Yesterday’s “action.” note the flight to gold and silver:
Lots of cockroach stocks. When you see cockroach problems, you sell and sell. Google’s China problems started this:
BP now yields 9.14%, assuming they survive and continue to pay their dividend.
And now for my favorite cockroach stock:
Sell in May and stay way. That’s the mantra. This year lots of adherents. These two charts are from Business Insider, which comment:
Latest fund flow data from the Investment Company Institute shows just how panicked investors became in May. As shown below in red, we’ve seen enormous outflows from U.S. equities, with $13.4 billion fleeing in the week of May 26th alone. Bond fund flows, shown in gray, have continued to see net new money.
On this chart, they comment:
From a fund flow perspective, investors in mutual funds have now pulled money out of U.S. stocks during 2008, 2009, and now year-to-date in 2010. To us this should be read as a substantial contrarian indicator. The investor panic was enormous during the last four weeks, and on a multi-year view, investors have simply been pulling more and more money out of stocks:
For more, click here.
Progress of sorts:
1. I hate being a landlord, though I do like the checks. I organized to: fixed a water leak in the bathroom, to solve the lead paint certificatton problem, to scrap and paint the walls and ceiling, to change the air conditioning filters, to fix the garage door motor. Gives excitement a whole new meaning.
2. I finally got delivery of Lenovo’s new ThinkPad X201 with the hard-to-get, but speedy i7 chip. It came with Windows 7 64 bit edition. So far, so good. It’s a total pain to test and reinstall all my favorite software. some of it, which worked with Windows XP, has refused to work with Windows 7. Real stupid.
I do like the X201’s speed, form factor (it’s small and light) and keyboard (full size and fantastic to type on). Note this X201 has added a touchpad, which is surprisingly useful.
3. My researches into covered calls are turning up a surprising breadth of investor emotions. One reader claimed I was a “moron” to consider them. Others said I’d lose my shirt in a declining market, like the one we have. Suffice, I’m still researching.
4. My NOW account used to pay 0.6%. Now it pays 0.4%. I opened yet another CD with yet another distant, but FDIC-insured bank.
Old, but good. You can include your own ethnicity.
A little old Jewish man is walking down the street one afternoon, when he sees a woman with perfect breasts.
.
He says to her, “Hey miss, would you let me BITE your breasts for $100?”
“Are you nuts?!” she replies, and keeps walking away.
He turns around, runs around the block and gets to the corner before she does. “Would you let me bite your breasts for $1,000 dollars?” he asks again.
“Listen you; I’m not that kind of woman! Got it?”
So the little old Jewish man runs around the next block and faces her again, “Would you let me bite your breasts – just once – for $10,000 dollars?!”
She thinks about it for a while and says, “Hmmmmm, $10,000 dollars…; Ok, just once, but not here. Let’s go to that dark alley over there.”
So they go into the alley, where she takes off her blouse to reveal the most perfect breasts in the world. As soon as he sees them, he grabs them and starts caressing them, fondling them slowly, kissing them, licking them, burying his face in them – but not biting them.
The woman finally gets annoyed and asks, ‘Well? Are you gonna bite them or not?’
“Nah,” says the little old Jewish man … “Costs too much!”
Harry Newton,who wonders if interest rates will ever rise. Our wonderful government is providing its retirees with great incentive to despair. Look at TBT. It’s still dropping.
Harry,
Covered calls have utility much of the time, and clear risks at others. There are ETF's and open end funds that utilize the strategy. None have them have put up particularly fine long term results. In a severely declining market, you will lose your butt on the underlying stock and have a few shekels of option premium to ease the pain. Then you face a dilemma of re-writing at a lower strike and adding costs/complexity in a recovering stock price environment. In a wildly bullish environment you cap your gains.
Options strategies are very flexible, and you can find them for all possible scenarios. They are expensive to implement on a regular basis, and paying attention to the mathematics is critical. Covered calls are the most conservative form.
Hi Harry- I made the big plunge today-went out and bought a Mac Pro laptop at the Ft Leavenworth PX-what a deal-no state sales tax had to be paid.
On your option research, have ever thought of putting on collars? Buy stock sell call and buy put at either a higher or lower strike price. Buying the put at a lower stike price from where you wrote the call would make you bullish, and buying the put at a higher strike price would make you bearish.