What are you buying today?

[LC]

Dipped a toe in XOM

[CorpRaider]

Small adds to:

 

D, DUK, PPL, SO, UTG

ABBV, THW

ADM, MO, PM

T

DIS

BAC, BX, PBCT, WFC

PH

DD

XOM

 

New position in Heico and small adds to a few Vanguard funds

 

Thanks

Lance

 

Yeah I was just looking at those UTEs for grandma.  WTF is up with those yields.  Seems like D is going to maybe issue some stock "for liquidity" but I didn't see anything on DUK.  If memory serves, you crushed it if you bought utilities during the great depression.

[shhughes1116]

The price action has been pretty...brutal...in utilities. 

 

Hard to say if there is any relationship, but I have often wondered about the relationship between Seeking Alpha and certain "income producing stocks" in the market.  A lot of the content on Seeking Alpha, in the recent past, has been pedaling all sorts of "income producing stocks", even as they reached nose-bleed levels.  I have to think a lot of weak-hands were pushed into these stocks, and are now fleeing, hence the awful price action.

[JRM]

How much longer are regulated utilities going to be allowed to over-earn?  They have never made more money between the agreed rate of return (typically close to 10%) and the cost of capital.  When taxes were lowered they were required to pass the savings on to the customer.  When rate makers get wise they will go after this margin, too.

 

Back in the day utilities were a growth industry.  It started with refrigeration and then air conditioning.  Maybe electric vehicles will be the next great growth phase, otherwise we are in a flat to declining load growth.  I tend to think EVs will be the next growth phase.

 

With that said, PEs of 30 are probably not justified for your  average utility even with low interest rates.  I wonder how many pension funds are getting annihilated right now?

[lnofeisone]

Added KMI, WMB, WFC

[texual]

Berkshire Hathaway B

Bank of America

IBM

Mastercard

Seritage Growth Properties

 

[Broeb22]

FTV

FSV

MA

ROP

[Castanza]

Have been trading BRK and GOOG the past two weeks with good success with about 20% of my cash pile while also establishing a long position. A bottom is a best guess at this point. Near term, the only thing that seems likely to continue is high volatility. Why not use this to your advantage on stocks you would feel comfortable holding?

 

Anyone else on the trading?

[LC]

Have been trading BRK and GOOG the past two weeks with good success with about 20% of my cash pile while also establishing a long position. A bottom is a best guess at this point. Near term, the only thing that seems likely to continue is high volatility. Why not use this to your advantage on stocks you would feel comfortable holding?

 

Anyone else on the trading?

Kind of. Doing the same in terms of establishing long position. Then selling call options against the position on big up days, and closing them out on down days.

[kab60]

Clipper Logistics

[vinod1]

Have been trading BRK and GOOG the past two weeks with good success with about 20% of my cash pile while also establishing a long position. A bottom is a best guess at this point. Near term, the only thing that seems likely to continue is high volatility. Why not use this to your advantage on stocks you would feel comfortable holding?

 

Anyone else on the trading?

 

Yes! Moved a few positions from stock to LEAPS, to free up cash to play the volatility, protect downside in case I am underestimating the severity while also locking in attractive prices if there is a sudden positive catalyst.

 

This strategy has been very profitable in 2008-2009 but then the volatility is so much more at that time. From purely financial perspective, let us hope the volatility lasts for some time.

 

My daily prayer: Lord, I am not asking for a bull market and I am not asking for a bear market, but is it friggin too much to ask for some volatility. (Minus the virus part)

 

Vinod

 

 

[LC]

Have been trading BRK and GOOG the past two weeks with good success with about 20% of my cash pile while also establishing a long position. A bottom is a best guess at this point. Near term, the only thing that seems likely to continue is high volatility. Why not use this to your advantage on stocks you would feel comfortable holding?

 

Anyone else on the trading?

 

Yes! Moved a few positions from stock to LEAPS, to free up cash to play the volatility, protect downside in case I am underestimating the severity while also locking in attractive prices if there is a sudden positive catalyst.

