BS in Economics, MA in Public Policy (International Economic Policy). J is a well-known voice in the global shipping community, with unparalleled investment results and a penchant for activist investing.
Mintzmyer founded Value Investor's Edge, a top-ranked deep value research service in May 2015, with the goal of establishing a top-tier community of deep value investors and activists. Value Investor's Edge subscribers leverage exclusive in-depth analytic reports and community investment experience to discover disconnects in global shipping and a variety of other beaten down sectors.
TipRanks.com ranked Mintzmyer’s performance in the top 3% of all global analysts at the end of 2015 for his 2-year investment performance. While compiling his research, Mintzmyer has interviewed numerous management teams at public maritime firms, and has worked with a multitude of investors. His exclusive analysis has received numerous 'Top Idea,' 'Must Read,' and 'Small Cap Insight' awards.
J is a CFA candidate and investment enthusiast who utilizes Seeking Alpha to provide an open exchange of both trading and investment ideas. Masters in Public Policy, with focus on International Security & Economic Policy from the University of Maryland, College Park. Distinguished Graduate of the United States Air Force Academy with a B.S. in Economics. President of Mintzmyer Investments LLC, a financial services company specializing in equity research and hedge fund advisory.
Extensive background in financial analysis, equity research, accounting, portfolio management, and customized asset allocation through nearly a decade of formalized education, personal studies, and practical experience. Avid reader of business/investments and biographies.
Legal Disclaimer: Any related contributions to Seeking Alpha, or elsewhere on the web, are to be construed as personal opinion only and do NOT constitute investment advice. An investor should always conduct personal due diligence before initiating a position. Provided articles and comments should NEVER be construed as official business recommendations. In efforts to keep full transparency, related positions will be disclosed at the end of each article to the maximum extent practicable. The majority of trades are reported live on Twitter, but this cannot be guaranteed due to technical constraints.
My premium service is a research and opinion subscription. No personalized investment advice will ever be given. I am not registered as an investment adviser, nor do I have any plans to pursue this path. No statements should be construed as anything but opinion, and the liability of all investment decisions reside with the individual. Although I do my utmost to procure high quality information, investors should always do their own due diligence and fact check all research prior to making any investment decisions. Any direct engagements with readers should always be viewed as hypothetical examples or simple exchanges of opinion as nothing is ever classified as “advice” in any sense of the word.
Doug Carey is the owner and founder of WealthTrace. He has over 19 years of experience in the financial markets. He has a masters degree in Economics from Miami University in Oxford, Ohio and a B.S. degree in Economics, with an emphasis in Finance, from Ball State University. Mr. Carey began managing money in 1997 when he became a portfolio manager for National City Bank helping to oversee over $10 billion in assets. He managed money for pension funds, 401K funds, mutual funds, large companies, and endowment funds. He has also been managing money for families for over 13 years. Before starting WealthTrace, Mr. Carey helped build a financial software company where he designed and created software to help portfolio managers and investment professionals analyze and manage portfolios and securities.
Mr. Carey also offers one-on-one financial planning and investment management services through our Registered Investment Advisor (RIA) firm. We are fee-only and do not work on any commissions so our goals are aligned with yours. Because we do everything online we can charge much less than standard advisors for our services.
I am an individual investor and the author of seven eBooks on dividend growth investing. I try to help self-directed individual investors profit from stock investing. I contribute articles and studies to both Seeking Alpha and Daily Trade Alert. I hold an undergraduate degree in physics from Holy Cross College and a JD from Georgetown University. My wife Sue and I live in beautiful Canandaigua, NY.
I have worked in market research at Proctor and Gamble, and as a systems analyst at AT &T. I have also worked in healthcare, and run a successful internet adventure in addition to being a known indie rock musician. I lost pretty much everything when my business burned 10 plus years ago (underinsured). Illness nearly took me just two years ago, but I am a survivor, and back 100%. During those lean ten years I day traded high risk high dividend stocks and managed to come out with enough to retire. Don't want to do that again. Time to invest for income.
Some of my more recent background lies in having directed the investor relations department for a tiny privately held energy company in Houston, Texas. I was the "inside" director/VP. In IR parlance, this means I was at the beck and call of the Chairman and President of the firm. Something I learned over the years: It's very easy to present the numbers while saying nothing of meaning or value!
