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JohnMullins

JohnMullins
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  • Why You Should Not Sell Your Oil Stocks At A Loss [View article]
    Purchasing call options on a stock that you sell for a loss would be considered substantially similar by the IRS, and therefore would violate the wash sale rules.
    Dec 16, 2014. 07:52 AM | 1 Like Like |Link to Comment
  • AT&T: 12% Yield And Potential Upside Catalysts [View article]
    Assuming your plan was to sell the puts as the previous comments state, you have also made an error in adding the dividends on top of the put sale for total return. If you sell the put to collect the option premium and hold the puts short, you do not collect dividends as well...you have to hold the common stock to collect the dividend. A large chunk of that put premium is actually the expected dividends you would receive between now and expiration.

    If you bought the common stock and, say, sold a covered call against it to collect that premium, then you would be eligible for the dividend...but options are priced with the expected dividend priced in. The Jun 2015 call is currently priced at around 2.50, which is only a .50 time premium. If that premium is less than the dividend amount on ex-div day, your shares will get called away and you still won't get the dividend.

    You can't have it both ways...you can go for the option premium OR the dividend.
    Sep 9, 2014. 11:26 AM | Likes Like |Link to Comment
  • AT&T: 12% Yield And Potential Upside Catalysts [View article]
    Selling naked puts allows you to collect the premium from the option, but you do NOT collect dividends on the common stock. J Mintzmyer is on the right track with his comment.

    Overall this is a very misleading and inaccurate article. Dangerously so.
    Sep 9, 2014. 11:10 AM | Likes Like |Link to Comment
  • 5 Safe Dividend Stocks When Using The 4% Rule [View article]
    I agree with your premise. However, your example of purchasing INTC in 2004 and not worrying about the price decrease is concerning. If the plan is to purchase stocks with healthy yields, you would not have been looking at INTC. Even if you were able to purchase for 19.68 (lowest close price in '04), that would have been a pitiful 0.8% dividend.

    "But an investor who was in search of income from the dividend INTC was paying would be enjoying a 460% increase in dividend income since then" --an investor in search of income would NOT be enjoying this increase.

    INTC didn't even see a 3% yield until the market tanked in August '08. The point is not that the future plan isn't sound, just that you can't take decent yielders today and take credit for their past performance. Thanks.
    Sep 12, 2013. 01:59 AM | 2 Likes Like |Link to Comment
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