My apologies, the previous comment should have read that you pocket $10.00 on 100 TLAB if the option is called....since the example was for 100 shaes, it should have read: On the other hand, if your option is called on the 13th b4 TLAB goes ex, you've selling a stock you bought at 3.36 for 3.50 and you pocket the 10.00 less commission proceeds for the call. Ordinarily this kind of thing
True, it is undervalued, but there is an even wierder play possible, TLAB options. Say you buy 100 TLAB @ 3.36 then sell a 3.5 January call for 10 cents. When the stock goes ex-dividend on 12/14 or whenever, you receive the 1.00 special dividend and the call is now essentially worthless since TLAB is now trading in the 2.50 range having gone down about $1. when it goes ex. On the other hand, if your option is called on the 13th b4 TLAB goes ex, you've selling a stock you bought at 3.36 for 3.50 and you pocket the 1.00 less commission proceeds for the call. Ordinarily this kind of thing makes no sense because you getg slaughtered on commisiions but the price here is so low that doing 500 or a 1000 shares is not huige money. THX
Good article; glad to see someone talking about the damage these negotiations are doing and the seeming schizophrenia that results. I think XLI is the big loser if we do go ff the cliff because with DOD/DOT & DOE spending cut by 10%, i think will see a lot less aircraft and heavy equipment being delivered. On the other hand, I am wondering about the optimism and why now? I can't see owning LMTk, Ford or Alcoa at this point unless one is certain of a fix before yearend. THX ED B
Ford: Don't Miss This 'Great Buy' Time [View article]
Ford's P/E may be low but there are circumstances for this as mentiioned in an earlier post from Tdot but isn't being long F exactly the wrong thing when faced with the fidcal cliff; car purchases are the easiest big ticket item that consumers can put off. Ford may end up selling a similar number of units in 2013 (if things improve in the UK) but there may be a slow and uncertain start if taxes go up, payroll deductions go up & discretionary federal spending is cut 10% across the board including DOD which indirectly employs so many engineers, assembly workers etc. I plan to sell a covered call on my Ford and LMT if the whole fiscal cliff situation (not just the tax portion) is not addressed by the next congressional recess. THX -Ted B
Great article and I think WU is a bargain at 12.5 but there is one fly in the ointment that seems to have escaped a lot of commenters on this: WMT...WalMart is one of the largest domestic issuers of prepaid Visa/Debit and now Amex cards. They also issue gobs of money orders outside the Western Union umbrella (as a number of grocery chains also do) and there is a dedicated "money desk" at nearly every WMT location that processes money orders, prepaid cards, electronic bill pay etc. Not sure about foreign transfers but there is also Grendot and a lot of other potential competition. WU still beats the USPS on money order fees though!! Thx - Ed B.;
Great Northern Iron Ore Properties: Investment Or Lottery? [View article]
There is a similar situation pertaining to the shares of Mesabi Trust (MSB) and Cleveland-Cliffs (CLF). I need to double check the circumstances under which MSB ceases to exist but I believe it is similar. Care to comment? I own some shares of MSB (another iron mining trust in MN) which likewise has a double digit yield; I missed your original article on high yield stocks but perhaps this has already been covered. THX - Ted B.
Great Northern Iron Ore Properties: Investment Or Lottery? [View article]
In reference to my prior post on Mesabi Trust; their website contains the somewhat grim statement that follows: "The Agreement of Trust has a duration ending 21 years after the death of the last survivor of 25 individuals living at the inception of the Trust, all of whom are named in an exhibit to the Agreement of Trust and were alive several years ago when the Trustees investigated this matter. The Amendment of Assignment has a duration ending when the reserves of minerals which are the subject of that agreement are exhausted." This seems to imply that given the vast reserves of Taconite available, MSB will continue as a going concern after the decease of these original certificate holders. By the way, the use of "Certificates of Beneficial Interest" was a method of freeing these companies from any federal tax liability because they are pass throughs and the unit holders are subject to any tax although it can be viewed as a return of capital under tax law.. - Ted B.
Tellabs: Begging For Attention? [View article]
On the other hand, if your option is called on the 13th b4 TLAB goes ex, you've selling a stock you bought at 3.36 for 3.50 and you pocket the 10.00 less commission proceeds for the call. Ordinarily this kind of thing
Tellabs: Begging For Attention? [View article]
Consumer Staples ETFs, Consumer Discretionary ETFs Brave The Fiscal Cliff Headwinds [View article]
Ford: Don't Miss This 'Great Buy' Time [View article]
Moving Money Into Western Union [View article]
Great Northern Iron Ore Properties: Investment Or Lottery? [View article]
I own some shares of MSB (another iron mining trust in MN) which likewise has a double digit yield; I missed your original article on high yield stocks but perhaps this has already been covered. THX - Ted B.
Great Northern Iron Ore Properties: Investment Or Lottery? [View article]
"The Agreement of Trust has a duration ending 21 years after the death of the last survivor of 25 individuals living at the inception of the Trust, all of whom are named in an exhibit to the Agreement of Trust and were alive several years ago when the Trustees investigated this matter. The Amendment of Assignment has a duration ending when the reserves of minerals which are the subject of that agreement are exhausted." This seems to imply that given the vast reserves of Taconite available, MSB will continue as a going concern after the decease of these original certificate holders. By the way, the use of "Certificates of Beneficial Interest" was a method of freeing these companies from any federal tax liability because they are pass throughs and the unit holders are subject to any tax although it can be viewed as a return of capital under tax law.. - Ted B.