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Posted by Martin March 01, 2023
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Technical view: T-Mobile US, Inc. (TMUS)


Technical view
 

TMUS is in stage #3. The stock struggles to break above its all-time high at 155 a share. It bounced off of it and falls lower. The trend is still intact but already vulnerable. On the weekly chart, we are seeing a V-shape recovery from 2022 lows, but it may also turn into a cup-and-handle pattern. If so, we will need to form the handle and that may send the stock below $130 a share.

 
Technical view weekly
 

One reason for price stagnation could be stagnating revenue. The company saw a very strong boost in revenue during and after the Covid lockdown but then moved sideways. In previous years, the company saw steady revenue growth. Not anymore.

 
Technical view weekly
 

The free cash flow of T-Mobile is horrible.

 
Technical view weekly
 

TMUS has enormous debt and very little cash to pay it, though lately, the company was paying the debt of:

 
Technical view weekly
 

Technical view weekly
 

Fundamentally, TMUS is overvalued. But we received an estimate for 2025 already, and it is higher by a double-digit number. Buying today would mean a 14% annualized return by 2025, which beats the market. So, although the stock is overvalued, it is a good buy for future valuation. As of today, the stock appears to undergo a time-based correction.

 
Technical view weekly
 

The stock is now HOLD
 

This post was published in our newsletter to our subscribers on Saturday, February 25th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 




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Posted by Martin February 22, 2023
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Technical view: PayPal Holdings, Inc. (PYPL)


Technical view
 

PayPal PYPL is still in stage #4. It was morphing into stage #1 but failed and resumed its downtrend. It is trading below its 2025 fair value providing an opportunity for 8% annualized growth at the current price. The price action speaks for a probability of a further decline so if you are interested in this stock (which in my opinion is still an innovative payment processor compared to others or traditional banks) any share buying needs to be done gradually at the current prices. I do not expect the stock to go lower as it is evidently bottoming. It may stay here for a long time. And if you buy now, be prepared for a slow movement up or even further decline.

 
Technical view weekly
 

The company shows growing revenue despite troubles and a recent decline. The revenue (6.72% annual average, and 14.55% 5-year average) was higher in 2022 than in 2021 so the selloff in 2022 seems to be an overreaction:

 
Technical view weekly
 

The free cash flow is steady with no growth but steady. We would prefer some growth in this metric. Even a small growth would be appreciated and it would provide some boost for the stock price movement. PYPL recently replaced their CEO, so let’s hope that move will be for the better and the company improves its finances which would translate to better stock valuation:

 
Technical view weekly
 

The company increased its cash substantially last year which could retire its entire debt. I think this is a very positive balance and something investors are not appreciating enough:

 
Technical view weekly
 

Technical view weekly
 

Fundamentally, the stock is trading above its fair value, but below its future fair value (see the red line in the chart above). At the current price, and if the earnings estimates remain at the current level, the stock may offer 9% growth in two years. And if it sparks a FOMO, it may be even better. I think the stock is a good long-term investment.

 
Technical view weekly
 

The stock is now BUY
 

This post was published in our newsletter to our subscribers on Saturday, February 18th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 




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Posted by Martin February 15, 2023
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Technical view: Netflix, Inc. (NFLX)


Technical view
 

NFLX is in stage #2. Netflix continues moving higher despite naysayers who think the stock is doomed because of the subscription sharing limitations and them canceling their subscription. But investors do not see it as a problem, at least not now. I expect the stock to reach 200-day MA on a weekly chart at $410 a share, but this process may take some time, and we may even see a few pullbacks on the way up. There will be resistance at $360 a share. The stock seems to stall now and possibly seeing the much-needed pullback. That makes the stock a “hold” for now.

 
Technical view weekly
 

The company’s revenue is slowing down (during 2022 we saw a significant reversal from rapid revenue growth). That may be concerning if we see the continuation:

 
Technical view weekly
 

The free cash flow of Netflix is quite horrible. It is a zig-zag move and most of the time between 2014 and 2020 the company was burning cash.

 
Technical view weekly
 

Unfortunately, the company is burdened with large debt and not enough cash to cover it. If interest rates keep rising higher, this may be a problem.

 
Technical view weekly
 

The current price action makes the stock overvalued on a fundamental basis again. I think the new subscription plan will be positive for the company and will be reflected in future earnings (not this earnings quarter, but we may see an impact as soon as Q1 2023). But given the current valuation and financial conditions of the company, I think the stock is a hold now.

