The Money Tree

Safely Generating Income in Retirement

About my long-term holdings

Posted by mounddweller on January 3, 2018

Fellow Investors,

The post today is a few words regarding the long-term holdings portion of my portfolio.  Looking at the data in the “Long Term Holdings” tab you can see that I began accumulating these positions about 10 years ago.

My thought at the time was to begin accumulating large cap, dividend growth stocks at reasonable prices as the opportunity presented itself.  Then, I would automatically reinvest the quarterly dividends until such time as I was ready to retire and begin cashing those quarterly dividend checks.  Since these were ‘buy and hold forever’ stocks I tried to ignore month to month fluctuations in price.  I feel the plan has been successful.  The portfolio now has 15 stocks, 11 C-Corps and 4 MLPs.    My strategy has been to buy when the stock is currently out of favor.  Doing so has allowed me to buy AT&T at an average cost of less than $32/share, Exxon Mobil at $73, Intel at $24, McDonald’s at around $94, and Microsoft around $29.  With all of these companies increasing their dividends per share on an annual basis my yield on cost is substantial and will only continue to increase.

So, you may be wondering what I currently have on my watchlist.  As you might expect, given the current market conditions, not much!  However, there are a few companies that I would like to add to the portfolio if the opportunity presents itself.  IBM is one such company.  I’ve looked and passed on it multiple times in the past couple of years when the dividend yield exceeded 4%.  22 straight quarters of declining revenue make me a bit nervous to pull the trigger.  However, I think they may be very close to putting this bad string of results behind them.  If they have a good 4th quarter of 2017 and we get even a mild correction in the market, I’d buy a small number of shares at $150 or less.

Another stock I have my eye on is OKE.  It is a large mid-stream oil and gas pipeline company headquartered in Oklahoma.  It has excellent growth prospects and despite jumping in the first couple days of trading in 2018 still yields a very respectable 5.4%.  I didn’t anticipate it jumping out of the gate in the new year and so now will wait for it to cool off and pull back a little bit.  I will be pleased if I can get it at $53/share or less.

Well, that’s it for this post.  Later this week I hope to introduce you to the real estate portion of my portfolio.




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I’m back!

Posted by mounddweller on January 1, 2018

Fellow Investors,

A new year has arrived and I have returned from a multi-year hiatus from writing in my blog.  Going forward the blog will have a new focus.  Previously, I focused on trading covered calls and naked puts for income.  Now that I’m a few years older and a little bit wiser, I’ve learned there’s a less stressful way to fund my retirement years.  Over the next couple of weeks I hope to introduce you to my new approach.

Until next time…




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Update – TROW

Posted by mounddweller on February 3, 2015

Fellow Traders,

I closed my Bollinger Band (BB) trade in TROW in just one day.  You’ll recall yesterday I posted that I bought TROW at $79.10.  Today the market was up big, the DOW was up over 300 points.  Consequently, TROW hit my first target price of $81.00.  I closed my position right before the end of the trading session, selling TROW at $81.15.  Doing so gave me a one-day ROIC of 2.37%.

It is likely that I left money on the table so to speak.  I only had the trade open one day and the stock closed today near its daily high.  Thus, I wouldn’t be surprised if it runs a bit higher.  However, with the market volatility we’ve seen lately it could just as easily give it all back tomorrow.  So, I decided to pocket the very short term gain and move on to the next trade.






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New Trade – TROW

Posted by mounddweller on February 2, 2015

Fellow Traders,

I have a new trade to tell you about.  I know, I know two in one month what am I thinking (ha ha).  However, this is not my typical naked put or covered call trade.  This is a straight, go long, buy stock trade in T. Rowe Price Group (TROW).  For those of you who follow Teddi at you’ll recognize this as what she calls a Bollinger Bands trade.

Below is a 3 month chart for TROW.

