Buzz's Buzz History for 2012

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May 13, 2012
Very busy Mother’s Day weekend.
A look at the difference between the Friday close prices and the Monday morning prices that we have been following, shows that the portfolios with Monday prices are all better than the Friday prices (up to 1% in some cases). We lost some stocks to the get-out price this past week, with the S&P giving up 1.1% since last weekend. I indicated which ones via Twitter and Facebook on the day that it happened.
Next weekend is expiration and we will reload the portfolios. There will be a few stocks called from that various portfolios next weekend. That is what we want.

May 5, 2012
In keeping with the tracking of our four portfolios using the Friday close before expiration and the Monday open after expiration weekend, I can report the following. In all cases the portfolios that had their buy/writes on Friday morning (we bought the stock 30 minutes after open on Monday morning and sold the calls as GTC 1 hour after the open on Monday) did better than if the stock had been bought at the Friday close price. This assumes, also, that everyone used the GTC strategy. As I reported earlier, all calls were purchased at the GTC price within the week after expiration, except for one stock, MCP. It is unlikely that we will get the $1.01 premium but we will continue to keep the GTC sale open.
The difference in returns for each of the portfolios is (Friday price vs. Monday price)
            $10K Agg – 7.2% vs. 8.2%
            $25K Cons – 6.6% vs. 7.5%
            $25K Agg- -3.8% vs. -2.6%
            $100K Retr - -12.5% vs. -12.2%
The $100,000 Retirement Portfolio took a hit this week with RIMM, SODA and CROX being sold at the get-out and GMCR tanking. We are holding GMCR till 5/10 hoping for a “tank bounce”

April 28, 2012
You may want to go back and review my last BUZZ (April 24, in blog history on my BUZZ page). After posting the "latest updates" last Saturday, based on Friday's pricing, it became evident that Monday was going to have a large down opening. This would be good for buying the stock (at lower prices) but not necessarily good for selling the calls (at lower pieces). I suggested selling the calls on a good-till-cancelled (GTC) basis.
I then kept track of what prices the stocks could be purchased for 30 minutes after the open on Monday morning. At 1 hour after the open I began pricing the calls we listed in our updates. Most were down but a very few were up. The up ones were purchased and the rest were put in as GTC at the Friday update prices.
I kept you posted via Twitter and Facebook what happened during the week. As of yesterday, we were had sold all the calls at the higher (Friday) price except MCP Apr32 at $1.01 which is on two of our portfolios. It will remain as a GTC for a while longer.
The following table shows what has happened in one week since we posted our "latest updates". Shown are the values of the portfolios at last weekend (based on Friday prices), and the differences this weekend between purchasing and selling at Friday closing prices and the Monday morning and GTC prices used for the analysis.

You can see that the GTC method can provide better returns because the stock purchase price is lower when purchased (Monday morning) and the calls are sold at a higher GTC prices (later).
The $25,000 Aggressive Portfolio is low primarily due to DNDN which we decided to keep even though it tanked several months ago. We have been able to sell more calls against it each month and it has worked its way back from -23.1% after the tank to -12.5% now. I think it will eventually provide a good positive return. DNDN’s stock price has increased from $10.15 to $11.35.It was purchased at $14.30 back in February and we have sold $1.40 worth of calls against it.

April 24, 2012
Yesterday on my Facebook and Twitter pages I suggested using the GTC (good till cancelled) method when selling the calls against the stock we owned or bought on Monday morning. It was evident that the market was going to be down Monday morning. In order to test this on all four of our portfolios, I “mock” bought all the stocks listed to buy on all of our “latest updates” which reflected Friday close prices. I did this 30 minutes after the markets opened. As a result, I got most of the stocks at a lower price. One hour after the open, I attempted to “mock” sell all the calls against the stocks in each portfolio at the Friday close premium. In a few cases, I could get the Friday price. In a few cases, I got a price higher than the Friday close price. In most cases, I had to make the purchases “GTC” at the Friday close prices.
By mid-day the markets had halved their losses and by the end of the day all but six of the GTC orders were filled at the Friday prices. The markets are scheduled to open strong today and I expect some more (if not all) for the remaining six GTC orders will be filled. As a result, those who opted to use the GTC method, should show better results at the next expiration that what I will show using the Friday close prices. You will have saved a little on the purchase price and still get all the anticipated call premium.
If you don’t have Facebook or Twitter accounts, you can still see my posts on these sites by clicking on the icons on the IES home page.

