What Did You Buy Today?

[vbin]

@fenders taking a clue from you, sold my first option call of T at $37 for Jan 2021. I do not think T can go higher than ~37-38 in the given period and if it does I am fine with booking some profits at $37, if it ends up in the money.

[fenders53]

(02-05-2019, 06:17 PM)vbin Wrote: @fenders taking a clue from you, sold my first option call of T at $37 for Jan 2021. I do not think T can go higher than ~37-38 in the given period and if it does I am fine with booking some profits at $37, if it ends up in the money.

Good for you.  T is one of my most active option positions, because I perceive it as stuck in a trading range.  My version of a "straddle" but that's not what it really is.  I maintain a long position of about 300 share +/- 100 shares.  I usually have a couple puts sold at about one month and another perhaps 6-8 weeks.   This month with 29 strike prices.  And a couple calls sold.  Mine are at 32 and 33 but they are short term.  I could end up with 500+ shares of T which is a little much, but not reckless given my portfolio.  I could also end up with half my shares sold cheap if T runs hard quickly.  If it happens I'll sell more calls on the first dip.  But what is really happening is I am collecting a 7%, and option call income in the 1 1/2% per month range.   My basis is rapidly dropping.  Some of my initial share were purchased at about $33 so that's a good thing.  Over time you can mitigate a bad buy into.  

This has worked even better on MET and a few other range bound stocks that pay a high DIV.  I consider it less risky than going long.  There is always significant risk these accidental high yielders are going to drop more as they sort out their issues.  This strat did not work out well on BAC for me.  I will be rolling calls forward for awhile so I don't lose out on all the run it made this month.  Nothing is perfect but the amount of income I am generating is very substantial.  Thanks for listening again everyone. 

[fenders53]

The list of stocks in the buy range is looking very thin again. I guess that's a good thing for our current ports.

[Otter]

(02-06-2019, 11:14 AM)fenders53 Wrote: The list of stocks in the buy range is looking very thin again.  I guess that's a good thing for our current ports.

There's still some stuff out there that appears to be reasonably valued. I'd go with ABBV, AMGN, BT, BTI, CVS, EV, LYB, ORI, QCOM, and SIEGY as representing fair or better value at the moment.

[Kerim]

(02-06-2019, 11:14 AM)fenders53 Wrote: The list of stocks in the buy range is looking very thin again.  I guess that's a good thing for our current ports.

Yeah, it makes me sad when the bargains dry up. But at least feeling good about the many purchases I made in December!

[divmenow]

You are correct. There are only a few select stocks still at a bargain. The market has ran up too fast now since Dec. Growth has slowed but yet they continue to run stocks up. But don't worry we will have another buying opportunity soon enough. In the past few days I have lightened up on positions and will hold the cash until better opportunities present themselves. I will be patient even if I have to wait to May-June lol

The buys I see right now are MO, CVS, WFC, DWDP and ABBV

That's about it!

[Otter]

(02-06-2019, 03:15 PM)divmenow Wrote: You are correct. There are only a few select stocks still at a bargain. The market has ran up too fast now since Dec. Growth has slowed but yet they continue to run stocks up. But don't worry we will have another buying opportunity soon enough. In the past few days I have lightened up on positions and will hold the cash until better opportunities present themselves. I will be patient even if I have to wait to May-June lol

The buys I see right now are MO, CVS, WFC, DWDP and ABBV

That's about it!

Am a DWDP shareholder, with a 27% paper loss on the holding at present. Am fairly certain it is fairly or better valued at this point. Am not entirely certain how to value it properly in light of the coming spin-offs, though. At one time I was an AA shareholder. Sadly, the AA/ARNC spinoff does not appear to have driven the promised value for shareholders. Hopefully DWDP does better.

[stockguru]

I was thinking of buying MCD. What everyone's thoughts about taking a position here? It doesn't correct all the much but its off a bit from its highs now. With a 22 PE or so it may be a bit over valued, but I like that divided.

[Otter]

(02-06-2019, 03:30 PM)stockguru Wrote: I was thinking of buying MCD. What everyone's thoughts about taking a position here? It doesn't correct all the much but its off a bit from its highs now. With a 22 PE or so it may be a bit over valued, but I like that divided.

Looks pretty steeply valued. About 10% above its 10yr average P/E, dividend growth rate has been flattening for the past couple years, current yield at multi-year lows, and lots of debt going into a late-cycle economy. I have a feeling there will be sale prices in the future much better than this. 

[Kerim]

(02-06-2019, 03:30 PM)stockguru Wrote: I was thinking of buying MCD. What everyone's thoughts about taking a position here? It doesn't correct all the much but its off a bit from its highs now. With a 22 PE or so it may be a bit over valued, but I like that divided.

Hard to argue with buying MCD at almost any point so long as your time horizon is long. But it does go on sale now and again, though its cycles tend to be pretty long, in my opinion. The company seems to be doing pretty well now, 2018 earnings were great, and it has avoided significant negative press, and the share price reflects all of that. At some point in the next five years though, fast food will get trashed again, their stores will get dated again, and the P/E will compress and the yield will head up over 3 percent as people -- again -- lament its demise. That's when I like buying MCD. Then just sit back and wait for the refresh as the stock runs to new highs.

In short, I can't recall a bad time to buy MCD shares (including now), but I can recall some way better times, and they'll come back around.

[Otter]

(02-06-2019, 04:06 PM)Kerim Wrote:

(02-06-2019, 03:30 PM)stockguru Wrote: I was thinking of buying MCD. What everyone's thoughts about taking a position here? It doesn't correct all the much but its off a bit from its highs now. With a 22 PE or so it may be a bit over valued, but I like that divided.

Hard to argue with buying MCD at almost any point so long as your time horizon is long. But it does go on sale now and again, though its cycles tend to be pretty long, in my opinion. The company seems to be doing pretty well now, 2018 earnings were great, and it has avoided significant negative press, and the share price reflects all of that. At some point in the next five years though, fast food will get trashed again, their stores will get dated again, and the P/E will compress and the yield will head up over 3 percent as people -- again -- lament its demise. That's when I like buying MCD. Then just sit back and wait for the refresh as the stock runs to new highs.

In short, I can't recall a bad time to buy MCD shares (including now), but I can recall some way better times, and they'll come back around.

Right. I have no doubt that MCD will continue to be a profitable going concern. That's true of most Dividend Aristocrats. That said, it just doesn't hit my value targets at the moment.

[fenders53]

I've owned MCD several times over the decades. There has never been a terrible time to buy it. That said, I sold my position last week above $185 for reasons not attributed to the company. I was just increasing my overall cash position a bit as I am tentative about the market it the short to midterm. MCD ran fast after my purchase and became one of the sell candidate. It certainly isn't cheap but $190 sure wouldn't surprise me. I'd like to see 160s to get back in. I am seriously considering it as core position when the next recession comes around. IMO VERY few restaurants qualify as safe for a long-term DGI hold.