BLOG - TROW 3-mnth 020215

The blue lines are the Bollinger Bands (BB).  The BBs provide a range of expected price action for a stock.  Wide BBs are a function of high volatility while narrow BBs indicate low volatility.  Stocks generally stay within their BBs.  Movement outside the BBs indicate extreme enthusiasm or pessimism by traders in a stock.  Stocks trading above or below their BBs will usually act like a coiled spring and move rapidly up or down back into the BB envelope.

The strategy behind a BB trade is to buy the stock after it reverses course and moves back up and away from the lower BB and then sell it once momentum begins to wane or begins to fall.

Today I bought TROW at $79.10.  In looking at the chart you can see TROW (like most stocks) fell most of last week.  On Wednesday, January 28 it closed down touching the lower BB.  Thursday, it traded significantly above and below the lower BB but ended up closing right on it.  Friday, was another big down day but TROW managed to eke out a gain and again closed on the lower BB.  Today, TROW opened higher making this a good set-up for a BB trade.

My target for this trade is to sell TROW at $81 or better.  Because the market is kind of shaky right now I’m going to set a tight stop-loss on this trade.  If at any point TROW dips to $78 I’ll sell.  I’ll also sell if TROW begins to lose momentum and closes below the opening price of the prior trading day.

If you’re a member of Teddi’s site and would like to learn more about the BB strategy you can read about it here:







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New Trade – QCOM

Posted by mounddweller on January 29, 2015



Fellow Traders,

Yes, it really is me and I’m really going to post something to my blog.  My apologies for the extended hiatus.  The reason I haven’t posted anything of late is because I haven’t been doing any trading.  I’ve continued to follow the market but wasn’t finding anything that I felt was worth risking my hard earned money on.

The increased volatility is starting to make that change.  More and more stocks are selling off from their multi-year highs and are beginning to hit major levels of support, either in the form of a 200 day moving average or previous support levels.

Today I used the huge selloff in QCOM to stick my toe back into the water so to speak.  I started with a very small trade, selling only 2 contracts of the QCOM FEB $60 put for $0.65.  If the puts expire OTM my ROIC will be 1.08%.  With only 23 days to expiration my annualized return is 17.2%.

Below is a 3-yr chart for QCOM.  As you can see there is plenty of support for QCOM at $60.

BLOG - QCOM 3 yr chart

I executed my trade very early in the trading day.  At 9:38 am ET to be precise.  Hindsight being 20/20, as you can see in the 1-day chart, it is clear that I was early in the trade.  Had I waited until later in the day I would have been able to get a great deal more for the FEB $60 contract.  However, at the time of my trade QCOM was at $64.42, 9.3% below the previous day closing price of $70.99.  That’s a huge one-day drop for a blue-chip stock like QCOM.  I felt QCOM couldn’t fall much further.  Also, since I still have a day job I couldn’t sit and stare continuously at my trading platform waiting for the stock to hit the very bottom for the day.

By the end of the day QCOM finished well off its lows.  Thus, I am very comfortable with my entry point.

BLOG - QCOM 012915 chart

My plan is to buy back the puts at $0.10 or less before expiration.  If QCOM closes below $60 before expiration I will roll the puts out and down, possibly adding more contracts as necessary to maintain a net credit on the trade.  However, given the current ‘up one day, down the next’ volatility we’re experiencing right now in the market I don’t think that will become necessary.  I think QCOM will bounce significantly before expiration.

Best Regards and Good Trading,







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October / November Results

Posted by mounddweller on November 30, 2014

Fellow Traders,

Ok, I know I didn’t provide an update last month.  Quite honestly I had very little to write about.  My trading in October was negligible.  I closed two trades one winner and another a loser.

