The Money Tree

Safely Generating Income in Retirement

Archive for May 1st, 2011

Deep OTM NP Strategy – MAY Week 3

Posted by mounddweller on May 1, 2011

Fellow Traders,

A very uninteresting list this week.  When I first saw the list I thought it might have some exciting possibilities.  I thought this because there were several selections which showed up on our list for the very first time ever.   These selections included HUSA, NR, and OWW.  However, after the requisite due diligence none seemed to offer a high enough return relative to the degree of risk being taken.

Best of luck to everyone in their trades this week.

Regards,

Troy

Advertisements

Posted in Deep OTM NP Strategy | 2 Comments »

NOK – Position Closed

Posted by mounddweller on May 1, 2011

Fellow Traders,

On Friday I closed out my position in NOK.  You’ll recall I initiated this position back on March 11th.  My objective in this trade was to capture Nokia’s dividend which, like a lot of foreign companies, is only paid once a year.  The ex-date for their annual dividend is May 4th.  I know what you’re thinking, Troy you sold too early, you’re not going to get the dividend.  Correct, I’m not.  Instead I applied the old adage, “a bird in hand is worth two in the bush!”  I decided to take advantage of the run-up in price and take the capital gain while I had it as opposed to collecting the dividend on May 4th and then perhaps having the stock fall back substantially.

Here are the transactions for this trade:

This turned out to be a wonderful trade.  In just 49 days I was able to generate a ROIC of 12.53%.  I consider that to be quite satisfactory.  This trade worked out so well that I am going to look for other foreign companies who pay substantial dividends once per year.  The strategy is simply to buy the stock a few weeks prior to the ex-date and ride the run-up as other traders drive up the price to get into the stock and capture the dividend.  If the stock rises substantially before the ex-date, take the money and run.  If it doesn’t, hold on to the stock, collect the dividend and then sell covered calls against it until the price recovers from the drop after going ex-dividend.

Regards,

Troy

Posted in Portfolio Updates | 2 Comments »

What Others are Trading – May 2011

Posted by mounddweller on May 1, 2011

Fellow Traders,

Can you believe it?  I’m actually getting this message posted on the first day of the month!  Long time readers know this is a very rare occurrence.  Usually I forget until several days have passed.

Anyway, here’s your chance.  Tell us what is working for you, and what isn’t.

Regards,

Troy

Posted in Your Picks | 4 Comments »