Finance, Food, Fun & Other Stuff: July 2013

Monday, July 22, 2013

Results for Week Ending July 20, 2013

Good day all!

I had a pickleball tournament this weekend and had a great time, more on this later.

ANALYSIS

Here is the trade we had on last week:

Sold GOOG 965 Call $ 3.84

Bought GOOG 960 Call $(3.44) This gave a 8% ROI

This might seem like a little bit of a gamble at first because we put this trade on when GOOG was going into earnings. But it really wasn’t much of a risk. The price has been butting up against the 200 Day SMA for some time now and looks to continue this pattern. The trade was put on almost 3 Std. Dev. above the strike price and almost 1.5 Std. Dev. above the all-time high for the stock. Also there was a pre-announcement leak that GOOG would deliver earnings below what the street was expecting (it turned out that the earnings were well below expectations, but were 19% increase year over year on a quarterly basis. This kinda shows that the analysts were way high in the expectations of GOOG this quarter.) When the earnings announcement did come out on Thursday after the market closed and confirmed the leak GOOG was hammered and that pretty much delivered our winning trade for the week.

PAPER TRADE

There are no paper trades on at this time.

COVERED CALLS

We still have our covered calls on Vivus and CBI again.

Symbol Company Stock Option Premium Initial Annualized

VVUS Vivus 13.67 July14 .20 2,676.00 8.96%

CBI Chicago Bridge

These are the completed covered call trades this year:

Symbol Month Premium Month ROI Ann Month ROI Cum Prem Cum An ROI

VVUS January $32 1.19% 14.35% $32 14.35%

VVUS February $63 2.35% 25.25% $95 21.30%

VVUS March $28 1.05% 12.56% $123 13.79%

VVUS April $29 1.08% 13.00% $152 17.04%

VVUS May $44 1.64% 11.51% $196 14.64%

VVUS June $16 0.597% 7.17% $212 15.84%

VVUS July $20 0.747% 8.96% $232 14.86%

CBI January $50 1.12% 13.39%

CBI March $125 2.31% 27.73% $175 12.94%

CBI April $230 4.05% 48.67% $405 7.14%

CBI June $45 0.831% 9.98% $450 8.42%

VVUS – We are breaking out of the $10-$12 range and into the $13-16 range. Well during this past week the stock again dipped below our strike price. So as we keep getting not called away we will keep If this holds we will probably be called away. That would be ok. We will have recovered part of the massive loss at the price drop. We can then use the loss to offset some of the capital gains we have accumulated this year.

CBI – We are in a good zone for this one. We haven’t put on a covered call here for a while as the option premium just hasn’t been there. If it is not there this time around we might consider selling a put on the shares if it looks good on that side. The stock has performed very well this year. Now the drying up of the premium. Right now there is not enough premium to put on a covered call trade.

This is the cumulative covered call results for 2013:

Symbol Invested $ Option Prem Call Away Div Total Return

VVUS $2,676.00 $ 232 $232 8.67%

CBI $4,480.00 $ 50 $320 $370 8.26%

CBI $5,409.00 $ 400 $ 91 $10.00 $501 9.35%

Totals $12.925.00 $682 $411 $10.00 $1,083 8.38%

DIVIDEND STOCKS

Here are the two portfolios updated.

This portfolio is an income portfolio made up of 100 shares of each stock. These stocks are some blue chips, some Business Development Companies (BDCs), Closed End Funds (CEFs) and some small caps that look like they will grow. Some of these I have talked about before, some not. I will give a brief note on each of them in the coming weeks:

Ticker Name Buy Current Div Pay Div

Price Price Date Yield

PSEC Prospect Capital 10.68 11.04 07/29/2013 11.96%

AGD Alpine Global Dynamic 4.84 4.77 07/29/2013 7.43%

TCPC TCP Capital 15.28 16.80 07/29/2013 8.99%

MO Altria 34.26 37.15 10/10/2013 5.17%

T ATT 37.34 35.81 08/01/2013 4.82%

ARCP Am. Realty Capital 16.69 14.76 09/15/2013 5.37%

GLAD Gladstone Capital 8.98 8.68 07/31/2013 9.35%

STI Sun Trust Bank 29.37 34.83 09/14/2013 1.36%

WFC Wells Fargo 37.74 44.45 09/01/2013 3.18%

KKR KKR & Co Units 20.77 20.91 08/21/2013 6.39%

Buy Price Portfolio Value = $21,595.00

Current Price Portfolio Value = $23,081.25

Gain/(Loss) So Far = $1,186.25

Portfolio Return = 6.14%

Dividends Received So Far = $203.24

Portfolio Return w/ Dividends = 7.82%

Current Prices as of 07/20/2013 Closing Price

We keep our dividend moat portfolio. I have made the new portfolio as a way to show that a good return can come from another type of dividend model besides the moat philosophy. All the new equities are well rated in their business area and are quite strong companies. The financials look great so the dividend payout is relatively safe. Also many of the new equities must pay out most of their earnings to keep their tax status. Slow and steady climb with this portfolio. This past week many of the stocks in the portfolio paid the quarterly dividend. Total return is now over 8% with the portfolio portion at almost 7%. This is great! This portfolio is showing my primary philosophy with stocks – buy great companies on sale and then let them ride.

