The Speculative Stocks....

[Otter]

This article provides an excellent analysis of why I continue to add to long-dated (January, 2022) UUP Puts:

https://seekingalpha.com/article/4336136...on-problem

Dollar index should top around the time the time the market bottoms. Makes for a handy canary in the coal mine.

Dollar index continuing to rise steadily is also the reason I am not buying into the recent market rallies, and consider them to be typical bear market rallies.

When the crossover happens, my strategy is to unload SPY puts, use most of the proceeds to buy Dividend Kings and Aristocrats with pristine balance sheets, and add some more UUP Puts, USO calls, and calls in something like EWY (South Korea ETF).

[fenders53]

If the run gets out of hand I'll add another SPY put or two. I'm not making index target predictions but there will be some black sky days at some point. Maybe I'll actually be properly hedged at some point. For now I'll just be content that I am less likely to lose enough money to be trade new cars everyday lol.

[Otter]

Also sold GLD out of my wife's account today for a 3% gain, and rolled the proceeds into 12/31/20 GLD 150 Puts. Russians have huge gold reserves, and Saudis are sitting on over 300 tons (near all-time highs for them).

I suspect some GLD gets converted into dollars on a large scale in the near-term. Inflationary pressure will eventually reach the commodity, but that doesn't happen until UUP starts going down.

[stockguru]

I went with a real speculative stock this morning. Bought OXY. I realize all the difficulties it will have but I see them survive. They still pay a .11 cent dividend on top of that 40 billion dollar debt lol

At $12 its worth a gamble. I can see this going back to $20 at some point over the next several years.

[fenders53]

(04-06-2020, 09:36 AM)stockguru Wrote: I went with a real speculative stock this morning. Bought OXY. I realize all the difficulties it will have but I see them survive. They still pay a .11 cent dividend on top of that 40 billion dollar debt lol

At $12 its worth a gamble. I can see this going back to $20 at some point over the next several years.

Interesting story to watch play out for sure.  I follow their drama and have never owned a share.  I think a little more time will have to pass before I'll go long an oil stock again.  I want to see if the oil major divs live.  I have no doubt they run higher someday.  It's just a flesh wound lol.

[Otter]

(04-06-2020, 09:44 AM)fenders53 Wrote:

(04-06-2020, 09:36 AM)stockguru Wrote: I went with a real speculative stock this morning. Bought OXY. I realize all the difficulties it will have but I see them survive. They still pay a .11 cent dividend on top of that 40 billion dollar debt lol

At $12 its worth a gamble. I can see this going back to $20 at some point over the next several years.

Interesting story to watch play out for sure.  I follow their drama and have never owned a share.  I think a little more time will have to pass before I'll go long an oil stock again.  I want to see if the oil major divs live.  I have no doubt they run higher someday.  It's just a flesh wound lol.

I can't yet jump in on individual equities, as I still can't value them. The E side of the P/E equation is a giant mystery right now for pretty much every company that exists. 

For broader-based indexes and commodities like dollars/oil/metals, I think there is more reliable macro-economic information that helps aid in valuation.

[fenders53]

(04-06-2020, 09:48 AM)Otter Wrote:

(04-06-2020, 09:44 AM)fenders53 Wrote:

(04-06-2020, 09:36 AM)stockguru Wrote: I went with a real speculative stock this morning. Bought OXY. I realize all the difficulties it will have but I see them survive. They still pay a .11 cent dividend on top of that 40 billion dollar debt lol

At $12 its worth a gamble. I can see this going back to $20 at some point over the next several years.

Interesting story to watch play out for sure.  I follow their drama and have never owned a share.  I think a little more time will have to pass before I'll go long an oil stock again.  I want to see if the oil major divs live.  I have no doubt they run higher someday.  It's just a flesh wound lol.

I can't yet jump in on individual equities, as I still can't value them. The E side of the P/E equation is a giant mystery right now for pretty much every company that exists. 

For broader-based indexes and commodities like dollars/oil/metals, I think there is more reliable macro-economic information that helps aid in valuation.