These days I scrutinize SEC filings with extreme caution, looking for items intentionally omitted or distorted.....before considering any investment. If I've learned anything, it's to look past the numbers and THINK every step of the way despite what others have to say. Stated business models and 6 or more consecutive quarters of results will usually tell me most of what I need to know. Meaningful momentum comes from "constantcy."
Hi-yield plays are the mainstay of my portfolios but there's a lot of venture capitalist in me. Thus I'm always playing a handful of penny stocks. Because they seldom boast great historical numbers, they're ripe pickings for my more instinctual type of analysis. I make money on most. I get slaughtered on a few but accept it all on balance.
Stock work is fascinating, great fun and has forced me to better understand who I am.
If you can't see me, take the garlic out of the room.
David Sims is the managing member of RidgeHaven Capital LLC. We prefer distressed equities and value investing. The firm was established to manage wealth with an eye on fundamental value, but also an understanding of technical trends and market behavior.
David is a Certified Public Accountant and previously worked as an auditor at a Big 4 accounting firm, SEC Reporting Analyst and financial systems administrator at a small private company.
Find the Sims On Finance Investing Podcast on iTunes, Tune In Radio, and Player FM radio.
Robert Hauver publishes The Double Dividend Stock Alert, a monthly investment newsletter that features the best dividend stocks and option selling strategies for income investors.
TipRanks rates DoubleDividendStocks in the Top 25 of all financial bloggers.
The https://www.DoubleDividendStocks.com website also features High Dividend Stocks By Sector Tables, and Covered Calls & Cash Secured Puts Tables, a Dividend Stocks blog, and a a Stock Market News & Data page. 845-225-4094
Fredrik Arnold is my pen name. In 2012 I retired from doing quality service analysis for John Hancock Long Term Care Insurance in Boston then moved to North Carolina in 2013. My fascination with capital preservation, fixed fractional trading, and trading systems keeps me blogging for Seeking Alpha. Most of my articles focus on dividend yields and analyst mean 1 yr targets as stock trading indicators. These are essential tools for catching the most valuable dividend dogs.
Dave Fish is Executive Editor for The Moneypaper and co-manager (since 1999) of the MP 63 Fund (Symbol: DRIPX), a fund that invests exclusively in companies that offer Direct Investment (or Dividend Reinvestment) Plans. He is also the author of the U.S. Dividend Champions spreadsheet (and PDF), which is updated at the end of each month...and lists companies that have increased their dividend payout for at least 25 consecutive years. (Separate tabs list "Contenders" that have increased their payouts for 10-24 years and "Challengers" that have increased their payouts for 5-9 years.) http://dripinvesting.org/Tools/Tools.asp
“The way to win is to work, work, work, work and hope to have a few insights.”
– Charlie Munger
“People err who think my art comes easily to me. I assure you, dear friend, nobody has devoted so much time and thought to compositions as I. There is not a famous master whose music I have not industriously studied through many times.”
- Wolfgang Amadeus Mozart
"It is better to be roughly right than precisely wrong."
- John Maynard Keynes
My time frame for looking at an investment would generally be between two to five years.
Consultant in the economics of renewable energy retrofitting - moving energy from liabilities to assets. Passionate student of the business scene, particularly commodities, currently not an active investor. Author, translator, blogger. Trading experience is more commodities than stocks.
Garvin Jabusch is Co-Founder and Chief Investment Officer of Green Alpha® Advisors, LLC. He is co-manager of the Shelton Green Alpha Fund (ticker NEXTX), the Green Alpha Next Economy Index, the Sierra Club Green Alpha Portfolio and others. He also authors the Sierra Club’s green economics blog, "Green Alpha's Next Economy."
I Know First is a financial services firm that utilizes an advanced self-learning algorithm to analyze, model and predict the stock market.
Co-Founder Dr. Lipa Roitman, a scientist, with over 20 years of experience created the market prediction system. The algorithm is based on artificial intelligence, machine learning and incorporates elements of artificial neural networks as well as genetic algorithms to model and predict the flow of money between 2,000 markets from 3-days to a year: stocks, ETF's, world indices, gold, currencies, interest rates, and commodities.
The algorithm outputs a predicted trend as a number, which in turn, is used by traders to identify when to enter and exit the market. While forecasts can be used for intra-day trading, the predictability tends to become stronger over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.