Here is how Portfolio #2 shakes out:

Ticker Name Buy Current Div. Pay

Price Price Date Shares

KO Coke 36.89 41.09 10/01/2013 137.800

AGD Alpine Global Dynamic 5.76 4.77 07/29/2013 994.710

AOD Alpine Total Dynamic 4.37 4.04 07/29/2013 1,274.571

MO Altria 34.26 37.15 07/10/2013 152.562

INTC Intel 22.87 23.02 09/01/2013 242.196

HIX Western Asset Hi Inc II 10.53 8.99 07/22/2013 531.753

MCD McDonald’s 91.74 100.27 09/15/2013 55.964

MSFT Microsoft 28.55 31.40 09/13/2013 184.025

JNJ Johnson and Johnson 68.03 92.23 09/12/2013 72.098

PG Proctor and Gamble 68.72 81.37 08/15/2013 73.080

Buy Price Portfolio Value = $51,996.01

Current Price Portfolio Value = $55,565.73

Gain/(Loss) So Far = $3,569.72

Dividends Received So Far = $973.10

Dividend ROI = 1.87%

Stock Return = 4.99%

Total Return = 6.87%

Coke (KO) delivered disappointing earnings this week as well as Microsoft (MSFT). Coke took an initial hit then rebounded back to even for the week. Microsoft took a 10% price hit Thursday but still is profitable and still generating cash like nobody’s business. Both of these businesses fundamental reason for being in our portfolio has not changed. Both are generating tons of cash each quarter and hold dominant positions in their markets. Yes people are drinking less soda and are not getting as many PCs as before. But both Microsoft and Coke are still holding their dominance with Coke also putting out bottled juices and water and Microsoft hitting hard the X-Box and cloud computing.

Here is the watch list. Our three keys make getting on the list and then getting into the portfolio rather difficult. Here are the three keys: (1) a moat business model, (2) dividend of at least 3%, (3) solid fundamental analysis numbers.

Ticker Recent Date Div Target

Name Price Yield Price

COP ConocoPhillips 66.00 4.53% 58.00

BAC Bank of America 14.75 0.35% 11.00

BRKB Berkshire Hath B 118.90 No Div Pd 100.00

FUN Cedar Fair 42.27 4.85% Up to $45

ConocoPhillips – This stock has great potential as the move significantly higher as the recent earnings was good and it has beat the street consistently.

Bank of America –This stock is keeping up a pattern of growing revenues and earnings after nearly collapsing in the banking crisis. This is a stock that I wish I had gotten into at this time last year at around $4.00

Berkshire Hathaway B Class – This is the way more affordable way to get into Berkshire Hathaway and Warren Buffett than the $150K+ regular Class A shares. Over any period of time 2years or greater an investment in Berkshire has made money. This past year (2012) the S&P beat Berkshire, only the 5^th time that has happened in the history of Berkshire – over 40 years. So this is one that is purely price appreciation. DISCLOSURE – I own this in my personal stock portfolio –one of the few stocks I do own.

Cedar Fair- This stock has Cedar Point as well as several regional amusement parks. It has been doing really well this year. I wish I had gotten into this one at the beginning of the year when I first came across it.

So far we are using the week’s downtrend to get closer to our target prices. Overall we are doing well with the two portfolios and I am very pleased.

QUESTIONS

All charts from freestockcharts.com. This is not a paid endorsement. They are a good free app that only asks for credit on their charts when you use them.

DISCLAIMER: Hashley Capital Management, LLC; as well as I are not giving any trading advice. All data is historical in nature and is intended for use as an educational tool. Trading in stocks and/or options is risky and can result in loss of capital. Stocks and options carry inherent risks and should be well researched before any buy/sell decision is made. There is no attempt to sell any brokerage services or act as a broker or dealer by Hashley Capital Management, LLC. Any forward looking comments on this blog are not attempts to solicit business for Hashley Capital Management, LLC and are the opinion of Hashley Capital Management only. If you choose to follow the same path and invest in the strategies and trades used by Hashley Capital Management, LLC after doing your own due diligence, that is your decision and yours alone.

Reach me @:

Email: hashleycm@yahoo.com

Twitter: @awagel01

Stocktwits: awagel01

Or leave a comment on the blog

TTFN

Ash

Tuesday, July 16, 2013

Results for week ending July 12, 2013

Hey,

This past week was an interesting week. Option premium has been way down for a few weeks now, so the past couple of weeks we did some directional trades. This week we did that again at the end of the day Wednesday after Mr. Bernacke’s speech was pretty encouraging to the markets. We did our buy as the price started to increase at the end of the day.

ANALYSIS

Here is the trade we had on last week:

GLD 122.00 Call Bought at $0.07 on Wednesday afternoon

GLD 121.00 Call Sold at $0.34 on Thursday afternoon This gave an ROI of 485%

I was not expecting that big of a move, but Thursday morning there was a big jump in the spot gold price. That put a $3 move on the GLD and secured our profit. Most of the $3 move was in the pre-market so right at the beginning of trading we had the sharp move. When this sharp move was made that told me it was time to get out.

