No license whatsoever is need to do consulting work on options in the individual accounts of investors. The key is that THEY - not me - has control over their account. While many clients are busy and want me to execute the trades for them as a service, there are a few who want to place the trades themselves. I am simply an advisor in such cases and that's just fine with me. Anyone can do what I do without a license as long as its done in private accounts where the investors have effective control and where I only have Limited Power of Attorney. Ajd where the number of clients aren't above "dozens and dozens."
By the way, I offer my services to detractors as well as admirers so if your stock market performance hasn't been up to snuff and you are looking for outsized returns with much less risk than just buying and holding stocks, you know who to call and what my number is. You KNOW that I produce the goods when I invite my worst enemy to participate. Because obviously if you took me up on my offer and I didn't produce the results, I can't imagine you being to shy to notify board members that what i'm saying isn't at all true.
So why not see for yourself just how good these returns really are. What have you got to lose - just the $50 fee for a five grand account that you would be paying. I would be most surprised if I couldn't earn you THIRTY percent a year on balance. You see, I actually produce returns that even Ponzi schemers wouldn't dare promise. Have you ever heard of the adage, "if you can't lick 'em, join 'em?" It just so happens that I have made one of the greatest niche investment discoveries of all time and in non-crashing markets, nobody tops my performance on balance. NOBODY.
Bought 100 EWY Jan 45-strike calls and sold against them 100 of the Jan. 50's for a net debit averaging $419.40 per contract. Total costs after commissions of $42,110. If this $57 South Korean fund is $50 or more in 34.2 weeks, the nominal return on investment will be 18.7% which is 28.4% annualized.
05/24/2013 10:32:05 Sold 81 EWY Jan 18 2014 50.0 Call @ 8.4 67,976.68
05/24/2013 10:32:05 Bought 19 EWY Jan 18 2014 45.0 Call @ 12.59 -23,945.57
05/24/2013 10:32:05 Sold 19 EWY Jan 18 2014 50.0 Call @ 8.42 15,983.14
05/24/2013 10:32:05 Bought 81 EWY Jan 18 2014 45.0 Call @ 12.6 -102,122.13
On the other hand, a naked put investor selling the March 23's wouldn't be fazed at all by a stock price drop to $26. He would STILL earn that 19.6% for 9.8 months even while buy-and-hold investors wereLOSING money. So not only are the returns with naked puts superior unless that stock really takes off (unlikely for PFE with such tepid prospects) but there is considerable downside safety as well.
You say you don't know much about options or can't get the all-important NAKED put authorization at Ameritrade? Well, I consider myself to be an excellent teacher and moreover, all members of my investing group WILL receive naked put authorization and they will all receive 21% commission discounts as well.
The commission savings alone often are as much as or more than the 1% fee that I charge (a whopping $50 for a 5K account for instance). For those that think that my returns are too good to be true, let me assure you that they ARE true.
As for those who remember that I lost 92% of my original money during the 2008/2009 crash, let me say that DEEP-out-of-the-money naked puts were NOT available during the crash. Had such options been trading, my percentage losses would have been much smaller.
If you or anyone else here is interested in finding out more about my one-of-a-kind program that offers outsized returns with less risk than buying and holding the stock, I can be reached at (213) 222-5547. What do you have to lose by calling?
I consider both PFE and MRK to be fully valued. They both sell for 12 to 13 times consensus 2014 earnings with expected earnings growth rates no more than mid single-digits at least through 2015 and with dividend yields in the mid 3's.
Here are earnings expectations for both companies:
2012: $2.19 for PFE, $3.82 for MRK (actual)
2013: $2.21 for PFE, $3.51 for MRK (consensus)
2014: $2.35 for PFE, $3.79 for MRK (consensus)
2015: $2.43 for PFE, $4.02 for MRK (consensus)
2016: $2.57 for PFE, $4.61 for MRK (consensus)
There's little to excite about PFE's earnings growth prospects all the way through 2016. For MRK, there's hope in the form of 2016 earnings but hefty expirations are taking a big bite out of 2013 earnings and the fact is that earnings for 2014 will be no more than what they earned in 2012.
But just because there is little to get excited about with respect to the company's STOCK, there are nice prospects for those who consider deep out-of-tyhe-money naked puts such as the March 23-strikes.