Visit us at iknowfirst.com
My investing experience dates back to high school years when I was first introduced to the stock market in economics classes and when I became fascinated by financial accounting. My first investing experience was rather painful: I lost a few thousand dollars on FOREX and penny stocks as I did not have a mentor or anybody knowledgeable about finance by my side. I still remember that time in details. After high school, I went to study economics with an emphasis on accounting at the University of Toronto. Four years later, with a finance degree under my belt, a decent experience gained in a few internships (where I got thanks to my soft skills, not my marks by any degree), I moved to Russia to work in investment banking, which I had decided was my passion a few years prior to that. I now live in Moscow, Russia, working as an Associate in Financial Advisory.
Due to the ongoing economic crisis in Russia, invoked by the sanctions, the country's financial industry has found itself in a pathetic state. Hence, things have gotten slow at work which is why I have a lot of free time to develop my services on Seeking Alpha (I started back in 2013, my final year of school). I am a number-cruncher by nature. Hence, my analyses almost always involve financial modeling and various financial metrics' calculations.
I feel that my job on Seeking Alpha is to identify investment opportunities among the smid-cap (small and medium cap) players in North America and Europe. Occasionally, I analyze a number of companies in a specific market segment in order to get a general idea about what is going on there as a whole. Sometimes, I write fairness opinion articles (I think nobody else on Seeking Alpha does that) on recent M&A transactions. I think that I bring value to my followers and other Seeking Alpha members by building analyses that are conservative in nature and present long-term views on individual companies. In my opinion, hard numbers are of more use to investors than tips, rumors, and guesstimates.
Feel free to contact me here or through my email: email@example.com. You may also check my Linkedin: ru.linkedin.com/in/avaltsev/ and Twitter: twitter.com/av_banker
30 years electronics industry veteran focused on Networking and Security and a lifelong Cub and Bear fan. Outside of my professional line of work, I follow and study only Solar Technology and companies since 2007. Practical knowledge in costs through self study, research and installation of 2 home systems totaling 17KW. I have no professional experience in Solar nor any inside contacts, no Finance or professional investing experience.
Wall Street Breakfast, Seeking Alpha's flagship daily business news summary, is a one-page summary that gives you a rapid overview of the day's key financial news. It's designed for easy readability on the site or by email (including on mobile devices), and is published before 7:00 AM ET every market day.
Wall Street Breakfast readership of over 900,000 includes many from the investment-banking and fund-management industries.
Sign up here to receive the Wall Street Breakfast in your inbox every business day: http://seekingalpha.com/account/email_preferences
My name is Dr. M. Max Pervaiz. That 66 in the user name is just an indication that I spent part of my youth not too far from Route 66 in the middle of the country. My investment style is explained here in detail.
I have a Ph.D. from MIT in Algorithm Development from the Department of Aeronautics and Astronautics. I also have a Masters in Applied Math from Oklahoma University. The Ph.D. thesis was heavy on numerical analysis, mathematics, fluid flow (physics), chemistry, and of course heavy duty coding. The MIT incubator had initially prepared me for my analytical abilities, which got further refined through my 27 years of engineering experience. I am still working as a full time engineering professional, but am beginning to consider retirement in a few years.
I am a results-oriented individual with significant number of accomplishments at the engineering enterprise level, and who is considered an asset in leading and contributing to the organizations’ growth goals in technical as well as financial matters. I am a highly analytic person capable of solving significantly challenging and complex problems, with an ability to think outside the box, while remaining focused on the tasks at hand for extended periods of time. Experience has included broad project management responsibilities encompassing advanced systems, analysis, design, development, integration, testing, and deployment. I have demonstrated sustained superior performance in multiple engineering programs and am a recipient of multiple achievement awards. I have applied this level of quantitative analysis and rigor in my financial evaluations of securities in my after-hour personal time in managing my personal portfolio.
There are in excess of 80 technical publications, which have given me some experience in journalistic abilities, in the sense of being able to tell a good story, providing a lawyerly and secular rationale for the ideas being presented, and above all the merit of the solutions being proposed for solving issues, while critically examining the disadvantages in an unemotional fashion, thereby retaining objectivity. This sort of experience has also played a direct role in my financial evaluations. In addition to the technical publications, I have written a large number of financial white papers for my own edification and for consumptions by friends and associates, but they are largely unpublished.
