The running of the bulls! (Stock market trading thread)

[clovis]

I have nothing really to say, except that this is the 500th post on this thread.

Other than that, I'm anxiously awaiting a pull back with COP. I wonder if the earnings will be pretty bad tomorrow...

[Halfway]

looking for a decent drop today to ad to some oilers.

PBR took a big hit and overreaction. Looking for a decent rebound.. This is a pure short term spec play and might even snag the dividend in March if the trade holds out.

[tarbe]

Originally Posted by Halfway

looking for a decent drop today to ad to some oilers.

PBR took a big hit and overreaction. Looking for a decent rebound.. This is a pure short term spec play and might even snag the dividend in March if the trade holds out.

PBR sure has been hammered this past year. Fundamentals don't look bad....

[clovis]

Nice to see the dividend continue uninterrupted with COP.

Thinking of making a move on COP before the ex-dividend date.

[tarbe]

Originally Posted by clovis

Nice to see the dividend continue uninterrupted with COP.

Thinking of making a move on COP before the ex-dividend date.

I stuck my little toe in on COP today when it was trading at it's session lows. Bought a little MSFT and WU as well...just kinda putting a stake in the ground.

Was real tempted on AAPL, but held off. Glad I did....it lost all the day's gains by the close. I'd like to get back in at <$450

My WHZ was all over the place today....up 10 cents, down 13 cents...up and down and up and down. Too close to the ex-div date to mess around selling, but it has been mostly up the last month and I am up overall on it, so I can't complain....yet. Looking forward to my second dividend from this monster.

[Halfway]

Originally Posted by tarbe

PBR sure has been hammered this past year. Fundamentals don't look bad....

Exactly.

This is pure spec as I have no desire to carry it long term.

Gonna break this resistance at 1514 S&P today? Looks like DOW has a date with 14015 very soon.

[clovis]

One other thing to like about COP and their dividend is that they pay fast. About 15 days after the date of record, the money will be deposited in your account.

Some of these companies take up to 40 days to pay.

In the big scheme of things, I know it doesn't matter, but I like to get the dividends as fast as possible. Who knows when another buy opportunity will present itself?

[willow_girl]

Anyone have any thoughts on ARI?

Sure do like the looks of that dividend!

[clovis]

As for ARI, I personally see a few red flags:

A second IPO in October, 2012 makes me wonder how sound their business might be. Is the IPO a way to keep funding the dividend, or to keep the company afloat?

Even with an 8.9% yield, they've only been paying for 3 years. I'd like to see a longer dividend history.

For the money, I like BPT much better, even though the company received some horrid press based on some information that wasn't even correct...and the writer was shorting the stock at the same time it was being published.

[frogmammy]

Unfortunately, MY bull is out grazing in the middle of the field, when he's not asleep under a tree If it wasn't for the fact that NTRI pays about 8% every quarter, I'd be depressed....I've had it a year now. I guess I'm going to own this FOREVER!!! Fortunately, not everything I've bought stays around this long!

Mon

The dividend is 8% annually. So, you've collected 70 cents per share dividend, while the stock price has dropped $3.00.
Still, I'm curious as to what promoted you to buy the stock in the first place? Did you think it had reached a bottom and was highly likely to rebound? Do you like the company's products? Did you feel that the valuation of the company was approaching cash reserves? I'm always curious exactly why somebody decides to buy into a company, then hold it. Most people (so far) have ignored that question, or else admit there was no logic involved.

