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Posted by MartZee June 23, 2010
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AOD dropped from portfolio, JNJ added.

Yesterday Alpine Total Dynamic Dividend Fund (AOD) dropped significantly down in price and today it continued down as well at the same speed as yesterday. On discussion boards I could find busy discussion why that happened. Mostly the concern was about a recent article by Dan Plettner at Seeking Alpha who wrote in his “Alpine’s Total Dynamic Dividend Fund: Overdosing on Financial Engineering” article why he thinks the methods of AOD’s trading and distributions are not sustainable.

Many members of the board were angry with him, because he is short the stock, he published the article at ex-dividend day and he possible triggered the sell off.

No matter what, he pin-points couple serious questions some investors refuse to discus or even consider. I must admit, that when I was buying AOD I was looking at the yield and totally ignored other aspects he brought up. So even though I lost money on this investment, he actually made me a favor by clarifying several things I have to take a look at in the future.

First my concern is about a constant NAV depletion. The fund opened in January 2007 at $19.07 NAV trading at $20 a share. Since then the NAV has been depleted to $6.78 (as of the end of March 2010) so the price had to drop as well. Any price above this NAV (premium) has no solid base and is risky to trade. As a long term investor in this case I do not like holding a fund which will potentially loose its capital and with this speed of three years (losing 65% of its NAV) it may happen pretty quickly.

I saw arguments that underlying portfolio will improve the NAV of the fund, but that doesn’t too sound to me.

With a danger of cutting the dividend and further drop in price I decided to liquidate my position in AOD and relocate my money into Johnson & Johnson (JNJ).

06/23/2010    Sold   219   AOD   @   6.2101

06/23/2010    Bought   23   JNJ   @   58.8594

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What’s happening with IGD?

Today Global Equity Dividend & Premium Opportunity Fund (IGD) dropped price by almost 6%. Why is it happening? The fund announced a distribution yesterday and it meant another distribution decrease (a third decrease in a row).

ING Investments, LLC announced the monthly distributions on the common shares of two of its closed-end funds: ING Global Equity Dividend and Premium Opportunity Fund (NYSE: IGD) […]

The monthly distributions announced today are reduced from distributions paid in prior periods in an effort to align the Fund’s distributions with the current conditions in the equity and options markets. The Funds’ management considered a number of factors before deciding to decrease … Fund’s distribution, including the level of assets in each respective Fund, the dividend yield of the underlying equity portfolios and prevailing implied option volatilities.

With respect to … (the) Fund, the distribution will be paid on July 15, 2010, to shareholders of record on July 6, 2010. The ex-dividend date is July 1, 2010. The distribution per share for … (the) Fund is as follows:

Fund Distribution
Per Share
Change from
ING Global Equity Dividend
and Premium Opportunity
Fund (NYSE: IGD)
$0.100 – $0.025

I checked the stock (fund) closely to see why this is happening and whether I should sell this ETF or hold it. ING Global Equity Dividend and Premium Opportunity Fund (the Fund) is a non-diversified, closed-end management investment company. The primary objective of the Fund is to provide a high level of income, with a secondary objective of capital appreciation. The Fund seeks to provide investors with a high level of income from a portfolio of global common stocks with dividend yields and premiums from covered call option writing utilizing an integrated option strategy. The Fund would invest at least 80% of its managed assets in a portfolio of common stocks of dividend paying companies located throughout the world, including the United States. The investment adviser of the Fund is ING Investments, LLC. The Fund’s sub-advisor is ING Investment Management Advisors B.V.

I looked at the Fund’s numbers and during 2008 – 2009 the Fund has been losing money due to financial crisis. The Funds holds 20.56% in Financial sector and during the crisis this got hit severely:

Top Sectors

% of Total Investments as of 04/30/2010
Financials 20.56%
Energy 12.20%
Consumer Staples 12.10%
Utilities 10.94%
Health Care 10.48%
Telecommunication 9.03%
Industrials 7.08%
Information Technology 6.43%
Consumer Discretionary 6.39%
Materials 4.78%

Another issue is that the Fund holds almost 40% (37.44%) of its holdings in European regions and these were hit severely too due to debt crisis in Greece, Portugal and Spain.
In this light it seems to me as a wise move that the management reduced the Fund’s distribution to keep the fund aligned with its current cash flow. The total yield is still more than 10% and when considering that the financial sector as well as Europe will not be in the crisis forever, the IGD is a great opportunity to buy at a discount right now as a long term investment.

Based on that I decided to hold on this ETF and as my cash allows I will potentially buy more shares.

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Posted by MartZee June 16, 2010
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Visa added to portfolio

Today I have bought Visa to my portfolio. I am expecting the stock to rise to $100 per share by the end of the year. Revenue growth is expected at 14% during the next five years. The stock will benefit from the economy recovery in the long run.

06/16/2010  10:33:26   Bought   20   V  @  76.1094

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Posted by MartZee June 15, 2010
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Market in confirmed rally today

The stock market has changed its status into a confirmed rally today as it surged in higher volume. The S&P 500 surged 2.3% and the Dow 2.1% as both cleared resistance at their 200-day moving averages. The NYSE composite climbed 2.5%, thanks to strength in energy and industrials.

Visa (V) erased its morning loses and ended high almost 4.5%. Given that I am buying this stock tomorrow.

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Posted by MartZee June 10, 2010
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Visa is creating a new trend

Visa (V) is creating a new trend these days, however the entire market is still weak and may not support this trend. Watch the stock very carefully. Right now the trend is creating its third high-high point and soon it may reverse to create a new high-low point. If it happens, on its reversal at high volume it will be my entry point. Also the entire market must be in confirmed rally at the same time to buy any new positions.