For any stock that is selected for further examination, the quantitative part is just the beginning, the thematic or story part is the most important aspect which is typically much more time consuming for me. I evaluate hundreds of correlations in a generic sense, and keep them in mind, for doing a detailed digging into individual stocks when the opportunity presents itself. For example, what is the correlation of the El Nino effect, with the storms and weather patterns in the Atlantic oceans, thereby affecting the insurance stocks, or what is the effect of El Nino on the coffee production, and which stocks could be affected. Another example can be trying to understand the effect of the differential between WTI and Brent Sea Crude prices and seeing how they correlate with the refineries on the east coast versus the west coast, and then depending upon which way the differential is moving, which refineries to consider for accumulation or reduction. As I stated, there are hundreds of broad correlations that I examine and then spend time on doing a thorough read of the companies in which I may be interested in investing. This includes remaining cognizant of general news, geopolitics, and global conflicts, with CNN, CNBC, BBC, and France 24 as my favorite news channels. That journalistic ability has helped me well, and I have developed an intuition to reading in between the lines in the evaluation of a company's own financial reporting as well as what the so-called expert financial analysts are predicting about the company. Internet is a wonderful tool which is available for folks of my generation, which provides tremendous advantage compared to intelligent investors of the past (like Ben Graham).
I am a highly successful individual investor who has developed personal propriety automated tools for data mining and decision making in selecting stocks for holding and determining when to sell. The highly analytical and automated propriety software is responsible for 13x growth in personal portfolio since March 2009. That explosive growth is due to the fact that I had taken a tremendous amount of loss in between Nov 2008 and March 2009, when I had sold most of my portfolio at loss, and I was sitting on cash by the end of March 2009. Starting 21 March 2009, I began buying into the market hand over fist. I am not saying that I predicted the crash, since I had tremendous tax loses (which is considered a hidden asset now), but rather that I was selling into the mini strength of the market in between the first and second massive hits to the market in late 2008 and early 2009. Had I been really smart, I would have gotten out before the massive downturn started in summer of 2008. Obviously there were many other smart people who had shorted the market then, but I was not one of them. While my investing experience started in 1991, that high level of sophistication of the developed tools only started after the 2008-2009 crash, when I had some additional free time to develop tools.
Microsoft is a wonderful company (I am not necessarily talking about its stock here) in the sense that it has afforded tremendous possibilities for people like me who have an analytical mind, and who have the know-how to code in Visual Basic for Applications (VBA). With the close integration of Excel with Internet Explorer (IE), I have VBA functions that can gather thousands of financial data values, from dozens of websites simultaneously, and populate those into my analysis spreadsheet in a few seconds after the click of a single button in the spreadsheet. That sheet also evaluates hundreds of financial ratios within the same few seconds, to provide an overall quantitative assessment of the stock under consideration. I have developed my own formulation of an Intrinsic Value (IV), from basic principles, that account for things like P/E ratio, P/S ratio, Earnings Growth, Cash position, P/CF, Debt/Capital, and ROI, into a singular expression of IV for the stocks. The expression is secular in the sense that there is no specific weightings that I have placed onto the individual ratios, but rather that the weightings just fall out from the basic first principles. The end expression is quite complicated in form, but it is not an issue for encoding it into a spreadsheet and is computationally inexpensive in VBA. IE is not necessarily a good browser, but it works well as a "background hidden process" in the Excel application, including the abilities to connect to an existing authenticated IE session, eliminating the need to insert passwords into the VBA code. May be someday, we'll have a means to gather data from other browsers like Chrome or Firefox (which are faster than IE and less prune to crashes - the background IE does not usually crash within the VBA, so I did not feel the need to invest time in looking for other ways). I have other accelerators, written in Visual Script (another MS product), that help speed the computations and gathering of data, which represents a poor person’s means of parallel processing.