 

This strategy has been very profitable in 2008-2009 but then the volatility is so much more at that time. From purely financial perspective, let us hope the volatility lasts for some time.

 

Vinod

 

Hi vinod,

 

Are you buying LEAPS ATM? I am doing a similar strategy buying deep ITM.

[vinod1]

Have been trading BRK and GOOG the past two weeks with good success with about 20% of my cash pile while also establishing a long position. A bottom is a best guess at this point. Near term, the only thing that seems likely to continue is high volatility. Why not use this to your advantage on stocks you would feel comfortable holding?

 

Anyone else on the trading?

 

Yes! Moved a few positions from stock to LEAPS, to free up cash to play the volatility, protect downside in case I am underestimating the severity while also locking in attractive prices if there is a sudden positive catalyst.

 

This strategy has been very profitable in 2008-2009 but then the volatility is so much more at that time. From purely financial perspective, let us hope the volatility lasts for some time.

 

Vinod

 

Hi vinod,

 

Are you buying LEAPS ATM? I am doing a similar strategy buying deep ITM.

 

Hi LC,

 

Did not fully flush out my strategy. With kids home, too little time to think!

 

But I bought $180 strike out of the money BRK 2022 calls yesterday. Exited long term BRK stock today.

 

Planning to do opportunistic changes as LEAP spreads are pretty high and I have to put in a few bids at different strike prices before something gets executed.

 

Vinod

[LC]

Thanks for sharing (and good luck with the little ones/your sanity  ;D)

[vinod1]

The way I see it serves two purposes

 

1. If we get some extreme tail event and BRK ends up at say $120 for example, a deep in the money LEAP would have resulted in a pretty big loss. Not really protecting me, other than freeing up some cash.

 

2. If market runs away while I am playing trading volatility and have higher cash allocation, the calls would make up for that.

 

Vinod

[Uccmal]

Trying to buy puts on MA, and a couple of others.  The implied volatility is way up.  The cost is more than the other day, when the stock was higher.  Option sellers are expecting a quick reversion right back down.  Todays market rise is in response to the expected stimulus plans.  Once they come out and eveyrone realizes the economy is operating at 70% things may really drop. 

 

I am sitting out Leaps for now until this volatility settles down to a lower level. 

[vinod1]

Trying to buy puts on MA, and a couple of others.  The implied volatility is way up.  The cost is more than the other day, when the stock was higher.  Option sellers are expecting a quick reversion right back down.  Todays market rise is in response to the expected stimulus plans.  Once they come out and eveyrone realizes the economy is operating at 70% things may really drop. 

 

I am sitting out Leaps for now until this volatility settles down to a lower level.

 

Hi Al,

 

Good to see you posting again after a long time!

 

Agree Leaps are expensive, putting in stink bids hoping to get execution, but not much luck.

 

Vinod

[flesh]

2022 calls on wfc, bk, bac. Some bac, bk, oln.

[LC]

The way I see it serves two purposes

 

1. If we get some extreme tail event and BRK ends up at say $120 for example, a deep in the money LEAP would have resulted in a pretty big loss. Not really protecting me, other than freeing up some cash.

 

2. If market runs away while I am playing trading volatility and have higher cash allocation, the calls would make up for that.

 

Vinod

 

I hear what you're saying with (1). Perhaps I should rethink my options. I figure, I'd rather have that intrinsic value stored up. If I buy OOM options it frees up a bit more cash; but my exposure is very conditional.

 

I'm always a bit nervous with OOM options because in the case of (2), it seems like they are only useful if prices run up enough. And you have to sell at the right point  i.e. maximum upwards movement and volatility - do you find these OOM calls have a limited lifespan where you can make decent money? Or do you plan to hold until expiration and count on being right on both direction & timing?

 

You're right on volatility - LEAPs past 2021 were very expensive today.

 

[KJP]

Griffin Industrial Realty

[Gregmal]

The way I see it serves two purposes

 

1. If we get some extreme tail event and BRK ends up at say $120 for example, a deep in the money LEAP would have resulted in a pretty big loss. Not really protecting me, other than freeing up some cash.

