Sunday, July 17, 2016

2015 Portfolio Lags

In spite of record stock market prices and a rebound in energy stocks since the beginning of the year, the 2015 portfolio continues to lag.  It is a small portfolio and way too concentrated in energy stocks.  Most disappointing is the tepid dividend growth. Original dividend when these stocks were bought was $4,129 and today the portfolio expects to pay $4,271 annually for a whopping gain of 0.336%.


Conoco's (COP) dividend cut is most responsible for this poor performance.  Without COP the other stocks dividends have increased 6.15%.   This more in line with our goals.                                           

Read more »

Friday, July 15, 2016

Looking in the Rear View Mirror GENTEX symbol GNTX

This market makes even the most experienced investor nervous.  Everything seems expensive.  However, I found a stock I want to add.   In May I wrote about my adding GNTX and selling an immediately call.  See Link on GNTX

I will add more GNTX today.

My original buy was at $16.35.  Today, GNTX is trading around $16.10.  This company pays a nice dividend.  It split in 2015 2:1.  The table below presents the stock buy and call option sale that I executed today.

Good Income Investing.


Disclosure: Long GNTX with calls.
Read more »

Thursday, July 14, 2016

Time Value of Money

In stock options there is something called the "time value of money"  when you are in your 83rd year, time is expensive!.  Called lost opportunity to you young folks. 


 No I am not in my 83rd year but many are including Afred Ferol and money carries different characteristics when you are old.  M*
Read more »

Monday, July 11, 2016

Pepsico (PEP)

Read more »

Tuesday, July 5, 2016

RMD - Table III How long will your stash Last?

I recently wrote an article about distributing IRA funds in accordance with the required minimal distributions imposed by the IRS.   I used the example of a person who inherited an IRA worth $1,000,000 and had to distribute income using the IRS Table I or single life table.  This table does not apply to the ordinary investor.
Read more »

Friday, July 1, 2016

CAT Call for the nervous investor

Caterpillar has been a very good income stock for me between covered calls and a juicy dividend.  However, CAT's fundamentals are terrible.  Revenues have plummeted; earnings per share are less than dividends paid out and CAT's stock price reflects that weakness.

I don't like to sell calls with a strike price less than my basis, so I have a couple of choices.  One is to add shares so that I average a lower basis and the other is to wait until the sentiment improves enough that someone will buy a call from me at or above my basis.

Because CAT's fundamentals are so weak, I do not want to add so I have patiently waited for improved sentiment and am selling a call today.

Here are the details:  September 16, 2016 expiration, $82.50 strike price, call premium of $1.05.  Because the expiration date is after the next ex-dividend date of July 18, I have included the dividend payment in the total return.

I use this technique when I have a previously solid stock that has suffered.  I don't mind being stuck with something like CAT with its 4% yield but I am a nervous investor and will be just as happy if CAT is called away.


Discloure:  Long CAT with calls
Read more »