Hey,
Now that
the Federal Government has temporarily averted the latest fiscal crisis we can
start doing some options trading again.
Now there were some ideas out there, but none of them passed all our
screening tests. And remember our
rule: If it doesn’t pass all our screen
tests then we don’t do the trade.
Here are
some updates:
Facebook
(FB) – Way back when, FB had an IPO. That was a boon for the company but a short
term bust for early investors. When the
IPO came out I recommended waiting until FB was below $25 and the closer to $20
the better. Well, I bought 200 shares at
$22.41 for a net investment of $4,482. This
past Friday I sold 100 Shares @ $51.17.
I made $635 on the trade and I still have 100 shares to sell at a later
date. The proceeds are now in cash
waiting for the next opportunity. I am
looking at the Twitter IPO as a possibility, but I need to do further research.
Berkshire
Hathaway Class B (BRK.B) – This stock I bought some time ago and
have held it and watched the steady and slow growth of the value. As with FB my valuation Berkshire has just
doubled. So now I have sold my stake in
that as well. I plan on getting back
into this stock when it dips back down below $113. This stock has stopped its upward turn and has
entered a channel pattern between $112 and $118.
The VIX
through the crisis hit high levels, way above 20. This is good and bad. Good in the sense that option prices started
to rise. Bad in the sense that
directional trading is very difficult.
There were trends that did start to show but in the options markets our
model did not give any trades to put on.
PAPER
TRADE
.
COVERED
CALLS
We still have our covered calls on
Vivus and CBI again.
Symbol
Company Stock
Option
Premium Initial
Annualized
COVERED PUTS
CBI Chicago
Bridge $54.09 Nov65 .22 5,409.00 4.88%
These are the completed covered call
trades this year:
Symbol
Month Premium Month
Ann Month Cum Prem Cum An ROI
ROI 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%
VVUS Sept $28
1.046% 12.55% $293 10.95%
VVUS
Oct $31 1.158% 13.90% $324 12.11%
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 – My patience with VVUS is almost
gone. Despite getting licensing
agreements and improving revenues, the net losses just keep seem to keep going
and getting bigger. We have lost 2/3 of
our value and it looks like it will even go further before we can get out of
the stock. When the stock was channeling
between a good high and a bad low I thought we could ride out the turbulence and
eventually get back to even.
CBI – We sold a put on this
for November. This acts like a covered
call for the put side. CBI looks like it
is on another run up so this will be interesting to see how this runs. Even if we get called away we will be making
money on the trade as the strike price is above our entry price.
This is the cumulative covered call
results for 2013:
Symbol
Invested $ Option
Prem Call Away Div
Total Return
VVUS
$2,676.00 $ 324
$324 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 $774
$411 $10.00
$1,195 9.24%
So
far we are having a good year with the covered call portfolio. 9.24% return is a good show for the
year. Based on cost we are doing
well. If we take total valuation we are
in the hole, so that is bad. Remember
Phil Town’s Rule #2 !!!
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 11.31
10/29/2013 11.96%
AGD Alpine Global
Dynamic 4.84 4.85
10/29/2013 7.43%
TCPC TCP
Capital
15.28 16.51 08/29/2013
8.99%
MO
Altria
34.26 35.86
01/10/2014 5.17%
T
ATT
37.34 34.61
02/01/2014 4.82%
ARCP Am. Realty
Capital 16.69
13.35 12/15/2013
5.37%
GLAD Gladstone
Capital 8.98
8.96 10/31/2013
9.35%
STI Sun Trust
Bank
29.37 34.67 12/14/2013
1.36%
WFC Wells Fargo
37.74 42.68
12/01/2013 3.18%
KKR KKR & Co
Units
20.77 22.84
11/21/2013 6.39%
Buy Price Portfolio Value
= $21,595.00
Current Price Portfolio Value =
$23,077.71
Gain/(Loss) So Far =
$1,482.71
Portfolio Return =
4.49%
Dividends Received So Far =
$505.85
Portfolio Return w/ Dividends =
9.21%
Current Prices as of 10/18/2013 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
01/01/2014 138.846
AGD Alpine Global Dynamic
5.76 4.85
10/29/2013 1,014.104
AOD Alpine Total
Dynamic
4.37 4.16 10/29/2013
1,300.824
MO
Altria
34.26 35.86
12/01/2013 154.513
INTC Intel
22.87 23.88
12/01/2013 244.600
HIX Western Asset Hi
Inc II 10.53 9.40
11/22/2013 536.327
MCD
McDonald’s
91.74 95.20 12/15/2013
56.398
MSFT
Microsoft
28.55 34.96
12/13/2013 185.384
JNJ Johnson
and Johnson 68.03 91.63 12/12/2013
72.603
PG
Proctor and Gamble 68.72 79.41
11/15/2013
73.638
Buy Price Portfolio Value
= $51,996.01
Current Price Portfolio Value =
$56,487.95
Gain/(Loss) So Far
=
$4,491.94
Dividends Received So Far =
$1,511.71
Total Return =
8.64%
I
am working on a Preferred Stock Portfolio.
It is still in the research phase, but I hope to have it up and running
before the end of the year. I am looking
at this because these are a great way lock in a good rate of return – usually 6.5%
to 7.5% for a period of years.
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
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