markets

Well its been a rough month in the markets thus far. I watched many banks melt and then come back some after falling. BAC, BMO, and WFC were the ones i watched closest.

If i had a few more dollars to spare i may of bought calls on some last week, but it is now too late. I have some spare cash, but that should be put to work shortly by my wife and her furniture shopping for our new house.

What little cash i did have i used to average down on t.CGS and N.CLCT ($2.50 and $7.50 respectively) which was prematurely early as both fell further.

I had to laugh when Citi group 'beat expectations' by only losing 2.5 BILLION! this quarter. Wow how many businesses can say we had a good quarter cause we only lost a couple billion?

I am contemplating on selling out some of BVF if it gets up over $12. I could also write covered calls on the remaining shares. I fear that after the next vote for the new board it will still be the old board. The market is telling us this isn't good because last vote shares fell after it was announced who won.

I personally like Eugene's board better than the current slave proposed. Seems to have less risk in the new alternative.

Two other companies have come to my attention from reading the many blogs, articles and sedar/edgar reports. WLP-N seems to be popular with the larger Value guys (Buffett, Klarman). UNH-N is in the same sector and equally beatin up.

Refiners VLO-N and SUN-N have fallin 50% in a short period and oil is now dropping. Refiners can't lose money for too long. Eventually prices will catch up and these might be good picks.

CUS.UN-T got below $4 briefly and still has a good yield. GCI-N has a similar chart to CGS-T and appears to be going bankrupt (according to the chart). This sector is getting hit bad with all the recession fears flying around.

I hate to break the bad news, but we've been in a recession (in US) for a year now and possilbly longer. Canada appears to be heading that way, but likely not as bad (hopefully).

I watch all sectors in order to try and bottom fish for some 'cheap companies'. LUN-T ($5.09) and BWR-T ($0.35) seem to be two that are distressed right now. For different reasons. LUN has aquired many companies and is trying to swallow them still. BWR is just not getting its costs in order and needs to improve margins.

Besides health care companies which continue to drag lower some consumer goods companies are feeling the pinch. One bright spot is K-N which seems to be on an uptrend? SBUX-N has been on a nice slide, and oil companies like TLM-T have pulled back far more and faster than the price of crude.

For a longer term play one might look at CCO-T in the mid $30's or PWF-T below $30 and write covered calls. Both are attractive for differing reasons, but may provide some good yields in a poor market (yield= dividend + call premiums).

DH

dismal performance

Sometimes it is better to do nothing than to do when it comes to investing. Many an article are written on us 'traders' who seem to think we can beat indexes and try to find a formula for it. Most lose to the index. I am 1 for 5 for beating the TSX (last yr i was up 20%+). Every other year i would of been better just to ignore the market. I have only been trading options for the past 2 years however.

Well by now you've figured while i don't have the formula i am not short on ideas and ways to try and find it. Biovail continues to dissappoint. The latest downgrade came yesterday and sent the stock tumbling down more than it went up the previous day.

I by now should have been placing more bets on different ideas. Two quick examples were rumours of BUD-N takeover by Inbev should have prompted me to buy a few calls or atleast sold some puts? Next I don't know what i was thinking in not buying BCE calls. The risk reward should of made for a nice trade. I saw Friday on NY exchange after the close BCE shares up almost 10% or $3.+ .

Now i don't mean to beat a dead horse here (especially at the sake of losing money) but pharma companies for the most part have been destroyed this year. All the big names are down, some more than others, yet they keep falling and the dividend yield keep rising. I need to start buying shares and writing calls on these. PFE, SNY, GSK.

Going forward in my Registered accounts i have continued to invest on dips (money goes in monthly to a money market fund) and have been upping my contributions to US and Overseas funds (much to my own demise).

Some US banks like BAC-N and maybe our own BMO look like possible call writing candidates right now? Attractive yields and suppossed 'ok' balance sheets.

Well little has changed for me. Options expired yesterday and lost another $500 or so on BVF calls. No new buys, but watchlist continues to grow. Trying to find good entry points right now is tough, because the market continues to falter (US) and it feels like good money is just being thrown after bad. I guess thats why investing should have long term objectives with disciplined entry points.

Next update when something exciting happens...

DH

New Post?

Well its about time.

My trading has pretty much been as my blog. Watch and do nothing. Well not exactly, but close.

First off updates regarding trades. My watchlist of CGS, TDG, and AKT.a has done well. The 2 have gone up nicely, both paying dividends along the way. CGS has continued down into the abyss however. I finally got around to buying when i saw other insiders picking up shares around $5. My cost is $4.05. I only bought a few so i can average down if it falls below $3.

I also bought CLCT for $9.75 and PNSN for $12.

I now have a Questrade account set up and its fees are ultra low. So i started buying when i completed that and closing my CIBC edge account.

I still hold BVF and collect the dividend. My average cost after dividends and protective puts is $14.40. I have some outstanding calls (is this a reocurring theme or what?) which expire in June. I hope the new share buy back will help the price up. The board is up for nomination 2 days after my options expire so if they like their jobs they should use the buy back to get the price up some!

MTE-N is a new addition among others to my watch list. Indian telco thats really cheap! The ADR has been hit by falling rupee relative to the US $.

My option trades:

DML: ended at $7.53 when its April option expired. I showed a profit for that of $0.45 which works out to be 5% in 3 months. Also noted was the large volatility and with this written call my max loss at any time in the 3 months was only 3.7%. Seems like this trade went ok.

TLM: very different trade result here. Stock wasn't taken, which turns out to be a good thing. You had downside protection so when the call expired in March the trade was only down just over 1%. BUT right after that the shares have jumped so this trade worked out ok too.

I am really kicking myself right now because i should have been writing calls on BVF for the past few months!

I still see pharmaceuticals cheaper compared to many sectors. KG in the US may now be showing progress.

If only i had bought TCK.b calls in Jan. Wow did that company go on a ride for the past 6 months. Too bad so sad.


One final note: If the wife would let me i would love to load up on CGS shares below $3. I will buy more, but not with the house equity of almost 100k that i was jokingly threatening to use.

DH