Long-Term Investing Using Historical Low Price-To-Book Valuations [View article]
Berkshire is undervalued for many reasons. One would be that it historically trades at a higher ratio to book value, I can't find my notes at the moment but memory tells it is close to 1.5 times book. At my company (OakTree Investment Advisors) we use BRK.B in accounts that need some income by selling covered calls and laddering the expiration dates. Works great and if we have to sit on the stock we never feel buyers remorse and we are not paying a mutual fund manager along with 12B-1 fees, trading costs, board of director fees etc.
The TJX Companies, Inc. Announces Quarterly Common Stock Dividend [View article]
OakTree Investment Advisors just added TJX as this weeks recommendation to our Covered Call Focus Blog. It's a good way to earn additional income from a great stock with a low yielding dividends. blog.myoaktreeadvisors...
Investors that are selling stocks that pay dividends because the tax rate on dividends are going up are planning to put their money where? Putting your money in a coffee can so as not to pay tax leaves you with nothing which is less than the after-tax return on dividends. Do we believe that "interest" is going to be taxed at a lower rate than dividends will be? Maybe the market is falling because the macro is looking worse and earnings are not growing as fast as they had been. I believe that the US has already entered a recession, which will continue to put pressure on corporate earnings thus PE ratios are starting to contract.
A Hot Dividend Stock With High Options Yields That's Still Undervalued [View article]
Annual'd means annualized. The "annualized if called yield" is calculated by adding the premium received plus or minus the difference between the strike price and price paid for the underlying stock plus the dividend which is than annualized.
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
I have thought that for years. I think the issue now is that China has such a need for energy that we will loose the international battle to them thus we need to start using our reserve and also being smart at the same time.
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
Two weeks ago a friend of mine was invited to small private round table discussion with President Clinton and Bush along with 3 former governors. The short version is they all agreed that the US has the opportunity to be energy independent in 10 years. Even if this doesn't pan out we will be producing a lot more energy as each year goes by which will require more pipelines which will be ever more difficult to build. Isn't one quality you always look for in a company is the difficulty and high entry cost for future competitors. These facts make Kinder-Morgan a great company to own and hold for the next 10 plus years "unless they shoot themselves in the foot".
A Hot Dividend Stock With High Options Yields That's Still Undervalued [View article]
Good article on ESV. May I recommend selling the March 2013 57.50 Call Option. The option was quoted at the close Friday at 4.40 and ESV closed at 58.13. In this trade you earn 2 dividends ($75) and ($377) if the stock gets called away, $452 minus commissions for holding a $5813 investment for 146 days. At OakTree Investment Advisors we are students of the "Business Cycle" and we see it contracting as evidenced by some of the earnings released last week. Therefore we are selling in the money calls at this time, even covering some existing out of the money positions and replacing them with in the money calls. For more conservative investors I would even recommend selling the March 2013 55 calls keeping in mind this stock has a Beta of 1.39, therefore not suitable for most investors who would consider themselves with a moderate risk tolerance. PS; ESV is one of Neil Kashkari favorite picks.
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
I keep looking for an issue with KMI and have not yet found one that would make me sell. I am the founder of OakTree Investment Advisors and have added over 40,000 shares to our client's portfolios, no where near the 4.6 million shares Leon Cooperman's Omega fund was holding at the end of June this year which was a 316% increase over the first quarter. I will be interested to see how many shares he has at the end of the third quarter.
Covered Calls For Income Can Cost Dearly In Long-Term Gains [View article]
At OakTree Investment Advisors we use covered calls to increase income and reduce risk. That doesn't mean we are always using this strategy. As students of business cycles and professional client's of ECRI, we selling "in the money" covered calls when we see a contraction unfolding and "out of the money" calls when the business cycle is expanding. Keep in mind that owning stocks are not suitable for everyone and that some investors are conservative and do not want to experience drops of 40% during a bear market. That said, long term aggressive investors should not use covered calls as a strategy, therefore they will always be long the 10 banger or long the dog and can not use this as a reason why selling covered calls do not work. For educational information on covered calls or business cycles feel free to go to (blog.myoaktreeadvisor... Good luck and I hope all you conservative investors profits on your next 1000 trades that are called away.