 
Technical view weekly
 

Technical view weekly
 

The stock is now HOLD
 

This post was published in our newsletter to our subscribers on Sunday, January 28th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 




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Posted by Martin February 01, 2023
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Technical view: Icahn Enterprises L.P. (IEP)


Technical view
 

IEP is in stage #2. The stock started declining as is typical but then reversed, possibly on the news that Carl Icahn reached the deal with Crown Holdings to add the activist investor’s members to the Crown’s board. The weekly chart shows a sideways pattern.

 
Technical view weekly
 

The company’s revenue is erratic but improving since 2020. If it keeps going higher, it may have a positive impact on the stock pushing the price higher:

 
Technical view weekly
 

Free cash flow is also choppy which may explain the stock price choppiness:

 
Technical view weekly
 

But the company has more cash in hand to pay its $7 billion debt (despite the recent cash decline, possibly resulting from the recent acquisitions).

 
Technical view weekly
 

The stock is more like a bond. It pays a great dividend but offers very little growth. This lack of growth is possibly a result of stock dilution that is extremely high. So, buying this company is for income than appreciation. In this case, I want to be buying at lower prices in the price cyclical decline.

 
Technical view weekly
 

Technical view weekly
 

The stock is now HOLD
 

This post was published in our newsletter to our subscribers on Sunday, January 28th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 




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Posted by Martin November 30, 2022
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Technical view: Tesla (TSLA)


Technical view
 

TSLA is in stage #4 of the trend. It broke lower again although it bounced, and it is now attempting to go higher. However, even with this bounce, there is no trend changer at all. The stock is clearly in a full bearish trend. The weekly chart shows it in a better and straight pattern. The stock is clearly getting to its weekly 200-day MA, and let’s hope that it will work as a support. If it doesn’t hold, we may see the stock decline lower. We have potential targets at $150, $110, and $62 if we break below the 200-day MA.

 
Technical view
 

However, the recent news about Elon Musk and his escapades with Twitter worries me. It is pure nonsense, in my opinion. He bought a company for $44 billion that is not worth that much. According to some reports, just interest on the loan Musk had to take to buy Twitter is somewhere near $1.5 billion a year. Twitter doesn’t generate enough income or cash flow to pay the loan. Twitter’s cash flow has been declining and negative since 2019, and with Musk’s current changes on the platform, advertisers seem to be fleeing away. And here is the problem. Musk is known to manipulate Tesla stock, and I am afraid that to pay his obligations to Twitter, he will tap into Tesla, ultimately sending the stock lower (as we have seen a few times in the past already).

TSLA is still extremely overvalued, but this company may be trading at a premium for many years until it matures. A head and shoulders pattern is still in play, and since the price broke below the neckline, we will most likely see a $160 – $150 decline. That level also corresponds with a 200-day moving average and is a significant support. Both levels may act as a magnet, so unless the market is optimistic and bears finally give up, the chances of further declines are better than an uptrend. But this may change quickly.

Given my worries about Musk, Twitter, and Tesla, I no longer think it is a good time to buy this stock. I want to wait for all my concerns to resolve before committing more funds to this company. The trend is down, the risk of Musk using Tesla as a piggy bank is high, and I do not see any stronghold anymore.

 
Technical view
 

The stock is now SELL
 

This post was published in our newsletter to our subscribers on Saturday, November 26th, 2022. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 




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Posted by Martin January 24, 2022
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Did you sell everything today? Psychology and stupidity of retail investors.


Did you join the retail investors today and sold everything? If you are wondering what drove the market today, you no longer have to. It was retail investors according to Blomberg and data from brokerage houses and their order flow reports. Today’s trading in the stock market was a typical view into the soul of mom and pops acting irrationally, and I hope, I really do, that you didn’t join them. If you read my newsletters, I wrote, many times, that the selling is not fundamentally justified. Not at this level and this speed. What we have witnessed was a pure irrational panic selling. Nothing more.
 

What has happened? Retail investors simply dumped their stocks just to see them rebound and rally without them when big money picked the cheap stocks and bought them.

 
SPX retail investors selloff
 

It was the retail investors who were left holding the bag behind left behind without their shares. Now, unless the market revisits those lows, they will be buying back at a lot higher prices than they sold. A typical retail stupidity of buying high, selling low.

This chart shows how retail investors’ selling gained speed in the morning and at noon, institutions picked up the cheap stocks:

 
retail investors imbalance
 

What’s next?

