JC's Random Musings

Greece: First Domino in a Crumbling Euro Zone - Seeking Alpha

2011-06-28T21:47:00.000-04:00

Greece: First Domino in a Crumbling Euro Zone - Seeking Alpha

The Answer to the Economy

2011-06-18T08:15:00.003-04:00

Folks this is easy so I will keep it short.

To stimulate the economy, the Federal Government needs to lower taxes for business and individuals. This will put more money in all pockets, encourage businesses to spend money, and draw some business back into the United States. Simple.

Next, interest rates need to rise gradually soon after the tax cuts. One, to manage growth from the tax cuts so that the economy does not get too heated. Two, to keep inflation low. Third, to strengthen the dollar, which in turn strengthens the economy and will keep commodity prices in check.

Simultaneously, the Federal Government needs to cut spending in a substantial way. First and foremost by repealing the Health Care Disaster.

This is the formula.

It worked in the 80's and it will work now.

Difference Between DC and AC Motors | Difference Between | DC vs AC Motors

2011-06-02T08:54:00.001-04:00

Difference Between DC and AC Motors Difference Between DC vs AC Motors

Great article describing the basic differences between the two types of motors.

LNG Law Blog | Liquefied Natural Gas law and news on federal regulation, regasification, environmental, safety and security issues

2011-03-02T21:10:00.001-05:00

LNG Law Blog | Liquefied Natural Gas law and news on federal regulation, regasification, environmental, safety and security issues: "- Sent using Google Toolbar"

6 High-Yielding Electric Utilities for Consideration - Seeking Alpha

2011-02-14T19:50:00.002-05:00

6 High-Yielding Electric Utilities for Consideration - Seeking Alpha

Here's an article discussing decent yielding utility stocks with some growth and dividend growth. I believe that the lower PE stocks would be great additions to round out any portfolio. Enjoy.

$INDU - SharpCharts Workbench - StockCharts.com

2011-02-13T20:01:00.009-05:00

What a great chart. Wow!
Courtesy of stockcharts.com

Dividend Champions: The Best List for Dividend Investors - Seeking Alpha

2011-02-09T21:28:00.000-05:00

Dividend Champions: The Best List for Dividend Investors - Seeking Alpha: "- Sent using Google Toolbar"

4 Portfolio Strategies for Savvy Investors

2011-02-09T21:21:00.000-05:00

4 Portfolio Strategies for Savvy Investors

Mad Money's Jim Cramer: Chesapeake Energy CEO on CNOOC Deal - CNBC

2011-01-31T19:03:00.000-05:00

Mad Money's Jim Cramer: Chesapeake Energy CEO on CNOOC Deal - CNBC: "- Sent using Google Toolbar"

Unions make up 40 percent of employees exempted from Obamacare | David Freddoso | Beltway Confidential | Washington Examiner

2011-01-29T13:44:00.000-05:00

Unions make up 40 percent of employees exempted from Obamacare | David Freddoso | Beltway Confidential | Washington Examiner

Reality

2011-01-22T19:37:00.019-05:00

It is amazing to see all the people who don't face reality. I have witnessed many thnigs that are so incredibly straight forward, yet are so difficult for certain people to see what will happen in REALITY. I cannot understand how folks do not see that reality has a way of coming through in the end, it always wins. It floats up thru the BS, the rhetoric, and the non-truths to show you how it really is.

This is a list of the obvious things that cannot elude reality:

1. Steroid use by an athlete will be found out.
2. Raising taxes stifles the economy.
3. Running from the law is a losing cause.
4. Cigarette smoking will kill you.
5. Lying will always catch up with you.
6. Not paying your mortgage will ruin your credit.
7. Taking on too much debt will bankrupt you.
8. Not going to school will not make you a success.
9. Student loans are the worst type of debt to incur. You cannot default on a student loan. Credit cards are a close second.
10.Pedophiles cannot be rehabilitated.
11.Sociopaths and psychopaths are near impossible to fix.
12.Communism does not work.
13.Letting your kids get away with things is not going to help them in life.
14.Spoiling your kids is not going to help them at all.
15.Lessons are not learned by bailouts, in fact, the bad behaviors are reinforced.
16.The sooner you work at a job, the sooner you will understand the real world. And the converse in even more true.
17.Everything on TV is scripted, there is no such thing as reality TV.
18.Cursing and swearing is not classy.
19.Just because you go to church does not give you the right to treat others poorly or that you get a clean slate from your past sins.
20.Children need parents, not parents/friends. Be a parent, the leader and authority figure, not a friend to your kids.
21.Protesting at funerals is about the most evil thing anyone can do.
22.Doing heinous things in the name of God is not going to get you into heaven.
23.You cannot help a human that first won't help themselves.
24.Any new way of hand computing addition, subtraction, multiplication, and division is ridiculous. AKA "new math".
25.Global warming is not happening, nor is it a man-made thing. Mother nature is so much more a factor than man that the notion is completely absurd. Man is a mere pawn on this planet.