Of course special considerations need to be applied to niche areas (for example, banks and REITs have slightly variant forms for the expression). Entirely different analysis is needed for the warrants and options, but understanding the IV for the underlying security itself is crucial for the analyses of warrants and options. For a value investor, who is also a quantitative investor, knowing the IV of a stock is very important. That IV is not constant in time, but rather changes as the inputs change. I consider the IV to be some future "equilibrium value" of the stock price (assuming my analysis is based on correct inputs), that the market will eventually recognize. If there is a sharp positive difference between the IV and the going price P (IV - P), then I will consider further examination of the stock stories, and could potentially buying the stock if I like the stories. Conversely, if the IV to P difference is negative, and if I own the stock, then that would be grounds for me to start selling the stock. Another possibility may be to consider shorting a stock if I don’t own it and differential is negative; but so far I have never shorted any stock. More on the sell part later, but let me explain the buy part of the equation first.
I consider the fundamental value investors (like Warren Buffett) to be the ones who have absolute confidence on their stock picking ability, and who go after a small number of companies and buy a large number of their stocks. I do not have that high degree of confidence in individual companies, and my ability to pick them. Instead, I have high confidence in my metrics, and the determination of IV of individual stocks, especially in relation to their peers' evaluations. If the stories and themes are right, I tend to buy into a large number of companies, with obviously a small number of shares in each. So, for example, if the theme is that the financials are going to outperform, then I would buy a large number of banks, insurance companies, as well as their long dated warrants (as I did post March 2009 and later). In the same fashion, if the theme is that the lower oil prices, with an increasing "crack spread" will be good for refiners, I may buy a large number of refiners that meet the metrics. Such was the case in late 2014 and early 2015, and I have done well with those picks. That refiner theme can be further tuned with a bias towards east or west coast refiners, depending upon the differential of the spread between various kinds of crudes and the refined products. Lately my trajectory to owning energy stocks, is to own the refiners first (downstream businesses, that deal with number of gallons handled, rather than the price of oil itself), then storage and pipeline companies (midstream), and then eventually the upstream businesses of the oil producers themselves. Within the upstream businesses, I will buy the oil servicers before the producers, as the oil prices improve.
My typical starting investment in a stock is between $4000 and $6000. I typically buy my stocks through the assignment of naked puts which I had sold to others (meaning I have sold a right to someone to buy their stock, should it drop below a certain threshold called Strike Price, and before a deadline in time which is called Expiry date, and for that "insurance" I collect a "premium"). Majority of naked puts expire in my favor, meaning that I get to keep the premium by the deadline time. That itself is a testament to that the fact that I had picked stocks with good underlying fundamentals, that were experiencing short term issues or market sentiments at the time of the writing of the contract. These are typically 60% of the times. Approximately 20% of the naked puts are assigned to me which cause me to lose money (in the short term). That is, the strike price minus the premium is still more than the going price of the stock when it was assigned to me, meaning that I overpaid on the stock compared to buying it directly at the then market price. But, I was willing to own the stock in the past, so I am most of time not concerned with such paper loss and short term sentiments. About 20% of the puts fall in the intermediate regime, where I am assigned the stock, but my overall cost remains below what I would have otherwise paid in the open market. Hence that is not a losing situation, but rather that I got the stock at a price lower than the market price at the time of assignment. After being assigned, I obviously look at the analysis again, and if it is still intact, then I may double down on my choice on further price drop and increase the stake further with typically twice as many number of contracts (not necessarily twice as much money, since there is a drop in the price). I may typically quadruple the size, if the same happens the third time around. This is a slightly different take on "buy low". I call it "buy more as it is lower", and I never commit my capital on a security all at once. To avoid emotional decisions, the time between consecutive buy trades on the same security can be several months. Another slightly different take on avoiding emotional decisions is that I do not do "market orders", they are always "limit orders" typically beyond the bid to ask spread, even for the options. This just means that I am not chasing the stocks, but rather letting the stocks come to me, when my price is met. If the trade does not get executed, I could care less, since there are plenty of fish in the sea.
Yes, I still make errors in picking losers, which later analyses shows that it was a blunder to own them. Rather than sticking with them, I typically sell them at a loss (note that I had characterized that loss as hidden asset earlier). However, because I am not a day trader, and seldom look at the market gyrations during daytime, since during that daytime I masquerade as an engineer (you have to focus on that day job if you also want to excel in it, which is certainly the case for me). Since I usually am not emotionally attached to companies, and am not glued to getting news from them, I many times miss out on a drastic decision by a company. For example, the bankruptcy filing by ANV (Allied Nevada Gold Corp) was an utter surprise, since I valued the gold assets in the ground to be substantially more than their debt obligations. But such things happen infrequently, and you just sell the stocks for pennies compared to what you had paid, to claim the tax loss to balance your other winners, or to increase your hidden asset if you are carrying forward a loss.
