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Posted by Martin January 03, 2021
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2020 in charts


The 2020 year was an interesting year. It looked like it would be a complete disaster at first, yet it turned around very fast and it became my best year investing so far. Here are some of the achievements in the charts:

 

 · Net-Liquidation Value

 

It was in August 2019 when my $20,000 account tanked to $1,600 after a series of costly mistakes trading 0 DTE SPX Iron Condors. I could manage the trades and grow the account until July. After that, volatility in the market kicked in and I was not able to navigate the trades through it. Losses were piling up fast. It took a month to completely destroy the entire account.

For the rest of the 2019 year, I was sitting tight and thinking about what should I do about this situation. I knew, that I will no longer trade SPX. It was a dead-end and I was trying hard. Yet, the strategy was in front of me for the entire time. Right in front of my nose, advocating it on this blog but ignoring it.
 

2019 TW Net-Liq
 

At the beginning of November 2019, I decided to go back to what I knew best – buying dividend growth stocks and monetizing them. I salvaged what I could and started aggressively buying dividend aristocrats such as PBCT, PPL, and AT&T. And, I started selling strangles around these positions. And the account started going up again.

In March 2020 when Covid hit the markets, the account tanked again. At first, I was depressed and on the brink of completely giving up. But I remember 2008 when everyone was panicking and selling I should have been buying. I was telling myself not to make the same mistake. So, I deposited some cash in the account and started aggressively buying depressed stocks. And as the market started recovering, I was selling puts like crazy.

This action paid off. As the markets continued recovering, my options were mostly expiring worthless for full profit. And I kept reinvesting those profits. Soon I could buy LEAPS against SPY and IWM. And I started selling covered calls against those positions. And reinvesting the profits. And the account continued growing even faster.
 

2020 TW Net-Liq
 

Could this be the end of my trading experiments and continuous growth? I believe so. My trading was a zig-zag move so far and not very encouraging:
 

Overall TW Net-Liq
 

I am pleased with the new strategy and its results. But I will not be as aggressive in 2021 as I was in 2020. I will be building reserves in cash to protect the trades in case I get assigned (the biggest issue is not the options, they have very little to no risk, but the assignment and not having enough cash to cover it). I will also start depositing $1,000 a month to this account and grow it even faster.

 

 · Dividends

 

Prior to 2020, I had no stock positions. I only traded SPX. I might have only a few shares as a result of some bright moment in my wicked trading thinking and bought one or two shares here and there. But in 2020, I started aggressively building my dividend aristocrats portfolio. From the dividend perspective, I am at the beginning of my journey. Note, that I am talking about the business account, not my ROTH or IRA accounts where I was investing primarily into dividend stocks and these have nice dividend income already. But this “business account” is a do-over.

Yet, I collected $2.27 in dividends in 2019 and $178 in 2020. My projected dividends grew from $26.15 in 2019 to $525.43 in 2020.
 

TW Annual Dividends
 

I expect the dividend income to grow as I keep adding more shares to my portfolio. The growth seems high and fast when you look at it but the projected dividend is calculated using the current dividend amount times the existing stock holdings and expected stock holdings or accumulation of the stocks during 2021. I plan on accumulating AT&T, MO, and AFL to reach 100 shares of each company during 2021 (if I get more, the better). If I achieve this goal, my projected dividend will be $1,106.50 in 2021.
 

TW Annual Dividends
 

I also understand that received dividends will be lagging behind the projected dividends as I will be accumulating stocks during the entire year and I may make some purchases after the dividend ex-day, so the projected dividend will increase yet I will miss that dividend payout in the given period. But I will receive it in the very next period.

 

 · Options

 

Options income was tricky in 2020. I collected a nice dividend income but the results are skewed due to a few factors:

1) I still hold a few bad SPX trades. These are included in the current net-liq so they will have no impact on the account value. I do not plan on salvaging those trades unless a good and cheap opportunity presents itself. But if these trades expire (mostly call spreads in the money), they will be recorded as a loss in the options income.

