COMMENT
Options. Hasn't been a lot of movement because the market is in a trading range so being able to write options and collect cash flow seems to be the strategy of choice right now.
COMMENT
Good time to sell Puts into the market? By doing this, you are taking on an obligation to buy the shares so you have to be comfortable owning this company. Also, on a stock like this that has a pretty decent dividend, there is a decent cash flow coming out on a regular basis and is about 4% higher than the risk free rate and options tend to be priced off the risk free rate, you actually get a much higher premium on the Put than you would on the Call option. Very good strategy.
BUY
Covered Call Cdn Banks ETF. Likes this one and uses it for some of his income portfolios. Very good distribution. With this product, you are buying the banks at a pretty decent price right now. All of the distributions from the premiums are being paid out to the unit owners (also believes they are paying the dividends) so take the distribution and pretend it should be half. Take the other half and either set it aside and buy more units or use a DRIP is available.
TOP PICK
(A Top Pick Oct 1/10. Up 40.01%) Bullish Put Spread. On the premise that the stock could be above $420 by the end of 2012, he will Sell a January/13 Put at $420 but Buy a January/13 Put at $380 in order to hedge the downside. They are talking about doing a dividend next year, which would do wonders for the stock price. The risk would be $40 and the gain $20. He suspects it will be above $420 and both options will expire worthless.
TOP PICK
Writing an April Put at $25, which will give you about $1.05 today. You're basically taking on an obligation to buy the stock at $25.
TOP PICK
(A Top Pick Oct 1/10. Up 10.53%.)A straddle on S&P 500 ETF. $124 is the strike price and 25 points is the cost and it goes out to December/12. Strictly a volatility trade. If the market goes up or down dramatically you will make money.
PAST TOP PICK
(A Top Pick Oct 1/10. Down 61.1%.)
COMMENT
If you think oil is going to do okay in the next year, and he thinks it will have a slow recovery.
COMMENT
January $19 strike call. Safe bet? That's an aggressive trade. These options are in the middle in terms of costs. Thinks there is some resistance at around $19 so he would rather write a Put or do a covered call, in other words own the stock and Sell a Call against it.
COMMENT
Enhanced Income Energy ETF. A covered call writing ETF. The reason there is a 21% distribution is because they are taking all of the option premiums that they sold initially and paying it out to you. That is not a realistic number for covered call writing on a long-term basis. If you own, take half the distribution and reinvest the other half back into the fund.
COMMENT
Covered Call Cdn Banks ETF (ZWB-T) or Enhanced Income Gold ETF (HEP-T)? Would prefer the gold HEP as he thinks gold is one of the best sectors of the economy against which to write covered calls.
COMMENT
Very focused on hotels in Western Canada and, particularly, in Fort McMurray so it is a very leveraged bet on economic conditions and hotel market in particular in Fort McMurray. There are some risks to it. Good yield of 10.3%. Payout ratio indicates they are overpaying. Reasonable investment, but a high risk/high reward situation.
DON'T BUY
He has been Short this stock for some time. They had a big concentration of tenancy to Prism, which has had financial troubles and they are disclaiming leases and has some short-term capital issues there. Very high risk and he does not believe the yield is sustainable.
COMMENT
Canadian housing bubble? What is different about the Canadian residential housing market is that housing is bought by folks for the right reasons i.e. people that want to live in them as their principal residence. They are not overleveraged unlike the US. The incentive is to pay down the mortgage as quickly as possible. He doesn't see a housing bubble. There is positive immigration, people have jobs and they need a place to live.
COMMENT
Investing in their debt? Largest Canadian REIT and is focused on shopping centers. People are looking for yield and safety of principal and you get it with this company. If you are looking for a reliable, safe, predictable income stream where you can sleep at night, this is a good call.