What I Am Buying Today.

[NilesMike]

(11-17-2021, 12:30 PM)fenders53 Wrote:

(11-16-2021, 04:10 PM)NilesMike Wrote:

(11-16-2021, 10:53 AM)fenders53 Wrote:

(11-16-2021, 10:37 AM)ken-do-nim Wrote: Home Depot has definitely been a star for me this year; pity I only funded it with 11 shares.

Conversely, I see Capital One Financial once again at the bottom of the heap today ...

Don't chase it.  Just trust me.  You'll get a chance but they are doing magic tricks to keep hitting earnings.  If that sounds like I am bashing HD it's not my intent.  They are logistics magicians and they are pinching pennies.  You'll get a hard dip in the next year if not sooner.  Wait for it and add shares then.  All the good news is priced in months ago, like most blue chips.  LOW is probably the better buy in the sector right now IMO.

The dip was in May/June

That's easier to see now of course but we generally only get about one chance a year to buy the blue chips at a true discount.  This is where I like your yield based entry theory Mike.  May not be wise to wait for a once in a decade high yield, but if you buy at the worst yield in a decade you are setting yourself up for underperformance.  It will happen far more times than not.  

Speaking of HD, for those watching my foolishness.  I need HD at 389.99 or less by close Friday.  No way I can bail before then unless price is well under 390.  Too much extrinsic value n the options still.  It's a defined risk trade that is completely hedged at 395.  It doesn't matter if it runs to 500.  I would never do a true short on a blue chip.  I'm not completely crazy.  I executed the spread after HD ran up 16 on the earnings announcement.  It always dips during conference call, except it didn't this time.    They got by with no forward guidance.  Probably because they are HD.

Using the dividend yield range method, HD is overvalued when yield is 1.0%. We are quit far away from that threshold so more upside should be available.

Just sayin'