A Comment -- General Comments From an Expert (A Commentary)

COMMENT
Uranium stocks. This is not on a lot of peoples radar screen at the moment. After the Japanese earthquake, a lot of people focused on other directions. There is probably also a lot of tax loss selling. Uranium will have legs longer term but in the short term, there doesn't seem to be any momentum. If you have the time horizon of a couple of years, it would be a good time to get in.
N/A
Market: Bought 3 stocks starting in August and he is scouring for bargains. This is a time when a lot of people are doing tax loss selling and he buys stocks when they are out of favour. There could be the Santa Clause Rally follow by the January affect in the first few days of January.
COMMENT
High-yield bonds as purchased through ETF's? These tend to focus in the US because high-yield in Canada is lacking. US high-yield gives you a certain amount of high volatility. Also watch for foreign exchange issues. A higher Cdn$ could impact your investment. You have to watch out for the fees.
COMMENT
Tax implication on large-cap US dividend stocks? 1st of all, you have to deal with the Cdn$ and if it gets stronger your investment will get weaker. There is a US 15% withholding tax on your dividends even if it’s in an RRSP, which you don't get back. This is a small negative of the big puzzle.(There has been a question on the 15%, so check with your advisor on this.)
N/A
Market: The overriding problem across the globe is that there is too much debt incurred for the countries or people to services them. We are tracking on par with other financial crisis since WW2. He looks for REITs with good management, low payout ratios, etc. You would like to see strong robust growth in the economy so there is a demand for commercial real estate, but the interest rates are low and credit spreads are low and ‘pretty good’ demand, so things are pretty good for REITs.
COMMENT
REITs are something that Canadians do much better than American based on total return from REITs in both countries. It is function of their distributions. Best REITS are dividend growers. Add tax efficiency because a lot do some payout in return of capital.
COMMENT
Markets. Seeing some signs of reversal. Activity today looks pretty encouraging. DEX Universe Bond ETF (XBB-T) is the ultimate in interest sensitivity as it is pure interest. Starting to sell off a bit on days that are positive for most of the other stocks. Getting to a very high point, which will be nerve-racking for some income oriented investors.
COMMENT
Technology. Cisco (CSCO-Q) is one of the larger technology companies and the chart shows a bottoming out. Seeing some pausing at a resistance level and is going contrary to the markets.
COMMENT
US homebuilders. KB Home (KBH-N) is showing at bit of an uptick. This was a leading indicator. Homebuilders started dropping before the rest of the market in the mid-2000 range. There is a possibility that we'll see these leading stocks carrying the rest of the markets.
COMMENT
Gold. Charts are showing a wedge pattern, which indicates volatility is going down. This is encouraging but he doesn't like gold because it is so volatile. You want to make sure it gets above the 1800 point with some positive days following that.
COMMENT

Options. If you write them every month and they expire on Saturday, do you wait until Monday to write a new option? If he knows he is not going to be exercised by the last hour on Friday, he will rewrite on Friday because he'd rather pick up those extra 2 days of option premiums over the weekend. If there is any question, he’ll wait and rewrite on Monday.

COMMENT

Options. If you either don't get Put or Called or you do, do you go back to the same stock? There are a number of stocks that he likes and he can see where the earnings momentum is, and he knows what the option premiums are, he tries to write them when they are down. He won't always stick to the same name.

COMMENT

Writing a covered call on a stock where you are underwater 10%, would you go more than one month in order to make some decent premium? Never think about getting even. If you lost 10%, you have lost 10%. Every position, think about it as though you just bought it.

DON'T BUY

Natural gas? Doesn't like natural gas because there is too much of it. With all the new finds in shale gas, it is great for us because maybe we become energy independent.

DON'T BUY

Writing covered calls and writing puts simultaneously on bank stocks during high volatility times such as 2009? Doesn't like this strategy because you expose yourself to a massive amount of downside risk. This means you are calling the market.

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