for a $365 loss (plus $200 from a put spread hedge).
NOC got called away - not worth rolling out- for an 8% annualized profit over 8 months; CVX ran away from me, but gave me a 10.77% gain, also 8 months.
As mentioned in my talk, my small IRA,the purest DITM account of the 5 family ones I invest in, finished 2011 with a 12.87% REAL (not annualized) gain; my brother's IRA, despite his MRD (minimum required distr.) still gained 9.4%.
My loser #5 - BTE, a Canadian oil company which I gave up on (and shouldn't have), I bought at just over $55 and sold at $43.70, but with the dividend and calls, only lost less than $700 per buy/write, rather than $1200 - after selling it in Sept. (see previous DITM blog) it rallied back to today's $57.28 - higher than when I bought it. Another trade I did (outside of DITM, as it didn't qualify with less than 2% dividend) was CAT - I caught the very top at $111, sold a 105 put to scalp some $$, and it dropped to below 70!! Not giving up, I rolled the puts - bot at $2100, resold at $2200, and 4 more rollouts, until the 105 put expired with CAT at 105.67 Friday. Forget IBD's 8% stop price - Buy And Wait (Not Buy And Hold).
Things should even get better - Barron's cover story this week was The Magic 4%; the belief that stocks have to raise dividends this year, due all the corporate cash and nowhere to put it!
Monday, January 16, 2012
THE REAL 1%:
If the "Occupiers" want to effect real change, they should demonstrate in front of the Federal Reserve. Every month, as I look at the left over $$ in my MMF account earning .01%,(and this is before Income Tax, Inflation, and a rapidly declining Dollar), I think of the Trillions of $$ in Pensions, Retirement accounts, CDs, etc. losing buying power. The top quintile of U.S that has disposable income, can put money to risk in stocks and venture capital to widen the gap above the middle class.
This coming Saturday morning, the 21st, I, and a few DITM adherents, are presenting views and actual trading results to the S.F. Bay Area Options Group at Fort Mason. The purest proxy in my DITM trading is my small IRA (99% DITM), which, as of Jan.1, returned 12.78% ACTUAL returns for 2011.
Considering the primary benefit was supposed to be SAFETY (less risk than an Index Fund, due to the safety net of the Call), this is a bit surprising, since it beat most all other asset classes. When one considers that after going through school, raising a family, etc. they have basically 20 years to seriously prepare for retirement, if it happens to be in the current Lost (Double) Decade of Zero rates and Zero stock returns, a struggling Social Security just won't cut it. At least a portion of one's assets must be put at risk, and one must practice fiscal as well as physical fitness to retire well. At last the media is starting to focus on dividend-paying stocks, in its herd-like fashion.
There is a slight learning curve, and trial and error period, to DITM to do it well. I hope to see some of you this weekend.
Here are some sources of dividend stocks:
SeekingAlpha.com/Investing for Income
DividendDetective.com - Harry Domash
Dividend.com - free trial
TheStreet.com
This coming Saturday morning, the 21st, I, and a few DITM adherents, are presenting views and actual trading results to the S.F. Bay Area Options Group at Fort Mason. The purest proxy in my DITM trading is my small IRA (99% DITM), which, as of Jan.1, returned 12.78% ACTUAL returns for 2011.
Considering the primary benefit was supposed to be SAFETY (less risk than an Index Fund, due to the safety net of the Call), this is a bit surprising, since it beat most all other asset classes. When one considers that after going through school, raising a family, etc. they have basically 20 years to seriously prepare for retirement, if it happens to be in the current Lost (Double) Decade of Zero rates and Zero stock returns, a struggling Social Security just won't cut it. At least a portion of one's assets must be put at risk, and one must practice fiscal as well as physical fitness to retire well. At last the media is starting to focus on dividend-paying stocks, in its herd-like fashion.
There is a slight learning curve, and trial and error period, to DITM to do it well. I hope to see some of you this weekend.
Here are some sources of dividend stocks:
SeekingAlpha.com/Investing for Income
DividendDetective.com - Harry Domash
Dividend.com - free trial
TheStreet.com
Tuesday, January 10, 2012
Puts sold to acquire stock for DITM buy/write:
DateSold Symbol # PUT $$
6/1/2011 INTC 3 Jul .21 64 expired 0
6/1/2011 LLY 2 Jul.37 66 expired 0
6/1/2011 HCN 1 Jul.50 30 expired 0
6/3/2011 TAL 2 Jul.30 150 expired 0
6/14/2011 SCCO 1 Jul.31 90 expired 0
7/12/2011 VZ 2 Sep.36 122 expired 0
7/21/2011 LO 1 Aug.105 130 expired 0
7/22/2011 LO 1 Aug.105 110 expired 0
6/9/2011 XTXI 3 Sep.10 184 expired 0
8/16/2011 GE 3 Sep.16 172 expired 0
8/16/2011 DVY 1 Sep.49 110 expired 0
7/22/2011 MAT 3 Aug.26 67 assigned
9/17/2011 GE 3 Dec.16 346 rolled
12/15/2011 GE 3 Mar.16 220net
10/20/2011 NEE 2 Nov.50 270 expired
10/24/2011 KMB 1 Nov.70 125 ex-D Dec.7
12/5/2011 NUE 2 Dec.40 148 ex-d Dec.28?
NY2012
12/23/2011 IP 2 Feb.28 221 ex-D Feb.14
1/3/2012 SCCO 2 Feb.31 320 ex-D Feb.14?
6/1/2011 INTC 3 Jul .21 64 expired 0
6/1/2011 LLY 2 Jul.37 66 expired 0
6/1/2011 HCN 1 Jul.50 30 expired 0
6/3/2011 TAL 2 Jul.30 150 expired 0
6/14/2011 SCCO 1 Jul.31 90 expired 0
7/12/2011 VZ 2 Sep.36 122 expired 0
7/21/2011 LO 1 Aug.105 130 expired 0
7/22/2011 LO 1 Aug.105 110 expired 0
6/9/2011 XTXI 3 Sep.10 184 expired 0
8/16/2011 GE 3 Sep.16 172 expired 0
8/16/2011 DVY 1 Sep.49 110 expired 0
7/22/2011 MAT 3 Aug.26 67 assigned
9/17/2011 GE 3 Dec.16 346 rolled
12/15/2011 GE 3 Mar.16 220net
10/20/2011 NEE 2 Nov.50 270 expired
10/24/2011 KMB 1 Nov.70 125 ex-D Dec.7
12/5/2011 NUE 2 Dec.40 148 ex-d Dec.28?
NY2012
12/23/2011 IP 2 Feb.28 221 ex-D Feb.14
1/3/2012 SCCO 2 Feb.31 320 ex-D Feb.14?
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