Results for Week Ended August 16, 2013

Hey,

Ok, we stayed with the GLD yet again this week.  But we did something a lot different.  We did a directional trade as we watched the market go down as GLD went up then we tried the directional trade to follow the trend.

School starts for the younger two kids Monday morning.  They have a half day the first day and then the rest of the week is a full day.  Hard to believe the summer is over already.

ANALYSIS

Dow Jones Index Weekly Chart

GLD Weekly Chart

Here is the trade we had on last week:

Bought             GLD    129.50  Call      $ (0.07)

Sold                 GLD    129.50  Call      $  0.44  This gave a 528.57% ROI

This is a trade that I do not do often.  I only risked $175 on this trade for 25 contracts.  But we did well with this making $37 per contract for $925.  I did only a minimum amount of contracts and risked $ because this is not a trade I do very much.  So if it went wrong I didn’t have that much exposure.

Here is the chart action and rationale behind the trade:

1.      Most of the week the price stayed almost the same.

2.      When the US stock price action dropped as a result of the US interest rate increases the GLD price along with gold started to rise.

3.      The second day of the price decline in stocks was on Thursday.  That is when I put on the trade.  I bought early in the morning and sold just before the close. 

4.      Starting Tuesday afternoon the Dow started losing traction ultimately falling 15,483 to 15,082 – 400 points this week.  This time the GLD acted like it should, when the Dow drops big GLD goes up. 

5.      Wednesday was a big pop that I didn’t do because I was trying to determine market direction.  While I waited to see the option premium on the put side disappeared.  Also as I was waiting to see if the direction had indeed changed the rest of the stocks and ETFs option premium disappeared as well.  This meant the only way to do anything at all was a directional trade.

6.      The only place I was comfortable with was the GLD.

7.      So shortly after the market opened on Thursday I put on the trade.

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       12.28      Aug16       .33                  2,676.00         14.79%

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%      

VVUS     Aug             $33        1.233%                 14.79%                  $265            14.85%     

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 have made a good deal of option premium on this stock, I just wish that we had gotten into this stock at a lower entry.  We are losing our shirt on this right now due to a poor entry point.  All the analysts following this stock have rated it at least a “Hold” with no analyst rating it an ”Underperform” or “Sell”.  This seems odd to me as the stock has lost literally halsf its value over the past year.  This is our speculative play so that is why I keep it.  We are getting great dividend income from it even with the high entry point.             

CBI – We did not put on a covered call this month.  Just could not get the risk/reward to go in our favor.  I am looking at on for the September expiry.    

This is the cumulative covered call results for 2013:

Symbol           Invested $       Option Prem     Call Away    Div     Total     Return

VVUS             $2,676.00        $ 265                                                   $265     9.90%

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  $1,116  8.63%

So far we are having a good year with the covered call portfolio.  8.63% return is a good show for the year.  That 12.95% return for the year.  I will take that any day of the week!!

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      10.89       08/29/2013         11.96%

AGD   Alpine Global Dynamic    4.84        4.64       08/29/2013          7.43%

TCPC  TCP Capital                    15.28      15.11       08/29/2013          8.99%

MO      Altria                              34.26      34.29       10/10/2013          5.17%

T          ATT                                37.34      34.18       11/01/2013          4.82%

ARCP  Am. Realty Capital         16.69      12.94       09/15/2013          5.37%         

GLAD Gladstone Capital              8.98       8.34       08/31/2013          9.35%

STI    Sun Trust Bank                  29.37     34.60        09/14/2013          1.36%

WFC  Wells Fargo                        37.74     42.75       09/01/2013          3.18%

KKR KKR & Co Units                 20.77     19.37       08/21/2013          6.39%

Buy Price Portfolio Value =             $21,595.00

Current Price Portfolio Value =      $21,960.29

Gain/(Loss) So Far =                             $365.29

Portfolio Return =                                     1.69%

Dividends Received So Far =                 $305.32

Portfolio Return w/ Dividends =               3.11%

Current Prices as of 08/16/2013 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      39.05       10/01/2013         137.800

AGD   Alpine Global Dynamic     5.76        4.64       08/29/2013       1,001.005