These newly-introduced puts are currently trading at $58 per contract bid, $63 asked. Cash margin requirements at TD Ameritrade (andONLY art Ameritrade) arwe $293 per contract and up-front premiums after commissions for those selling at the bid price are $57.40. The nominal return for those holding the 9.8 months to March expiration is 19.6% which is 24$ annualized or a full 2% per month.
In order for a buy-and-hold Pfizer investor to earn 19.6%, the stock would have to be at least a $34 number factoring in the three dividend payments. Looking at those earnings prospects, what are the realistic chances of the stock getting much over $34 by then? On the iother side of the coin, there is the very real chance of the stock falling somewhat. Even at say $26, this wouldn't exactly be the buy of the century.
Now if the stock does fall to $26 at March expiration, buy-and-hold investors would be staring at an overall 7% LOSS (10% loss on the stock less 3% dividend
CEO Tim Cook handled himself very well at that Congressional Sub-Committee meeting. Among other things, he advanced the idea of allowing repatriation at a reasonable rate like 10%.
Myself: 277K on a 952K starting portfolio at year-end 2012 (29.1% for 20.2 weeks)
Brother Mark: 419K on a $1.598M portfolio at year-end 2012 (26.2% for 20.2 weeks)
In 2011 in a flat market, my return was 58%. In last year's better market, I earned 42% on the expanded portfolio. And now I'm up almost 30% still in May on the much greater starting portfolio. I'll likely wind up in the 50's or maybe even the 60's this year.
As of now, I'm laying claim to being the best percentage wealth creator in the land in non-crashing markets. When the market doesn't have a once-in-a-lifetime crash, I can't think of a living soul who does better than I do. What else can I say? My Eureka moment of two years ago is one of the greatest investment discoveries ever. Sorry that I'm not more modest but that isn't my bag. On the other hand, producing consistent other-worldly returns with maximum safety IS my bag. I actually produce returns that the Ponzi schemers wouldn't even dream of promising.
Pfizwer broke trend and fell out of its prior trading range on April 30 when the stock tanked from $30.43 to $29.07 in the wake of its earnings miss and disappointing outlook. Since then, however, it has N OT gone down every day at all; it has been locked in a new narrow closing trading range between $28.60 and $29.56.
The main problem is that there is virtually no internal growth; the small gains in earnings per share are entirely due to stock buybacks. Pfizer does 5/8 of its business overseas where it has almost no piricing discretion at all. Foreign governments largely dictate to Pfizer what they will reimburse for the drugs. And for the most part, especially with European austerity, the trend is towares slightly LOWER prices each year.
Analyst consensus calls for only 2% earnings gains in 2013 followed by 5% type gains in 2014 and 2015. The stock currently sells for a rather rich 13 times earnings and its dividend yield is a rather pedestrian 3.4%.
With such fundamentals, do you really think that the stock is undervalued? I think it's at least fully valued and quite likely overvalued at this point. That's the reason why I completely exited the stock on April 2 as Pfizer was approaching $30. I just couldn't imagine why many investors would be willing to pay much beyond $30 a share with such a tepid outlook for the foreseeable future.
Yesterday I sold almost a thousand JCP Nan 8-strike naiked puts for my clients. With those 8-strikes sold for an average of $22 apiece, the stock closed at $18.80. The one thing that JCP has going for iit is the real estate that it owns. The book value of that real estate, much of it bought 20, 30 and 40 years ago is $14 per share but in an SEC filing late last week, the company said that the true value of that real estate was around $18 per share.
Remember - the naked puts I'm selling are the EIGHT strikes with the stock near NINETEEN. The low for the decade in the stock has been $13.55. Just how risky is it to assume that the stock will merely hold above just EIGHT dollars until January?
Cash margin requirements on these options were $104 apiece and net proceeds amounted to $21.20 for options sold at $22. The return if held to expiration is just over TWENTY percent for an eight-month holding period or just over THIRTY percent annualized.
But actual annualized returns will be somewhat higher than that as these options figure to be almost entirely worthless by mid-November. At that time, the options should be able to be bought back for the exchange minimum of $1 apiece. So what will likely happen is that $20.20 will be earned on $104 margin but for just a SIX-month holding period. The annualized return is likely to be close to FORTY percent. And look at that amazing safety - to garner that return, all the stock has to be is EIGHT bucks.
Now what were you saying about market highs, etc? Do you honestly think that with real estate worth $14 to $18 a share that the stock is going to dive below $8 within the next eight months?