April 21, 2012
As many of you have let me know, it was a bad month. Only the $25,000 Conservative Portfolio was able to end the month ahead of the S&P500. The $10,000 Aggressive Portfolio was close. You can see under our “Results” tab, on our home page, where each of the Portfolios is this weekend. We have had these monthly setbacks before and have been able to overcome them. This should be especially true with earnings continuing to be announced. The first earnings announced this past week were overshadowed by unemployment numbers and European unrest (again). Earnings were better than expected and could continue for the next few weeks.
We can learn from these kinds of months. First with all the stocks sold at the get-out, we have an opportunity to “refresh” our portfolios. Remember, we are not a “buy-and-hold” strategy. We want to buy, write and get called. Stocks called and sold at the get-out provide cash to buy something new that may do better. This leads into the second thing we can learn from months like our last. The get-out price must be adhered to. Thinking that they will “come back” usually doesn’t work. In our $100,000 Retirement Portfolio, five stocks were sold at the get-out price (-15%) during the month. Of the five, only one (FST) came back to above the get-out (but only by $0.25). All the rest (NBR, MDR, HUSA and UPL) stayed well below the get-out price. If we had not sold at the get-out price, these stocks would have dragged the Portfolio down from a value of $92,198 to $84,600 ($7,598 lost). You could have purchase another stock and sold calls with that amount.

April 15, 2012
Since last expiration (March 17) to today, the markets have been flat to down. Unfortunately, so have our portfolios, Pretty dull! Wednesday started with Alcoa earnings, which were better than expected. The stock popped for two days and then settled back. There will be a string of earnings announcements over the next two months. Next week is expiration weekend (April 21) and maybe the Analyzer can find some companies that will have good earnings and we can start seeing some movement upward.

April 9, 2012
The weekend Easter and Sader meals were interrupted with dire financial news. Many were predicting a repeat of 2008 and “60 Minutes” capped off the weekend with a prediction that the EU is going to have to collapse because it will not be able to “buy” its way out. There was also concern over the employment figures.
So I decided to wait till this morning to see if the markets were “buying” the news. The DOW (I use the DOW here rather than the S&P500 because it tends to be more “news” sensitive) was 155 points down sharply at the open but then settled into a rising range.
A look at our portfolios, an hour after the open, indicated many stocks down but about one third were actually up. UPL, in the Retirement Portfolio, was lost to the get-out, but that was the only one on the sharp drop this morning in all the portfolios.
We have lost a total of eleven (11) stocks to the get-out price out of a total of thirty-eight (38) stocks in the four portfolios. This may seem really bad. It’s bad, but we’ve been there before and pulled out.
The get-out price is important to the Covered Call Strategy. We use -15%.You can use whatever you want, but you must stick to it. Too many investors think “it’s gonna come back.” The problem is that it usually doesn’t come back, especially by the next expiration. I try to “tweet/Facebook” our get-outs on the day they occur.
Since we use the Friday close prices, your purchase price on Monday will be different than what we posted in the “Latest Updates”. Therefore, your get-out prices will be different from ours. You should monitor your stocks and their prices as they reach the get-out price and then buy back the calls and sell the stock when they reach your get-out. The subscriber downloadable spreadsheet helps monitor the get outs.

March 29, 2012
RIMM (in all of our March portfolios) had an interesting day. Last night they announced bad numbers and the stock went down in after-hours trading. This morning the price started to rise and ended the day up $0.97 (+7.06%). Apparently, the guidance and words of change for the company were taken as good news. This rarely happens.
DNDN (in the $25K Agg) continues to “hang in there”. The stock was purchased in February, and tanked late February We decided to hold the stock because it is so volatile. We did sell some Apr12 calls. The stock price has gone from $10.05 last Friday to $10.66 today. Slow but steady. But this is the kind of stock that could shoot up suddenly.
If our portfolios were sold today (including commission) they would be: $10K Agg - +7.7%, $25K Cons - +7.8%, $25K Agg – (0.3%), $100K Ret – (4.3%).
Don’t’ worry about the $100K Ret. We’ve already taken out $6,000 in income (total return actually +1.7%) and a single stock can provide a big boost in one day. RIMM added $582 to the portfolio on its performance today.