Now this goes against our basic trading platform. But this iw why we die the trade.

1. The individual option was at $7 a contract ($.07 a share * 100 shares = $7). This is very cheap so we would not be out much money if this did not pan out.

2. Each time for the past five times after a positive Bernacke speech the GLD has gone up. So we had some history on our side.

3. With little time till expiration any move up would probably make a large move up in option price.

PAPER TRADE

There are no paper trades on at this time.

COVERED CALLS

We still have our covered calls on Vivus and CBI again.

Symbol Company Stock Option Premium Initial Annualized

VVUS Vivus 14.49 July14 .20 2,676.00 8.96%

CBI Chicago Bridge

These are the completed covered call trades this year:

Symbol Month Premium Month ROI Ann Month ROI Cum Prem Cum An ROI

VVUS January $32 1.19% 14.35% $32 14.35%

VVUS February $63 2.35% 25.25% $95 21.30%

VVUS March $28 1.05% 12.56% $123 13.79%

VVUS April $29 1.08% 13.00% $152 17.04%

VVUS May $44 1.64% 11.51% $196 14.64%

VVUS June $16 0.597% 7.17% $212 15.84%

CBI January $50 1.12% 13.39%

CBI March $ 125 2.31% 27.73% $175 12.94%

CBI April $230 4.05% 48.67% $405 7.14%

CBI June $45 0.831% 9.98% $450 8.42%

VVUS – We are breaking out of the $10-$12 range and into the $14-16 range. If this holds we will probably be called away. That would be ok. We will have recovered part of the massive loss at the price drop. We can then use the loss to offset some of the capital gains we have accumulated this year.

CBI – We are in a good zone for this one. The stock has performed very well this year. Now the drying up of the premium. Right now there is not enough premium to put on a covered call trade. I am thinking of putting on a covered call on this for July still, but will wait until later in the week of the 15^th during expiration week.

This is the cumulative covered call results for 2013:

Symbol Invested $ Option Prem Call Away Div Total Return

VVUS $2,676.00 $ 212 $212 7.92%

CBI $4,480.00 $ 50 $320 $370 8.26%

CBI $5,409.00 $400 $ 91 $5.00 $496 9.17%

Totals $12.925.00 $662 $411 $5.00 $1,078 8.34%

DIVIDEND STOCKS

Here are the two portfolios updated.

Ticker Name Buy Current Div Pay Div

Price Price Date Yield

PSEC Prospect Capital 10.68 10.89 07/29/2013 11.96%

AGD Alpine Global Dynamic 4.84 4.67 07/29/2013 7.43%

TCPC TCP Capital 15.28 16.67 07/29/2013 8.99%

MO Altria 34.26 36.92 07/10/2013 5.17%

T ATT 37.34 35.81 08/01/2013 4.82%

ARCP Am. Realty Capital 16.69 14.60 09/15/2013 5.37%

GLAD Gladstone Capital 8.98 8.54 07/31/2013 9.35%

STI Sun Trust Bank 29.37 33.97 09/14/2013 1.36%

WFC Wells Fargo 37.74 42.63 09/01/2013 3.18%

KKR KKR & Co Units 20.77 20.46 08/21/2013 6.39%

Buy Price Portfolio Value = $21,595.00

Current Price Portfolio Value = $22,674.99

Gain/(Loss) So Far = $1,079.99

Portfolio Return = 4.26%

Dividends Received So Far = $203.24

Portfolio Return w/ Dividends = 5.00%

Current Prices as of 07/12/2013 Closing Price

We keep our dividend moat portfolio. I have made the new portfolio as a way to show that a good return can come from another type of dividend model besides the moat philosophy. All the new equities are well rated in their business area and are quite strong companies. The financials look great so the dividend payout is relatively safe. Also many of the new equities must pay out most of their earnings to keep their tax status. slow and steady climb with this portfolio. This past week many of the stocks in the portfolio paid the quarterly dividend. Total return is now over 8% with the portfolio portion at almost 7%. This is great! This portfolio is showing my primary philosophy with stocks – buy great companies on sale and then let them ride.

Here is how Portfolio #2 shakes out:

Ticker Name Buy Current Div. Pay

Price Price Date Shares

KO Coke 36.89 41.03 10/01/2013 137.800

AGD Alpine Global Dynamic 5.76 4.67 07/29/2013 994.710

AOD Alpine Total Dynamic 4.37 4.01 07/29/2013 1,274.571

MO Altria 34.26 36.92 07/10/2013 152.562

INTC Intel 22.87 23.90 09/01/2013 242.196

HIX Western Asset Hi Inc II 10.53 8.99 07/22/2013 531.753

MCD McDonald’s 91.74 101.58 09/15/2013 55.964

MSFT Microsoft 28.55 35.61 09/13/2013 184.025

JNJ Johnson and Johnson 68.03 89.99 09/12/2013 72.098

PG Proctor and Gamble 68.72 81.55 08/15/2013 73.080

Buy Price Portfolio Value = $51,996.01

Current Price Portfolio Value = $56,308.55

Gain/(Loss) So Far = $4,312.54