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Bret Kenwell  

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  • Using Covered Calls To Increase Your Yield: Gravy For A Dividend Growth Portfolio [View article]
    Dantownehall,

    Some of the risks aren't exactly realized right away. If you buy 200 shares of POT right now, and it instantly opens down at 35. You might not want to take the loss, so you sell covered calls to lower your cost basis. let's say you sold the 37.5's. Well now if it rallies quickly you may get your shares called away for a $400 loss, assuming you used two contracts.

    Another risk to covered calls is a rising price. Let's say you again had 200 shares of POT. Maybe you sold the 42.5's this time. Well if POT went up $.25 a day for a month, you may be incline to buy back the call, and sell the one above it, the 45's. But what if for some reason POT opens up $6 and rising a $1 a day for the rest of the week, closing near 50 dollars. Well now your CC costs way to may to buy back (if you collect $81 in premium, it's probably $300 after the gap up and over $700 after the run up). And your profit is capped $7.5 below the current market price.

    As you can see, not the biggest risks in the world to worry about, being naked the calls (or puts) would be much, much worse.

    Happy trading!!
    May 31, 2012. 08:44 AM | 1 Like Like |Link to Comment
  • Using Covered Calls To Increase Your Yield: Gravy For A Dividend Growth Portfolio [View article]
    No problem! I re-read my stuff over and over and sometimes don't catch things until after it's published. Easy to miss little things like that, very easy. Good work and keep on writing.
    May 30, 2012. 06:37 PM | Likes Like |Link to Comment
  • Using Covered Calls To Increase Your Yield: Gravy For A Dividend Growth Portfolio [View article]
    Hey,

    Good piece. I too advise to sell covered calls, both in my articles and in conversations between myself and other investors. They have their time and place for them, but many times can act as a "second dividend" as you say.

    One edit though on your article:

    "The option expires worthless, you keep your 100 shares of POT, and get $162 in covered call premium for your trouble."

    If I am correct, it was 2 contracts sold for $81 apiece. Thus above would need to read

    "The option expires worthless, you keep your 200 shares of POT, and get $162 in covered call premium for your trouble."

    Just one contributor trying to help another! :)

    Good-buy and good luck!
    May 30, 2012. 06:23 PM | 2 Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Liusing,

    Of course not. my example to 2020 was obviously exaggerated, however you can see the point I was making (hopefully). That Microsoft is a fairly safe investment, short and long term. I hope Windows 8 does well, it will give them the catalyst they need and will break them into the tablet/smartphone market.
    May 30, 2012. 09:19 AM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Tiekone,

    If MSFT can tap into the tablet and smartphone industry don't you think they will still have a competitive edge? Just because they're a monopoly money maker in one dimension, does not mean that they can't/haven't diversified themselves enough to collect plenty of money in other markets to make up for it. Thoughts?
    May 29, 2012. 09:53 AM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Liusing,

    Thanks for commenting, and I agree about some of the things you say. I like MSFT for those reasons as well. It gives investors some advantages. The first being the fact that it is a dividend paying blue chip stock. The worst that happens is that 2020 comes along and MSFT is trading at 30 bucks still, but you've collected dividends the whole way down the road and have a lot more $$ than before with a yield around 3%.

    Or, some of these products really hit it, MSFT has a rich potential for growth and this thing is trading north of $40 in a few years. Either way it is a low risk, low volatile stock that most investors can stomach. You're doing a great job with scaled accumulation!! Nice work!
    May 29, 2012. 09:51 AM | Likes Like |Link to Comment
  • At These Levels, Qualcomm Deserves A Look [View article]
    Hawkeyes/Northhills,

    Great to hear you're a long time investor in the name (as long as you weren't burned in the tech bust!). But QCOM is a great name that supplies to way to many companies and has way to much demand, to be trading down at 57.
    You're comment about it being a great price entry for new investors is spot on. I think if you're new or experienced and DON'T have a position, this level is a great time to get long!