 

As you can see, as of this writing the SPX futures are down again (down -1.06%) and that is typical for bounces like the one we saw today:

 
SPX futures
 

We need to see a follow-through to call this a reversal and recovery. If the price continues lower without any stops, the end is still not here. If we start chop around or even see another green candle with a higher closing price than today’s price, we may see it as a bottoming process. But even with that, there is a risk of a dead cat bounce:

 
SPX dead cat bounce
 

To tell for sure, we still need to wait before we can engage in full-scale trading. In the meantime, I rolled a few strangles that needed to go lower as they were hurting my buying power, and purchased a few depressed stocks such as Netflix (NFLX), and I plan on adding more SNOW, TSLA, APPL, and AMZN, so, if you joined the suckers selling today, keep selling. I am buying.
 
 




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Posted by Martin July 18, 2021
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2021 Week 28 investing and trading report


Another week of July is over and it is time to provide our weekly investing and trading report for our main business account. We run two accounts – one account is our main business account where we trade options against dividend stocks we either own or plan on owning. Our second account is a challenge account that is designed for beginning investors starting with little money to invest and grow their account from $100 to $75,000. We provide a report of our business account (the main account) every Saturday on weekly basis and we provide our challenge account review every month on Monday evening at the beginning of each month.
 

Closing strangles positions

 
When we open a new strangle trade as I wrote about last week our main goal is to keep that trade running all the way to expiration. If everything goes well and the stock doesn’t move violently to either side, we let it go and let it expire.

Sometimes, the stock runs up or down hard, and either our call or put side gets challenged. That is the time we start watching our position carefully and if any of this situation happens we roll the trade:
&nbs;

The challenged side gets beyond delta 30

 

In this case, we review how much buying power would be released if we roll the trade. If the roll releases $800, $1,000, $2,000, or more of the buying power, we will roll the trade. But it must be a roll for credit. If a rolling trade would result in a debit trade, we would probably let it go and accept the assignment. But if the trade was naked and we do not have enough cash (or 100 shares) to accept the assignment, we roll farther away in time to make sure the trade will bring in credit, even a small one.
&nbs;

The challenged side gets in the money

 

A stock drops so fast that we are unable to roll soon enough to keep the price between the strikes. In this case, we roll the trade for sure. We roll lower (or higher) and away in time. If the stock was near the money or at the money (but still in the money), we can wait a bit or we can roll in the next expiration day, and we roll the challenged side out of the money. But again, such rolling must result in a credit. If the next expiration day rolling still requires debit, we go further away in time and we go as far away as it turns from a debit trade to credit trade.

The challenged side gets deep in the money

 

If the stock gets deep in the money due to a market selloff, we again do the exact same moves as described above but we do not go into the next expiration day. We go to 90 DTE or farther away. Why? We want to avoid early assignments. We then maintain that trade at 90 DTE or farther until we are able to roll the trade closer to the money. In order to roll deep in the money strangle, we sometimes have to change the trade to a staddle (meaning we bring the trade calls and puts strikes together). That helps in rolling the trade away for credit.
trade.

None of the above helps

 

If none of the above-mentioned strategies help, for example rolling would require adding more money or more buying power at the bad trade, we then take assignments. But if we do not have enough cash for put assignment, we start rolling the trade away in time as is. No changing of strikes, only moving it away in time. Usually, the opposite side brings in enough credit to offset the cost of the challenged side. This buys us time to accumulate cash and take a stock assignment. If it is a call side, we start hedging the trade by buying shares to cover the call side. If this is not feasible (for example our call strike is at $30 a share and the stock is trading at $100 a share then hedging makes no sense. In this case, I add a put and sell 2 puts to roll 1 call. It is a kinda uneven strangle. But it takes planning, releasing cash for the new obligations. If your account is stressed, then just roll until you are ready to let it go (or the market decides to work with you, and the stock retreats and allows you to roll up (or get out).
trade.

Just do it

 
When doing all these adjustments, you must do it. You must try it. I always play with those adjustments, meaning I am simulating them. I do not place those trades but I simulate the adjustments to see what the trade would look like and what the result would look like if I do that adjustment. When I am happy with what I see, I do it. If not, I rather wait. It’s a game and you have to play it. If you are not sure, just roll the entire trade away as is – same strikes just longer expiration until you find a solution you like.

As I said a few times before, options are a fluid trading vehicle. No rules are set in stone. The best way to find a solution to a bad trade is to play with it. What worked once may not work again this time and something else would work better.