For those stocks for which a single contract would cause me to spend more than $10K, I allow myself to buy less than 100 shares through direct limit orders. This is how I had established positions in GOOG and AAPL, before their splits. I sometimes also buy stocks which do not have associated options. This is seldom, and the story really needs to make sense to me before I plunge. Such stocks are usually relatively illiquid. A part of the portfolio value (about 10%) is relegated to speculation, where the quantitative analysis becomes scant, but there may be a good story to consider. I do not have a good speculation record, about 70% of my speculations don't pan out, but the 30% that do, have produced outsized gains, which not only wash away my sins with the poor 70% picks, but provide a substantial boost to the portfolio performance by a wide margin. That speculation is not haphazard, it is "prudent speculation" that typically bets on more than one company in the same arena. An example of a "prudent speculation" is my purchase of a few thousand CSIQ (Canadian Solar) shares with an average cost of about $2, and that stock is currently (April 2015) trading in the high 30’s. The theme there was that the CSIQ growth will come back, in earnings as well as in sales, since the Chinese Government has no choice but to continue their infrastructure spending on solar installations to curb their pollution. With the CSIQ stock outperforming and becoming profitable, it is no longer characterized as a speculative buy, but rather an investment in my portfolio. Another of my recent speculation is HQCL (Hanswha Q Cells), for which I have purchased 3000 shares at $1.4 average cost for my initial investment. Only time will tell whether this is a good speculation. But the speculation theme there is that it used to be a Chinese company that merged with a Korean company and is now considered a Korean company. I am bullish on Korea, since their Government creates conditions in making their companies grow. Another theme for HQCL is that it is the only solar panel maker that makes high efficiency panels that can work under very harsh conditions. Yes, there is some madness to speculation here.
On the buy side, the initial investment of time on a particular stock can be high. It can be several hours of reading, while only spending a few seconds on generating the quantitative reports, and a few minutes to examine the IV value, and some other underlying ratios that did not enter the IV calculations. But once the stock is bought, the "maintenance" on that is typically every six months, and generally limited to quantitative analysis rerun and its examination. This allows me to remain emotionless on my initial decisions and I allow the time to hopefully work to my benefit for the particular security. But the key benefit of having a low ongoing maintenance is that I can afford to keep a large number of securities in my portfolio. To show you, what kind of "quant" I am - I have close to 1500 positions in stocks, options, and warrants, both in my after-tax, and retirement accounts in April 2015 (stocks are about 900 in number). I have to work hard to keep up with this, but I have managed so far, and done so effectively. That large number of positions will hopefully make sense as I describe my selling mechanism below.
Now some explanations on the sell side of the portfolio management. Yes, I do sell, and yet I will still call myself a "fundamental quant". I strive to keep the portfolio turnover low, again from the point of view of keeping emotions out of my decisions as the market is gyrating. Firstly, most of my positions which are done are related to the options getting expired, so they typically result in little or no turnover, but they do constitute a completed trade from a tax perspective. So, for example, naked puts expiring in my favor, just cause me to pay tax, and do not represent a turnover in portfolio. Those naked puts which are assigned to me also should not be considered as turnover, since they are just coming in and not out going out.
For every stock position that I have in the portfolio, I have a corresponding sell order or covered call written out on the stock. To keep the emotions out, and to unmitigatingly trigger wash sales, I usually do not immediately place sell orders on a security that I have just bought. I let at least one month of gap between the buy and sell orders to pass by. Wash sales are not a problem in themselves, since you get to readjust your basis of remaining stocks. But I just want to keep my accounting simple and hence I do not like wash sales (broker is also required to report on those to the IRS). To further limit my turnover, my initial sell price on a security is typically 50% more than my initial cost, independent of any IV calculation. This means that the order is there, just in case, if there is a spike up someday, and the more likely scenario will be that the sell order will just expire, and I will have to redo it a few months later.