There are many more things. Maybe I will list them in another post.

Garlic resource

2011-01-15T13:37:00.002-05:00

I will keep this short and sweet. Found a website that has some great info regarding garlic, the health benefits, how to prepare and use in food, etc. Garlic is such a great spice/root. I love it and use it often. Enjoy.

http://www.garlic-central.com/garlic-101.html

2010 Covered Call Wrap-up

2011-01-15T09:45:00.004-05:00

OK everybody, I tallied up my covered calls that I sold against stocks on my portfolio for 2010. I started using covered calls to bring in some "added dividend" to stocks I already own.

Are you ready for this????

My take on those contracts was worth 8.9% added to my portfolio for the year 2010. The strategy is to buy stocks that will pay a decent divy 2-6% and that I can sell calls against to pull in between 1/2-1% per month. That should give me a minimum of 8% to up to 18% right off the top BEFORE appreciation of share price. I expect something in the middle, say 13%, which is pretty solid and relatively safe with the stocks I tend to hold.

Now I will nix that real quick when the market indicators that I use tell me to get out as this strategy is part of the "capital appreciation and preservation", appreciate capital in uptrends, preserve capital in downtrends. And yes I will post when that happens and give fair warning before much damage is done to the market and the portfolio.

I will attempt to keep you all posted with my positions and calls sold in 2011.

OK now to the calls I have sold with Jan 20 2011 expiration:
PEP $67.50 Calls
GIS $37.50 Calls
C $5 Calls (I expect these to be exercised unless the market reacts poorly to the Citi earnings report this upcoming week)
I will also sell calls against NLY $18 strike this week for whatever the going price is, I only expect .20/share.

Chesapeake Energy Chart

2011-01-15T08:32:00.005-05:00

Chart courtesy of stockcharts.com.

Look at this chart. One word - giddyup!!
Do your own due diligence.
JC

Volunteer

2010-11-25T08:29:00.002-05:00

Happy Thanksgiving. As you may know I volunteer at an animal rescue and I will be spending a few hours of quality time with my special buddies this afternoon. My point: I wish everyone could give even an hour or two a week to do some good work for someone less fortunate..... at animal shelters, food banks, nursing homes, hospitals, helping homebound folks, etc.....whatever is in your heart to do for others. Think about how much good could happen from that and how much better this world would be.

Buy American

2010-11-25T07:55:00.008-05:00

This post was spurred on by a conversation with an old friend of mine regarding "Buy American" and some other topics. It is edited to remove the names, but the content is still applicable. Enjoy.

I'm with you and other Americans that people want to support companies based in the USA and that shows that Americans still have a heart. In that same token, Americans need to be unencumbered with regulations, fees, taxes, unions, etc. that don't allow us to reach our full potential.

Americans are by far the most productive people on the planet. We need to get the unions and government out of the way to let businesses do their best and lessen costs so we can compete worldwide. We can still dominate in industrial production, we just need to be unshackled from the horrific chains of the tax code, regulations, and having to pay for those able bodied folks that frankly choose not to participate in the workforce.

Who would want to pay more for the same quality of anything? We CAN do better for cheaper....if the government would just get out of the way. Another fact is that if you have walked through a US auto plant you would have noticed that ALL of the process machines are made in Japan or Germany. It is hypocritical just to scratch the surface. The US manufacturing companies have been buying the best quality product for THEIR needs for 30+ years, way longer than the average American as Americans were very loyal to "American Made" up until say the end of the 1980s.

The unionized American manufacturing organizations need to be reconstructed from the very top, down to the lowest worker to have fairer compensation packages. We can still pay higher wages than the world by far, but we have to be honest with ourselves. Union labor contracts need to be abolished, that would create competition for jobs, motivate workers to produce or be replaced with someone who will....just like everyone else. Manufacturing workers need to negotiate their wages like all others do, including myself, that would eliminate the "lowest common denominator" culture in the manufacturing plants, that is, I am only going to do the minimum that I am allowed to get away with. It even goes deeper in that culture in that people who DO perform are discouraged, threatened, or worse if they keep working so hard. That is abysmal.