 

Here is our investing and trading report:

 

Account Value: $73,733.99 -$254.28 -0.34%
Options trading results
Options Premiums Received: $719.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
05 June 2021 Options: $4,677.00 +6.37%  
06 July 2021 Options: $2,083.00 +2.83%  
Options Premiums YTD: $29,793.00 +40.41%  
Dividend income results
Dividends Received: $23.55    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
06 July 2021 Dividends: $157.40    
Dividends YTD: $820.94    
Portfolio metrics
Portfolio Yield: 4.69%    
Portfolio Dividend Growth: 8.47%    
Ann. Div Income & YOC in 10 yrs: $17,602.81 19.67%  
Ann. Div Income & YOC in 20 yrs: $169,107.79 189.00%  
Ann. Div Income & YOC in 25 yrs: $878,423.27 981.73%  
Ann. Div Income & YOC in 30 yrs: $7,689,838.06 8,594.24%  
Portfolio Alpha: 32.92%    
Portfolio Weighted Beta: 0.72    
CAGR: 744.27%    
AROC: 31.64%    
TROC: 19.63%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 76.62%  
2021 Portfolio Value Goal: $42,344.06 174.13% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $23.55 dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts. According to our holdings currently on our balance sheet, all stocks should generate $4,044.00 annual dividend income. It is not as of yet because many of the stocks were purchased recently and we missed their dividend. But next year, we should be receiving the full amount.

The chart below indicates our current annual dividend payout from our dividend stock holdings.

Last week, our dividend income reached 76.62% of our dividend income goal.

 
Annual Dividend Payout week 28
 

Options Investing and Trading Report

 
Last week we rolled a few trades to release a stressed buying power in our account. We rolled TSLA, SPCE, SPX, BA, AAPL, CROX, CSCO, MU, TSN, OXY, DKNG, and IJS. These trades are now in good shape and some were ready to expire worthless for a full profit.

We opened new trades against QYLD (short put), and PMT (short put).

We had 8 trades that expired on Friday:
 

1 PPL Jul16 26 put / 30 call strangle for 1.47 credit
1 KBE Jul16 47 put / 61 call strangle for 0.80 credit
1 KBE Jul16 54 covered call for 0.27 credit
1 APAM Jul16 45 put / 55 call strangle for 1.60 credit
1 AES Jul16 23 put / 27 call strangle for 0.55 credit
1 SNOW Jul16 295/300 call credit spread for 1.49 credit
1 OXY Jul16 25 put / 33 call strangle for 0.52 credit
1 O Jul16 65 put for 0.37 credit

 

We will be reopening these trades during the next week or two.

The new trades and adjustments delivered $719.00 options premiums last week.
 

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $169,107.79 in 20 years and $7,689,838.06 in 30 years. I wish, I had that $7 million income now. But that is the fate of dividend growth investing. It is not a quick rich scheme and building an account takes time.

We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening. In just 10 years, we will start receiving $17,602.81 in today’s dollars. It is not bad considering that in March 2021 it was only $3,202.52 in projected future dividends.

 
Future Divi on YOC week 28
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $93,468.90 to $94,437.23. Last week, we added 50 shares of QYLD, 10 shares to ICSH, 1 share of SNOW, and 20 shares to PMT.

We use ICSH as a savings account and as of today, we are mostly in a preservation mode. We feel like our balance sheet is way aggressive and has no cash reserves. Therefore, we are mostly adding money to our cash reserves.

 
Stock holdings week 28
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 2.83% monthly ROI in July 2021, totaling a 40.41% ROI YTD. We are getting close to our 45% mark!

Our account grew by 258.41% this year despite very slow growth in June and July. I suggest the growth was suppressed by the market volatility and options trades increasing their maintenance requirements that ate the net-liq value. Once the options expire (hopefully) the net liquidating value will go up faster.
 

Our options trading averaged $4,256.14 per month this year. If this trend continues, we are on track to make $51,073.71 trading options in 2021. With the income of $29,793.00 to date, we are half way to this projected income.
 

Old SPX trades repair

 

This week, we rolled our old SPX trades way higher and away in time. I am not yet decided what to do with these positions. My original plan to try to roll it out of the money doesn’t work. So, I am now thinking to keep the trades rolling until I will be able to apply for portfolio margin and convert these Condors into strangles. With a portfolio margin, I will only need about $10,000 buying power per strangles. With a Reg-T margin, I need $55,000 buying power. Not feasible to trade under such circumstances.

