Also bought it in IRA #3 but sold call options against it for added income. I'm treating VZ as a substitute for fixed income bond holdings that yield less than 3%. Between the dividends and option premiums I hope to earn over 15% per year.
Grandma's position is a 2.4% stake and IRA #3 is 2.25% and 94% of the shares could be called away at 50.
If the stock should rise in the near term, She'll sell call options against it for added income. This is a 2.4% position and her cost is just under $49/share.
She'll use VZ as a replacement for her fixed income portfolio. Her cash position is now down to about 3% but she's able to live off dividends she's earning in this account and she has more cash coming soon because some of her holdings could be called away due to being short covered call options.
Note: In her income bracket dividends are federally tax free whereas interest on bonds are fully taxable. You could say that our current tax code and low interest rates are forcing retirees and individual investors to sell bonds and buy equities.
Her account was up 3.5% today led by a strong showing from LO which overtook IBM to become her largest holding. If she continues to compound her money at 3.5% per day her current $705 account value should reach over $1 million in the coming months.
In IRA #2 I sold covered calls against my recent purchase of BX today with it trading over 31. I'm currently only up about 6% on the stock and if it's called away, I'll be up about 20% which will be held in the form of shares in BX-another trophy for my IRA.
I was short the 5/23, May, Call Options and 2/3 of my shares were called away because GMCR was in the $$ by 3 cents. I'll hold on to the balance as a long term investment.
But only 28% of her shares. It's still her third largest position at 6.5% of her portfolio.
I also sold some shares in IRA #4.
Merger discussion with RAI have moved the stock from 50 to 60 this year.
In three of my accounts and used some of the cash to buy BRKB. My plan is to take some profits through the summer and raise cash.
Grandma sold 28% of her shares in LO but it still makes up 6.5% of her holdings and is still ranked #3 in her top 10 holdings behind only BRK and PM.
In my Roth IRA I sold some LO and put 25% of the proceeds in BRKB at 127.40/share. The balance was used to sell cash secured put options against another stock.
More BRK will be bought on any correction. BRKB now makes up just 3% of the assets in this account.
And she added to her holding in KEYCORP NEW PFD 7.75% SR A KEY/PRG. It has a 6% yield but just went XD today. She paid $128.50/share.
Cv into 7.0922 of KEY
@ $51.045/share. This is a 4.67% position. Cash now makes up just 5.4% of the assets in this account.
Top holdings in this IRA: *PM- 30%, STX-12.3%, IBM-12%, BRK-9%, AIG 7.75%, LO 6.72%, WFC-4.67%, BX-3.9%, COP-3.8% and MRH- 1.35%.
*Note-currently short June-85-call options against PM that are currently in the $$ so more cash should be coming soon.
Bought AIG Warrants today in account #2 and have orders in to buy more in my Farm account. I paid 25.25/share. I'm also short call options against both the AIG shares I own and the warrants I just bought.
American International Group Inc AIG/WS
"The contracts advanced 1.1 percent to $24.03 at 10:05 in New York, beating the record of $24 on their first day of trading in January of 2011. The warrants, which traded as low as $4.66 in October of that year, allow investors to buy AIG common stock at $45 apiece by Jan. 19, 2021. Shares of the New York-based insurer climbed 0.4 percent to $53.83 and are up about 20 percent in the past year."
"APPLE PICKER?...."??? It's raspberry and cherry picking season now. Apple season starts in a few months.
I'm building a new woodshed and storage shed so back to work I go----------------
In other news-I did buy shares in a spec stock-SODA, today and sold call options against said shares, so the drinks are on me.
AIG just added another $2 billion to their share repurchase and they're buying back shares $17 below book so all buys are accretive to earnings. By my calculations they'll earn another $600 million on every share repurchased at 55 on their $2 bills.
Good times for investors.
I've been talking AIG up for some time---"
Did More GMCR and AIG Today
Why GMCR? They reported a good quarter and the stock has dropped 12% on the news so I sold more puts against it today.
Why AIG? It still trades at a 45% discount to book value which will only be enhanced by an aggressive share repurchase program which is coming. Also, when you hear the name AIG don't you you think of bailout? Everyone hates this company now even though the new AIG has nothing to do with the former. I now have 1% of my assets in AIG with more coming as cash comes into my account.
PM was priced at 90.5 at the time of these moves with AIG over 39 and GMCR in the 43s."
Feb 11, 2013 11:04 AM
My IRA thanks you--I'm looking at selling call options against my position but there's no hurry because AIG should be trading near 60 which will only increase the current option premiums.
Sold 12% of my LO shares in IRA #1 @ 60.29/share and bought IBM @ 182.66/share.
LO currently makes up 8% of the assets in this account and is still its largest position and IBM is now a 3.8% holding.
Also bought some XOM today in Roth IRA #1 @ 82.2/share using cash on hand. It's a 3.44% position.
and she also bought more WELLS FARGO convertible 7.5% PFD.
LO is still her 3rd largest holding behind only PM and BRK.
She paid 75.57/share for WMT, 1221 for WFC PFD and sold LO for 61.07 per share.