We typically sell calls at least 3 months out. Since we use business cycle analysis as the foundation of our investment strategy we would only sell DITM calls to reduce risk such as we did in 2008 on positions that we had a low cost basis on and still had a desire to continue owning those positions.
I have been using covered calls for 30 years and can't think of a good reason to sell out of the money calls on tech stocks. Other than AAPL the other companies have a beta over 1 and are probably not suitable for investors looking for income or "in an endless search for income". If you are looking at these tech stocks as investments you are concerned more with growth, and an out of the money Call would only work to stymie your efforts. I would use in the money calls when the business cycle is turning over and was interested in taking some risk off the table, as I can lower my cost basis and still retain the stock in the portfolio - if that is the most suitable course of action for the client. If an investor is looking for income and wanted to enhance their returns they should look for companies that have a good history of raising dividends and a beta below 1. These are the types of companies we recommend employing the Covered Call Strategy on for investors looking for a steady stream of enhanced income. On our blog (blog.myoaktreeadvisor... are some educational articles that discuss using covered calls along with information on using business cycles to help one decide when to use "in the money" or "out of the money" calls.
Considering The Opportunity Costs Of 'Trading Dividends' [View article]
Buy and hold was a great strategy through the eighties and nineties and up to 2008. But, we are entering a period of a lower growth economy (GDP trendline of 2% versus 4%) therefore we will experience more frequent recessions getting back to the norm. US expansions do not historically last 7 to 8 years like most of us have experienced. Therefore only time will tell if buy and hold will work during the next 10 to 20 years. My thoughts are that it will not be as productive and investors will need to be more nimble.
Exporting American Natural Gas: Smart And Strategic Energy Policy? [View article]
XOM wins even if we have a good comprehensive energy policy that pushes for transportation to start using more natural gas. The Honda civic that runs on natural gas has been around for years but is only sold in CA to my knowledge. Has this changed recently?
Retirement Strategy: Buy Any Dips In Dividend Winning Stocks [View article]
We like using covered calls on most positions (currently we have 9 stocks in the RS portfolio). In the money calls are used when we see a contraction in the business cycle and out of the money calls when the business cycle is expanding. At OakTree Investment Advisors, we are professional clients of ECRI, but for those of you who are students of the business cycle use your own metrics, such as the STD DEV of the market or PE ratios, to determine when to sell "in the money" or "out of the money" calls . Using a combination of metrics will work the best. For some educational articles on covered calls go to (blog.myoaktreeadvisor... I guess Tom Keener would say "shameless plug" if he would happen to read this but I have been using covered calls for 30 years as a way to reduce risk and to take some money off the table when I felt the market was over priced without having to sell my positions at that moment, and I think it is not only an appropriate, but a profitable strategy that can be employed for the core of an equity portfolio.
We (OakTree Investment Advisors) just recommended KO on our Covered Call Focus blog recommending buying the shares long and selling the Jan. 2014 42.50 call. If called away you have a nice yield to call or you can also buy back the call if the price comes down. This is not a get rich fast strategy but should work out just fine for the conservative investor. Our recommendation can be found at blog.myoaktreeadvisors... along with some educational articles.
Long-Term Investing Using Historical Low Price-To-Book Valuations [View article]
The TJX Companies, Inc. Announces Quarterly Common Stock Dividend [View article]
MLPs Are Getting Crushed [View article]
A Hot Dividend Stock With High Options Yields That's Still Undervalued [View article]
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
A Hot Dividend Stock With High Options Yields That's Still Undervalued [View article]
Kinder Morgan: Juicy Dividends Backed By Impressive Cash Flows [View article]
Covered Calls For Income Can Cost Dearly In Long-Term Gains [View article]
5 Tech Covered Calls To Consider [View article]
5 Tech Covered Calls To Consider [View article]
Considering The Opportunity Costs Of 'Trading Dividends' [View article]
Exporting American Natural Gas: Smart And Strategic Energy Policy? [View article]
Retirement Strategy: Buy Any Dips In Dividend Winning Stocks [View article]
Using LEAPs To Buy Coca-Cola [View article]