 

2. If market runs away while I am playing trading volatility and have higher cash allocation, the calls would make up for that.

 

Vinod

 

I hear what you're saying with (1). Perhaps I should rethink my options. I figure, I'd rather have that intrinsic value stored up. If I buy OOM options it frees up a bit more cash; but my exposure is very conditional.

 

I'm always a bit nervous with OOM options because in the case of (2), it seems like they are only useful if prices run up enough. And you have to sell at the right point  i.e. maximum upwards movement and volatility - do you find these OOM calls have a limited lifespan where you can make decent money? Or do you plan to hold until expiration and count on being right on both direction & timing?

 

You're right on volatility - LEAPs past 2021 were very expensive today.

 

This is a unique subject. Personally, I prefer to cut the stock via deep ITM. How much depends on my confidence and ability to really get under the hood. Being honest with myself this usually eliminates much over the market cap of day $10B. Companies bigger than that, even ones we all know well like BRK pose zero analytical edge and even when they do, have parts that move too quick.

 

If I really like it but am uncertain, I try to use the ITM as a stop loss. Similar to what I did with WFC in January. $45 strike. If it goes below there, I’m out. With stuff I’m dedicated to, you go deep ITM, figure that your margin of safety, and then of, let’s say something extraordinary like this happens, and you find yourself below the strike, you should still have reasonable confidence in valuation and time sorting things out, to load the boat on those same now OTM calls. Example let’s say BRK $150 calls. In the money now, and if they ever go below, you can swing big as OTM

[TwoCitiesCapital]

I hope you guys are taking advantage of this volatility

 

Was able to sell some long-dated calls on Santander today for $2.25 and immediately buy them back for $1.50.

 

Just being patient with limit orders outside of the bid/ask

 

[LC]

I hope you guys are taking advantage of this volatility

 

Was able to sell some long-dated calls on Santander today for $2.25 and immediately buy them back for $1.50.

 

Just being patient with limit orders outside of the bid/ask

 

Trying my best. Sold some short-dated PM calls. Bought a slug at $69/sh a week back; sold 70-strike Apr 3 calls for $1.20; Will look to close out the calls later this week/early next week for 0.20 or less.

[Uccmal]

Everything is so fast moving that its hard to make any reasonably educated decisions. 

 

The problem I have with writing options is the huge amount of margin they use up.  Covered calls would be cheaper but I dont have enough common stock in anything large cap to make it worthwhile putting alot of brain power into. 

 

The other area from my 2008/09 playbook I completely forgot about were Preferred shares.  I just had a look at several sets of Prefs for Enbridge, BCE, and Bam in Canada.  Enbridge in particular has a few series that are yielding 10-11% and are off close to 50% in the last two weeks.  Did people suddenly stop buying oil and gas (rhetorical). BAM and BCE have some yielding near 8-10% and trading down 40% or so.  Did people stop using the internet and making calls?  I may look at picking up a basket of these and sort the garbage out later.  My research department doesn't have the capacity to analyze all the prospectus :-). 

[Guest cherzeca]

Everything is so fast moving that its hard to make any reasonably educated decisions. 

 

The problem I have with writing options is the huge amount of margin they use up.  Covered calls would be cheaper but I dont have enough common stock in anything large cap to make it worthwhile putting alot of brain power into. 

 

The other area from my 2008/09 playbook I completely forgot about were Preferred shares.  I just had a look at several sets of Prefs for Enbridge, BCE, and Bam in Canada.  Enbridge in particular has a few series that are yielding 10-11% and are off close to 50% in the last two weeks.  Did people suddenly stop buying oil and gas (rhetorical). BAM and BCE have some yielding near 8-10% and trading down 40% or so.  Did people stop using the internet and making calls?  I may look at picking up a basket of these and sort the garbage out later.  My research department doesn't have the capacity to analyze all the prospectus :-).

 

I've read guys like Icahn and Tepper are buying some oil patch debt.