My losing trade was in Analog Devices (ADI).  On September 17th I sold to open OCT $49 puts for $0.75.  At the time ADI was trading at $49.71.  I sold the puts as the stock bounced off the lower Bollinger Band.  My intent was to buy back the puts once the stock ran into resistance or hit the upper Bollinger Band.  As you can see, after about three days the stock began to trade sideways.  Had a stuck to my plan and exited I would have closed out the trade with a small gain.  Instead I chose to hang on and hope that ADI would resume its climb to the upper Bollinger Band.  Failure to follow my plan cost me dearly.  I held on until OCT expiration but not wanting to have ADI put to me and not wanting to roll out to NOV I chose to buy to close my puts and accept the lost.  As you can see I bought back my puts at almost the worst possible time.  Shortly after expiration the stock began to rise.  Had I simply rolled out at the $49 strike or down and out to a lower strike I could have managed the trade back to a profitable close.  Alas, hindsight is 20/20.


My revised plan is to resell another round of puts once ADI returns to a favorable trading position.  Thus far that has not occurred and I am sitting on my loss.

My winning trade in October was in T. R. Price (TROW).  TROW is on my list of stocks that I’d like to accumulate for my retirement portfolio.  On October 15th I sold to open the NOV $70 puts at $1.85.  Like with ADI, TROW was at the bottom of the Bollinger Band and I sold the puts in anticipation of a bounce.  However in this case, unlike ADI the trade worked in my favor.  I was able to buy to close my puts just one week later on October 23rd at $0.30.


Now let’s move on to November.  This past month I successfully closed two trades, one in AT&T (T) and the other in TJ Maxx (TJX).

On October 23rd I sold to open the NOV $33 puts for T at $0.36.  At the time T was trading at $33.49.

BLOG - T nov14

At November expiration T was trading at $35.28 and the puts expired OTM.

My last closed trade was in TJX.  On November 19th I sold to open the TJX DEC $57.50 puts at $0.65.  At the time TJX was trading at $61.35.


A scant 6 days later TJX was at $64.24 and I was able to buy to close my puts for only $0.05.

That’s it for my closed trades.  My trade in VALE remains open and I am actively working to manage my position by selling covered calls and buying them back when the opportunity presents itself.

My newest open trade is in Occidental Petroleum (OXY).  I used the energy meltdown on Friday to sell the DEC $75 puts at $0.77.  At the time OXY was trading at $79.82.

Well that’s it for another month.  I’ll be back at the end of December with both a monthly and yearly update.

Happy trading.







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September 2014 Results

Posted by mounddweller on October 6, 2014

Fellow Traders,

There isn’t much to report for the month of September.  The level of activity at work has severely curtailed my trading.  This is both a good and a bad thing.  Good in that it has allowed me to miss several ‘opportunities’ which likely would have resulted in a bad trade and would have put me in a rescue mode.  Bad in that I did make a few snap decisions which I’m now regretting.  Let’s first look at the trades I closed in September.

I closed 3 trades in September.  They were in KMI, TGT, and TROW.  KMI is a stock in which I’m looking to build a long-term position.  I have been trading naked puts in KMI since February.  The range of puts I have sold has been $32.50 – $37.50.  In September I had 2 SEP $37.50 puts expire OTM.  This trade netted me $118.05 with a ROIC of 1.57%.  I kept the trade very small because I felt KMI might fall further and I wanted to be able to roll out and down while increasing the number of contacts as necessary.  That didn’t happen so I’m happy with a small profit.

Next up is TGT.  My TGT trade started back in early August as a buy/write in order to capture the dividend.  I bought the stock at $58.06 and sold the AUG $58 calls.  The calls were exercised and I had the stock called away from me at expiration and after the ex-date.  The dividend landed in my account on September 10.  This trade was also small, only a couple hundred shares.  I netted $195.10 and my ROIC was 1.68%.

My last closed trade was in TROW.  TROW is another stock in which I’d like to build a long-term position.  Back in July I began this effort by selling the AUG $80 put.  TROW fell significantly in AUG and rather than accept assignment I decided to roll the AUG puts out into SEP.  TROW subsequently recovered and the SEP $80 puts expired OTM.  This trade netted me $216.60 and my ROIC was 2.71%.  I am now waiting to reenter the trade with NOV expirations being the target.