March 24, 2012
One week into the April cycle. Here is a snapshot of the first week:
$10K Aggressive: +11.5% ytd, HUSA sold at get-out, 2 over strike price.
$25K Conservative: +7.4% ytd, HUSA sold at get-out, 2 over strike price
$25K Aggressive: +1.7% ytd, HUSA sold at get-out, KBH tanked and holding 5 days for bounce.
$100K Retirement: -3.5% ytd, HUSA sold at get-out.
S&P500: +6.2% ytd.
I’m not worried about the Retirement portfolio. The markets were down three of the five days this week. The S&P500 was up only 0.27% on Friday, while the Retirement portfolio was up a strong 1.7% on that day.
We report our returns based on the proceeds that would be received if we sold all shares at the close that day, including commissions. The latest version of the downloadable spreadsheet now provides this calculation.

March 17, 2012
EXPIRATION WEEKEND—For all you Irish, Happy St. Patrick’s Day. All of the Portfolio’s “Results” (tab from the home page) and “Latest Updates” (tab from the “Subscriber Welcome” page) were uploaded to the server this morning. If you are not getting the March 17 pages, try refreshing your browser.
When presenting the value and return of a portfolio at the beginning or end of an expiration month (or in these blogs in between), we add the proceeds that would be realized if all the stock in the portfolio were sold at the stock price on that day. This calculation includes commissions.
We have added a “Proceeds” calculation to a new downloadable Excel workbook (v1.1.12) that is available to subscribers. In some cases, call premium this month was very good, and in other cases, call premium is very poor.
You will note that several stocks were sold this weekend because there wasn’t any good call premium going forward to April. We used the cash generated by these sales to establish new and better buy/write. Remember, our objective is to buy, sell and get called. We are not buy-and-hold.

March 10, 2012
One week till expiration. Here is a snapshot of where we are with our four portfolios.
$10K Aggressive - up+5.2% (TSL sold at get-out, $8.19, on 2/24; ONTY tanked but we continue to hold because the Mar10 call premium was so large ($1.90) the current return at today’s price ($5.04) shows a +24.5% return and we might be able to sell Apr7 calls next weekend.)
$25K Conservative - up+3.9% (GNK tanked on 2/23 but we continue to hold (probably a mistake) and will do so till next weekend to see options.)
$25K Aggressive - down-1.5% (ONTY tanked but we continue to hold because the Mar10 call premium was so large ($1.90) the current return at today’s price ($5.04) shows a +24.5% return and we might be able to sell Apr7 calls next weekend; GNK tanked on 2/23 but we continue to hold (probably a mistake) and will do so till next weekend to see options; CECO sold at get-out, $8.88, on 2/29; VHC sold at get-out, $21.72, on 2/29; DNDN tanked but we continue to hold because the price has rebounded some and might be able to sell April calls next weekend.)
$100K Retirement - up+3.8% plus $4,000 taken as income (GNK tanked on 2/23 but we continue to hold (probably a mistake) and will do so till next weekend to see options; FNSR sold at get-out, $19.90, on 3/1; ANR sold at get-out, $17.09, on 3/5. )
S&P500 – up+4.2%

March 2, 2012
DNDN (in our $25K Aggressive Portfolio) tanked on 2/28 and we usually hold a tanked stock for five trading days in the hope that there will be a bounce. In this case, I am going to suggest that we hold this stock for a while for several reasons. The first is this long article “Why I Remain Positive On Dendreon” by Larry Smith (I too was a trombone player in my high school band). Last expiration weekend (February 18) the Analyzer recommended buying 200 DNDN at $14.30 and selling the Mar17 at $0.75. Our normal get-out (-15%) would have been at $12.16.Todays price was $11.15 (-22.0%) and we would normally hold till 3/5 (five trading days). Right now, the cost to hold is $202 for the 200 shares. The price range since the “tank” is $10.87 to $10.69. I think the stock price may move up some between now and expiration of the calls (March 17).We may even be able to sell some more calls at that time. Therefore I am going to hold DNDN for the time being.

February 24, 2012
There was a little pull back of the portfolios this week, which could be expected after such a strong run-up in the February call cycle. This weekend, the returns are as follows: $10K Aggressive - +16.8%
$25K Conservative - +4.5%
$25K Aggressive - +13.3%
$100K Retirement - +9.3% after $4,000 taken as income (total return +13.3%)
S&P500 - +3.8%

In the $10K Aggressive Portfolio we sold TSL today at the get-out price after buying back the calls. Yesterday GNK in the $25K Conservative and Aggressive Portfolios and the $100 Retirement Portfolio tanked at the announcement of a stock offering at $7.10 next week. We are holding until next week expecting a bounce. Both of these “alerts” were put up on Twitter and Facebook when they happened. I am trying to use these “social media” sites to alert subscribers of something significant and in real time – usually a get-out. Icons linking to Twitter and Facebook are in the middle of our home page. You don’t have to have an account in either of these sites to see what we have put up. Just click and look. If you do have an account and become a “follower”, you can get emails of what we have “tweeted”