AOD   Alpine Total Dynamic        4.37        4.02       08/29/2013      1,283.110

MO      Altria                                34.26      34.29       10/10/2013         152.562

INTC   Intel                                  22.87      21.92       09/01/2013         242.196

HIX    Western Asset Hi Inc II     10.53       8.84       08/22/2013         531.753       

MCD   McDonald’s                      91.74     95.03       09/15/2013           55.964

MSFT  Microsoft                          28.55     31.80       09/13/2013         184.025

JNJ      Johnson and Johnson         68.03    89.37        09/12/2013           72.098

PG       Proctor and Gamble           68.72    79.90        11/15/2013           73.638

Buy Price Portfolio Value =             $51,996.01

Current Price Portfolio Value =      $53,922.16

Gain/(Loss) So Far =                           $1,926.15

Dividends Received So Far =               $1,080.96

Dividend ROI =                                       2.08%

Stock Return =                                         1.63%

Total Return =                                         3.70%      

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            67.38                                                   4.53%         58.00

BAC    Bank of America         14.42                                                  0.35%         11.00

BRKB Berkshire Hath B        115.24                                                 No Div Pd       100.00

FUN    Cedar Fair                   43.55                                       4.85%         Up to $45

VOC   VOC Energy Trust      15.10                                       10.94%       Up to $14.75                               

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.

VOC Energy Trust – This is an MLP that is called a statutory trust.  This means that is will only be around for a finite time before it must terminate.  If there is still income coming in when the termination date happens there most likely will be another statutory trust formed to take advantage of that or the company will turn itself into a conventional MLP.  This company holds oil and gas interests in Texas, Kansas and Oklahoma.  It hit a dry well earlier this year which is the reason of the income drop so far this year.  Again this company is generating lots of cash and will still turn out dividends at a nice rate.  With the WTI (West Texas Intermediate)oil price now approaching the Brent price (VOC largely gets paid the WTI price for its oil) and it looks like it will be doing that for some time to come the cash stream looks good for this company.  Getting in at a ceiling of $14.75 would be a great thing for good income for years to come.

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

Results for Week Ending August 8, 2013

Hey all,

Ok, we stayed with the GLD again this week.  GLD basically treaded water this week and so we kept our bearish bias by doing a call spread.  This treading water did not end the slow downward slump for GLD and we are expecting it to continue.

Eldest daughter got her learner’s permit this past week.  Very happy for her.  She has been saving up for a car and now she will be able to drive it!!

Other two are gearing up for school to start.  A week from Monday and they are back at it.  It seems so hard to believe that it is that time of year already.  Summer has gone by sooo fast.

GLD 1 Month Price Chart

GLD 1 Month Price Chart 

GLD 1 Week Price Chart

ANALYSIS

Here is the trade we had on last week:

Sold                 GLD    129.50  Call      $ 0.08

Bought             GLD    130.50  Call      $(0.04)  This gave a 4% ROI

There are several ideas in the chart that show this was a good trade to put on:

1.      The 200 Day SMA stayed negative this week.

2.      The 50 Day SMA turned slightly positive and crossed the 200 Day SMA Friday afternoon but that was more of a function of the Tuesday and Wednesday price action rather than any turning of a trend.  The 200 Day SMA is in a definite down slide

3.      Price is hovering on the 50 Day SMA and has been above the 200 Day SMA for about 14 days.  The 200 Day SMA is at 148.11 as of close Friday.

4.      Looking at the 3 Month Price Chart the market price broke through the lower Bollinger Band significantly in the latter part of June and has not broken through to the top side yet.

5.      Bringing the chart down to the 1 Month level we still have a breakout on the bottom Bollinger Band around the 6^th of August and not a break to the upside until a slight break on Friday and the price quickly retreated back down. 

6.      The week opened with the price at 126.46 and closed with the price 126.85, a .39 move for the week.  This is basically flat.  For us to change from a bear bias to a bull bias I need more than a .39 move and it needs to be over more than one week.

7.      The 2 week price move is 128.4 – 126.85 and the 3 week price move is 127.64 – 126.85.  So we are slowly dropping lower over a long period of time.  A 6month move is from about 141 down to 127 and that trend shows no sign of letting up. 