 

Accumulating Growth Stocks

 

Last week, we added 1 share to our SNOW position.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 50 shares of QYLD, 10 shares of ICSH, and 20 shares of PMT to our dividend growth positions. In the upcoming weeks, we will be accumulating aggressively the higher yield income stocks to boost our dividend income furthermore.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market was going up last week and it reached (almost) our price target. It got close to it. But that move upwards was not very convincing. It was in fact very weak move and we had a few hiccups on the road up. A week ago, the market dropped on inflation fears but recovered quickly just to lose it all again at the end of this week.

 
SPX July 18 2021 outlook
 

The market is looking for direction. And this trend may continue for a week or two. We may also see a correction of 10% (more or less). And honestly, even though the market may continue higher, I am more and more in favor of seeing a correction sparked by inflation fears.

But I am in the FED camp, or Jerome Powell’s camp, who insists that the inflation is transitory. I agree with that. I agree with renowned economist Lacy Hunt who says inflation is transitory and typical to recovering economies. We had a spike in inflation after every recession. We had a spike in inflation in 2009 after the economy started recovering from the Great Recession and people were predicting another crash. Remember that? Many were predicting a crash all the way until 2013-2014! But that never materialized.

Inflation doesn’t cause a recession. It is an effect of a recession. When businesses came to life after March 2020 40% crash boosted by the US government support and people receiving stimulus checks (in a similar manner as we experienced in 2009) it is obvious that there would be a spike in inflation. And there will be the same exact doom and gloom talk about it.

I still remember some pundits saying in 2009 – 2013 that this would all end badly because FED lowered interest rates to zero, started a huge QE program, and as interest rates started skyrocketing FED would have nothing left to fight it off. Well, 13 years later, history repeats itself.

Here is a video of an interview with Lacy Hunt and his excellent presentation. I would like you to watch it. It will give you a great insight into the economic behavior around recessions. How GDP behaves? Money flow and money supply? Inflation? We have experienced it all in 2009 and people already forgot.

 

 

So, if you see the market selling off on fear of inflation, buy. It is a dip that will leave naysayers and doom predictors biting the dust.

But, this doesn’t mean that the market will not sell-off. As I mentioned above, I expect it to cool off a bit. I expect it to retest our previous breakout and go lower to a $4,250 level. It may be just a one-day dip, quick and fast, that would recover quickly, or it may not materialize at all.

 
SPX July 18 2021 outlook
 

One reason for this expectation not happening is simple – earnings, earnings, earnings. And we just started another earnings season and so far, the companies are beating it. And as in real estate, location is the most important factor driving prices, in the stock market, it is earnings. And the market trails the earnings predictions so far. When we see earnings going down, expect problems:

 
SPX earnings 2021 outlook 28
 

Based on these estimates, the SPX should be trading at $3,394.00, 27% lower than today, and based on the future earnings estimate, the SPX intrinsic value is at $4,119.36 (5% below the current price). The stock market is pricing the price range to be at $4,080.00 and 4575.00. With this cold market looking for a direction, it is difficult to say where it wants to go.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 28

 

Account Stocks holding

 
TW Account holdings week 28
 

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 49.59% since we opened our portfolio while our portfolio grew 16.39% only. On YTD basis, the S&P 500 grew 19.74% and our portfolio 9.41%.

But the numbers above apply to our stock holdings in our account, not the overall account net-liq growth. Our overall account beats the market growing by 258.41%!
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 28
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 28
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 28
 

We are on track to accomplish our dividend income goal, currently, we are at 76.62% of the goal to reach $1,071 of dividend income this year. Currently, we accumulated enough shares to receive $4,044.00 in annual dividends if we have held through the entire dividend cycle.
 

TW Received vs Future Dividends week 28

The chart above is the corrected chart comparing the projected MONTHLY dividend income vs received dividend income. And again, the projected dividend income is based on the stock holdings up to date. That is the income we would have received if we have held over the entire dividend cycle.

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 28
 

As of today, our account cumulative return is 28.50% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin June 19, 2021
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2021 Week 24 investing and trading report


The market didn’t like the FED meeting and what they came up with after they finally admitted that the inflation may not be as transitory as they were trumpeting last few months. In this trading report, we will look at our investing and trading results, and focus on the market direction and how to protect our portfolio against the new inflationary cycle.
 

Let’s go and review this week’s investing and trading.

