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Ray Merola  

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  • Union Pacific: How To Trade Around A Core Position [View article]
    I had the same problem, Amerlafrance. Thanks for bringing this up.

    awayk, can you assist?
    May 17, 2015. 06:56 PM | Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Augustus

    AIM takes the "intuition" part out of the mix. In many cases, this may be a good thing. On the other hand, it seems that sometimes intuition can work out well: for certain people in certain circumstances. My opinion is much of "intuition" is a form of pattern recognition. Some people, through repetition, or ability to discern specific patterns, may have an innate ability to beat the odds.

    I wonder if sometimes the ability is nearly subconscious?
    May 17, 2015. 06:55 PM | 1 Like Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    awayk

    What an outstanding comment. Clearly one of the "author's picks."

    I have not studied the clinical versus actuarial approach when making investment decisions. Not even a lookback record of my own actions. It's really got me thinking.

    On one hand, when investing there are so many independent variables that are difficult to quantify, I'm not sure how to handicap it. Some "rules" like the "sell 25% when up 25%" rule I've bent a number of times for while I believe have been good reasons. But I've not checked the overall outcomes versus the path not taken.

    On the other hand, there are some investment rules that I implement in a strict actuarial fashion: scaling into/out of a position, using all limit orders, and not "chasing" stocks. If they "run away" from me, then I'll spit on 'em and find another.

    What do other readers think?? What's your opinion?
    May 17, 2015. 06:50 PM | 3 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Many thanks, peapaw

    There's nothing inherently wrong with simply buying and holding core positions (until one is convinced the underlying thesis has changed).

    An advantage of trading around core positions is most all stocks get overvalued from time-to-time, and none of us wants to "round trip" a good gain.

    Good luck with all your 2015 investments.
    May 17, 2015. 06:45 PM | 4 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    SHunsader

    You've outlined another approach to manage the tax aspect of trading around a core position. Likewise, I have found your strategy and its derivatives quite helpful in my own personal situation.
    May 17, 2015. 06:42 PM | 1 Like Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    TRI

    In my own cases, the net / net has come out pretty well. The key is to be very disciplined and not "chase."

    In addition, I tend to bend my own rules if I'm close to the point of cross the short-term/long-term capital gain threshold. However, I believe an investor should not "fear the tax man," as holding on because in an attempt to manage taxes can backfire; I suspect we've all "round tripped" a couple times and that's a really bad deal.

    Currently the long-term CG rates (at least for many of us) are not too bad. A $10 gain top rate is 15%, or $1.50. In the UNP case, selling ~$116 and buying back ~$106 works out fine.

    Thank you for bringing up an excellent point.
    May 17, 2015. 06:39 PM | 2 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Thanks, mikem0309

    Scaling has made and saved me a lot of money. I contend no one can pick the tops and bottoms accurately. There's just too many variables. Scaling in or out permits the investor to average around the top and bottom with far better outcomes.

    The advent of online discount brokerage houses has allowed retail investors the latitude to utilize this approach without undue transaction costs.
    May 17, 2015. 06:34 PM | 1 Like Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    zebra18

    Arguably, I find scaling in / out of a position may be the best overall generalized portfolio management strategy out there; rivaled by ONLY using limit orders to buy and sell.

    No open market orders, nor stop losses.
    May 17, 2015. 06:31 PM | 3 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    sdavid0419

    Your strategy is an excellent one. I frequently use precisely the same options strategy; however, delving into that was beyond the scope of this article.

    Indeed, one must deal with 100 share round lots to execute. In addition, there's the potential for the stock to fall below the put strike, just to later rise well above it before expiration. Or conversely, the share price rises well beyond the call strike, but fall before expiration. We keep the premium, but don't get to buy or sell the underlying shares.

    Nonetheless, an investor who understands the risks and rewards of covered calls and cash-secured puts, you've outlined a fine approach to grind out a few extra points, and/or option premiums.

    May 17, 2015. 06:29 PM | Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Thanks for reading and commenting, Norman Tweed

    Appreciate the data point and instablog link about freight hauling / UNP. Given the sustained growth, Union Pacific stock rarely seems "cheap."

    I believe the shares may be offering an infrequent discount; trading around fair value. Might get another bite at the apple below $100.

    May 17, 2015. 09:46 AM | 4 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Good point John

    When I began investing some 30 years ago, trading fees were ~$50 per transaction. Discount brokers and the internet were not yet available. That made owning stock difficult for small investors.

    Transactional friction remains a consideration; however, the advent of online brokerage houses has made reasonable scaling feasible.
    May 17, 2015. 09:40 AM | 3 Likes Like |Link to Comment
  • Annaly And The Giant 11.8% Dividend Yield [View article]
    Thank you for another excellent article and insights. Looking forward to your follow-on work about the company..

    I'm thinking Annaly management going shorter duration contributed to the 1Q 2015 shrinking spread, too.
    May 17, 2015. 09:06 AM | 3 Likes Like |Link to Comment
  • Union Pacific: How To Trade Around A Core Position [View article]
    Thank you for the very kind words, CapeCapMgmt
    May 17, 2015. 08:45 AM | 6 Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Annaly has not declared a 2Q common dividend. Historically that won't happen until end of June.
    May 15, 2015. 08:53 AM | Likes Like |Link to Comment
  • Is Annaly Capital's Management The Solution Or The Problem? [View article]
    Thanks for sharing again. Responded to the link earlier. Annaly execs have purchased shares routinely. It's a positive, but doesn't address the issues raised.
    May 13, 2015. 05:50 PM | Likes Like |Link to Comment
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