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  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    dday-

    Nike said this, but I want to emphasize to make sure it's clear. If you want to buy the STOCK, you want to SELL a PUT. This way, if prices work out, the buyer of the put will then put the stock to you. If you BUY a PUT without having the shares to put to the buyer, I'm sure options traders have a name for this, but it's certainly not what you're looking for.

    Good luck, and belated welcome to SA!
    Nov 10, 2011. 03:04 PM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    Outcast-

    Is the reason why you say

    "If the stock moves near (or above) the top of your price range, you could sell a CALL option at or a little out of the money on 100 or 200 shares of the stock.
    And/or, assuming you have the cash to buy the stock, if the stock moves near (or below) the bottom of your price range, you could sell a PUT option on 100 or 200 shares of the stock . . . "

    because the opposite won't be worth selling. In other words, if I have shares of xyz that I want to keep, even if it's trading at the top of my range, I would think to sell puts at the bottom of my range, because chances are the options will just expire. But are you taking into consideration the fact that in such a scenario, the puts will barely make up the commissions?
    Nov 10, 2011. 09:21 AM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    If I had to guess, I'd say it means you use tdameritrade.

    But even if I'm wrong on that, each contract is for 100 shares, such that one trade for one contract will cost you $10.99 in commission, and then the price of the contract x100 will either be the cost of a purchase or your premium on a sale.

    But even if I'm wrong on that, I'm sure someone on here will correct me : )
    Nov 10, 2011. 09:17 AM | Likes Like |Link to Comment
  • Stock Spin-Offs: What To Expect From Dividends [View article]
    User- thanks for the tip.

    Joergens- thanks for your advice, too. I feel a little better about myself now because I am at least familiar with the financials. I have a bs (in more ways than one) in accounting, although I'm looking to brush up on these skills, particularly when it comes to getting and using ratios from them. I also ready the Intelligent Investor, the one with comments by Jason Zweig, and thought it was a great, eye-opening book. Tons of great principles that make so much sense. My only criticism is that it seems from his commentary that Mr. Zweig might be getting some sort of kickback from ETF providers (or however they're called), as he repeatedly recommends investors to dump money into them. But he's entitled to really believe that, and (little, uneducated, inexperienced) I do see the value of such a move.

    So now that we have clarified the question, of how does the break-up facilitate return to shareholder, I ask, why does the concept work? Even a theoretical example will do. I just have have some sort of mental block about it. If a company has $10 of assets and $2 sales (keeping it overly simplistic), and split it up to 6/4, I would think that they are not going to earn more revenue simply because of this. Unless you're going to tell me that they do that so that more investors (e.g. international) are willing to pay more for the company, driving up the price for the current shareholder, I am at a loss why it's a good thing?

    I just want to conclude by saying, I appreciate you staying with me for a few days now working through this : )
    Nov 10, 2011. 02:18 AM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    webmind-

    Agreed, but I think the author's point is that you can take your 10-12% yield and get even more without touching the yield. Who doesn't want more cash?

    And the flip side is that since it doesn't sound like you care too much about market price, fluctuations do not bother you too much. However, fluctuations are also what will lead to your options being called or put- and you losing your yield machine.
    Nov 9, 2011. 02:09 PM | Likes Like |Link to Comment
  • Stock Spin-Offs: What To Expect From Dividends [View article]
    Joergens-

    Thanks. I completely agree with what your saying. I'm still slightly confused, though, because I've seen the corporations say unlocking shareholder value, as this is the (or one of the) rationale(s) to the split up. I think that it would make sense for corporate executives to have relatively similar concepts of shareholder value, even where as you put it, shareholders may have very different understandings themselves. What does the corporation mean, that's what I do not get.

    But while we're on the topic, I'm trying to learn more about (intrinsic) valuation. Do you have any good resources I might look to?

    Thanks.
    Nov 9, 2011. 02:05 PM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    I read his comment as assuming he was factoring in the additional income and basing it on his effective cost. But it's comforting that even if I was wrong, at least I agree with you.
    Nov 9, 2011. 01:53 PM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    So CSPs tax treatment was touched upon. What about covered calls (do options traders refer to them as ccs?)?
    Nov 9, 2011. 10:28 AM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    Selling a call obligates you to sell the underlying stock at the call price to the buyer of the call. While you still end up with premium income, you end up losing the stock. If you owned the stock, then you'd be selling it for less than the current market price.

    If you do not own the underlying stock, then you have to buy it at the higher price to sell at the lower call price.

    But I'm no options expert.
    Nov 8, 2011. 03:20 PM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    Dieto-

    Thanks for pointing out the obvious. I should've seen that one.

    Would I be correct in assuming that selling covered calls are regarded as a bearish strategy?
    Nov 8, 2011. 02:56 PM | Likes Like |Link to Comment
  • Dividend Investors: Improve Your Yield-On-Cost [View article]
    I've been thinking about this strategy the last few weeks, actually. Chances are I saw it mentioned in articles or comments on SA, but it's been intriguing me. A few questions as I think about possibly getting my feet wet (I have a very bad stigma towards options trading, for now):

    May I ask what trading platform/broker you use or recommend?

    Where do you think is the best place to learn about it?

    What about buying calls? Would this be a similar strategy or likely to have similar results?

    Thanks.
    Nov 8, 2011. 01:27 PM | 2 Likes Like |Link to Comment
  • Dividend Stocks Vs. Growth Stocks: Myth And Math [View article]
    CP-

    I enjoyed your theorizing. As has been pointed out ad nauseam, in a real world situation in which there are market dips, GS probably get hit harder. However, in my unsolicited opinion, the only really good rebuttal to your article is that 10 years is likely too long a horizon for many GS.

    With that said, you were very explicit in your intention and your assumptions; your article was thought-out and clearly thought-provoking. Thanks.
    Nov 8, 2011. 01:16 PM | 3 Likes Like |Link to Comment
  • Stock Spin-Offs: What To Expect From Dividends [View article]
    Joergens-

    Thanks for the explanation. Would I be correct in deducing, then, that "shareholder value" only refers to market price, and not to the successes of the individual companies?
    Nov 8, 2011. 10:13 AM | Likes Like |Link to Comment
  • Stock Spin-Offs: What To Expect From Dividends [View article]
    Can someone please explain the concept of "unlocking shareholder value"? (I also heard it regarding COP and a reit that I cannot remember.) I'm having difficulty understanding why the parts will be greater than the whole?
    Nov 7, 2011. 05:30 PM | 2 Likes Like |Link to Comment
  • Dividend Investing And 'Payback': Why It Pays To Watch Closely [View article]
    Noooooooow I get it. There's another comment about it below. YOC to current yield is like apples to oranges, kind of. Thank you for pointing this out, I hope I'm in a position in which it will be useful : )
    Nov 4, 2011. 01:09 PM | 1 Like Like |Link to Comment
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