 

Here is our investing and trading report:

 

Account Value: $70,011.65 -$2,308.14 -3.19%
Options trading results
Options Premiums Received: $974.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
05 May 2021 Options: $6,346.00 +9.22%  
05 June 2021 Options: $2,554.00 +3.65%  
Options Premiums YTD: $25,587.00 +36.55%  
Dividend income results
Dividends Received: $43.99    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $109.38    
Dividends YTD: $604.36    
Portfolio metrics
Portfolio Yield: 4.72%    
Portfolio Dividend Growth: 8.44%    
Ann. Div Income & YOC in 10 yrs: $15,942.33 19.80%  
Ann. Div Income & YOC in 20 yrs: $795,593.16 988.25%  
Ann. Div Income & YOC in 25 yrs: $649,650.04 891.04%  
Ann. Div Income & YOC in 30 yrs: $6,948,865.15 8,631.57%  
Portfolio Alpha: 28.90%    
Portfolio Weighted Beta: 0.74    
CAGR: 788.07%    
AROC: 29.00%    
TROC: 22.79%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 56.41%  
2021 Portfolio Value Goal: $42,344.06 165.34% Accomplished

 

Dividend Investing and Trading Report

 
Last week, we have received a $43.99 in dividends income. We feel that the income will be growing faster as more of our holdings mature and become eligible for dividend payouts.

The chart below indicates our current annual dividend payout from our dividend stock holdings. A dividend growth investor needs to be aware of this payout from each stock. The chart indicates that some stocks contribute (or will be contributing to our income with large sums while others contribute very little. That can be a problem. If a company that contributes with large dividends suddenly cuts the dividend, it will have a very significant impact on our income (for example, if OMF cuts the dividend, or suspends it, the impact on our portfolio dividend income will be significant.

I am OK with this imbalance during the accumulation phase but plan to address it in the next phase of cultivating our portfolio. In other words, in the next phase, I will be accumulating stocks with lesser payout to match the stocks that pay more in dividends. If a company cuts the dividend, the impact of a lost income will be mitigated.

Last week, our dividend income reached 56.41% of our dividend income goal.

 
Annual Dividend Payout week 24
 

Options Investing and Trading Report

 
Last week we didn’t trade much. We rolled a few trades that got in trouble. We also reopened some of the trades that expired two weeks ago and we were waiting for the market to show its direction.

The new trades and adjustments delivered $974.00 options premiums last week.

We had a few trades expiring this week and we may re-open them next week (but that will depend on the market). The following trades expired for a full profit:

1 TSLA Jun18 660/670 bear call spread for +0.70 credit
1 TSLA Jun18 530/540 bull put spread for +0.83 credit
1 KBE Jun18 50 put / 60 call strangle for +0.67 credit
1 O Jun18 65 put for +0.45 credit
1 ABBV Jun18 108 put / 123 call strangle for +0.86 credit
1 AES Jun18 24 put / 27 call strangle for +0.31 credit
1 OXY Jun18 26 put / 32 call strangle for +0.52 credit

We had to roll our APAM trade, and our KBE puts got in the money. I was not able to roll the trade (I was not in front of the computer) and we got assigned to 100 shares of KBE. However, in the inflationary environment, banks should perform well and KBE is a banks’ ETF. So I plan on staying in the position (if I have enough cash in the account, due to SPX open trade, over the weekend, the account pricing is messed up by the broker and I can’t see what buying power I have available, so I have to wait until Monday to make the decision whether to keep KBE or close the position). If I stay, I will be selling covered calls.

You can watch all our trades in this spreadsheet and you can also subscribe to our newsletter for our trade alerts.
 

Expected Future Dividend Income

 
As the table at the beginning of this report indicates, our aggressive dividend growth stocks accumulation is starting to show significant progress in our future dividends income. Our portfolio dividend yield and dividend growth will be bringing us almost $152,246.48 in 20 years and $6,863,144.95 in 30 years. We will keep aggressively accumulating dividend growth stocks to generate liveable income sooner than in 20 years. And the portfolio is starting to show this to be happening.

 
Future Divi on YOC week 24
 

The chart above shows how our future dividend income based on the future yield on cost develops and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $78,473.04 to $83,739.91. Last week, we added a few stock positions to our portfolio, such as 10 shares of ICSH, 100 shares of KBE (put assignment), 20 shares of TSN, and 10 shares of WBA.

 
Stock holdings week 24
 
Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal. However, as mentioned above, this harms our dividend payout and portfolio growth. Although, it is temporary. Therefore, once we reach this goal (which we set because of the ability to trade covered calls), we will start accumulating these shares to equalize our dividend income rather than have an equal amount of shares.
 

Investing and trading ROI

 

Our options trading delivered a 3.65% monthly ROI in June 2021, totaling a 36.55% ROI YTD.

Our account grew by 240.32% this year.
 

Our options trading averaged $4,264.50 per month this year. If this trend continues, we are on track to make $51,174.00 trading options in 2021.
 