Here are 2 examples of what I think is rational trading. I'm posting them now. I expect both to be rocking tomorrow.
1 Option straddle at 65 on ASEI. Since the February options expire, the contracts will be at very close to actual cash value the rest of the week. So, at this moment, the bid for the 65 straddle(call and put) is 4.60. What that means is that you pay $4.60 for the position, and whether ASEI goes up or down, you make everything away from $65 at the moment you sell or exercise your option contract. SO, if ASEI is at 72, and you sell your call, you will get $7.00 as the return on your $4.60.
OK, so you may wonder, what if ASEI sits right there til the end of the day Friday? Weoo, you would be able to get whatever the bid is for the contracts, but certainly a loss. SO, suppose you look at the March contract? The ask for the March 65(both call and put) straddle is $5.65 You get an entire month extra time, in case tomorrow is a dud. So, even if there is less than $5.65 move in the stock, there will be the time premium.
As the evidence of the logicality of this trade I offer 2 observations. Over the past year, the next day earnings moves on ASEI has been $10, $15, $8, and a dud, for an average of $8 which would put you ahead at least $2.35 per share, or $235 per contract.
Over the 8 days following earnings, the maximum moves have been $10, $21, $8, and $6.
Every one would have paid off, an average of $11, a minimum of $6. vs the cost now of $5.65. That is in cash value, not counting the time value.

2. The same scenario for FOSL. The March 105 straddle costs $14.80. However the 100/110 position(called a strangle, rather than straddle) costs $10.20. The payoff will be the same minus 40 cents, or $40 per contract. In return for losing the $40, you are putting up $460 less outlay. Sounds like a good deal.
Over the past year, FOSL has had earnings moves of $20, $50, $23, and $12(which had stretched to $15 within 5 days) So, in each of those cases, a similar strangle would have paid $5, $35, $8, and even. Of course, that is cash value, and there is always some time premium.
So, theres my logical and sensible trade predictions. We'll be able to tell tomorrow if the payoff is immediate, or if not, we'll know within a few days.

[frogmammy]

Originally Posted by zong

The dividend is 8% annually. So, you've collected 70 cents per share dividend, while the stock price has dropped $3.00.
Still, I'm curious as to what promoted you to buy the stock in the first place? Did you think it had reached a bottom and was highly likely to rebound? Do you like the company's products? Did you feel that the valuation of the company was approaching cash reserves? I'm always curious exactly why somebody decides to buy into a company, then hold it. Most people (so far) have ignored that question, or else admit there was no logic involved.

Oh, Zong! This will SO go contrary to how you operate!

Obesity is "hot" right now, so I took a look at "fat" stocks...MED, WW, NTRI and Jenny Craig...Jenny was a no go right off the bat. There was also the exercise segment, but I had no interest at that time. Of all, NTRI looked the best to me, product availability was good, looked like it had "good bones", price was down with room for improvement. Tried the product and it was palatable, off the shelf (as opposed to MED).

And then NTRI goofed around and went down. Held on until "diet season" started and it hasn't moved much, but the season is young. Have enjoyed the 8% I receive every three months....as opposed to the 1% the bank would have paid...and I FULLY expect that the proposed changes in marketing will bring the price up again.

Mon

[clovis]

Originally Posted by zong

The dividend is 8% annually. So, you've collected 70 cents per share dividend, while the stock price has dropped $3.00.
Still, I'm curious as to what promoted you to buy the stock in the first place? Did you think it had reached a bottom and was highly likely to rebound? Do you like the company's products? Did you feel that the valuation of the company was approaching cash reserves? I'm always curious exactly why somebody decides to buy into a company, then hold it. Most people (so far) have ignored that question, or else admit there was no logic involved.

I take a long hard look and study any stock before I buy it. I answer all the questions you asked, and then some.

I look at:

Dividend payout history
Sustainability of the dividend
Payout ratio of the dividend
Dividend yeild
Debt the company has
What percentage of the stock is owned by investment funds?
What is the future for the industry as a whole?
How solid is the stock? Is it an old company, or an overnight sensation?
Charts: How has the stock preformed in the past 5, 10 and 20 years
How much has the stock fluctuated in the past?
Where is the stock in it's 52 week high and low? (I'm looking for bargains)
What is the press saying about this stock?

There are more questions that I ask before buying any stock, but these come to mind right now.

[clovis]

I missed a buying opportunity for COP before the dividend ex-date, and am not sure where to allocate the money I have:

Buy COP and wait until the next ex-date?
Buy KO, before the 2/28 exdate, even though it has a low yield of 2.7%?
Buy ATT, with it's 5% yield, even though I am going to have to wait until March to make the ex-date?

FWIW, I am trying to play catch up on my small retirement fund, and have limited cash to invest. I already own ATT, and like it very much.

