jokingme

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  • Stick with Covered Calls
    I'm curious as to the author's typical time frame for his covered call strategy.
    Without recommending KO as an investment, which would you do?
    Purchase KO at $45.90 (Friday 1/2/09 close).
    Sell Jan $45 for $1.60 (in the money)
    Sell Jan $47.50 for $.40
    Sell Feb $45 for $2.65
    Sell Feb $47.50 for $1.35
    Sell May $50 for $1.65 plus $.38 dividend.
    Sell Aug $50 for $2.65 plus $.76 dividend.
    Sell Jan10 $55 for $2.10 plus $1.52 dividend.
    Other, please specify.
    Do you have specific 'return profile' rules? (i.e. at least 10% total return, 1% per month income, etc. that you're looking to achieve).
    Thanks,John
    All opinions welcome.
    Jan 05 08:48 am |Rating: +1 0 |Link to Comment |View article
  • Dividend Income in Market Downturns
    This article made me look to see how I've managed the 'income' side of my portfolio this year. Even though my portfolio is down significantly for the year, my dividend income is up over 20% (not including option income).

    Major reasons:
    1. My 8 largest holdings (nearly 50% of portfolio) increased their dividend by an average of more than 10%. All increased their dividend. I may not get 10% again, but I expect increases from all of them in 2009.
    2. Shift from low/no dividend stocks to preferred shares (mostly REITs). In total these are equal to my largest single position and yield over 11%.
    3. Use of covered calls to supplement dividends. Using this income to purchase more dividend paying/growing stocks and selling more CCs. Done with small position sizes only (.5 - 1%). Not for the faint of heart.
    ---
    As for O, in 2008 I bought O and sold for a profit, bought O-PD and sold for a profit, repurchased O and have Dec$25 covered calls sold against it. Made as much on O covered calls as I did on the O dividends in 2008. Looking forward to selling another juicy CC on 12/22. No, I won't be upset at all if O is called away for $25 as I'd likely just switch back to the preferreds again.
    ---

    Dec 08 17:43 pm |Rating: 0 0 |Link to Comment |View article
  • Penn West Energy Trust: An Underappreciated Gem
    Jack,
    Thanks for this great write-up and discussion. I look forward to reading your next one almost as much as my monthly dividend check from PWE.
    May 09 08:37 am |Rating: 0 0 |Link to Comment |View article

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