Old SPX trades repair

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

Last week, we didn’t add any speculative or growth stocks to our portfolio.

 

Accumulating Dividend Growth Stocks

 

Last week, we added 10 shares of ICSH, 100 shares of KBE (put assignment), 20 shares of TSN, and 10 shares of WBA to our portfolio.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The FED announced at its last week’s FOMC meeting that they may raise the interest rate in 2023. But not just once but possibly twice. The stock market didn’t like it and retreated from the all-time high.

 
SPX June 18 2021 outlook
 

In the last few weeks, the S&P 500 traded sideways in a narrow channel, it even broke the upper channel trendline but it was not convincing at all. On Wednesday and especially Friday, the market retreated hard. Currently, the market is trendless and there are no signs of direction. It can go anywhere from here.

The FED is also prepared to start reducing its bond purchasing program (at least they talk about it). That could pour more fuel on the market’s downward fire. There are several dangers for the market.

The FED is going to hike interest rates, but European Central Bank, ECB, announced that they have no interest in raising their rates and that they will keep them low at 0.00 to -0.5%. If FED does raise rates, that could spark outflows from the US markets to European markets and we might see a substantial correction.

This can easily tamper with Fed’s intentions.

 

Why did value stocks drop?

 

In the inflationary environment and rising interest rates, value stocks and low PE growth stocks perform the best. One would see banks, insurance companies, and tech stocks actually making money, not the meme stocks, rallying. But on Friday, everything went down, except the tech stocks that should not have gone down. What the heck? So why the stocks that should strive dropped? The reason was the dollar. The dollar jumped up after the announcement. But this appears to be a brief shakedown and market repositioning. Nevertheless, the growth stocks seem to be back.

 
USD June 18 2021
 

The best strategy? A mix of both, the growth stocks and value stocks.

 

70% probability of going down

 

Overall, I am still bullish and I expect the market to go as high as $4,800 – $5,000 by 2023. The reason is that the overall S&P 500 earnings expectation for the next years and the following year is extremely strong (the US economic growth is expected to remain above 5% well into 2022 and the inflation will decelerate according to Wells Fargo, and S&P 500 EPS is up to $220). That will fuel the market up. The interest hike is already priced in today’s market and unless FED comes up with any surprise (or the economy) all the events are priced in. Nothing new to expect.

But short term, we may see some correction.

 
SPX June 18 2021-2 outlook
 

The best scenario is that from here we would bounce, and continue higher. The market is sitting at a 50-day moving average and it went nowhere for months. It could be an end of a consolidation pattern. But I do not see anything that would confirm this trend, so it is just speculation.

 
SPX June 18 2021-3 outlook
 

We could continue lower to retest the previous lows before we go higher again.

 
SPX June 18 2021-4 outlook
 

But given how extended the market is, inflated by cheap money, I lean towards the declining scenario and I think we will see a correction. If we break the 50-day moving average, the $4,000 level or $3,966 level (that would correspond to a 7% correction, so we may even overshoot that target, if the market decides to go down) is very likely.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 24

 

Account Stocks holding

 
TW Account holdings week 24
 

Our stock holdings still do not beat the market. However, I expect it to change over time. S&P 500 grew 44.03% since we opened our portfolio while our portfolio grew 14.35% only. On YTD basis, the S&P 500 grew 14.19% and our portfolio 7.36%.
 

Account Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market as they mature. However, these are just our stock holdings. The entire portfolio beats the market by far thanks to monetizing those positions.

Our goal is to grow this account to $1,000,000.00 value in ten years. We are in year two.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 24
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 24
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 24
 

We are on track to accomplish our dividend income goal, currently, we are at 56.41% of the goal to reach $1,071 of dividend income this year.

However, the chart below indicates that our dividend income will possibly exceed this goal as we accumulated enough shares to receive $3,548.03 in dividends.
 

TW Received vs Future Dividends week 24

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return. It shows how the last week’s selloff shook down our returns but we are recovering along with the market.
 

TW cumulative return wk 24
 

As of today, our account cumulative return is 22.85% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading exceeded our expectations. I hope, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!




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Posted by Martin January 18, 2020
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AGNC – Time to say goodbye


I have been invested in AGNC since 2008 and I liked this company. But it is time to depart from this investment as it no longer meets my requirements for dividend investing. I wish, it was. But it isn’t.

At first, the company looked great. They started increasing dividend every year, although the very first increase in 2009 from 2.51 annual dividend a share to 5.15 was large and raised many questions but the company earnings and cash flow could cover the payout. So, why not. I liked it.

