Stocks to start the year with...

[dawgball]

Currently own:

JNJ
DIS

Looking for time to buy:

FDX
WFC -- still very skeptical, but I start positions slowly.
HSY -- not sure why, but I can not take my eye off of this one.

Portfolio killer of 2007:
WMT

Portfolio savior of 2007:
MMM

Overall performance of 2007 pre-tax:
+21% (much of this was in MMM)

Played mostly deep ITM LEAPS in 2007 and wrote covered calls against them throughout the year.

Currently not playing any options except writing covered calls on stock positions. If my portfolio was larger I would sell naked puts for stocks that I am bullish on.

edited to add: naked only in the sense of having cash waiting to buy them if called... so not technically naked

 

[selkirk]

good performance Dawgball, in the large US blue chips biggest gain MCD.

also wrote puts on MCD at 37.50,40,42.50 various months, currently have $50 march, which is probably a mistake may have to buy them back.

good option play was puts on VLO, came close to having the stock put to me, but never did, do not have any options on VLO currently.

why not look at PBS etf, looking at buying this etf since believe the media companies have been sold off pretty good.

also own VWO which performed well last year, and hope for a positive year this year.

ABX is the sr. gold company I own, like it in the low 40 of coarse if I knew it would jump 15% in a matter of days, would own much more. have 36,38 puts on this that look safe.


worse stocks
Telus, wrote covered and uncovered calls on this or it would be worse...now a value stock, will continue this in 08, and near the end of year may sell stock.

HD....how to lose 15% in US retail, even with covered calls, and a good div.

bam real estate stay away.

most of my energy plays have covered calls on.

thanks
selkirk

 

[smoke & mirrors]

i just picked up some IMA, HOOK & ONT

 

[dawgball]

Just to update recent thoughts:

Bought WFC @ 28.69

Eyeballing PFE, HSY

And looky looky, patience AGAIN would have been key in my major losses last year on WMT.

That is the one focus I am trying to hone this year. Thinking longer term (2-5 years) and not letting losses on the balance sheet force me to make rash decisions.

I don't intend to ever be a Buy & Forget investor (many people confuse this with Buy & Hold), but the 2-5 year timeframe is my focus at this point.

 

[selkirk]

agree with WFC, have a small amount, do not own PFE.

have a hard time to buy indivual drug/pharma stocks, they often drift lower or can blow up...prefer to play them with an etf, so my risk is spread out. good sector I just have a hard time to pick the winner.

HSY has a nice yield of 3%, and also love their product, however concerned about how input cost will effect them going forward. food prices are increasing.

MCD have a 52.50put, and a 57.50 call in March.
wrote more options on BAM, like the company though it is probably dead money in the next six months.

like their spinoff BIP, the results are on the 21st. has done nothing, not bad value below 19 US. and nice yield.

looking to buy some if there is a sale, have bought some at 18.75 today....be careful stock has been weak....I just bought a small amount at this time.

the market is in belief the FEd will cut rates drastically, not sure though.
the number one job of a central bank is to fight inflation.....(will in the US two mandates fight inflation and promote economic growth).

oil is going hgher, resources are rallying, and food prices are just getting stronger....do not believe that we will see double digit inflation, however the central bank should be concerned if non core inflation climbs to 5%.

thanks
selkirk

 

[dawgball]

oil is going hgher

thanks
selkirk

Thanks for the comments, selkirk.

I think oil is about at its peak (not that I am in te peak picking business). I think $100 oil in the US is going to create more than just bitching and moaning.

I made an intentionally outlandish prediction a few months ago that oil would see $60 before it saw $100. I made this type of statement because it sounds better than "oil is going lower." :00hour This was when it was $98.80. That one got shut down, but my point is that I would much rather be short oil than long.

We'll see how that works out.

p.s. only making this statement with voice not wallet. not playing any oil right now.

 

[selkirk]

Dawgball would not disagree with you on a correction in oil in the short term.. have been surprised by the move it has had, would have thought it would be below 95 and in the 90-85 range.

basically my point is when oil, natural gas, base metals, ect are making (record high) or multi year highs that the fed has to be concerned with inflation. non core inflation is running at 4.4% (jan), now if oil, energy corrects then they can probably reduce rates further (from the 50 basis points they will do in March). however if oil stays high and base metals are increasing, along with ag. prices the fed will have to stop... or 5% non core and higher inflation will appear.

my energy holdings are CNQ, ECA, TLM (misery), PCA, SU, Devon, oil (on Toronto opposite of misery), 3 other jr. PWT.un and cresent in the income trust.

will lose pwt.un at 26 because of a covered call I wrote...dumb.
all my oil, energy holdings are hedge, except Crecent (toronto).

would suit my portfolio if oil stayed in a range of 90-100, even 105. if it shoots higher will make some people very happy (who bought the calls), at least from march to june.

