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Philip Morris International, Inc. Message Board

  • axpkocop axpkocop May 15, 2013 12:12 PM Flag

    Why You Should Buy "LO" & Sell it Higher?

    43.98-Bought more LO today. I may be chasing it but it still has a 5% yield and only trades at 13 times this year's earning's estimates.

    In other news-I had some MSFT shares called away at 28-what was I thinking when I sold those options? MSFT must be going XD soon.

    This IRA is currently over 50% cash which is devoted to selling cash secured put options for income in lue of owning bonds due to low interest rates. Currently the stock market is up about 15% year to date but this IRA is only up about 10% due to my option strategy.

    If you had $100,000 invested in both stocks and bonds you'd have earned about 1% on your bond portfolio and 15% on your equity holdings year to date. So you'd be up about $16,000 or 8%.

    In my case-selling puts and owning stocks I'm ahead about $20,000 or 10% because I've earned about 5% selling puts and 15% vias my stock holdings. More risk yes, but much greater returns. Also owning bonds that earn you 2% per year means you're locking in bonds that mature in 5-7 years and if rates go up your bond holdings will get killed, so in my opinion you'll earn less and risk more.

 
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