We'll have to see if the market waits around for the fundamentals to play out with any real clarity.  It often doesn't.  The market knows earnings will be absolute garbage for most companies.  I'll just continue to nibble or trim positions that swing 10% in a few days time. That's been working very well for weeks now with all the volatility.  I lower my basis anyway.  Mostly long-term positions so not overly concerned if I catch the exact bottom.  I know I never will unless it's blind luck.

[fenders53]

Here area few closed end funds, preferred stock funds for your watch list. I own them all. I don't actually consider them all that speculative longterm, but make no mistake they are ALWAYS volatile in a rough market. Pull up a long-term chart. They survived the GFC and they'll get roughed up again. You may recognize one from my 2019 Perfect Port contest. All have a long history of big dividends. Did I mention they are volatile? Run by managers with a good long-term REP. Not telling anyone to buy today. I add tiny amounts. I'll get more serious with my adds eventually. They can definitely drop further.

JPS- A Nuveen preferred stock income fund. Monthly Divs. 9.1%

DNP- Utility preferred income fund, it may be less volatile, Monthly Divs 8.6%

ARCC- Corporate Loan sharks, I definitely expect this one to drop more at some point, the riskiest of the bunch IMO, quarterly payer 17.5%

RQI- Real Estate, Cohen and Stearns run, I expect it will drop more the next few months, Monthly payer, 12%

The term SWAN is inappropriately used on Seeking Alpha until I just want to puke. I seriously don't stress modest positions of these in my port. IMO they are one helluva a lot safer income streams than many of my high Div individual stock holdings. They run like a tech stock when then is some hope of blue skies. They are cyclical. I trim them when it just starts looking too good to be true and the yields drop due to share appreciation. The yields are usually not this crazy high.

Hope this helps someone, and I am NOT telling anyone to buy them today. I'm not adding today.

[vbin]

(04-03-2020, 11:37 AM)Otter Wrote: Just bought some 7/17/20 USO 5.50 Puts. Will sell on the first down leg for oil, as this recent 38.5% run up in just a few days seems a tiny bit overdone.

They are meeting Thursday. I don't think it will.get postponed this time. Thought even on good news you might see selling.

[fenders53]

(04-07-2020, 11:26 AM)vbin Wrote:

(04-03-2020, 11:37 AM)Otter Wrote: Just bought some 7/17/20 USO 5.50 Puts. Will sell on the first down leg for oil, as this recent 38.5% run up in just a few days seems a tiny bit overdone.

They are meeting Thursday. I don't think it will.get postponed this time. Thought even on good news you might see selling.

I followed Otter into this USO trade. I won't pretend to know where oil stocks will go short-term  because the long-term is a factor for the bulls (as it should be).  Oil has no rational hope of running higher for long no matter what they agree to at the meeting.  The whole world needs to commit to cutting production 30% for a year.  Watch that not happen.  I'm not even concerned if oil spikes 10% after the meeting.  This is why we don't bet on the next two weeks if we are smart.

[Otter]

(04-07-2020, 12:02 PM)fenders53 Wrote:

(04-07-2020, 11:26 AM)vbin Wrote:

(04-03-2020, 11:37 AM)Otter Wrote: Just bought some 7/17/20 USO 5.50 Puts. Will sell on the first down leg for oil, as this recent 38.5% run up in just a few days seems a tiny bit overdone.

They are meeting Thursday. I don't think it will.get postponed this time. Thought even on good news you might see selling.

I followed Otter into this USO trade. I won't pretend to know where oil stocks will go short-term  because the long-term is a factor for the bulls (as it should be).  Oil has no rational hope of running higher for long no matter what they agree to at the meeting.  The whole world needs to commit to cutting production 30% for a year.  Watch that not happen.  I'm not even concerned if oil spikes 10% after the meeting.  This is why we don't bet on the next two weeks if we are smart.

Implied volatility rears its ugly head. USO down over 3% to 5.32, and the ITM 5.50 puts aren't even budging in price. 

Exact opposite of what I experienced on the opposite side with call options.

Edited to add - According to most option calculators, my position should be up over 5% at the moment.

[Otter]

Aaand, closed my USO Puts for a 5.4% gain.