2) I am not only selling premiums but I am also buying LEAPS. When I buy a LEAPS call, it will also show up as options cash outflow and could be considered a loss if you do not know that it was a purchase and not a loss. In 2020 I purchased a few LEAPS against SPY and IWM for almost $5,000 dollars. Thus, in 2020, it seems that I have lost $14,976.91 in options premiums. But it is not correct. I yet have to come up with a good recording method to filter out these purchases. Of course, in the following years, I expect these LEAPS to make a profit and it will show up as income in the next year(s).
 

TW Annual Dividends
 

I hope, this provided a good insight into my 2020 trading and investing efforts. I am happy with the results and I hope, I will continue growing my account in 2021 towards my goal of financial freedom. By 2021 my goal is to reach the $42,344.06 net-liq value of my account. Let’s see, if I will be able to achieve it or even exceed it.
 

Good luck to you and Happy New Year!




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Posted by Martin February 17, 2018
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Trading options process


In order to trade successfully and stay in your comfort zone, I believe you need to know exactly what to do in any situation of your trade outcome.

No analysis, no oscillator, no market prediction will tell you what the market would do next. It is impossible and if anyone tries to sell you a miraculous winning strategy secret, he is lying. If any such secret exists, the one selling it to you would use it for himself and get awfully rich.

Trading is 90% about psychology and the rest is skills and knowing what to do. In order to trade successfully and have consistent returns, you must do the following:

 
1) Have a trading plan and strategy. Always know what to do in any situation.

2) Have enough money in your account so you can manage your trades when they need adjustment. The worst case what can happen to you is to be forced closing your trade at a loss due to a margin call.

3) Never predict the market. Always trade what you see is happening and not what you think will happen because it may not happen at all.

4) Trade only a handful of trades you have time to handle and manage. If you still work a full time job, opening 1000 different trades will knock you out in a sharp sell off. You will not be able to manage them when needed.
 

I am a visual person. It helps to have the process visible. Here is what my strategy decision process looks like:
 

Strategy flow chart
(note, I took the IT classes about 10 years ago and no longer remember exactly how to create the flow charts properly. So some ways above may not be correct and I apologize for it.)
 

When trading options, you must be perfectly OK with anything what’s depicted above. If you are OK with any of the point shown above you will not be surprised, angry or anxious about it and you will trade comfortable. And when comfortable you will also become consistent.




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Posted by Martin August 05, 2015
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Strategy


2024 Strategy

 

In 2023, I developed my trading strategy to increase income from our portfolio. In 2021 and 2022, I started trading options against SPX again. The 2021 year was great, but I ignored cash management. My old bad habit. 2022 was a brutal year, yet we rolled back old trades from 2021 and increased investments. I am happy about it. In 2023, I developed an SPX options strategy called “Crumbs” method. I started trading it in September 2023, and out of 70 trades, the strategy lost only four trades. All the others were winners. You may say that in a bull market, everyone is a genius, and you are right. The strategy may not work well in a bear market either. But I started at the beginning of September, a pullback in the bull market. My old system would fail; this one held.

 

 · Dividend Investing – Asset Accumulation

 

In 2024, I will continue accumulating dividend stocks. I will focus on dividend growth stocks and add a few high-yield dividend stocks such as REITs, BDCs, and MLPs. They are risky but bring in higher income. The goal is to accumulate 100 shares of those stocks I already own.

Below are my goals for 2023 and 2024 stock accumulation. The white rows are tasks to be performed, the green highlighted rows are completed tasks, and the red rows are tasks that I am currently focusing on. The focus will change over time, but as of now, my main goal will be accumulating cash in ICSH and SGOV.
 

 

 · Growth Stocks Accumulation

 

Besides dividend stocks, I will accumulate growth stocks, too. I neglected them before, but I admit that growth stocks can significantly increase one’s portfolio. However, I will accumulate solid, established companies, no high-fliers or speculative stocks.

 

 · Covered Calls and Strangles

 

2024, I will keep selling covered calls against dividend and growth stocks. If a covered call gets in the money, I will add naked puts to allow for rolling the calls higher and away in time to avoid having my stocks called away. If an assignment happens, I will repurchase the stock.

