Tuesday, March 6, 2012

Headline news and CAT

Dear income investors:   

You'll notice that Caterpillar (CAT) is performing today just as expected; it is very prone to headline news.    The news is global uncertainty and more significant to CAT the perception that global growth is slowing.

As an income investor, I don't trade, I invest.  I have made a lot of money from CAT and will consider adding to my position when the stock is 10% lower than when I profiled it's potential for covered call income.  So I have my alert set at $103.   At $103 the dividend yield increases to 1.78%.  At some point, headline news will change and I will write a call on CAT with the purpose of making ten percent.

If CAT's stock price continues to wane, I will consider additions at 10 percent increments.  But let us not wish away this opportunity.

Enhanced by Zemanta