Timmothy Posey

Ten Products that Boomed During Recession

iPhones sold pretty well during the recession...

6 Dividend Stocks for Current Income

I disagree with the author here. Although the picks are 'sound' in nature by historical fundamental analysis for dividend investors, there are some real risk involved here. These stocks do not have guaranteed dividends and any unfavorable economic event to any one of the stocks listed in the article would cause severe portfolio dislocation. I think it would be prudent to look into an ETF that has most of these stocks listed (along with several others) to help diversify away risk. One such example would be PFM, a collection of 282 stocks with strong dividends. This currently yields about 2.25%; which is about on average.

If you are also looking at dividend, I would go higher up in the capital structure and take a look at PGF or PGX, an ETF of preferred shares, where the current yield is about 8% a year in steady dividends (mostly made of financial companies). Although preferred shares do not typically increase dividend amounts, they are mostly guaranteed and cumulative in nature if they have to be suspended.

Lastly, HYG is a popular ETF of high-yield corporate bonds that yields nearly 10% a year. Corporate bonds have guaranteed requirements on payment of interest (dividends for the ETF holder) along with return of principal.

Q3 Earnings Season: Not the Time to Get Short

Excellent points well made. I want to short this market but my origination for this article was to stay long during the Q3 earnings season (mostly through the end of October) and resist the temptation to get short. Notice I am not outright buying calls, I'm selling October puts which allows me a bullish-to-neutral stance on the market.

I'm mostly selling the SPY $100 puts, which collect a nice premium now, yet I think there is enough support for the market above 1000 on the S&P to support me doing so. Even if the market does nothing for the next two weeks I still come out a winner.

Q3 Earnings Season: Not the Time to Get Short

True, operational earnings should be the MacDaddy over reported earnings, but it's hard to ignore CNBC doing a 24/7 scrolling ticker of "Goldman Sachs reports best quarterly earnings ever due to trading and derivatives activity".

I included the insurers especially because often times their operations (selling insurance) isn't that great, but they make tons of RIGL (realized investment gains/losses); one could make the argument that investing/trading is part of their core business since that's what they do with the premium they collect.

As for shorting, I think a lot of folks jumped on the short bus last week. We went from the highs of 1080 to about 1020 in a matter of days. Or perhaps its just the low volume of buyers that were present for those days...

Construct a Fixed Income Portfolio with 5%+ Dividends Using ETFs

I'd add PGF to the list. It's the preferred shares ETF of financials, and pays nearly 9% by itself.

First Solar Sell-Off Is Overdone

Last year around this time, FSLR was at $280. So it's sold off quite a bit.

The Next Shoe to Drop in Banking: An Options Strategy

Do you mean a 6 cent credit? +0.38 cents in credit to sell the Sept $12 put and $15 call, -0.32 to buy the Jan2010 $12 put:

0.38 - 0.32 = 0.06

BB&T (BBT) shares up 4.9% amid reports it may be the one to buy ailing Colonial BancGroup (CNB -11.9%).

So BBT is buying a bank that has 12% of its books as non-performing loans and also undergoing CRIMINAL investigation of accounting fraud and errors, and BBT rallies on this news?

Selling Most of Excel Maritime into the Euphoria

I thought this pop was due to Fast Money recommending it yesterday for its "Home Run" play. Guy Adami said it could go back to $60. People got greedy.

I'm long EXM and selling calls.

The Economy Now: A 5-Point Summary

I agree that this administration (and the previous one) punted no the tough decisions that are necessary to correct the long-term financial imbalances in our economy.

The Fed has an interested choice next week.

zerohedge.blogspot.com...

A little-noticed addendum to the FHA's home-loan program will let first-time home buyers use their $8,000 tax credit for downpayments or closing costs, effectively reincarnating zero-down loans. Those critters, of course, were blamed for sparking this whole mess in the first place.

Yawn. FHA has already removed this addendum.

moneyfeatures.blogs.mo.../

Steer Clear of Treasury Auctions

I say #1 is more likely. It is easier for the Federal Reserve to pull the plug on all the recent "green shoots" media play and allow the market to correct itself back down. That will lead the flight to quality into 10-year Treasuries and bring down the mortgage rates to ~4.5%. Let it sit there for about a year and it is the equivalent of a multi-hundred billion dollar tax break on the consumers from refi's and lending companies re-hiring mortgage brokers to handle the extra demand. It will also allow the banks to profit from origination fees to help balance out the losses from their non-performing assets.

Next, the High-Yield Stress Test

Dean Foods has already raised a secondary offering (common) to pay for that $196 million bond. So you can essentially scratch them off that list. As for the rest, they will most like just roll debt forward or issue common to pay for the coupons.

I don't think we're "there" yet as far as seeing real world stress test on high yields. The credit markets are "open" however everybody is currently trying to tap the credit/capital markets and that includes the gov't. We will most likely see very high yields in the near future.

Long Term Treasury Yields Likely to Rise, Pressuring Dollar Lower

Let's get for real here. The inflation that is coming will be double-digits, and yes, it is INTENDED. Inflation will be rampant, and it will be the saving grace for the Obama Administration, because they will be able to report higher personal income increases than ever before. The $30k a school teacher now makes will be $70k in the next few years.

They believe that inflation will solve our problems. E.g., it will lead to higher housing prices and spur demand back into housing, and it will inflate personal incomes and salaries all to the point where we can all afford our debt. This new "government" bubble will buy time for consumers and our government to dig out from their debt and then the next deflation/crash will (supposedly) relatively mild because more consumers will have a healthier balance sheet in which to re-inflate themselves. At least, that is the current administration's thinking.

Oil: Something I Have to Own Again

USO is based on the front month futures contract. It is horrible for holding long term due to "contango" (where the futures is more than the spot price). USL is a 12-month rolling ETF for crude and its best suited for those holding it more than 30 days. However, USO is best suited for "backwardation" (where the spot is higher than the futures)

DXO isn't great for holding long-term due to the leverage performance decay (2% minus 2% plus 2% isn't break-even.)

I'm holding USL long-term for the next 2-3 years. I think it will take longer than most expect for the reflation trade to occur. But when it happens we can see oil at $200/barrel due to the Fed monetization necessary for the gov't to buy Treasuries with the left hand while the right hand is selling it.