 

 · SPX Crumbs Strategy

 

Last year, I started trading the Crumbs strategy. The process is simple. I will sell primarily Iron Condors against SPX with deltas <5 and 0 to 2 DTE (sometimes 5 DTE if trading over the weekend). With a delta below five on both sides, it is improbable that trade will get busted. Of course, it can happen; anything can happen, but the odds of it happening are lower than with trades that are closer to the money.

The trades are positioned at 2 SD (two standard deviations), and if the market drops by 2 SD, we may expect a bounce the next day, which may save the trade from being busted. The market would have to crash or grow by 1.50% to 2.50% (depending on implied volatility) in a day or two, and that is also less likely in a regular market.

The profit with these trades will be smaller than most traders do. I will only collect $15 – $30 premium per trade. But if I collect this premium every two days (on average), the account can grow very fast. If we have 250 trading days in a year, I will collect $30 per trade. I will be able to bring in approx. $3,750 in premiums per year. But scale the transactions up, and it will grow a lot more.

In bear markets, we can see more significant drops, of course (in 2022, we saw 4% drops in a day), and when that happens, I hope to be either out of the trade (not trading) and if I happen to be in a position that gets busted, I will roll such trade.

So, my exit plan with the Crumbs strategy will be to let each trade expire worthless for a full profit. Alternatively, if the trade gets busted, I will attempt to make two adjustments:
 

1) Roll the untested spread to create an Iron Fly (if puts get in the money, I will roll calls down to align a short call with a short put, and vice versa).
2) I will close the untested side (short call or short put) to release a buying power (BP) and roll the tested side away in time, and either the same strikes or up or down as needed.
3) I might also widen the spread to reduce the cost of the spread or collect a credit.
 

Here is our 2023 SPX Crumbs strategy spreadsheet:
 

View Full Spreadsheet

 

 · Stocks Crumbs Strategy

 

I will also trade the Crumbs strategy against stocks. The approach is similar to the SPX except using individual equities.

I will evaluate these stocks monthly and open a new trade to collect at least a $20 premium (after fees). Also, the goal will be to open a 30 DTE trade 20% below the current stock price. With this setup, a stock is unlikely to get busted by 20% in 30 days (if it is an established company). But, again, it still may happen; anything can happen in the market, so don’t get me wrong, this is an invincible strategy. If it happens, I will roll the put away in time, and if possible, to collect credit, I will roll it down. If none will work, let the put assign and buy 100 shares of the stock.

 

 · Futures Crumbs Strategy

 

At the end of 2023, I tested trading the “Crumbs” strategy against E-minis (/ES Futures). There are two aspects why I liked it. One, Futures can be traded 24/7. Two, this can also substitute for the Stocks Crumbs Strategy. The problem with the stocks was that the Crumbs strategy could be traded against stocks priced at >$100 a share. And many stocks that are priced at $100 – $150 a share have no premium available. So, I would have to trade pricier stocks, like NVDA, COST, MSFT, etc., but these have a hefty margin requirement. If traded the same way, futures will require only about 10% of the stock margin requirement (for example, ABDE stock would require $4,772.80 buying power; Futures would only need ~$400 BP).

If no stock can be traded in a given month, I will use Futures instead.

I will also trade the 45 DTE ladder. That means that I will slowly open trades with 45 DTE until I have a trade on every expiration day. That will require approx. $18,000.00 buying power and it can deliver approx. $1,350.00 premiums every 45 days. But this will be a matter of scaling up the account so that it will be a slow process and not an overnight endeavor.

 

 · Cash and Trades Management and Account Scaling

 

This part of my trading will require a lot of discipline, which I need to improve, and I tend to overtrade with insufficient money to sustain any losses eventually. So, I will dedicate the entire 2024 to getting my account in order regarding cash and trade management. In my Trade Journals, I created a section which will help visualize my progress.

My new cash management for 2024 is as follows:
 

1) 50% of the portfolio will be in dividend and growth stocks.
2) 20% of the portfolio will be dedicated to options trading.
3) 30% of the portfolio will be in cash reserves.
 

Here is my allocation at the beginning of 2024:

 
Startegy goal 2024
 

As you can see, my allocation is not up to the goal, so 2024 will be dedicated to aligning my portfolio with the plan.

