Stock Picks for Monday July2, 2012

Ticker Trade Date Price Ex. date Ex. Price % chg Profit % Profit Shares Position value Cum. Profit # bars Profit/bar MAE MFE Scale In/Out KFT Open Long 7/2/2012 38.62 7/2/2012 38.62 0.00% -14.00 -0.14% 258.933 10000.00 -28.00 2 -7.00 0.00% 0.00% 0/0 MSFT Open Long 7/2/2012 30.59 7/2/2012 30.59 0.00% -14.00 -0.14% 326.904 10000.00 -14.00 2 -7.00 0.00% 0.00% 0/0

Systematic Covered Call Writing

Here is a link on Systematic Covered Call Writing

MEASURING STOCK PORTFOLIO PERFORMANCE

This was posted on the just covered calls forum and I thought it was well written and is similar to my own aspirations. Written by Ed Boot MEASURING STOCK PORTFOLIO PERFORMANCE I consider myself a bottom-line oriented investor. I believe the single best measure of investment performance is what I call ‘Total Account Value Return Percent’. If I started the year with $100,000 in my account and ended that year with $110,000 (and have not made any deposits or withdrawals), then my ‘Total Account Value Return Percent’ is +10.0%. My personal goal is to achieve an annual minimum return of + 15% every year, and to beat the Dow by at least 4%. I measure account value monthly, on the last day of each month showing my Account Value (the amount my account is worth at the close of business that day if I disposed of all assets and converted everything to cash). I chart performance by gain/loss for the month and for the year to date- indicating how my account has performed for each period. This method makes it easy to compare my performance from all activities that occurred in my account and compare it to the return of the Dow, S&P, etc. and that is what I am looking at – how did my investment performance measure against the indexes. In addition to my goal of account value return I also measure my personal objectives for the year regarding my disciplines, strategies, and internal rules, but the best measuring stick is always my performance vs. the indexes. The Total Account Value Return Percent approach incorporates those components that add value to a covered call account (option income, dividends, and capital gains) and also the aspects that subtract value from the account (capital losses). I prefer this approach to others both for its simplicity as well as for its ‘bottom-line’ focus. It also has the advantage of enabling simple comparison with whatever benchmark you might choose to compare your results against (Dow Jones, S&P 500, Russell 3000, etc.) since the ‘Total Return Percent’ is the primary method used by virtually all indexes, and is readily available. Most of my covered call positions are established out-of-the money, slightly out-of-the-money, at-the-money, or slightly in-the-money. This is consistent with my overall market assessment of a ‘neutral’ performance for the market every year, which of course is unknown for 2009, was too optimistic for 2008 and too pessimistic for 2007. If you are a very conservative investor and seek to minimize the possibility of loss each year, then always sell deep-in-the-money covered calls, however, this does lead to less-performance. Deep-in-the-money covered calls will substantially limit the likelihood of loss; however, it will also prevent you from fully participating in market gains in more bullish periods (such as the March-December 2009 time-frame) as well as in losses in more bearish periods. I also utilize Naked Puts (NP) or Cash Secured Puts (CSP) either Out of the Money or Deep out of the money Puts. I often enter the initial stock transaction with an NP, especially in turbulent times and generally look for a minimum of 10% downside protection. My ultimate objective is to own the stock (I never sell NP’s on a stock I don’t want to own) which provides for 3 way profitability while NP’s only provide one way. Over the past 81 years, the S&P 500 has declined in 23 years and increased in 58 years. The year 2009 seems destined to be a big winner, but I believe that by consistently applying my covered calls strategy every month, I will be able to achieve my investing objective which is to achieve annualized returns that exceed the overall stock market averages on a consistent basis over a period of several years. Ed Boot 11/10/2008

Value Investing

I thought this was an iteresting article on the Graham number. http://www.fool.com/investing/general/2012/06/08/investing-101-graham-undervalued-stocks-with-ubs-b.aspx