When to Move From High-Fliers to High Quality Stocks

April 25, 2011

Seeking Alpha just published an article of mine with the above title. Please read it here.


New Seeking Alpha Article on Best Buy

April 6, 2011

I posted an exclusive article on Seeking Alpha making a case for investing in Best Buy, for instance by selling put options. You can read my article here.

Exclusive Articles on Seeking Alpha

January 26, 2011

Dear readers,

From now on some of my articles will be published exclusively at Seeking Alpha. I wrote an article called Two Short Ideas for Bearish Investors, which was published there yesterday.

If you are interested in following me on Seeking Alpha, you can do so here. Registration for the web site is free.

Call and Put Selling – A Follow-Up

January 23, 2011
As promised, I am revisiting some put and calls sales I wrote about in October 2009 and May 2010. In October 2009, I advocated selling covered calls on stocks to take advantage of a market that had risen substantially in a short amount of time – little did I know that it had far higher to go. After a strong pullback in May 2010, I suggested writing puts to take advantage of a weaker market and higher implied volatilities (higher prices, in other words) in options.

Before looking at the results, note that there was nothing particularly clever about the selection of stocks (the 12 largest stocks in the U.S. by market capitalization at the time the first article was written) or the timing (I suggested selling calls after a significant increase in the market and selling puts after a significant decrease). The following chart shows that I was not nailing any tops or bottoms.

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Investing for Income in 2011 with Stocks and Options – Part 3: High-Yield Stocks

January 11, 2011

A discussion about investing for income would be incomplete without looking at stocks with high dividend yields. To screen for good candidates, the following criteria were used:

* Current dividend yield over 4%.

* Growth rate of dividends over 3% in the last five years.

* Low or medium fair value uncertainty (as determined by Morningstar’s analysts).

I eliminated from the list healthcare companies (since I wrote about them recently), financials (due to lack of transparency and risks that are not easily quantified) and limited partnerships (due to tax issues that can complicate the picture). That does not mean that I think companies in these categories are ill suited for income investing – only that I wanted to avoid them in this article for the sake of simplicity. Perhaps I will address them later in a separate article. The list of candidates was further trimmed down to what I subjectively consider the best opportunities.

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Investing for Income in 2011 with Stocks and Options – Part 2

December 22, 2010

While some tech companies have been on fire this year, sporting valuations and price action reminiscent of the tech bubble, the older tech giants have grown into their valuations and many look like good investments at current prices. Here is a look at forward P/E ratios and dividend yields for a group I call Value Tech:

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Investing for Income in 2011 with Stocks and Options – Part 1

December 16, 2010

Generating a decent rate of return on an investment portfolio, while not taking too much risk, is challenging in a low interest rate environment. The standard safe investment — longer term Treasury bonds – currently offers a low rate of return with plenty of risk as demonstrated by recent market action. High-quality stocks, some with dividends yielding more than the bonds, generally seem to offer much better value.

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