Few people can honestly say that they have methods that dramatically beats the market but I am one of the very few who can say that. I consider myself to be just about the best percentage wealth creator in the land in all but all-out crashes such as 2008/2009.
Instead of trying to criticize something that is obviously this good, you
r) As a member of my group, they receive the all-important authorization to sell naked puts that is so hard to come by for new accounts these days.
2) As a member of my group, they automatically recieve a 21% commission discount on all trades
3) My consulting fees are 1% a year on original investments and additions. Fees for annual renewals are still based on the ORIGINAL amounts and not on appreciated values. Did you know that the Dreyfus Managed Stocks Fund charges 3.3% a year, they don't deal in even covered call-writing and they rarely change their holdings?
4) Members of my group are able to take advantage of my world-class discovery regarding deep-out-of-the-money naked puts.
5) Un like funds, with me one size does NOT fit all. Investments are in individual accounts and tailored to the risk tolerances and goals of each investor.
6) Those having any questions can contact me almost any time during the trading day and I will be there. As a retiree, I am not tied up in sales meetings, etc.
My older brother Michael who passed away a month ago didn't know much about the stock market and had little faith in it. He had a lot of money in his IRA's invested in the top stocks with the fund managed by venerable Dreyfus.
Since I'm coning into a chunk of this money and with me being the top financial guy in the family, I have been made aware of the goings on with this fund and what an eye-opener it is.
First of all, my brother was being charged about 3.3% a year by Dreyfus. And what kind of results was he getting for his money? The fund was little more than a glorified S & P index fund with there being about 75 bic-cap stock positions. Not surprisingly, there was absolutely no options activity in the fund - including NO covered calls whatsoever.
But what surprised me so much was how infrequently the fund managers changed the positions. Through the end of Aoril, there had been only ONE change in the fund - one large-cap stock was sold and another bought. Moreover, more than half the positions were those dating back as far as 2005. Less than half the fund had been changed in the last five years. And for this my brother was paying 3.3% a year?
Through the end of April, the Dreyfus Managed Stodks fund wqs ahead by about 12% - in line with market averages. But the heavy fees knocked the return back below market averages. Such a deal.
But even among those few who can sell naked puts, most deal at brokerages other than Ameritrade. These brokerages fear un suitability lawsuits and so they arbitrarily boost minimum margin requirements to two, three and even five times what they are at Ameritrade. So while I'm staring at 30% returns at my brokerage, those dealing with the likes of Merrill or UBS are looking at much, much less-attractive returns because of the arbitrarily-high margin requirements.
Surprisingly enough, even at Ameritrade where conditions are ideal, I'm told by the chief options principals there that almost nobody else there is doing what I do. So incredibly enough, I almost have this field entirely to myself.
Many many folks here can't do what I do because they are unable to garner NAKED put authorization at Ameritrade. Have I mentioned that almost anyone using my good offices IS able to get that all-important authorization? It's true.
By the way, if anyone is afraid of being taken in by a scam or Ponzi scheme, be aware that that can't happen with MY investors since nobody turns over money to me personally to manage. All trades are handled in the private accounts of the investors and all that I have is trading authorization - but NO authorization at all to deposit or withdraw funds.
If anyone here is interested in earning 25% in non-crashing markets instead of 1% in CD's, I can be contacted during market hours at (213) 222-5537. My real name is Alan Daniels, I'm a 70-year-old retired accounting manager and I have made a world-class discovery that will shatter market returns in all but major market crashes. How many people can truthfully say that they have methods that dramatically beats the market but I can say it and I have the results to prove it.
I'm just aghast that nobody here is taking advantage of what I have to offer but let's just say that my phone hasn't exactly been ringing off the hook. But a 5K investment would cost only 50 bucks. Try it and be amazed.
So now we see why a put such as the JCP 8's have much value when the chances are so small of the stock falling below that price. It's all of the cash-covered put sellers acting in their own interests and wanting to greatly reduce the onerous margin requirements that's responsible. It is THEIR buying that is jacking up the prices beyond what is reasonable.
Now for every buyer ther has to be a seller and if there is such a shortage of those like me who can sell the options short, just WHO is doing the selling? That one is easy - it is the OPTIONS MARKET MAKERS who are absolutely delighted to sell these semi-worthless puts while they continually jack up the price. These market makers know fully that the cash-covered sellers have to buy to reduce their margin and they aren't about to quibble for a few extra bucks per contract. So the market makers keep the prices as high as they can - and then comes along someone like me who can sell these things naked and earn these 30% kind of an nualized returns with virtually no risk.