Then, in 2010, the company increased the dividend again to 5.60 a share Earnings and cash flow covered the payout well above. And that was the last increase investors ever saw. Two years later, as earnings started deteriorating, the company went on a path of 6 consecutive years of dividend cut.

 
AGNC dividends
 

At first, I believed in the company, and I loved them (a thing a true dividend growth investor should never ever do!) and provided excuses to myself and everybody who asked for the company, that “this is just a temporary, it is to protect the company’s ability to make money and improve”, and all sorts of other excuses. And when the company changed into monthly dividend paying company I loved them even more because I thought, I would be making money faster by re-investing the dividends.

There are better companies than this.

So I am selling all AGNC shares from all my portfolios and re-allocating to Helmerich & Payne Inc (HP) which is a dividend champion, increasing dividends every year since 1973 for 46 years. Their current dividend yield is 6.29%, and annual dividend growth 1.4%.




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Posted by Martin February 02, 2019
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January 2019 trading and investing results


S&P 500  2,706.53 +199.68 (+7.96%)  Dow 30  25,063.89 +1,736.43 (+7.44%)  Nasdaq  7,263.87 +628.59 (+9.47%)
 

September results

I just finished reporting December 2018 and we are again at the end of another month. True, I reported December late.

January started off slow, but ended up well. Our accounts are up and recovering from last year slaughter. But the question is, are we out of the forest or is more carnage coming? Boy, I wish I knew.

In January, we continued trading successfully in our IRA account and made nice income of $2,661.00 in received premiums. In our other accounts, TDA and ROTH, we didn’t trade this month. We only managed opened trades to roll what was necessary to do.
 

We are posting our results:
 

 
IRA Equity:

IRA account equity
 

ROTH Equity:

ROTH account equity
 

TD Equity:

TD account equity

 

We post our trades on our Facebook page.

 
 

 · Dividend stock investing

 

Dividend investing is doing great on both accounts – ROTH and IRA. We keep using 50% of all options income and buy dividend stocks. IRA account keeps growing fast with new stocks being purchased every month. ROTH is more or less stagnant.

 

Here is a review of our accounts stock holdings:

 
Traditional IRA
Trading Results
 

ROTH IRA
Trading Results
 

TD account
Trading Results
 

January started very slow and at first, it looked like we will not be able to purchase any shares this month as we didn’t meet cash flow criteria to purchase new shares. However, two weeks before month end our income jumped up and it allowed us to buy a few shares to add to our dividend income portfolio.

In January 2019 we purchased the following shares:

 
IRA purchases:
Dividend growth stocks
 

It wasn’t easy to choose which stock to buy as many great sotcks in our watch list were indicated as “buy”. We decided to add STX in the end.

At the very last week of the month, our income increased enough to allow us more purchases next week.
 

We haven’t purchased any shares in ROTH or TD this month.
 

We keep spending 50% of our options trading proceeds to buy good dividend growth stocks using our screener to get a better entry into the stocks. Although capital appreciation is not our goal but a secondary target, timing the entry creates good results as our positions are mostly up. However, do not be too excited, any large selloff can temporarily send those stocks down again. It is a dividend income what matters to our portfolios, not the portfolio value and capital appreciation. It seems to be evident that using options to grow the portfolio is the right way to do.

 

 · Dividend Income

 

IRA dividend income
Trading Results
 

ROTH IRA dividend income
Trading Results

 

 · What’s next in the stock market?

 

I am unsure what to expect from the market in upcoming month. January 2019 was definitely one of the best months since 3 years ago. We went up +8%, almost 9%. We went up however, too much and too fast.

I wish this rally / recovery continues but, when reviewing historical charts, it could actually be bad for the market if we do not see any pullback or consolidation at the current levels. Many bearish charts from the past since 1955 indicated bad things happening in similar situation when the market hasn’t pulled back.

Thus the market is giving us mixed signals. I can’t say where we are heading from now.

Nevertheless, I held a believe through the entire 2018 year that the market selloff was just a correction and not a bear market. I still think, this is the case. Although we have mixed signals and we should expect any outcome in this market, it is starting to look like more and more as the previous bullish instances in the past:
 

Trading Results
(Source: CCM)
 

I recommend Chris Ciovacco’s (CCM) video who covers the historical charts and market behaviors and compares it to today’s market conditions to assess his equity allocation. I believe, his outlook can be helpful to assess the next market’s move and trade accordingly:

 

 

Happy Trading!




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