Now let’s take a look at the new trades I opened in September.  Actually one, VALE is a trade I opened in late August.  You’ll recall I sold the SEP $12.50 puts for $0.15 and said I’d let the stock be put to me if they expired ITM.  The purpose of doing so was to be long the shares and in a position to capture the substantial $0.40 semi-annual dividend whose ex-date is October 17.  The trade started out as planned but has fallen much further than I anticipated.  I am now sitting on a substantial unrealized loss as I bought the stock at $12.50 and it closed today at $11.31.  This, however, is an improvement over its low last week of $10.61.  My plan remains to sell $12.50 calls after it recovers and I’ve earned the dividend.  Now it just looks like it’ll take a bit longer than I originally anticipated.

My new open trade is in ADI.  Specifically, I sold the OCT $49 puts at $0.75.  This is one of those cases where I took my eye off the ball and let the trade run away from me.  My original intent was to sell the puts as the result of the stock hitting and bouncing off the lower Bollinger Band.  The trade was to end when the rebound petered out and I had captured a large portion of the initial premium.  Unfortunately as I mentioned at the beginning of the post I’ve been very busy at work and I missed the turn in the stock.  ADI got as high $50.64 after bouncing off the lower Bollinger Band at around $48.72.  Today, ADI closed at $47.15.  Unless we have a big bounce in ADI before expiration, I’ll need to roll this position out and down.  I’ll likely increase the number of puts in the trade and roll down to the $48 strike.

So there you have it.  That’s the extent of my trading during September.  Best of luck to everyone as we head into the historically volatile month of October.





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August 2014 Results

Posted by mounddweller on August 29, 2014

Fellow Traders,

Well another month has passed us by.  This one seemed to pass by very quickly.  Let’s see how I did.

I closed 5 positions this month, 4 were winners and one was a loser.  Let’s put the bad news behind us and talk about the loser first.  Back in April of this year I bought JUL $VIX puts.  My rationale was that the VIX was very low and that we’d have a pullback at some point before July expiration after all the big shots on Wall Street headed for the Hamptons in late May.  Alas, the substantial pullback I felt was a certainty never transpired.  Instead the averages just kept plowing on to new highs and the $VIX got even lower.

In early JUL as expiration drew ominously closer I decided to roll my puts out by selling the JUL puts and buying AUG puts.  The total amount of capital I had in the trade at this point was $1,578.  Thankfully for me we finally got a small, quick pullback in early AUG which allowed me to exit the position with a loss of just $530.  Am I happy about the loss, definitely not!  However, it is a much better result than losing the entire $1,578.  I could have rolled out again and tried to wait out being able to exit at a profit but given the market’s trend to the upside I decided to just cut my losses and move on.

This was the 3rd time I’ve tried to trade the $VIX.  I’ve lost money 2 of the 3 times.  I doubt I’ll try this trade again anytime soon.  OK, enough said about the lone loser.  Let’s now look at my winners.

My four winning trades were in INTC, MAT, QCOM, and TGT.

Last month I told you about being called out of my long-term position in INTC with deep ITM covered calls at $27.  The other part of that original trade included more covered calls at the AUG $26 strike.  I got called away at $26 and ended up making 9.88% on the trade.  I still have some INTC left in my account that I hadn’t sold covered calls against.  I will look to add to that position in the coming months once INTC falls back into my buy range which is just under $30.