Most of the sells are done via writing covered calls on the securities that I own. To limit the turnover, I typically only write a single covered call (meaning that I sell a right to someone to purchase 100 shares of stock from me at a given threshold called Strike price, up to a certain deadline called Expiry date, even when the stock may be trading above the Strike price by that deadline, and for that privilege, the buyer pays me a premium). This, in contrast to selling naked puts, where I may write more than one contract (e.g., I wrote 30 contracts on HQCL in the above example). The strike price plus the premium, as stated above, is typically more than 50% of my initial cost of the security. Very frequently, these covered calls don't get executed, and I could care less, since I am not chasing anything, and I want to keep the turnover low. As the stock starts going up in price, as most of them do, if the analysis is correct, my future orders on the security under consideration may be less than 50% of the recent price, but it is seldom less than my IV computation. So, some of the stocks do get sold or assigned, but their number is far less than what I had gathered in the first place and at the same time, their per share value is typically substantially higher. If a stock does get sold, and if I still have a remaining position in it, my next sell order is at least a 30% more than my last order. So, this is a slightly different take on "sell high"; I call it "sell less as the price is higher".
So, by now, you may be wondering as to why I have so many stocks. The more you have, the more they remain in front of you, even when you are not actively looking at them on a day to day basis. Besides they are low maintenance now, after my initial investment of time. Secondly, the stock market comprises of individual securities - it is not a "stock market" that I am invested in, but rather a "market of particular stocks" in which I am invested. Each of those securities has its own cycle, some long duration, and some short duration, and while it may appear that the stocks seem to go up and down together with the market, they still have their own cycles. Not all the stocks are at their 52-week low, when the market is at the yearly low, and the same is true on the high side. Since I cannot determine, the peaks and valleys of the market, as well as the subset of that eco system for my own stock selections, I cannot know when the peak arrives for each security also. But I do know, that the peak arrives in most cases. Hopefully with a large number of selections, the near peaks where I may sell are staggered in time, if and when I am fortunate enough to sell. This has the added advantage that the overall performance can exceed the broader stock market by a wide margin, while you remain extremely diversified. This is something that I have demonstrated through my portfolio management. Think of securities as sinusoidal waves staggered in time, with different time periods (or wavelengths), and different amplitudes – you jump from one peak where you sell a security to the valley of a different security which you would buy into. You do this on a weekly or daily basis, and it exaggerates your annual performance. Getting to the point where you have a large number selection to get in and out would require years in the making – and it took 24 years for me to get to this point. That selection had dwindled down for me only in the brief period of late 2008 and early 2009.
The other lingering question that you may have, is that if the turnover is low, I am buying more and selling less, where is the cash to buy coming from? Well, there are dividends from the actual stocks that are constantly coming, including the yields from the covered calls and naked puts that expire in my favor. But also note that even though, I am selling less number of shares, the value of each subsequently sale is actually more. So, for example, my average cost on MU (Micron Tech) is about $5, but I have sold it for $10, $15, $21, and $33 at various times, with a covered call pending at $40. Furthermore, since I kept on buying MU as it was going down several years ago, I have a few thousand shares still left to unwind. Another example is VRX (Valeant) with an average cost of $14, and the last 100 shares sold at $199, with a few hundred shares left now. The other source of cash is actually my day job itself. Yes, I am reasonably compensated, and my wife also works; a sizable portion of our salary goes into the portfolio on a regular basis, and most of it goes into the after tax-account.
I intend to continue refining my tools, as I have time. I am hiring two students as interns over the summer, to help them understanding coding, financial analysis, and portfolio management. This is one way of giving back to the society. While my portfolio may be okay for retiring, it is certainly not large enough for me to indulge in philanthropic activities sometime down the road. Hopefully with a few more years of working, the portfolio will be in a critical mass to balloon up such that retirement withdrawals will be insignificant, and with added time in retirement, I can pursue philanthropy. I am grateful to the US Government who paid for my graduate expenses, and I am grateful to some of the companies where I worked, and it will be good to give back. I also hope to write on financial matters as I get some time, and publish for free on SA, as another means of willing back.
Thanks for reading my financial bio. Feel free to check out my engineering bio on Linked-In, if you are interested.
I enjoy studying different trends in the economy and applying these trends to the financial markets.
Finding growth opportunities in undervalued stocks has always been a hobby of mine.
Catharina is an expert in the energy sector, including utilities, oil/gas, cleantech and unconventional/alternative energy. She has been a ranked analyst for global investment banks for many years. Her analysis covers thematic ideas and long as well as long/short stock picks.