I think that what I have discovered is one of the ghreatest niche investing discoveries ever and this golden goose is going to continually lay eggs because there is little to change the basic mechanism.
So why is it ME who has discovered this and almost nobody else? Well consider this:
1) Supposedly the best minds on Wall Street are the fund managers but they are almost all out of options. What's a few hundred thousand dollars or even a few million if you are running a $10B fund? The options market just isn't big enough to provide much for the funds and therefore the managers aren't even in these instruments.
2) Because they have big fears of options unsuitability lawsuits, the brokerages aren't granting many new authorizations to sell NAKED puts. As mentioned above, 98% of put sales are of necessity fully cash-covered and only 2% are able to sell naked puts.
Four years ago at the bottom of the crash, very deep-out-of-the-money naked puts such as the 5's and 8's weren't even offered. A put is an insurance instrument to protect holders of the stock somewhat if the stock collapses but with JCP at $18, who realistically would want to buy protection against the stock falling below $5 or even $8 within the next eight months? Especially when the real estate can be sold for $14 to $18 a share.
The only reason why the options exchanges even started introducing such low-stgrike options was due to clamoring by put sellers who can only sell fully cash-covered puts and cannot sell naked puts. About 98% of put sellers do NOT have NAKED put authorization and if they want to sell puts at all, it has to be FULLY CASH COVERED.
In fully cash-covered put selling, there has to be enough cash to withstand the stock going all the way down to ZERO. So for JCP for example, if an investor wants to sell say a Jan. 15-strike put which is currently $168 per contract, he has to put up a whopping $1,500 per contract. It's a reasonable play to be sure - 15% for eight months if the stock remains above $15. But this kind of investor can do way better if at the same time he sells the 15-strikes, he BUYS something like the 8-strikes which are at $23 asked. Because by buying those 8-strikes, the margin requirements are vastly reduced. Now the risk isn't from $15 to zero but from $15 to $8 since ownership of the 8-strike puts protects against declines below that price. Not that it is needed mind you but the brokerages will only impose margin requirements of $700 per unit with ownership of the 8's whereas margin would be $1,500 per contract without such ownership. The cash-covered put seller is more than willing to give up $23 per unit of his $168 in profits if he could reduce margin requirements by more than half. So now the net take is only $145 per unit instead of $168 but margin requirements are only $700 per unit and that's over 20%.
If it isn't above $23 by then, I'll just roll down to something like the 20's expiring in Jan. 2015. I can certainly lose short-term but to lose over the longer haul, the stock almost has to be a bottomless pit. It has been a long time since GG traded below $20 a share.
For those wanting an even safer investment, the 8-strike naked puts for January are now trading for $22 bid, $23 asked. The margin-safe price is all the way down to $9 per share (12.5% above the $8 strike price). Cash margin requirements are $80 (ten times the $8 strike) plus the $23 asked per contract or $103 all told. Up-front proceeds are $21.20 ($22 asked less 80 cents in commissions). So if held the eight months to expiration, the nominal return would be 20.6% which is 30.9% annualized. And with an expected early-out, the annualized return would likely balloon to the mid-to-high 30's.
And those that are ultra, ultra, ultra safe and want to invest in the FIVE-strike naked puts for January (margin-safe price of just $5.65 with the stock now $18.01), the bid is $10 and the ask is $11. Cash margin requirements are therefore $50 (ten times the strike) plus $11 or $61. Sellers of these options would receive $9.20 net per contract after commissions. And that's still 15.1% for eight months or 22.6% annuali9zed. And with the virtually-certainearly-out, actual annualized returns will be mid-20's.
Can you imagine earning a TWENTY-FIVE percent annualized return for JCP merely holding $5.65 when the stock is at $18, the underlying real estate is worth $14 to $18 per share, the 10-year low is $13.55 and George Soros just ten days ago bought 9% of the company's stock at $16?
Much to the dismay of my detractors, I had my Eureka moment retgarding this kind of situation in Aug. 2011 and I've been doing nothing but coining money for myself and my group of investors ever since. Which do you suppose is the better investment if you are looking to earn 15% over the next eight months - just needing JCP to be $5.65 or more or say needing Pfizer to be a $33 stock at which point the PE would be FIFTEEN for a 4% to 5% earnings grower?