February 18, 2012
We’ve had a very good first month. On this February expiration weekend, the portfolios show the following returns:
            $10K Aggressive - +18.8%
            $25K Conservative - +8.7%
            $25K Aggressive - +13.6%
            $100K Retirement - +10.0% after $4,000 taken as income (total return +14.0%)
            S&P500 - +3.5%
Some explanation is necessary for you to track the returns of our portfolios. I’ll take the $10K Aggressive as the example since it was the most explosive. On the first expiration of 2012 (January 21, 2012) last month, we opened this portfolio and showed an initial return of +5.8% right out of the gate. This was due to the call premium sold (a lot of it from ONTY). If you look at the “Results” tor this portfolio today, you will see that the return during the month to today, rose to 10.5%, primarily due to stock appreciation. Now if you check out the “Latest Update” for the $10K portfolio, you will note that the return has increased to 18.8%. This increase is due to the call premium realized ($879) as we start the February buy/writes. This is exactly what we want – call premium and stock appreciation.
You will note that I have sold more calls against ONTY. The premiums are just too high. We sold the Feb10 call at $1.25 and the Mar10 at $1.90. We bought the stock at $6.47 so the call premium has walked that price down to $3.32. The stock price this weekend is $8.60. Our return right now is 79.2%.

February 11, 2012
All the portfolios are up nicely. For those who don’t get “tweets” or “follow” our Facebook, here is a summary:
            $10K Aggressive - +9.9% 2 stocks sold at get-out, 1 stock over strike price.
            $25K Conservative - +5.6% 1 stock sold at get-out, 3 stocks over strike price.
            $25K Aggressive - +4.2% 1 stock sold at get-out, 1 stock over strike price.
$100K Retirement after $2K taken a income - +8.1% 1 stock sold at get-out, 7 stocks over strike price
.
I will be trying to alert you when a stock in any of the Portfolios gets close to or when we exercise and get-out. So far there have been the following get-outs:
            $10K Aggressive – RDEF at $7.48 on 1/30 and RES at $15.21 on 1/26.
            $25K Conservative – RES at $15.21 on 1/26.
            $25K Aggressive – OSG at $11.48 on 2/10
$100K Retirement – PPO at $45.93 on 2/10 after earlier tank and rebound above get-out price.
Note that your get-out prices are probably different, since we use the Friday close prices and you probably bought Monday morning.

We might be faced with a difficult choice next weekend (expiration). ONTY which was labeled RISKY BUT PICKED CAREFULLY!!! was purchased at $6.47 and the Feb10 call was sold at $1.25 in both of the Aggressive Portfolios. The price has moved up nicely to $8.40 so the return right now is +48%. The price may or may not get to $10.00 by next weekend (expiration). The question will be “if not called do we sell the stock and take the big return or hold the stock and sell more calls?”. The Mar10 is selling for $1.70. Earnings are to be announced on March 5 and there are some drugs in the pipeline. But it is still a DRUG stock that carries great RISK.

February 3, 2012, 2011
There are three new icons on the site home page. We have gotten into “social networking”.  I was reluctant to do so, but my children and grandchildren told me I “wasn’t with it”. So I joined Facebook and Twitter. I was already on Linkedin. The icons have been up since last expiration (January 21), and I must say I’m not getting much response. This blog (Buzz,s BUZZ) is read by many of you regularly. I can tell by the number of “hits” it gets.
So, I thought I’d tell you (in the BUZZ) what we will be using Twitter and Facebook for. In the past, subscribers had to wait till the next expiration to see what happened to their portfolios based upon data an rules. This was particularly problematic with the “get-out”. Well, since last expiration I have Tweetted and Facebooked (T&Fed) that we have gotten out of RES and REDF in the $10,000 Aggressive Portfolio on the dates it happened. In the $100,000 Retirement Portfolio, I T&Fed that PPO tanked on Tuesday but we were going to hold for five trading days hoping for a bounce. As of today, PPO has bounced to above the get-out price and we will retain PPO in the portfolio. I hope to continue providing this service on a real (dayly) basis when something significant happens.
Two weeks into the first cycle here’s how are we doing? Very well:
            S&P500 +2.2%
           $10,000 Aggressive Portfolio +7.8% even though RES and REDF sold at get-out. I also think ONTY (labeled RISKY!!) will be called.
           $25,000 Conservative Portfolio +6.6% with 4 of 11 above strike price.
           $25,000 Aggressive Portfolio +5.9%
           $100,000 Retirement Portfolio +7.2% 7 of 12 above the strike price and retaining PPO in the portfolio.