    And Northhills,

    Yes, I believe he meant 57 !
    May 28, 2012. 10:42 AM | Likes Like |Link to Comment
  • At These Levels, Qualcomm Deserves A Look [View article]
    Hey guys,

    Sorry it took me so long to comment, with it being the holiday weekend and what not.
    Bgessner,
    Yes, I am aware to where else QCOM supplies their chips. Perhaps I should have included it. I suppose I vaguely did, but especially here on SA I try and keep things to the point and focus and the largest idea most of the times, or at least the ones that I feel will hit most people directly. So I should have included them, thank you for pointing that out and I will look to build off of this advice in the future! But totally agree that QCOM is a huge buy (obviously!) right now at 57.
    May 28, 2012. 10:40 AM | Likes Like |Link to Comment
  • 10 Steady Climbers To Set Your Sights On [View article]
    Bert,

    I am curious about your thoughts on JPM. Clearly this article was written much earlier than the rapid deterioration they have have recently seen. They lost several billion dollars on their hedge trade but have since shaved what...$20 billion dollars in market cap off.

    I understand that a lot of it was a loss in trust from the bank and their reputation is badly bruised but at some point is there too much value in the JP Morgan name to let it sulk at these levels?

    Below 30 I would think it is a strong buy (pending further losses that have yet to be disclosed or some form of a financial crisis), especially with a 52-week low of about $28.

    Bret
    May 25, 2012. 04:22 PM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Analysts and their price targets should usually be taken with a grain of salt. And with life, and especially with investing, it's full of "shoulda, woulda, coulda's."

    Good-buy and good luck!

    Bret
    May 25, 2012. 12:50 PM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Yes! Growtheport (I like the fruit line haha!) But the cloud is a big deal. Again, in other comments above I got into detail as to why it is not included in the article. Though I plan to have one out soon about the cloud and it's importance.
    MSFT could fall flat on their face, as you say. But I think it has a better chance of taking that turning point. With their hands in the many different fields it's in, offers them to be successful in a few different ways. It also allows them to be more diversified and balanced for the years to come.

    In respect to your price targets, most are currently set above the current market price. I think under 30, MSFT was a good deal, but at 29 I think it's even better, personally.
    May 25, 2012. 12:19 PM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    DCristof,

    Wow, a lot of excellent points. You clearly know a few things about MSFT ;) I must add that they are becoming a rather large player in the cloud, and though this article fails to mention it, does not mean I am not aware of it. I did not want the piece to rabble on and on, so I will be doing a separate piece about it.

    And a long position in MSFT I think (obviously) is a good idea. Like I said, in my opinion, they have great value and are a good growth company. With a nice divy, they will pay you to slowly see these growth prospects play out, all with low volatility. Re-investing those dividends will likely only make your MSFT position that much better in a decade or so.

    Clearly you know your MSFT, and cloud may have been one of the "many more things to say" so if you don't mind me asking, what are your thoughts on it exactly? If you have no opinion on it, that's fine too, just curious to hear what you think is all. Comment sections are either full of destructive criticism, or helpful educational discussions. Glad to see it was the latter this time !
    May 25, 2012. 11:14 AM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Growtheport,

    Right on. Not sure if you read some of the comments, but in one I stated that MSFT doesn't need to be the #1 in every category of business they venture into. But if they can become a legitimate threat and consume market space, then that's all they really need. So they might not ever be that dominate force they were in the 90's.

    But AAPL or other names aren't for everyone. MSFT is a value play with a divy and with good future growth lying ahead. They have very low volatility and are relatively safe. Like you said, it's a good place for long term money. Especially at $29, I think a starter position is legitimate don't you think?
    May 25, 2012. 11:00 AM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    Tragic,

    It does all seem unlikely. Though that doesn't seem like a bad idea. I mean some social media is so hip and cool one day, and then gone the next. But who knows, many other iconic names have come and gone just as easily. There is probably a lot of confusion on the Twitter IPO after the FB flop, wouldn't you think?

    I like where your heads at!

    Thanks for commenting,

    Bret
    May 25, 2012. 09:16 AM | Likes Like |Link to Comment
  • After Recent Selling, Microsoft Is A Buy [View article]
    That last line at the bottom,

    "Microsoft will likely never see the glory days of the past but the certainly are positioned to continue a slow upward climb. Isn't that what a good stock is supposed to do?"

    That's what I'm saying. They may not be #1 in every business venture they enter into. But as long as they are a real competitive threat and gain market share, who cares? Their shareholders will see their stock increase, they will continue to get an increased dividend and won't suffer through large amounts of volatility going forward. It might have new innovative products, but still has the speed of a dinosaur :)

    Might I just also add, great first comment from you on SA! Welcome!
    May 25, 2012. 09:12 AM | Likes Like |Link to Comment
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