 

Scaling Options Trading

 

I am setting a $10,000.00 of the funds to trade the SPX Crumbs trades, but I can open trades using only about 60% of this amount at any given time. Also, each open trade can only risk 5% of the amount. At the beginning of 2024, I violated this goal, so again, in 2024, it will be my task to align the account with this rule.

All proceeds from the SPX Crumbs trading will be parked in the ICSH fund at the end of every month.

Once the savings in the ICSH reach the allocated cash for SPX trading (as of today, $10,000.00), I will scale my options trading up. For example, once I save $12,000, I will raise the allocated amount to $12,000.00. That will increase the number of Iron Condors contracts or widen their spread. Until then, I will only trade the same amount of contracts without increasing the size.

The savings and scaling described above also apply to Stocks Crumbs trades and Futures.

 

Cash Savings

 

The next part of my 2024 strategy will be to increase cash savings. For years, I was always fully invested, which proved me wrong. When a bear market hit, I didn’t have enough cash and was forced to close trades at a loss. I also missed great opportunities. For example, I could buy Netflix (NFLX) below $200 a share when investors panicked in 2022. I tried but needed more cash to keep holding the position. Margin calls came, and I had to sell to release BP. Even today, I am pissed at myself for this missed opportunity.

Bear markets are part of this game and will come again. And when they do, I want to be prepared. In 2024, I will save money in the SGOV fund. I will start buying equities only after this goal is achieved.

The tasks above cover my 2024 strategy and goals. Let’s revisit it at the end of 2024 and evaluate it.

 
 


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Trading options is dead dangerous! Really?

Trading options is dead dangerous! Really?

If you received or read a disclosure from your broker about options trading stating that trading options is dangerous and you may lose money, do not believe it. If you know what you are doing and what to expect from options, they can be very safe and they actually can be less dangerous than trading stocks themselves.

Do you believe me? No? Then read the next text.

Meet the new Monster – selling options

A friend of mine sent me a risk disclosure given to him by a broker which was describing a few trading strategies and tools investors can use. A portion speaking about selling options was especially interesting.

All they were saying about selling options was scary and very discouraging. According to them, selling option contracts causes you taking an enormous risk which can wipe out all your money. Although they agreed that this risk can be partially mitigated by owning the underlying security or having enough cash.

 
(MORE: Covered Call Trading Plan Update)
 

Unfortunately such disclaimer is usually very generic and vague. It is aimed to protect the broker and not you, the client. But the primary goal is to scare you so you won’t trade options at all. It is now an industry standard to make a hype around options and mystify them as something a normal investor cannot do at all cost. Per brokers, trading options is something accessible only by rich investors and professionals. The opposite is true. Everybody can trade options and it is in many cases less dangerous than trading stocks.

Under certain conditions, options can be dangerous. For example, you have no clue how to trade them and yet you do it. Or if you decide selling naked calls, you really will be undertaking an enormous risk. But all other basic options strategies such as naked put selling, cash secured put selling, and covered calls are actually less risky than trading stocks themselves.

 
(MORE: Getting Paid To Do Nothing)
 

Why brokers came up with such disclosures scaring potential investors to death? It is because of their risk they undertake when their clients use naked put selling using margin. Then, put selling is not your financial problem, it is the broker’s problem. They do not want you to trade options because they are scared of you, and your options trading. Therefore, they will never tell you the truth but they will keep you in ignorance and scared to death. I will try to explain this later.

Why selling options is not dangerous?

Let’s take a look at the two basic options we have – calls and puts. Then you can do four basic trades with those options:

  1. You can buy a call (long) – bullish
  2. You can buy a put (long) – bearish
  3. You can sell a call (short) – generally bearish, but can be a bullish trade
  4. You can sell a put (short) – bullish

Buying calls risk

When you buy a call option, you speculate that the stock price will grow. What you can lose? You can lose 100% of money you paid for the call contract. In order to make money, the stock price must rapidly rise above the strike price of the call option, otherwise your trade will be a loss. The time value (theta) will destroy your option before it can even make some profit.

Well, not for me.

 
(MORE: Gambling Vs Investing – What’s the Difference?)
 

Buying puts risk

When you buy puts, you speculate that the underlying stock will go down. Same as with the call option, the stock must move rapidly down in order to make you money. Otherwise theta will destroy your put option. During violent bearish markets this trade makes sense to protect your portfolio and your current positions. Otherwise not for me either.