Today morning the market opened in strong rally after China trade data and US job data. The Dow Jones industrial average rose about 230 points in late morning trading. The Dow and the Standard & Poor’s 500 index climbed about 2.3 percent, while the technology-dominated Nasdaq composite index rose about 2 percent, which is creating a follow-through day. If this trend sustains its momentum till the end of the day, we may see the market in rally attempt.

I am expecting Visa to provide a buy point sometimes in June 16 to June 21st 2010.

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Posted by MartZee June 07, 2010
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Market slips back into correction

Today’s last hour sell off sent the rally attempt back into correction on fears that Europe economic problems would hurt recovery. The Dow slashed 115 points a day after it dropped 323 points on Friday. S&P500 is down 14 and Nasdaq which led the rally attempt a few days ago reduced by more than 2% and ended this rally attempt. Once again, it is wise to wait with buying new positions. I am staying in cash and waiting aside for the new rally.

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Posted by Martin June 05, 2010
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Picks 05/31 – 06/04

Trading Account:

New [tag]stock picks[/tag] this week:

Stocks bought or added to portfolio this week:

Stocks dropped from portfolio this week:

Stocks watched this week:


Existing & new [tag]holdings[/tag]:
Symbol Qty Last Gain($) Gain(%) Stop ATR Risk to
stop (%)

Contribution this week: $0

Current [tag]capital exposure[/tag]: 0%     Learn more

New positions available to open: 0     Learn more

Starting [tag]account value[/tag] = $1,600.08

Account value = $1,600.08 (without margin)

Buying power = $0

[tag]Portfolio Gain/Loss[/tag] this week = 0%

[tag]Portfolio[/tag] Gain/Loss for JUNE 2010 = 0%

Portfolio Gain/Loss for 2010 = -45.43%

[tag]Annual Return[/tag] (CAGR): -37.56%

Lending Club:

Debt notes
Available cash: $15.60
In Funding Notes: $0.00
Outstanding Principal: $389.08
Accrued Interest: $2.61
Account Total: $407.29  Net Annualized Return: 12.79%
Contributions this week: $0.00
Weighted Average Rate: 11.56%
Expected Monthly Payments: $13.11
Payments to Date: $15.79
Principal Payments: $10.92
Interest Payments: $4.87
Late Fees Received: $0.00

ROTH IRA Account:

New [tag]stock picks[/tag] this week:
06/02/2010 Bought 11.800 GABUX @ $6.00

Existing & new [tag]holdings[/tag]:

NTF Mutual Funds
Symbol Qty Last Gain($) Gain(%) Div.
AIGYX 83.472 12.74  63.44 6.34 7.13 27
ATIPX 106.395 8.91  7.80 0.83 7.04 24
GABUX 77.118 5.88  -17.35 -3.68 3.99 12
HISIX 26.918 6.20  -33.11 -16.55 4.56 4
SICNX 62.259 6.33  -55.89 -12.42 4.97 10
SWDSX 53.286 11.14  -10.57 -1.75 4.00 15
SWLSX 29.814 9.35  9.84 3.66 1.63 7
Individual ETFs
Symbol Qty Last Gain($) Gain(%) Div.
AOD 219.0 6.71  -534.36 -26.67 21.40 82
IGD 29.0 10.89  -40.89 -11.46 13.61 18
Individual stocks
Symbol Qty Last Gain($) Gain(%) Div.
Account target and current allocation
Individual stocks 0 42% 0%
NTF Mutual funds $3,898.22 38% 67%
ETFs $1,785.30 20% 31%

Contribution this week: $50

Starting [tag]account value[/tag] = $5,889.44

Account value = $5,783.52 

Dividends received in JUNE 2010 = $5.03

Dividends received in 2010 = $150.05

Portfolio dividends yield 2010 = 2.59%

Portfolio dividends yield lifetime = 4.05%

Dividends received lifetime = $234.17

[tag]Portfolio Gain/Loss[/tag] this week = -2.63%

[tag]Portfolio[/tag] Gain/Loss for JUNE 2010 = -2.63%

Portfolio Gain/Loss for 2010 = -8.79%

[tag]Annual Return[/tag] (CAGR): -5.90%

[tag]Portfolio Return[/tag] since inception: -18.83%

Last week the stock market resumed rally again, particularly NASDAQ. However on Friday the rally attempt has been put under pressure and this rally may fail. This is why I am still keeping the market status at “Rally Attempt” instead of changing it to a confirmed rally status. The next week trading will reveal if this rally sustains this pressure or continues.

I am still watching a few of the stocks I wish to buy – Visa and Medifast. Both stocks are creating great buying opportunity. Visa is still under a strong downtrend, however, creating possible trend reversal. I still cannot say, whether it is turning the direction or not. So waiting for the market and for the stock to show its direction is the proper way to go.

Medifast is in downtrend reversal. The weekly chart created the bullish reversal in oversold zone, but I am waiting for the reversal on daily chart.

I am still thinking on how to manage the trading portfolio better way, whether to quit stock trading for now, save more money and return back later or continue trading while saving more money. I still do not want to give up the trading, so most possible way will be that I will purchase stocks like Visa, Medifast and I will continue saving in a mutual fund or ETF the similar way as I do in my ROTH IRA account.

Are you interested in Reverse Scale Strategy and see how it works when implemented to even a small account?

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