January 29, 2011
The website has been reworked with a cleaner look. My objective is to make it easy to “surf” and easy to use. I am opposed to putting a lot of “advertisements” on my site. Sometimes I Google “covered calls” and click on some of the “competition” sponsored links. They tend to be pretty busy and have a lot of “splash” but I have a hard time figuring out just exactly what they are offering and how much it’s going to cost me. These sites never put up “all” their results, just the ones they were lucky on. You’ll notice that we do list all our results going back to 1999. It’s a lot of data, but it is all there.
I’ve added links to the company’s LinkedIn, Facebook and Twitter sites. I’ve been on LinkedIn for many years, but Facebook and Twitter are new. I will try to alert you as to what is going on with our four (4) portfolios during the cycle between expirations via Facebook and Twitter. I will try to alert you to the “get-out” sales on the day they happen. There will be “Bad Alerts” and “Good Alerts” – hopefully more good than bad.
We are off to a very good start for 2012. Every portfolio is up over 3.0% in one week. The $100,000 Retirement is up 9.2% after taking out $2,000 for income. The S&P500 (our benchmark) was flat for the week.

January 22, 2012
HAPPY NEW YEAR!!! The changes to the website have been made, and there are still a few things I need to clean up. One thing you can do to make sure you are seeing the new pages is to “REFRESH” your browser when going to a new page. I apologize for getting the new $100,000 Retirement Portfolio up so late this weekend.
As mentioned in earlier BUZZ’s, I am dropping the lists of 20 Aggressive and Conservative buy/writes. Any subscriber can run the Analyzer at any time and develop their own lists or portfolios  if they want to. I am adding two new portfolios to replace the lists. These are $25,000 Aggressive and Conservative Portfolios. The intent of all four portfolios is to demonstrate how Covered Calls work, and if you want to follow along each month, copying any portfolio, that’s fine. But remember that we use the closing prices on Friday of expiration weekend and by the time you start making your trades on Monday morning, prices will have changed. But stock prices and call prices tend to move in tandem resulting in similar returns. Our objective is to have the Analyzer find stocks that are going to move up (hopefully to the strike price). You should consider using the “downloadable spreadsheet” to track your actual transaction prices and use your actual commissions.
I’m not up to date on social media. I’ve been on LinkedIn for a long time, but FaceBook and Twitter are new to me. I have enrolled with both and there are links to these sites on the home page. The reason I have added these is to alert you when we are getting close to the get-out price, when we have hit the get-out price, when a stock may have tanked, what we are doing in the portfolios and when a stock gets above the strike price. I don’t know how this will work – it’s a work in process. My daughter is going to give me lessons this week on how social media sites work.
Looking forward to a more prosperous year in 2012.

January 14, 2012
One more week and the year (2011) will be officially over. Next weekend (expiration) we will close out the lists and portfolios for the year and start with four (4) new portfolios. There will be no lists in 2012. Running the Analyzer, with your own parameters, will give you a list of up to forty (40) buy/writes that you can choose from for your own portfolios, if you don’t want to consider ours.
We will be initiating a slightly new look to our website and I am planning to add either a Facebook or a Twitter link. Maybe both. This will allow me to provide alerts during the month rather than only on expiration weekend.

January 8, 2012
I have continued to work on the website. There will be no changes to the Analyzer and the logarithms that make it work. However, the two lists that were published each expiration weekend will be eliminated. Any subscriber could do what I was doing each expiration weekend. Namely, run the Analyzer with both Conservative (low PE) and Aggressive (high PE or no earnings) in the parameters and select twenty stocks to put on the “Lists”. The lists will be replaced by two (2) new $25,000 Portfolios – one aggressive and one conservative. We will also tighten up our criteria for selecting the buy/write the Analyzer finds. The Analyzer is not equipped to identify stocks that are being manipulated (like in China), played by the “shorters”, manipulated by the Market Managers, etc. So in 2011, our criteria will be to avoid Chinese stocks and risky Biopharmaceuticals and maybe others during the year. We will continue to be aggressive with our aggressive portfolios but it will be more controlled aggressiveness. More next weekend and then the New year starts on January 21

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