(01-30-2020, 05:44 PM)vbin Wrote: Anyone owns SO? It had a great run recently, I am thinking to sell/trim, thoughts?
Added a little RDS.B
You probably know I am crazy for UTEs. I never sell them, but I am about to in my own way. This is the UTE bubble of all time and there will be an ugly reckoning. Don't ask me when the end comes because they are in total momo mode like has never happened before to my knowledge. There is ZERO safety in a UTE with a 30 PE. At this point you might as well be holding a small cap chip stock. Due to the run up the Div yields have faded and they aren't coming back for years solely through raises. We don't know when the momo ends so now may or may not be a bad time to start. You asked for thoughts and my advice is start backing away slowly. Be prepared to leave in a hurry if necessary.
That said. I am not so smart as I started selling covered calls weeks ago which was too early. My damage is done and most of my UTE calls are now $5+ in the money. The immediate upside for me in further price run-up is now gone for me so I'll make lemonade from the situation. There is always a way to adjust to some degree. I have some serious cushion for a couple really bad UTE days and I can react. I'll just keep rolling the calls forward and selling time, at a higher strike price when possible. I'll collect some Divs while it unfolds.
This is really nuts. A real LT DGI investor will close his eyes and ride this out. It's my opinion he'll wait five or ten years to even dream of justifying the decision to not take a little profit when it was obvious the current SP was many years ahead of schedule. Most DGIers will just sit still and eat the consequences.
I'm on record now, we'll see if this post ages well or not, but I am more then certain those entering UTEs now are going to regret it, and holding won't save them ever if you consider opportunity cost going forward as you should.