any time I turn on CNBC there is a pundit, expert who claims oil is going down, there was a special guest (the term) and the argument was not if oil would fall, but how much one sounded bullish saying it would drop to 85.

the anchor said 80 and thoguht the oil trade was over. oil at the time was 93-95. do watch CNBC much however only heard one guest bullish on oil, the rest all going to 80.

the thinking long term is flawed though, will start another post about oil and the market. though like what one commentator said in cdn.

she basically started her two minute commentary with "US going to recession, when it comes to oil prices who cares". okay she is from Calgary but made some great points about overall demand and supply....

short term oil may pull back, however long term oil should move higher. (let us hope it waits a few months to do this...lol.)

thanks
selkirk

 

[dawgball]

Like DTB, I think it's always good to look at past thought process and review.

Currently in (same as before):
JNJ
WFC
DIS

Sold covered call position against DIS for Mar35 which appears to be heading toward worthless expiration.

Up a little on WFC at this point after the recent correction back down.

JNJ - down just under 10% total but feel safe there.

DIS -- down a little but making that up currently with covered calls. Looking to do this monthly for about 2-5% recovery each time.

WFC & JNJ are straight shares. DIS is a JAN10, 25Call position.

Overall portfolio % is pretty good for the year because both JNJ and DIS have recovered from January 1 prices. Other than that, not much activity here.

 

[DOGS THAT BARK]

I have to learn to coverd call bit--its certainly a good tool. watched kirk for years doing them and even got tutorial from him few years back which I still have--but damn its hard to teach old dogs new tricks--can't get past fear of unknown or moreso something new.

good job Dawg--today should have helped us all a tad also

 

[wareagle]

here's my recs

POT(potash)
bunge ltd
ADM
RIG

see the theme?

 

[selkirk]

it is great to be hedged in this market, or just in cash.... the MCD options expire this Friday, (well Thursday,), the premiums you get for options is excellent.

hope NXY stays below $32 cdn. this week, and MCD stays in the range indicated in the previous post.

thanks
selkirk

 

[selkirk]

"MCD have a 52.50put, and a 57.50 call in March.
wrote more options on BAM, like the company though it is probably dead money in the next six months."

MCD closed $54.42, so the 52.50 puts expired worthless, and the 57.50 calls expired worthless, wrote these at different times and received on average between 1.50-1.75. will look at puts on MCD, hope for a small pullback... will be a small positon than normal, or this was.....

NXY $32 call on Montreal expired worthless as NXY
traded 29.22 +.05. I have currenltly 34 out, covered, the 32 were uncovered.

like HD, though I do have 32.50 aug covered calls on the stock.

BAM is cheap, though everyone hates real estate, so would wait for a turn, have 40 calls out (covered on the stock), 1.50 wrote them when stock was higher. should have sold my small stake.

BIP 15.52 their spinoff infastructure trust appears, CHEAP, CHEAP, however have a small position to see how the results come in.....should note thought it was cheap at 18, last year people love infastructure plays, now....who cares....

on tuesday will write more options, well next week, happy trading.
got stopped out of ABX, with a nice profit, will look to buy back or write a few puts, however will wait until gold steadies......have no golds, besides a small fund.


thanks
selkirk

 

[dawgball]

Update:

Had rolled the LEAPS into straight shares of DIS about 4 weeks ago. I actually thought we were going to see another 4-6 months of hard times with the stock and I didn't want the larger percentage hit. But closed the positions yesterday at 34.50 on a limit sell order i didn't expect to hit this soon.

I will be selling Puts against DIS tomorrow or sometime next week for June. I will be happy either way if I'm called or they expire worthless. I will keep writing monthly Puts on DIS until I am called.

WFC -- sold in March at $32 and using these proceeds to either roll into more DIS or INTC.

Which brings up INTC for the first time. This is a stock that I have been eyeing for a while and still deciding how I want to play.

JNJ -- still own straight shares. for some reason, i have not been writing covered calls against. need to start. wasting money.

WMT -- just wanted to bring my pain up again about this bastid! Bought last fall around $46. Sold around $42 due to letting emotions get in the way. Now that SOB won't stop!

 

[selkirk]

a quick update from my last post in this thread March 20, BIP is no longer CHEAP, CHEAP.

surprised it is up over 30%, though happy. BIP even got as low as 14.60. this is a spinoff from BAM.