What's left of American manufacturing had better wake up and recreate itself. Use the technology that we have to become more productive than the world, in fact create better technology, hire motivated, productive people who take pride in their work, and practice what they preach such as buying their goods, machines, etc. from American companies with those same values.

I'm done here.

A great e-mail that I need to share.

2010-11-14T19:14:00.001-05:00

This came as an e-mail from a friend, pretty much nails it. Enjoy.

If you ever wondered what side of the fence you sit on, this is a great test!

If a conservative doesn't like guns, he doesn't buy one. If a liberal doesn't like guns, he wants all guns outlawed.

If a conservative is a vegetarian, he doesn't eat meat. If a liberal is a vegetarian, he wants all meat products banned for everyone.

If a conservative is homosexual, he quietly leads his life. If a liberal is homosexual, he demands legislated respect.

If a conservative is down-and-out, he thinks about how to better his situation. A liberal wonders who is going to take care of him.

If a conservative doesn't like a talk show host, he switches channels. Liberals demand that those they don't like be shut down.

If a conservative is a non-believer, he doesn't go to church. A liberal non-believer wants any mention of God and religion silenced. (Unless it's a foreign religion, of course!)

If a conservative decides he needs health care, he goes about shopping for it, or may choose a job that provides it. A liberal demands that the rest of us pay for his.

If a conservative reads this, he'll forward it so his friends can have a good laugh. A liberal will harshly comment on it because he's "offended"

June 2010 Scoreboard

2010-06-26T13:36:00.002-04:00

June was an interesting month where I learned a few things about calls and the pitfalls.

I had written covered calls for:
MO $21 strike
WFMI $41 strike
T $25 strike (these were exercised)
PG $62.5 strike
COST $62.5 strike

The market did not agree with me this month and the portfolio took a hit. This month, I am paying more attention to the market action. I do believe that we will head upward from here. I will strategically plan to sell calls on the stocks I own when they reach a higher price and the calls are more attractive for selling.

Covered Call Scoreboard - May 2010

2010-05-22T20:01:00.002-04:00

In my fourth month of writing covered calls against the stocks that I own I have been able to grab another 3/4% of income for my portfolio. They have all just expired on midnight Friday.

The covered calls include:
MO $22 strike
T $27 strike
WFMI $40 strike
COST $62.5 strike

For the four months of covered calls that I have written, I have been able to obtain nearly 3% of income for my portfolio. I expect that for the year, I should be able to obtain 10% from covered call positions alone.

Covered call Scoreboard - March 2010

2010-03-12T19:32:00.005-05:00

In my second month of writing covered calls against the stocks that I own I have been able to grab another 1/2% of income for my portfolio. They are to expire next week.

The covered calls include:
MO $21 strike
AA $15 strike
GDXJ $27 strike
NLY $18 strike
MGM $12 strike
WFMI $32 strike

As of this post, the options that may be exercised are the NLY, WFMI, and the MGM calls. I expect that all three of these will expire worthless.....but I have been wrong before. We shall see.

For the two months of covered calls that I have written, I have been able to obtain a 1.5% of income for my portfolio. I expect that for the year, I should be able to obtain 10% from covered call positions alone.

February's Results - Covered Calls

2010-02-22T19:41:00.013-05:00

In my first month of writing covered calls on stocks that I own I was able to create additional 1% of 'income'.

February's Results
The calls I wrote were all February 2010 expiration and consisted of

MO $21 strike
DD $34 strike
AA $15 strike
GDXJ $25 strike
NLY $18 strike
MGM $12 strike
MGM $13 strike
WFMI $32 strike

The WFMI calls were exercised at $32, it went from my buy price at $30.52 to over $33/sh in two days after Whole Foods reported earnings. I received 2% premium on the calls and 4 1/2% for the stock appreciation, that's 6 1/2% in 4 days!!!!!

This month's strategy with WFMI: I bought some shares today at $33.83 and sold the Mar 20 $36 calls against that position. I received about a percent on that sale, and IF they are exercised I will have made 6% on the stock, so say a 7% return in a month.

My DD calls were exercised at $34. I got a 3% for the premium and I made 8% on the sale of the stock. I got an 11% total return in less than 2 months on DD. I likely will not buy it back for I believe it is fairly valued and the upside is limited. If it drops a few percent I will entertain buying it again, but not until it drops.