Is there a more poorly-managed company out there than JCP? If not for options, I wouldn't touch this company as at best I see the stock just holding current levels; the upside is almost nil. But the fact is that with real estate valued at between $14 and $18 per share, it's almost impossible for this thing to really crash. And if the stock's downside isn't that much, selling very deep out-of-the-money naked puts currently provides the safest investment I've ever seen that will return well over 20% on your money.
At TD Ameritrade and ONLY that brokerage, NAKED put margin requirements are as follows:
1) Ten times the chosen strike price as long as the stock remains 12.5% above that strike.
2) The ask price per contract
Currently, JCP is at $18.01 with the ten-year low being $13.55. The very safe 10-strike naked puts at Ameritrade are quoted at $43 bid and $45 asked per contract. So cash margin requirements at Ameritirade are $100 to satisfy the ten times the strike price requirement and $45 as the asked price pf pme cpmtract/ So total cash requirements come to $145. What a seller of one contract would receive is the bid price of $45 less 80 cents in brokerage commissions or $44.20 net. So if the stock can just stay abofve #$%$ more than $10 which is $11.25, the return if held to expiration would be $44.20/$145 which is a nominal 29.0% for eight months which is an amazing 43.5% annualized. But investors will do even better than that annualized since the options will be able to be bought back for the exchange minimum of $1 around Halloween when the time remaining to expiration is only a few months.
05/14 - initiation of the 295K portfolio with the S & P at 1,634
05/15 - 295,950 (S & P 1,659, high valuation from inception)
05/17 - 294,080 (S & P 1,667, low valuation from inception)
Dn 0.3%. Portfolio gain to date
Up 2 0%. S & P 500
Note: 60% of this portfolio is still in cash. More orders will be entered this week.
04/03 - initiation of the 200K portfolio with the S & P at 1,570
04/03 - 199,910 (S & P 1,554)
04/04 - 200,510 (S & P 1,560)
04/09 - 197,945 (S & P 1,569), low valuation from inception
05/10 - 207,800 (S & P 1,634)
05/15 - 213,820 (S & P 1,659), high valuation for 2013 to date
05/17 - 212,940 (S & P 1,667)
Up 6.5%. Portfolio gain to date
Up 6 2%. S & P 500
01) $5,000 earned on AIG (40 contracts at $17 now; was $142 on 12/31). $680 remains.
02) $5,080 earned on AGNC (40 contracts at $146 now; was $273 on 12/31). $5,840 remains.
03) $3,800 earned on C (50 contracts at $16 now; was $92 on 12/31). $800 remains.
04) $2,880 earned on CSCO (80 contracts at $8 now; was $44 on 12/31). $640 remains.
05) $2,640 earned on PBR (60 contracts at $64 now; was $108 on 12/31). $3,840 remains.
06) $2,600 earned on PFE (50 contracts at $21 now; was $73 on 12/31). $1,050 remains
07) $2,565 earned on new PFE investment (50 contracts - includes $35 in commissions). $1,050 remains.
08) $7,500 earned on HPQ (100 contracts at $10 now; was $85 on 12/31). $1,000 remains.
09) $3,570 earned on INTC (70 contracts at $13 now; was $64 on 12/31). $910 remains.
10) 10,300 earned on BBY (100 contracts at $13 now; was $116 on 12/31). $1,300 remains.
11) $3,750 earned on F (150 contracts at $6 now; was $31 on 12/31). $900 remains.
12) $2,430 earned on TEVA (30 contracts at $32 now; was $113 on 12/31). $960 remains.
13) $1,020 earned on new AAPL investment net of commissions. $4,180 remains.
14) $3,585 earned on new GLW investment net of commissions. $750 remains.
15) $2,840 earned on new BIDU investment net of commissions. $3,540 remains.
16) $2,760 earned on new BAC investment net of commissions. $900 remains.
17) $3,180 earned on new JCP investment net of commissions. $2,300 remains.
18) $7,400 earned on JCP (200 contracts at $41; was $78 on 12/31). At least $4,100 remains to Jan. 2014.
19) $1,930 earned on new QCOM investment net of commissions. At least $2,340 remains to Jan. 2014.
20) $6,535 LOST on new GG investment net of commissions. At least $8,875 remains to Jan. 2014.