Following are the activity from the previous month:
The cash coverage requirements on the puts account for about 44% of our cash position. The cash position in our portfolio is high at around 40%. We will continue to use cash-covered puts along with direct purchases spread-out over a period of time to build the portfolio.
Below is our updated portfolio – the overall portfolio is up 7.03% compared to our cost basis:
Below is a summary of transactions during the year:
We have covered calls written against one-third of our ICICI Bank (IBN) shares (Jan 2012 55). We also have cash covered puts on Cisco (CSCO) shares (Jan 2012 20 at $2.64), Berkshire Hataway (BRK.B) shares (Jan 2012 75 at $7.15), Itron (ITRI) shares (May 2011 60 at $6.90) , Noble Corporation (NE) shares (June 2011 33 at $2.62), Abbott Labs (ABT) shares (Jan 2012 45 at $4.40), Johnson & Johnson (JNJ) shares (July 2011 60 at $2.47), H&R Block (HRB) shares (Jan 2012 10 at $1.60 and 12.5 at $2.30), Alcoa (AA) shares (Jan 2012 15 at $1.70), Nutrisystem (NTRI) shares (June 2011 17 at $1.30), and Gol Linhas (July 2011 12.5 at $0.85 with a cash coverage requirement of about 44% of our cash position.
We added Canon (CAJ) to our watch list. Our updated watch list follow – Almost Family (AFAM), Applied Materials (AMAT), Air Products & Chemicals (APD), Brown-Foreman (BF-B), Canon (CAJ), Disney (DIS), Darden’s Restaurants (DRI), Goldman Sachs (GS), Home Depot (HD), McDonalds (MCD), 3M Company (MMM), China Nepstar (NPD), Pitney Bowes (PBI), Procter & Gamble (PG), Rovi Corporation (ROVI), UPS Corporation (UPS), VF Corporation (VFC), and Waste Management (WM).
- Our cash-covered put option on TD Ameritrade (AMTD) Feb 2011 15 at $1.35 written on 7/13/2010 expired worthless. Also the cash-covered put option on Quality Systems (QSII) Jan 2011 60 at $5.50 that we wrote on 10/29/2010 was closed on 2/15/2011 at $0.90. The transactions netted a total gain of around 0.3% based on the overall portfolio value.
- Wrote cash covered puts on the following: H&R Block (HRB) Jan 2012 12.5 at $2.30 on 2/15/2011 with <1% of portfolio, and Gol Linhas (GOL) July 2011 12.5 at $0.85 on 2/15/2011 with <2% of portfolio.
- Bought K12 Inc (LRN) at $32.21 on 2/15/2011 with around 1.5% of portfolio.
The cash coverage requirements on the puts account for about 44% of our cash position. The cash position in our portfolio is high at around 40%. We will continue to use cash-covered puts along with direct purchases spread-out over a period of time to build the portfolio.
Below is our updated portfolio – the overall portfolio is up 7.03% compared to our cost basis:
| Stock | Buy Date | Buy Price | Current Price | Current % Of Portfolio | Unrealized % Return | Yield as % of Portfolio Value |
| Altria (MO) | Various | 19.19 | 24.79 | 1.85 | 29.17 | 0.16 |
| Philip Morris International (PM) | 1/4/2005 | 32.19 | 61.43 | 1.83 | 90.82 | 0.12 |
| Kraft Foods (KFT) | Various | 26.33 | 30.91 | 1.84 | 17.41 | 0.09 |
| Pfizer (PFE) | Various | 22.13 | 19.19 | 2.00 | (13.28) | 0.09 |
| ICICI Bank (IBN) | 5/18/2006 and 08/01/2008 | 25.28 | 45.57 | 2.04 | 91.74 | 0.11 |
| Central Europe & Russia Fund (CEE) | Various | 39.23 | 42.27 | 2.20 | 7.76 | 0.01 |
| Itron Inc. (ITRI) | 11/07/2007 | 85.01 | 57.71 | 0.86 | (32.19) | None |
| iRobot (IRBT) | 12/18/2007 | 18.65 | 29.13 | 1.73 | 57.53 | None |
| LDK Solar (LDK) | 01/22/2008 | 30.49 | 14.45 | 1.29 | (29) | None |
| Aegon N.V. (AEG) | 04/28/2008 | 15.99 | 7.69 | 0.92 | (21.59) | 0.00 |
| Frontline Limited (FRO) | 10/06/2008 | 36.95 | 26.16 | 1.17 | (20.40) | 0.08 |
| DryShips Incorporated (DRYS) | 02/09/2009 | 6.96 | 5.03 | 0.52 | (27.84) | 0.00 |