This month's strategy with AA: I sold some Mar 20 $14 strike calls on a portion of my position in AA that I recently purchased at $13.25. I received almost 3% on those calls and if these are exercised I will have made 6% on the stock sale. Basically almost 9% in a little over a month. Not bad. If AA continues to go up, I will sell calls on the other 2/3 of the AA position that I own.

This month's strategy with GDXJ: I like Gold, I like GDXJ, I wanted to sell calls that I hoped would not be exercised. I sold Mar 20 $27 strike price calls. I got 1% for the premium on the calls, IF the calls are exercised, I will have made 8% on the stock for a 9% gain. Keep in mind that I made 1% on the Feb 20 $25 strike calls in three days. So for a month and a half I would make 10% on GDXJ and the call premiums.

I did buy some T at around $25.40 and sold Mar 20 $26 calls and received a 1% premium. I don't expect these to be exercised, but if they are I will get about a 3% win in a month. I am really looking for the dividend at the end of March so I would likely buy it again before the dividend is declared.

My strategy with my NLY position: I want to sell some calls, but I really don't want to sell the Mar 20 $18 calls, heck the stock is at $17.90 and the premium is only 1 1/2%!! I would like to sell some $19 strike price calls but I don't see that happening. I will check out the technical indicators and if it and the market is overbought, I will take a chance on selling the $18 calls.

JC

Covered Call Scoreboard

2010-02-13T20:32:00.002-05:00

In my first month of writing covered calls on stocks that I own I was able to create additional 1% of 'income'. They are all expected to expire at the end of next week.

The calls I wrote were all February 2010 expiration and consisted of

MO $21 strike
DD $34 strike
AA $15 strike
GDXJ $25 strike
NLY $18 strike
MGM $12 strike
MGM $13 strike

As of this writing the only call options that might be executed by the buyer is the GDXJ contracts. We'll see and I will continue to post my results.
JC

S+P - Where Are We Going?

2010-01-16T19:59:00.005-05:00

If you were a reader of this blog last summer, you would have made a cool 25% in six months. It has been a good run.......but technically, the run appears to be nearing an end for a while.

Technically, we have hit the major resistances at 1150 on the S+P. The market is oversold and looks like the classic rolling-over pattern. See the chart, courtesy of StockCharts.com.

The federal government has not given us the catalyst for further growth, which is not going to happen with this Congress and President. Sadly, with all the unprecedented spending, taxes are going to go up. The Taxman will be coming after your money soon.

If I am wrong and tax increases are not imposed, there still is no catalyst to propel the US economy to any sustainable growth. I believe the likelihood of that is slim. (We need significant, permanent tax cuts to make that happen, the likelihood of this is even slimmer!)

Unfortunately, the next target for the S+P appears to be to about the 1050-1100 range say by mid year. That is a 4-9% drop from here.

If there is some game changing news to alter the course of the direction of the S+P, I will follow up this post with a revised target. Until then, expect a correction and it may happen soon and somewhat quick............then we become range bound until at least May.

Any comments?

More Covered Calls

2010-01-16T08:42:00.004-05:00

I have had a decent run up on a small long position in DuPont (DD). It is up 5% in 6 weeks and I figured I would sell at $34 if it hit that target. It went past there and fell back to $34 so here is what I did.

I sold the Feb 10 $34 strike calls for $1.00/contract. Therefore, if they are exercised by the expiration date in February, the profit in this set of transactions is $2.50/sh + $1.00/sh = $3.50/sh.

$3.50 profit per share/$32.50 original cost per share = 10.7% profit in less than 2 months

I will take that any day of the week. If the $34 strike call does not get exercised, I will sell another call for the March 10 expiration. In the meantime I will likely pick up a dividend of another 1%.

Any thoughts?

Stock Option Adventures

2010-01-13T21:52:00.002-05:00

I have recently opened myself into a world of new horizons with regards to stock trading.

Covered Call Options.

I finally did it. I completed my research and applied for Level 1 options trading.

It is quite interesting in that I have written a number of calls that are out of the money, that is I am allowing others to speculate that these stocks will end up going higher in the near future.

I have written calls a month out, that is February calls against the following stocks.

Altria (MO)- February 21 calls @ .36/contract
MGM Mirage (MGM) - February 12 calls @ .30/contract and February 13 calls @ .39/contract (written at different times)

Right now the MGM 12 calls ended up in the money. I am awating to see if the contract holder will exercise them. MGM closed at 12.39 today. I wrote the 12 calls when MGM screamed up from 9.10 to 10.40 in a couple of days.

It will be exciting to see how this works out.