Opinions, anyone?

[Michael W. Smith]

How did we miss out on HNZ - H J Heinz which is being bought up by Berkshire Hathoway for $72.50 / share?!?

I've looked at it for years - Pittsburgh is a 2 hour drive. What held me back was you couldn't buy the stock direct. If someone would have bought some shares back on December 17, 2009, it closed at $42.43. Holding it for 3 years and a few months, you would now have a stock worth $30.00 per share MORE than what you paid.

Of course, there seems to be suspicion now that there was illegal trading and some of the Wall Street bigwigs heard of the buyout a day or so before the announcement, so they could profit.

Zong, one of my criteria for buying a stock is to be able to bypass the stockbroker and buy it direct from the company - or a company that handles the buying and selling.

I also prefer to buy stocks that don't have an initial fee to buy in, or charges a fee for reinvesting the dividend. I also like to buy stocks that offer a Direct buy with a ROTH IRA.

All of my stocks are considered - long term. I'm buying them based on my opinion after checking information that they are a good stock to buy and to hold. A good solid stock that will throw out a dividend every quarter. A stock that produces or makes something that many people need or use.

Out of my picks, I've only had a few that didn't work out. Enron for one. Frontier for another. I owned Massey Coal - bought it, watched it skyrocket, and then watched it fall - then watched as it got bought out by Alpha Natural Resources, which has now plummetted.

Enron is of course dead. Frontier is still alive - pays a nice dividend now, but I don't ever see getting even let alone making a profit of it. (It will be a nice company to sell for a loss to help out with taxes some time.) Alpha is still alive - but coal stocks have been hit hard. Luckily I didn't have large amounts invested in any of them.

On the other hand, I've done well with some stocks. Some stocks have thrown off other companies and given me free stock - Marathon Oil through off Marathon Petroleum which has done great. There is at least one other company if not two that through off a company and gave me free stock.

I'm an investor that has evolved. My initial retirement was in a bank CD. Didn't take too long to figure out once interest rates dropped to nothing that the bank was ripping me off. Transferred from the bank and put into an IRA with my insurance company. (At least it is guaranteed to pay a MINIMUM of 3%.)

I then evolved into mutual funds, and joined The Vanguard family.

I've now evolved and have bought individual stocks.

I might just evolve at some other point and try some day trading or flipping. But currently I'm happy to buy and hold.

[clovis]

Originally Posted by tarbe

I have to admit to having a soft spot for COP. The petrochemical company I retired from this past year started its existence as Conoco Chemical Company.

I still consider them a sister company. I dealt with them quite a lot when I was working, and I think they are a pretty good outfit.

I am waiting for a dip to get back in (took some profits this fall). I hope I get a good chance to get back in at a discount!


Tim

I was napping this week when COP dipped below $57.

I've been working on another investment deal with real estate this week, but I hate it that I missed COP.

[clovis]

Originally Posted by Michael W. Smith

How did we miss out on HNZ - H J Heinz which is being bought up by Berkshire Hathoway for $72.50 / share?!?

I've looked at it for years - Pittsburgh is a 2 hour drive. What held me back was you couldn't buy the stock direct. If someone would have bought some shares back on December 17, 2009, it closed at $42.43. Holding it for 3 years and a few months, you would now have a stock worth $30.00 per share MORE than what you paid.

I was watching HNZ back when it was in the mid-$50's. Looks like I missed out in a big way!!!

[willow_girl]

How's everyone faring in the big market run-up this week?

My IRA has increased in value by $700 since the end of January.

Unloaded some LNDC this week for a profit of $89. I haven't had a lot of time to research trades this year, so I've mostly been keeping an eye on it and WOR, buying on dips and selling when the price goes back up.

[clovis]

Originally Posted by willow_girl

How's everyone faring in the big market run-up this week?

My IRA has increased in value by $700 since the end of January.

Unloaded some LNDC this week for a profit of $89. I haven't had a lot of time to research trades this year, so I've mostly been keeping an eye on it and WOR, buying on dips and selling when the price goes back up.

I've seen a huge bump to my account too...but it sure is getting hard to find bargains in the market.