Now, let’s look at MAT.  You’ll recall I originally sold the AUG $35 puts at $0.35 and my plan was to take assignment if they closed ITM and then turn around and sell SEP covered calls and try to collect the $0.38 dividend, the ex-date of which was 8/25.  Well, at AUG expiration MAT closed at $35.08, thus my AUG puts expired worthless.  On the following Monday with the dividend ex-date only one week away I took another look at my options.  As it turned out premiums were far better for the SEP puts than they were for the calls even after accounting for the $0.38 dividend.  Thus, I decided to sell the SEP $35 puts for $0.70.  After going ex-dividend on 8/25 MAT fell through support at $35 and got to as low as $34.46 on 8/26.  On 8/27 it bounced so I decided to buy back the SEP $35 puts at $0.55.  Doing so got me out of the trade with a profit of 1.24% in 41 days.  I’m now looking for a good time to re-enter the position as I feel MAT is a true bargain at these levels.  I’m currently tracking the SEP and OCT $34 puts.  MAT closed today at $34.46.

Next up is QCOM.  Last month I mentioned that QCOM was taking me for a wild ride.  Thankfully the ride, while exciting, ended profitably.  I entered this position back on July 24th by selling the AUG $74.50 puts.  A week later I had to role these down to the AUG29 $74 puts.  Then just one day later I had to roll down yet again, this time to the SEP $72.50 puts.  I also had to increase the number of contracts to keep the trade in a net credit status.  It bottomed at $72.49 on August 7th and has been rising nicely ever since.  On 8/26 I bought back my SEP $72.50 puts at $0.13.  I ended up closing the trade with a net gain of 0.79% (about $180).

My last ‘closed’ trade is in TGT.  I have closed in quotation marks it isn’t officially closed yet.  I’m actually waiting on the dividend I captured to hit my account on 9/10.  On 8/15 I bought TGT at $58.06 and sold the AUG22 $58 calls for $0.61.  I had the stock called away from me on 8/22.  However, I still earned the $0.52 dividend.  My net gain on the trade will be 1.68% with a 26 day holding period.

That’s it for my closed positions.  However, I also opened some new positions this month as well.  I currently have open positions in KMI, MCD, TROW, and VALE.  All but VALE are on my long-term hold list.  With KMI I already have a small position that I’m hoping to expand by having sold the SEP $37.50 puts at $0.63.  I initiated a small position in MCD by just buying the stock outright.  I couldn’t find a decent covered call trade I liked to try to capture the dividend so I just bought it straight out.  With TROW I’ve been selling the $80 puts for a couple months now.  It goes ex-dividend on 9/10 so I’ll need to make a decision on it in the next week or so.  Last up is my brand new trade that I just entered today in VALE.  On the Yahoo message board I frequent they’ve been talking about VALE for quite some time.  It’s not on my list of tracking stocks but after hearing about all of the successful trades everyone was making in it I decided to give it a try.  Today I sold 10 VALE SEP $12.50 puts at $0.15.  We’ll see how everything turns out in about 3 weeks.  My plan is if assigned at $12.50 is to sell covered calls and try to capture the large, semi-annual dividend of $0.4075 dividend in October.  If the puts stay OTM I may go ahead and do a separate buy/write trade later in the month to try to capture the dividend.

Well that’s it for another month.  Happy trading.


Best Regards,








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July 2014 Results

Posted by mounddweller on August 9, 2014

Fellow Traders,

I’m slow to post my monthly results again.  I think it is partly the result of my apathy towards this market.  As I mentioned last month I’m finding it harder and harder to identify trades which meet my level of comfort with regard to risk vs. reward.

However, that being said I did do a few trades during the month of July.  Let’s see what my closed trades looked like.

I closed 5 trades in July, netting $1,357.84.  The bulk of my profits came from a long-held position in INTC.  You may recall back in April I sold JUL and AUG calls on INTC at strike prices of $27 and $26 respectively.  At expiration in JUL my shares were called away at $27.  This resulted in a gain of $851, over $4 per share.   I chose not to roll my options out and up simply because it has been my experience that chasing a stock up doesn’t work.  I’d rather allow the position to be called away and then start again fresh when the stock inevitably takes another dip.