Selling calls risk

And now we are getting into the “deadly dangerous, risky option selling” (as per the above mentioned broker). There are two trades, two strategies with selling calls.
 

  1. naked calls
  2. covered calls

To be honest, naked calls can be very dangerous. How do they work? If you sell a call for a stock, let’s say AT&T (T) at strike price of 34 a share and you do not own the stock, you are undertaking an enormous risk. If something great happens with the company, for example over the weekend they announce a very good news, then the following Monday, the stock may open higher with a gap (for example the stock jumps up from $33 a share to $150 a share over the weekend). you will have no time and no option to fix this trade.

 
(MORE: Limited Partnership (LP) & Master Limited Partnership (MLP))
 

Then you are in trouble. You will be forced to sell 100 shares of the stock (which you do not own) and you would have to go and buy it for $150 a share in order to satisfy the call obligation. The loss can be huge. But who would trade such a trade? If you have no knowledge about options you may open such trade as a mistake. Or you need to be a very skilled trader in order to manage such a trade and avoid problems (usually traders cover such trade with a different option creating all sorts of option spreads, so they do not stay fully naked.

This was the only dangerous option trading I know of. And now lets see the “piece of cake” part.

Covered calls risk

There are yet another two strategies with covered calls. Each may have either a bullish or bearish expectations. The strategies are:
 

  1. total return strategy, or buy-write
  2. partial return strategy

I like the total return or buy-write strategy. How that works? You buy 100 shares of a stock, for example AT&T (T) at 34 a share, and at the same time you sell a call at 36 strike and collect, for example, 1.50 (or $150) premium. Your call contract is covered by 100 shares of the stock from the beginning.

 
(MORE: I’m Confused… )
 

What can happen to you? Two things. If the stock stays below 36 strike, the option expires worthless and you can sell another contract. If the stock rises above 36 a share, your 100 shares of the stock will be called away from you. You will have to sell 100 shares of (T) at 36 (strike) a share. You realize a gain by selling the stock ($3,600 – $3,400 = $200 gain) plus collected premium ($200 stock gain + $150 premium = $350 total return).

As you can see, with selling calls you actually make more money, than trading stock itself.

So where is the risk? The risk is in a situation when the stock drops too low. In that case the loss on the stock side is so large that premiums collected cannot compensate for the loss. But if you happen to own a dividend growth stock how often these stocks drop so low that you stop sleeping well at night?

And compare it to a single stock trading. What is the difference between a stock you bought at 34 a share and it dropped over the weekend to 10 a share because of bad news? The risk is absolutely the same as when owning a short call contract. You are losing money in both cases, but with options you are losing less.

 
(MORE: Retire Before Dad 2014 Financial Goals)
 

The total return covered call strategy is a bullish strategy and works well against stocks you want to buy and sell with gain.

What about the partial return strategy?

This strategy can be either bullish or bearish. If you are bullish, it works the same way as the total return strategy where you write call contracts against the stock you already own (so no stock buy portion) and you want to sell the stock.

If you are neutral or moderately bearish, this strategy can help you collecting premiums (sometimes called another dividend) while you are waiting for the stock to grow and make you capital gain. This works well in sideways markets.

 
(MORE: Dividends Aren’t Evil)
 

The third expectation is If are very bearish and expect the stock to drop significantly. This strategy is a protective strategy and again you write the contracts against stocks you already own.

If you expect the stock to fall down in bearish environment, you may decide to sell a deep in the money covered call. As the stock falls down, the value of the contract is diminishing and eliminating the loss on the stock.

For example, you have a stock (T) which currently trades at $34 a share. The markets are turbulent and you expect the stock to fall to $25 a share where you identified next major support. You sell a long term deep in the money call, for example June, or even January 2015 25 strike call. For such contract you will receive 9.6 or $960 premium. If the stock falls back down to 25 a share, the call option will become worthless and you either buy it back or let expire. You keep the full premium $960, but your stock will show $900 loss. The entire trade protected you and you are about 60 dollars in positive territory.