8.      So for all the reasons above we are sticking with our bearish bias writing call spreads as far up the option chain as we can.

9.      This time the 129.5 was right at the 1.5 Standard Deviation mark we use.

10.  We were able to hold our 3% minimum, but just barely. 

11.  Again, all of our other equities/ETFs really didn’t have any margin all that met our trading requirements.  All the others were at $0 spread at less than 1 standard deviation away from the strike 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       13.60      Aug16       .33                  2,676.00         14.79%

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 have a week to go until expiration and I think we are safe here.  We are keeping the $13-16 range.  As long as this trend keeps up we will just keep plugging along and collect premium.           

CBI – We did not put on a covered call this month.  Just could not get the risk/reward to go in our favor.  I am looking at on for the September expiry.  We will see how the risk/reward looks at the end of next week.  

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      10.86       08/29/2013         11.96%

AGD   Alpine Global Dynamic    4.84        4.83       08/29/2013          7.43%

TCPC  TCP Capital                    15.28      15.39       08/29/2013          8.99%

MO      Altria                              34.26      35.37       10/10/2013          5.17%

T          ATT                                37.34      34.80       11/01/2013          4.82%

ARCP  Am. Realty Capital         16.69     13.82        09/15/2013          5.37%         

GLAD Gladstone Capital              8.98       8.83        08/31/2013          9.35%

STI    Sun Trust Bank                  29.37     34.97        09/14/2013          1.36%

WFC  Wells Fargo                        37.74     43.23       09/01/2013          3.18%

KKR KKR & Co Units                 20.77     20.15       08/21/2013          6.39%

Buy Price Portfolio Value =             $21,595.00

Current Price Portfolio Value =      $22,480.00

Gain/(Loss) So Far =                           $1,190.31

Portfolio Return =                                     4.10%

Dividends Received So Far =                 $305.32

Portfolio Return w/ Dividends =               5.51%

Current Prices as of 08/09/2013 Closing Price

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      40.16       10/01/2013         137.800

AGD   Alpine Global Dynamic     5.76        4.83       08/29/2013       1,001.005

AOD   Alpine Total Dynamic        4.37       4.04        08/29/2013      1,283.110

MO      Altria                                34.26      35.37       10/10/2013         152.562

INTC   Intel                                  22.87      23.26       09/01/2013         242.196

HIX    Western Asset Hi Inc II     10.53       8.78       08/22/2013         531.753       

MCD   McDonald’s                      91.74     97.62       09/15/2013           55.964

MSFT  Microsoft                          28.55     32.70       09/13/2013         184.025

JNJ      Johnson and Johnson         68.03    92.36        09/12/2013           72.098

PG       Proctor and Gamble           68.72    81.64        08/15/2013           73.080

Buy Price Portfolio Value =             $51,996.01

Current Price Portfolio Value =      $55,357.09

Gain/(Loss) So Far =                           $3,389.41

Dividends Received So Far =               $1,036.35

Dividend ROI =                                       1.99%

Stock Return =                                         4.47%

Total Return =                                         6.46%      

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            66.83                                                   4.53%         58.00

BAC    Bank of America         14.45                                                  0.35%         11.00

BRKB Berkshire Hath B        116.71                                                 No Div Pd       100.00

FUN    Cedar Fair                   44.09                                       4.85%         Up to $45

VOC   VOC Energy Trust      15.35                                       10.94%       Up to $14.75                               

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.

VOC Energy Trust – This is an MLP that is called a statutory trust.  This means that is will only be around for a finite time before it must terminate.  If there is still income coming in when the termination date happens there most likely will be another statutory trust formed to take advantage of that or the company will turn itself into a conventional MLP.  This company holds oil and gas interests in Texas, Kansas and Oklahoma.  It hit a dry well earlier this year which is the reason of the income drop so far this year.  Again this company is generating lots of cash and will still turn out dividends at a nice rate.  With the WTI (West Texas Intermediate)oil price now approaching the Brent price (VOC largely gets paid the WTI price for its oil) and it looks like it will be doing that for some time to come the cash stream looks good for this company.  Getting in at a ceiling of $14.75 would be a great thing for good income for years to come.

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