Patrick's Rants


HMY Call Closed

Filed under: Money,Stocks — site admin @ 11:13 am

The 9.00 January calls in HMY were hovering close to $0.05 and since I can buy to close, or cover, with TD Ameritrade for no commissions when the options are a nickel or less I placed an order good for the day on Friday. $5.02 (exchange fees are always added) later and I have closed the call portion of my HMY position.
As I previously wrote, gold is a volatile holding and stocks do what stocks do. I don’t have a crystal ball, but do expect more volatility in my gold stock holding and look to sell the 9 call again two to three months out, this time for more than the $0.39 I got on the last roll.

The recap for HMY return on the call only sold for $0.39 and bought to close at $0.05. To be as fair as I can with this transaction I’ll allocate about half of my commissions on the buy-write to the calls (although I was only charged $0.78 for this part of the trade, it would have been more without the “buy” side). So $34.00 – $5.02 is 577.29%. Annualized it’s a ridiculous 305,699%. Let’s be a little more down-to-earth. I bought this stock because it had a great return as a buy-write stock. The total investment which includes my initial purchase and the closing transaction is $814.01. I received $38.22 for the call option for a three month return of 4.7% – annualized it’s 18.8%. Not the ridiculous number from above, but still a decent return.

Hey, this is what I’m doing in my own account. I’m posting it for entertainment and educational purposes only. Do your own due diligence.


Looking to get back into GTE

Filed under: Money,Stocks — site admin @ 9:02 pm

After freeing up some capital and running my screeners at TDAmeritrade, I’m looking to jump back into GTE. I’m looking for the price to move in the range of 7.04 – 7.60 where it’s been recently. I made a few quick turns in 2009 and 2013. Checking back on my spreadsheet, I realize I made an error in my original post. My first trade was 19.15%, not around 9% as I first wrote. That was about a three week turn. The second trade netted 11.4% in 12 days and the last trade returned 14.4% in about three weeks. The annualized returns are just ridiculous… I should have just kept trading GTE instead of venturing over to Africa with HMY.

This is what I do, posted for entertainment and educational purposes only. You need to consult your own experts and make up your own mind. You could end up holding onto a dog gold miner like I did. 🙂


Portfolio Review

Filed under: Money,Stocks — site admin @ 7:12 am

My active account has taken quite the beating this year, pretty well wiping out all of my gains since I opened it. It is a dinky little account, though so no harm no foul, it could just be worth a bit lot more. The dividend stocks that I hold continue to pay out their dividends and I patiently wait for recovery of HMY and EGY

On a much more positive note, my wife’s passively(semi-actively?) managed account is doing just fine. We look at the Prime Interest Rate to decide which ETF or Mutual Fund is the “right” one for right now, move the primary investment as the Fed makes adjustments that move the Prime Rate, dollar cost average into the funds as deposits are made into the account. I may add options – covered calls and cash secured puts – but no single position has round lots so there will have to be some rebalancing or continued growth of holdings before I can add that extra boost to the growth of her account.

In the overall scheme of things, my active account is only a small part of my expected total retirement funds so for it to be beat up down and sideways – while a bit ego bruising – is not currently a major concern. I do, however, have to prove to myself that I’m capable of taking the existing nest egg and making it grow over time


All That Glitters

Filed under: Money,Stocks — site admin @ 6:58 am

HMY has taken a bit of a beating as of late, most recently from a George Kesarios in his article, Mining Stocks to Avoid over on Seeking Alpha. It’s not usually a good thing when your holdings get mentioned over there. At least not when my holdings get mentioned over there since they do typically upset the apple (or gold, or battery) cart when they start writing. I can’t say that I can take issue with George’s assessment. Heck, look at the long term chart and you will see a decline in price over the past several years. But what I still see fundamentally is a company showing positive earnings per share and real cash in the form of dividends (I’m not a huge dividend investor, but it’s nice to be “paid to wait”) It has a price to earnings ratio of 10 and that usually tells me that it’s not overpriced – I try to stick with a P/E below 20.

Kesarios states that he believes that Harmony Gold, along with others, failed to cash in on the huge run up in gold pricing (and look at their long term chart – he’s kinda right) and gold is going to completely collapse soon. Whether the gold hoarders or doomsday preppers are done collecting all the gold they ever want is hard to say. Look around. There are so many places here that are buying gold that we could be at the top of the bubble – Warren Buffet says be fearful when others are greedy – or we could be at the start of another run.

I’m holding 300 shares of HMY. I’m expecting the price to go to $7.20 as I posted before, but if it doesn’t happen within the next two to three months it will be time to start looking at selling the calls. Enough calls over enough time recoups the investment and produces a little bit of cash flow, but it also means I’m holding these for a year. I don’t see a total melt down of this stock like happened with ABAT, but one can clearly see an article on Seeking Alpha gets read by a lot of people and prices are definitely affected when they beat it with their keyboards.

I have HMY in my account. Yes I will be holding it until I get the $7.20 price, decide that I can’t wait any more and adjust my price, or collect call premiums for the next year or so. Don’t copy me, you could do just as poorly. This is what I’m doing in my own account. This is for entertainment and educational purposes only. Do your own research and due diligence.


Fool’s Gold

Filed under: Money,Stocks — site admin @ 6:29 pm

Today I added 200 shares of HMY to my existing position. The price this morning was down around $6.45 and I figured I could catch a round turn to sell at $7.20. As usually happens when you think you know the bottom of the chart, the market proves you wrong and HMY closed the day at $6.25. The order is in to sell 200 shares at $7.20, so we just wait.

This is my own account, published for entertainment and educational purposes. Do your own research.


New Position

Filed under: Money,Stocks — site admin @ 6:59 am

I added a covered call position in HMY using a buy-write order. Using the buy-write order, you can buy the stock and sell the covered call in one transaction which saves in commission costs. HMY hit my screener and I decided to add 100 shares to my account. I placed the order to buy using the January $9.00 calls while HMY was sitting at just over $8.00 for a net debit of $7.60.
Here’s what happened, HMY dropped to $7.99 and the call dropped to $0.39 – net price $7.60 plus commissions.
This one is going to be a sit and wait, but three things are possible.

  1. The price goes above $9.00 by expiration, and I have to sell for about an 18% gain (in four months)
  2. The price just kind of hangs where it is… It’s a gold mining stock; it’s more likely to be all over the place. If it just “hangs”, the calls will expire worthless, I’ll have collected about 5% premium (~15% annualized) and I’ll be looking to sell another round of calls
  3. The price drops due to labor unrest (or any other reason, including bloggers on other web sites 😉 ), I keep the option premium and have to sit on it for a while before being able to sell more calls or close my position.

Disclaimer: This is what I’m doing, it’s for entertainment and educational purposes only. I don’t expect you to follow my lead in any way shape or form. I expect you to do your own research, to make up your own mind and take responsibility for your own actions.

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