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My name is Ron Smith, I am 64 years old and have been retired from a community college for two years. My portfolio AAPL APU AVA BCE CLX D DLR EMR GIS HASI JNJ KO KHC LMT LNT O OHI PAYX PG SO SE T UL VTR WEC
  • Capital Gains And Apple Call Options 0 comments
    Aug 25, 2014 2:10 PM | about stocks: AAPL

    I said in my last article I would write about this:

    My dividend growth history is relatively recent, going back a couple of years. Before that what I did is described below by someone who I have known on Apple forums for some years:

    It is Ron who is the legendary former AAPL options gunslinger and now sage dividend investor.

    I thought it was an overly generous description of my past and my present, but I did get out of the Apple options game in mid to late 2013 while preserving most of the gains I had made over the previous 4 years. It was those gains that funded our dividend growth portfolios - and later some rollovers from other retirement accounts.

    In the meantime Apple has been a position in my dividend growth portfolio. I had a hankering to go back into options back in September, 2013 when Apple dropped from $72 and change to $63.30, but I had already turned in my retirement papers and was averse to taking any risks with investments.

    Recently, however, I decided to come out of retirement and put a portion of our portfolios in the Apple call options and LEAPs. There are several reasons for this:

    1) We have been living in Merida, Yucatan, Mexico for 7 months now and have a pretty handle on our expense. Our pensions and SS checks do a more than adequate job of covering those expenses.

    2) I could maintain our core dividend growth positions, continuing to reinvest the dividends, while freeing up some money for a capital gains strategy using Apple call options.

    3) I frankly missed having some skin in "the game."

    I did sell or trim some DGI positions to make money available for this pursuit, among them AAPL, KMB, CAT, MCD, WAG and NGG. I made up for some of the lost income by adding to KMI, but the income is still good and more than adequate.

    July 21 I started opening some Apple call positions. I will not go into the details here, but will be glad to upon request. I added to some of those positions on August 8, on a dip in AAPL. These positions, when they were opened, were about 13.5% of our total portfolios

    So far those positions are up a bit over 30%. The plan is working and being much more closely monitored than our dividend growth stocks. In dividend-ish terms, we have made about 140% of the amount of dividends generated by the dividend growth part of our portfolio.

    It is my opinion that Apple has a pretty good year and a half (or more) in front of it. We'll see. Lessons I learned in 2008 (when I went catatonic and lost a bunch of money) served me well in mid to late 2012 when I did a pretty good job of preserving capital and moving into our current dividend growth portfolio.

    That's it in a nutshell. Will be happy to answer questions about the past, present, or future. Just let me get out my deck of cards :).

    Stocks: AAPL
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