Where is the risk? The risk is in early assignment. If your expectations were wrong and the stock continues rising, the opposite trader who owns your call may exercise the option early and you may lose money. But that would happen if you originally bought the stock too high or high enough that the collected your premium won’t be able to cover the loss. Otherwise this trade will work the exact same way as total return trade.

 
(MORE: How To Manage Your TSP Like A Stock Professional)
 

Since I am a visual person I like to see charts and numbers to see the whole picture. If you are like me, here is a flow chart how the entire covered call strategy works:

Covered call


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Posted by Martin November 02, 2023
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Technical view: 3M Company (MMM)


Technical view
 

MMM is in stage #4 but attempting to create a new base (forming to stage #1). Lately the stock went from an all-time high of $250 a share to last week’s close at $87.52 a share (over 65% decline since 2017). I bought this stock for $202 a share when it first dipped thinking that this could be a great deal. 3M was a great company back then. Like other big names involved in multiple sectors (to name one Johnson & Johnson (JNJ) or Grainger (GWW)) I expected 3M to perform in a similar manner. JNJ, for example, is so widely involved in multiple trades such as consumer staples that a problem in one sector will not impact the entire company. A great example of diversification. 3M, unfortunately, was so badly mismanaged that the same diversification couldn’t protect the company from this 5-year long slump. And now, investors are asking whether MMM is a good buy or not. This, however, depends on the goal you have when thinking about buying or selling this stock. As a dividend investor, I think this company is way better value than it was back in 2017 and there are a few reasons why I think so.

1) The company’s broad and diversified structure will survive, and 3M will get over its current problems. Unless they start spinning off the good and healthy parts of the company, the problems will be solved at some point in the future. But this will take time, and, in the meantime, Wall Street will panic and predict the end of 3M (the same way they were talking about the end of JNJ multiple times in the past when they got hit with lawsuits and troubles).

2) The recent steps the management took started the improvement process. The company’s financials are becoming healthy again. Let’s just hope they will keep moving in the right direction.

3) The stock valuation is now in a very deeply undervalued territory (based on the adjusted earnings growth, the fair value of this stock for 2023 is at $136.49 and for 2025 it is at $158.24 a share). Last time the stock was this undervalued was in 2008, briefly in 2010 and in 2019. The current valuation provides a great opportunity.

4) The company pays dividends (current yield is 6.86%) and increases it every year even despite its current problems, the company generates enough cash flow to sustain the dividend. There was a rapid decline in cash flow in 2022 where the dividend got endangered, but since then cash flow started improving and it is heading in the right direction.
 

On the weekly chart, we can still see a continuation of the problems. There is no change in the trend. It is clearly in stage #4 and continues lower.

 
Technical view weekly
 

We can’t see any base forming on this chart yet. So technically, this trend is still strongly bearish.

The 3M’s revenue kept going higher over the years, even during its problems in 2020-2023 revenue kept growing but slowed significantly. On a one-year basis, revenue declined by 3.56%, a 2-year decline by 3.59%. A 5-year still shows a meager 0.39% growth, 10-year is at 0.49% growth. I believe investors see this and punish the stock.

 
Technical view weekly
 

As mentioned earlier, the company’s cash flow started falling rapidly since 2019 but in 2021 we are seeing improvement and growth again. Will it continue?

 
Technical view weekly
 

This chart shows the free cash flow line better (the orange line with a tiny “F” boxes):

 
Technical view weekly
 

As you can see, the cash flow is improving, and it is also expected to improve. If it will, the stock price will follow.
Here is a culprit of all the troubles:

 
Technical view weekly
 

Earnings got hit hard and the stock followed. I keep saying that what matters the most in the stock market is “earnings, earnings, and earnings.”

Since 2014, the company started piling up a huge debt and not having enough cash to sustain it. This was unprecedent for 3M. Fortunately, in 2020 the company started aggressively paying the debt off. There is still a long way to go and in the current interest rate environment, this is a burden which also weights on the current stock price:

 
Technical view weekly
 

3M pays dividends and increases them since 1970. It started increasing dividends in 2013 very aggressively. But if we look at the cash flow, earnings, and debt levels, it seems obvious that this dividend growth was not supported by the company’s earnings or free cash flow but by debt. Yes, the company may have been borrowing money to pay increased dividends and today, the stock is punished for it.

