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 6th 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 5th 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
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TTFN
Ash
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