Greetings-
When I was in grades school, Alfred E. Neuman’s face was a constant companion to my Superman lunch box. I probably spent too much time thumbing through Mad Magazine. I once answered and ad in MAD Magazine. I remember working my tail off to earn a few bucks and sending in most of that money for a life sized glow in the dark Frankenstein. It was plastic sheet did not glow in the dark at all. You know ultimately, nothing you can purchase on God’s green earth is really very fulfilling. This was an early caveat emptor lesson and I remember it.
But, lest you think I never buy anything…I am starting to eyeball US stocks and will be looking to make some clever purchases with a few twists. If the market breaks as it typically does into SEP-OCT.
Tactic 1: Stock options have been priced up a bit here...should the market do a swan dive into the Fall I would hope to see that continue. I am warming to the idea of selling some puts to accumulate a few companies in the US.
Tactic 2: Yield replacement…bonds will need to be sold soon (if not now) and are statistically pretty expensive to stocks (see last installment – NOW 10 yr at 2.60%, 30yr at 3.73%). Looking for some dividend paying companies with solid profitability.
Tactic 3: Cheap…Low prices for good earnings. Below is a screening of some of the companies that are going on my shopping list…again, should the overall market break sharply, I would like to sell puts.
Tactic 4: Bite off only what can be chewed. NO LEVERAGING. Only (sell enough puts to) buy what you can afford from cash holdings should the stock be put to you-replacing bonds sold or idle cash.
I have provided the list of companies I screened along with some pertinent data. And the put options I will be tracking going forward.
Hoping for a drubbing, trying to be clever in hunting yield.
All the best,
Leon
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