 
Technical view weekly
 

I think this is the only positive chart so far – declining shares outstanding. The company is constantly and systematically buying back its shares at 2.75% annual rate (5-year average is at 1.52%).

 
Technical view weekly
 

Employment at MMM holds steady and it started declining slowly in 2022:

 
Technical view weekly
 

I believe, at the current price, MMM is very undervalued providing a great potential for future price appreciation and collecting dividends while waiting for it to increase the price.

 
Technical view weekly
 

If the price appreciates, it may take some time. I do not expect it to happen in 2025 but over time. If we are investing in a 10 year or more time horizon, this might be a great opportunity.

Over the years, MMM beat the market. With the last few years’ declines, it is not able to do so anymore. It beats the market with dividends but not the capital growth:

 
Technical view weekly
 

Despite all the recent negative sentiment and bad financials, I do not think these are systemic issues. The company made bad decisions in the past, it is now paying for it and it is improving its balance sheets. If it keeps doing it and going in the right direction, this recent selling can be a good opportunity to make some decent profits.
I think all the hurdles will be overcome in the future and buying now could bring long-term profits. Buying slowly at the current levels should be a good contrarian opportunity.
 

The stock is now BUY
 

This post was published in our newsletter to our subscribers on Sunday, October 29th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.

 
 




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Posted by Martin September 20, 2023
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Technical view: Realty Income, Inc. (O)


Technical view
 

O is in stage #4. Realty Income (O) is a dividend darling of many investors, and it has paid and increased dividends for more than 25 years. The company went public in 1995 and survived many downturns the biggest in 2000, 2009, and 2020. It increased the dividend during those periods of time. It also survived high interest rates back in 1995 (the FED rate was 6% in 1995) and it survived the rates in 2000 and 2009 too. Yes, the stock declined during those years but if you were not panicking and bought, you ended

 
Technical view weekly
 

Keep reading O Technical View:




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Posted by Martin September 13, 2023
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Technical view: Amazon, Inc. (AMZN)


Technical view
 

AMZN is in stage #2. The stock is recovering from last year’s carnage. In 2022 it almost reached lows from 2020 Covid lows. It was a great buying opportunity. But for the entire 2023 it was rallying and erasing the losses. If you were bold enough to buy when everyone else was panicking, you are sitting on nice gains. The stock rallied 60% from the 2022 lows. And the company is a great business. On the surface, it may look like a boring bad enterprise – what is good about a grey boring internet selling portal? eBay does it too! But there is a difference between the two. There is very powerful advertising on their portals, powerful cloud service (gaining steam again), and much more.

 
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Posted by Martin September 06, 2023
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Technical view: Aflac Incorporated (AFL)


Technical view
 

AFL is in stage #2. The stock performed very well during the bear market. We had a decline but it recovered very nice and it wasn’t as deep as what we saw in 2020. Today, the stock is also pulling back from a strong rally which may provide a good opportunity.

 
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Posted by Martin August 29, 2023
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Technical view: NVIDIA Corporation (NVDA)


Technical view
 

NVDA is in stage #2. The stock rallied very hard and there is a lot of controversy about this stock and the company it represents. We have a strong cult built around the stock. People would die defending it and they buy no matter what. And these people were awarded sticking to their guns further empowering their cult-like mentality. Then there is a whole other group of bears saying that this stock is crazy, the run unsustainable and the stock is overpriced. The rest don’t know how to value this company. And it is a problem. It is extremely hard to value NVDA and predict its future outcomes. Even if we step way far away to see the whole picture.

 
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Posted by Martin August 03, 2023
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Technical view: AES Corp, Inc. (AES)


Technical view
 

AES is in stage #2. But it is a weak uptrend, though. Over a longer period of time, the stock is more in stage #3 than #2. Since 2018 it saw a volatile move up, then crash in 2020, sharp recovery and now a zig-zag trading. It makes sense to wait for the bottoms of this choppy move to buy. We are currently in the lower portion of the channel and the stock is undervalued. AES is a boring dividend paying stock. It was a laggard for the year so far and if utilities pick up, the stock may go higher.

 
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