COMMENT
Losses in financials are going to continue. Wouldn't “Buy and Hold” any bank. You could buy for a trade and sell on a bounce. Just announced earnings that were okay. Balance sheet continues to expand which he doesn't like.
BUY
Extremely boring company of most listeners are probably paying every month for their water heater and every year the company increases the price by 1%-2% and no one knows it. Cash flow is almost guaranteed. Recession resistant. 10.75% distribution is very safe.
COMMENT
Options on a falling US$: Buy a Put on the US$ versus whatever currency you want to trade against. The best way to do this is through Philadelphia's (PHLX) World Currency Options. They are very easy to use.
DON'T BUY
This one is so cheap that the option play becomes very difficult. You're not going to be able to make too much of an options play on a $2 stock.
DON'T BUY
European banks are high risk. #1 prediction is that Europe will get hit harder than North America is with this recession, so the worst is still coming for them. Unlike the US, which is aggressively de-leveraging itself right now, Europe has not been as aggressive.
COMMENT
Calendar Spread is a time premium collection strategy. Ideally the stock should be in a consolidation phase. You want it to be in a sideways trading pattern, not running up or running down. You also have to worry whether the stock is assignable to you because of your option come expiration.
TOP PICK
Did a nice job of acquiring competition in areas where they were not as strong. Bad thing about this bank are rumours of nationalization but he doesn't think it will happen. Could be an $8-$10 stock and in 3 years a $20-$25 stock. When he purchases this, he'll take a front month “out of the money” call giving him room for capital appreciation with a ratio of possibly 3 of them.
TOP PICK
Leaps of 2011 “in the money” options Calls around $12.50 strike. He'll also Sell 3 front month “slightly out of the money” options against that to collect premium and do that every month as time passes.
TOP PICK
Oil is down because of a global recession and he doesn't think it's going to last. This one always performs well. As well he would buy an “out month” in the money Call, maybe 2011 and Sell on a ratio “out of the money” front month calls to bring in a little premium to help with the cost of the “out month” option.