My other closed trades in July were in LOW, GIS, NUE, and XLNX.  With LOW and XLNX I bought back my puts early, locking in a profit before expiration.  GIS and NUE were held to expiration and expired OTM.  My average holding period for the four trades was 16 days.  GIS was the longest held at 25 days and XLNX the shortest at 6 days.

In July I also initiated 3 new trades and rolled out one existing trade.  My new trades were in MAT, TROW, and QCOM.  The existing trade I extended by rolling out was in the $VIX.  More about that in a few weeks when I report my AUG results.  So here’s what my 3 new trades look like:

(1) On 7/17 – STO 4 MAT AUG $35 puts at $0.35.  I got in a little early but I liked this trade because MAT is oversold, beaten down, and has been left for dead.  Had I waited a few more days I could have gotten $0.50 for my puts.  MAT has strong support at $35 and pays a quarterly dividend of $0.38/share.  If MAT slips below $35 at expiration my plan is to take assignment and sell the SEP calls while capturing the next dividend on 8/25.  While MAT is not on my long-term hold wish list, should I be assigned I wouldn’t mind owning it at the current price and holding it until it recovered.

(2) On 7/24 – STO 1 TROW AUG $80 put at $1.35.  Clearly I was early on this one as well.  The stock has continued to move south since I sold my put.  On Friday it closed at $78.11.  Unlike MAT, TROW is on my long-term hold list.  I want to build a ‘hold forever’ position in TROW, reinvesting the dividends until I’m ready to retire and then living on them in retirement.  For this reason, should TROW close ITM I will accept assignment and begin collecting the modest, but rapidly growing quarterly dividend of $0.44.  It has increased its dividend every year for the past 27.  In the past 5 years the dividend has grown 76%, from $0.25 to $0.44/qtr.

(3) On 7/24 – STO 2 QCOM AUG $74.50 puts at $0.60.  This trade has taken me on a wild ride.  The first week I felt like a genius.  However, on 7/31 my puts went ITM so I immediately rolled down and out two weeks to the AUG29 $74 puts for a net credit.  However, you’ll have to wait until SEP to hear how the wild ride ends because on 8/1 QCOM took another dip and I had to roll further out and down to the SEP $72.50 puts.  I’m no longer feeling like a genius and hope that I’m able to extract myself from the trade with all of my money if not my pride intact.

Well that’s it for another month.  If I get so motivated and find some time I may post again this month telling you a bit more about the stocks in my dividend superstar list and which ones I’m looking to accumulate long-term for my retirement.

Best of luck to my fellow traders.  Be safe out there!





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June 2014 Results

Posted by mounddweller on July 6, 2014

Fellow Traders,

A belated Happy Independence Day to you!  I hope each of you has had a wonderful holiday relaxing and enjoying good food, drink, and the company of friends.

To be honest I don’t have much to report this month.  Several factors limited my trading activity not the least of which is the height of the market and the record lows in the $VIX.

I only closed two trades in June.  On May 20th I sold 3 JUN EXC $33 puts at $0.35.  At expiration on June 21st these puts expired OTM.  The result was a small gain of $96.55 with a net ROIC of 0.98%.  My other closed trade was in Nucor.    On June 4th I sold two 27JUN $49 puts at $0.55.  These barely expired OTM with NUE trading at $49.09 on Friday, June 27th.  My profit was $102.05 with a net ROIC of 1.04%.

During the month I opened two new naked put trades.  On June 24th I sold 2 JUL GIS $52.50 puts at $0.50.  Also, on June 30th I sold 3 JUL NUE $48 puts at $0.56.

As I mentioned at the beginning of this post it is becoming increasingly difficult to find trades which meet my risk / reward criteria.  The $VIX is so low that the only trades with any premium are close to ATM or are on risky stocks.  Thus, I’ve limited my trades to ones where the high quality stock appears to be bouncing off the lower Bollinger band (BB).

That’s it for this month.  Best of luck to everyone one in the coming month.  Be ever vigilant!  A correction could occur when we least expect it.










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