Cash Positions

[dividendventure]

I keep an emergency fund on the side and invest everything else. If I find no interesting purchases, I accumulate the cash for a while, which ends up never being more than 2 months.

I decide how much I will invest in the beginning of the year and then stick to that. This means I am happy to take a chunk of my emergency fund to invest in a sudden market drop, but then I spend the next few months building it back. At the end of the year I will have a full emergency fund and the investment amount I decided.

This year I am quite happy as I have already reached my quota

[hendi_alex]

I've been using T as a vehicle for covered calls for quite a while. Just recently trimmed the position by 40% however, as don't like the self inflicted damage that is being done in the sector. These price wars are going to hurt performance for many quarters into the future. That combines with under funded pension issues that are already a specter for T. So my opinion is to underweight the big telecom companies until prices settle at a point that provides for healthier margins.

[rapidacid]

Alex, would you be willing to share a recent Covered Call trade you executed for T? Every time I've looked the numbers have been pretty junky

[hendi_alex]

My T cc plays are modestly ahead, by maybe $1000, but the play has gone sour, erasing most of the gains. My premise was that call income would be adequate to offset any potential capital losses, thereby sheltering the dividend as real cash flow. Before the recent price drop, as a covered call play it was a real cash cow, kicking out about 5% every three to four months. With the current drop, two or three of the most recent buys have dropped to modest losses and the overall gain just represents a modest percentage of the invested dollar amount. That is why I trimmed the position and will not initiate more covered call plays unless the big three quit playing this cut throat game that will lead to much lower share prices if it continues for very long.

[Jimbo]

(12-15-2014, 12:39 PM)hendi_alex Wrote: My T cc plays are modestly ahead, by maybe $1000, but the play has gone sour, erasing most of the gains. My premise was that call income would be adequate to offset any potential capital losses, thereby sheltering the dividend as real cash flow. Before the recent price drop, as a covered call play it was a real cash cow, kicking out about 5% every three to four months. With the current drop, two or three of the most recent buys have dropped to modest losses and the overall gain just represents a modest percentage of the invested dollar amount. That is why I trimmed the position and will not initiate more covered call plays unless the big three quit playing this cut throat game that will lead to much lower share prices if it continues for very long.

Some see gold, some see coal.
In this I see both, my T is down (I see coal), I can call T and tell them, I want in on some of this price slashing (usage plans), (I see gold).
I'll call and tell them to reduce my rates and if they balk, I'll tell them I'm a owner, that'll get their attention.

Jim

[hendi_alex]

I'll take my gold via the 50% off sale that is going on at the gas pump. When I once again start to feel pain at the gasoline pump, my portfolio is going to explode over the top. So there will be something positive happening on both sides of the cycle. And the nice thing here, is that I don't have to call to complain and beg in order to get the discount at the pump. Adequate competition guarantees the discount.

[Jimbo]

(12-15-2014, 03:58 PM)hendi_alex Wrote: I'll take my gold via the 50% off sale that is going on the the gas pump. When I once again start to feel pain at the gasoline pump, my portfolio is going to explode over the top. So there will be something positive happening on both sides of the cycle. And the nice thing here, is that I don't have to call to complain and beg in order to get the discount at the pump. Adequate competition guarantees the discount.

I feel the joy of up in one down on another, stock vs pump.

Though being in the Bay Area, we never see that sub $2.00 per gallon, lol.

Have a nice little energy set and looking to pickup some more with a little bit more of a drop.

Jim