Thursday, October 23, 2014

Busy Earnings Day

I had CA report last night, the report seemed pretty uneventful.  Tonight SYNA, CBI & KLAC report.  Hopefully some good news.  I am not batting that great so far this earnings season.  RCII was off a bit. SNDK was off the first day, but has since recovered.  Certainly no blowouts. I am having a decent week, but need another 2 or 3 like this one just to crawl back to break even.  The GTAT BR really put a big hole in my results.

I have only made one transaction this week.  I rebought VEC at $19.71 on some heavy selling (I expect by institutions) at the start of the week. Recall these spin offs often sell off early as a lot of Mutual Funds and ETFs may not be allowed to hold them per their bylaws.  That early price pressure is something smaller investors can take advantage of.  VEC seems like a solid (if boring) company and is expected to earn well north of $2 a share. Seems they should be worth $245 to $25.

Also spin offs often prosper as they can focus more on what they see as important issues as they are no longer part of a larger company.

2 comments:

John Carney said...

Marsh,

Have you thought about writing out of the money puts on MFI. I did a lot of this in the 1990's when the blue chips were doing well.

Right now you own five of the 10 MFI that have 2.6% dividends. So you would write the Dec 20th 2014 on the ones that you don't own and use Mr. Random to select if there is more than 5 stocks. Or you could include stocks with 1.8% to 2.5% dividends if there were not five on the list.

Normally the market moves up over 80% of the time so you just collect the premium. Over time it can pick up 3 to 4 percent. The income would help with the stinkers that can go off 30%.

Marsh_Gerda said...

John - I have not considered that. I did think about selling some calls on SNDK and actually did with ATVI.