| Plum Creek Timber (PCL) | 07/23/2009 | 30.50 | 42.53 | 2.53 | 39.45 | 0.14 |
| CPFL Energia S.A. (CPL) | 07/28/2009 | 50.45 | 75.85 | 2.26 | 50.35 | 0.18 |
| BP plc (BP) | 08/05/2009 | 51.49 | 47.93 | 1.43 | (6.91) | 0.09 |
| AT&T (T) | 08/27/2009 | 26.38 | 28.57 | 1.70 | 8.29 | 0.12 |
| Sysco Corporation (SYY) | Various | 25.92 | 28.64 | 2.13 | 10.48 | 0.10 |
| Exelon (EXC) | 12/30/2009 | 49.38 | 41.58 | 1.86 | (15.80) | 0.16 |
| Telefonica SA (TEF) | 02/09/2010 | 22.93 | 25.25 | 2.26 | 10.12 | 0.24 |
| Vonage Holdings (VG) | 04/06/2010 | 1.51 | 4.26 | 1.27 | 181.31 | 0 |
| Archer Daniels Midland (ADM) | 04/23/2010 | 28.27 | 37.65 | 2.24 | 33.16 | 0.09 |
| Intel Corporation (INTC) | Various | 21.91 | 22.14 | 2.64 | 1.05 | 0.12 |
| Google Inc. (GOOG) | 05/03/2010 | 528.36 | 630.08 | 1.88 | 19.25 | 0 |
| Cardinal Health (CAH) | 05/06/2010 | 34.42 | 42.14 | 1.88 | 22.42 | 0.06 |
| Pearson PLC (PSO) | 05/06/2010 | 14.32 | 17.19 | 1.79 | 20.01 | 0.16 |
| Nokia (NOK) | 05/14/2010 | 10.35 | 9.19 | 1.37 | (11.21) | 0.16 |
| Harris (HRS) | 06/07/2010 | 45.65 | 48.65 | 2.17 | 9.59 | 0.08 |
| Beckton Dickson (BDX) | 06/23/2010 | 70.20 | 81.28 | 2.42 | 15.78 | 0.10 |
| NYSE EuroNext (NYX) | 10/22/2010 | 30.38 | 37.79 | 2.25 | 24.39 | 0.15 |
| Owens & Minor Inc. (OMI) | 10/22/2010 | 28.11 | 31.42 | 1.87 | 11.78 | 0.08 |
| Encana (ECA) | 11/8/2010 | 29.22 | 30.97 | 1.84 | 6.08 | 0.10 |
| Nucor Steel (NUE) | 1/21/2011 | 44.96 | 48.74 | 2.18 | 8.40 | 0.12 |
| K12 Inc (LRN) | 2/15/2011 | 32.21 | 33.77 | 1.51 | 4.83 | 0.00 |
| Cash | 40.27 | |||||
| Total Portfolio | 7.03 | 2.65 |
Below is a summary of transactions during the year:
| Stock | Buy Date | Buy Price | Sell Date | Sell Price | % Gain (Loss) | % Portfolio Return* |
| GSK Jan 2011 35 Put | 1/22/2011 | NA | 3/26/2010 | NA | NA | 0.14 |
| NUE Jan 2011 40 Put | 1/22/2011 | NA | 3/26/2010 | NA | NA | 0.17 |
| ADP Jan 2011 40 Put | 1/22/2011 | NA | 6/21/2010 | NA | NA | 0.10 |
| COST Jan 2011 55 Put | 1/22/2011 | NA | 8/16/2010 | NA | NA | 0.10 |
| QSII June 2011 60 Put | 2/15/2011 | NA | 10/29/2010 | NA | NA | 0.15 |
| AMTD Feb 2011 15 Put | 2/19/2011 | NA | 7/13/2010 | NA | NA | 0.15 |
| Realized Gain/(Loss) YTD | - | - | - | - | - | 0.79 |
- % Gain/Loss Relative to Portfolio Value at Beginning of Year + Deposits
- The table assumes realization of profits associated with selling options only after the option is exercised or expiry.
We have covered calls written against one-third of our ICICI Bank (IBN) shares (Jan 2012 55). We also have cash covered puts on Cisco (CSCO) shares (Jan 2012 20 at $2.64), Berkshire Hataway (BRK.B) shares (Jan 2012 75 at $7.15), Itron (ITRI) shares (May 2011 60 at $6.90) , Noble Corporation (NE) shares (June 2011 33 at $2.62), Abbott Labs (ABT) shares (Jan 2012 45 at $4.40), Johnson & Johnson (JNJ) shares (July 2011 60 at $2.47), H&R Block (HRB) shares (Jan 2012 10 at $1.60 and 12.5 at $2.30), Alcoa (AA) shares (Jan 2012 15 at $1.70), Nutrisystem (NTRI) shares (June 2011 17 at $1.30), and Gol Linhas (July 2011 12.5 at $0.85 with a cash coverage requirement of about 44% of our cash position.
We added Canon (CAJ) to our watch list. Our updated watch list follow – Almost Family (AFAM), Applied Materials (AMAT), Air Products & Chemicals (APD), Brown-Foreman (BF-B), Canon (CAJ), Disney (DIS), Darden’s Restaurants (DRI), Goldman Sachs (GS), Home Depot (HD), McDonalds (MCD), 3M Company (MMM), China Nepstar (NPD), Pitney Bowes (PBI), Procter & Gamble (PG), Rovi Corporation (ROVI), UPS Corporation (UPS), VF Corporation (VFC), and Waste Management (WM).
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