BAM contains control and will manage the company, they just came out with earnings and they were good. also they are going to pay out a div so you get paid 5.15% while you wait.

hard to figure out NAV however stands at around 17.50-18. besides power assets, and other infastructure investments they own large amount of timberlands. these assets are not valued to highly and probably is one reason the stock sold down...

yes who knew but about a month ago the US did not need anymore lumber, as there would be no more homes built...ect. there are still homes to be replaced and the US popluation is still growing so millions of new homes will be needed.

believe at or below NAV BIP is still a good long term play. trimmed the positon above $20 however will buy it back if it falls to $18. have 50% of the positon. which I will keep. in the short history this has been very volatile so one should expect more of the same.

so no longer CHEAP CHEAP, until it drops back to 18....not sure....

BAM also talked about this is a great way to play commercial real estate is off its lows 25.93 (was around 27-29 for a while. now at 35.15 and showing great strength.

believe it hits 40-42 by year end as long as the markets do not fall sharply. downside is probably 32. if it fell to 28-30 would consider it a great buy...... though the markets will probaly need to turn ugly for that to happen...

looking at VLO, barely escaped having this stock put to me, will not buy it now just making new lows as oil makes new highs however soon this stock maybe ready to snap back.

own BIP and BAM, looking at VLO.

thanks
selkirk

 

[dawgball]

Update:

Last month I sold front month puts against 27.50 strike on MSFT for $0.65. I was called on these, so my net price on these shares are 26.85 not counting commissions which equal 0.075 per share.

Also bought Jan10 12.50 calls on PFE for 5.35. I believe the stock price was right at 17.65 at the time.

These are currently my only two positions in this account.

I am looking at possibly getting into a financial Index fund for a small amount if IYF dips back down in the $65-67 range.

My shoulda-coulda-woulda mention of the month is BAC. I told one of my trading compadres that if BAC touched below 20, I was considering putting half of this account in it. :nono:

 

[dawgball]

Also, I would stay the hell away from energy right now merely due to immediate downside is higher potential than immediate upside.

Anyone have any recommendations on stocks that follow alternative stem cell research? This seems to be a technology story that has been largely ignored due to the energy story, but it's still there. There are a lot of people who are smarter than me who are still burning midnight oil figuring some really cool stuff out.

BTW, when I say "alternative stem cell research", I am referring to non-embryonic cell research.

Like this: http://www.timesonline.co.uk/tol/news/uk/science/article2080314.ece

 

[selkirk]

bam is down slightly but is holding up well and is done well the past two weeks. bip is almost flat counting div.

natural gas will do great however it is going down and this may continue until winter or a big huricane... will reduce my natural gas holdings this summer, some are getting cheap ,...may get 10% cheaper though eca, cnq...

as for your health play dawgball jr. drug stocks are very risky and often crash.

some etfs

IHI 59.38 62.39 high low 59.38
medical devices looks interesting, and sometimes easier for approvals.

pph 69.61 low 65.93 hgih 84.10
yield 3.42%, looking to buy some for a long term play on a pullback..

VWO 44.22 hgih 58.925 low 38.86
yield 4.45% this was holding up so well....if the us market weakens further this will follow...however long term emerg. will outperform and you get 4% to wait.

HYG 93.99 high 106.10 low 90.73
yield 8.32 % yes high yield bonds, corporate...this is almost and should count as equity in a portfolio.

XLF 20.87
would wait if the US economy goes down how can the bank stocks outperform.

KBE see XLF 5.36% yield great way to play the recovery in regional banks,...do not own any still waiting and wonder if things can get worse.

own hyg, small amount vwo long term holding, and hope to buy ihi in the future.

ABX, MCD MCD is performing well, ABX is a good stock just slightly up, more of a hold still not bad way to play gold.

thanks
selkirk

 

[selkirk]

though I hope the US financials recover have no idea if they will, seems they have a hard time to increase earnings if the US economy stays flat.

also how bad are the housing numbers, this moves almost on a weakly basis. there was a great short squeeze, and oil is off over 20% from the highs.

and the us government is backing freddie and fannie,and also money to other banks 3.75 billion to bac...ect.

however can their business recover...would sit on the sidelines for the most part.

financial wfc, mfc, bns, some td.

have covered calls on almost everything in the portfolio.

thanks
selkirk

 

[dawgball]

Covered Calls are the way to go in this market. I completely agree. If you have a portfolio of stocks that you like but the economy stays flat or even declines, CCs are a great way to limit your downside/provide yourself with monthly "income".

I actually look at CCs as a manually generated dividend. :shrug:

PFE is just not a very good candidate due to very low volatility.

 

[dawgball]

Sold covered calls against MSFT yesterday.

SEP08 28 call for $0.92

This brings my net cost for my MSFT shares to $25.93.

At this point, I don't mind being called on those. I will continue writing these until I am called out. Then I will start selling Puts against.

PFE LEAPS: I have limit sell order at $8.00. They closed yesterday at $6.65 but have been up near $7.30 if memory serves me correctly. Intrinsic value right now is $6.71, so the last price from yesterday is not reflecting any time value on the Bid side.