Am I Crazy?

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Update:
2/12/2014
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Well, I saw my new trade in T go up in value $220.98 in 24 hours. I weighed the good and the bad and decided that $220.98 is more than enough money to collect in a 24 period. The total is after the trades are factored in as well.

I wanted to let the stock run up a little bit more, and I even looked at selling the calls. After looking at all the possibilities, I decided that a gain like that is too much to play with, and now, I am ready to play another hand with an even bigger cash hoard.

My main reason for taking the cash is that who knows what tomorrow will bring. If the market falls, I am ready to buy. If it goes up, I miss the gain, but I made a nice little profit either way.

What made me sell today is that I read the saying that “Bulls make money, Bears make money, pigs get slaughtered” last night and it hit home. I cannot tell you how many times I had a nice gain only to see it evaporate in minutes. Greed is a big factor when trading. Most traders want the big win that never seems to present itself. I made a plan to take the cash if it is about a 1% gain, however, this trade resulted in a .67% profit.

I was just talking about being flexible yesterday, and I listened to what I said.
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I was not only talking about moving from one stock to another because it represented a better trade possibility, but I was also talking about taking the profits if they come my way. Sure I wanted the big trade. As a matter of fact, I was working this morning and thinking about how nice it would be to pull off a $500 profit with this trade. I was feeling great, but wondered if the stock would run up that much before it took a breather, and I was mulling over the calls. When I saw the gain getting close to $200.00, my thoughts changed. I work way too hard for $200.00 bucks, and it was staring me right in the face. I could not pass it up. By the time I changed the order, the price moved up a bit, and I got a better price than I expected- Another bonus!

So, I took the profit. It was not the amount I set out to get, but it is quite a bit of cash. I am staying flexible.

To put it in perspective, I made $220.98 in profit in a trade that took one day. By the hour, I took in $9.21/hour for a 24 hour period. Sounds good to me. I might not be hitting the big scores, but those seem to be few and far between.

As soon as I sold, I had a new order in for 972 shares of T at 34.30. I might get lucky and pick them up tomorrow as the market opens. I have noticed in the past that orders sometimes fill at really depressed prices as soon as the market opens and then the prices go back up. We will see how it turns out.

Good luck to all. Any thoughts are greatly appreciated.

Keep cranking,

Robert the DividendDreamer

Update:

2/10/2015

Not much to update as of today. The
orders have been sitting and GE and T are just basically sitting still. FE turned a little to the upside and the call moved higher, but not high enough to generate significant income.

We will see how tomorrow and the rest of the week goes. Good luck to all.

Keep cranking,

Robert the DividendDreamer
—————————————————————-

Read on, and let me know.

Well, I have an opportunity to capture a dividend in my trading account. Now that I sold out the T shares and booked the profits, I have placed a limit order for GE with the proceeds. I have a limit price 1.25% lower than the closing price today. If it is filled Monday, I will be able to capture the dividend on the 19th along with my other shares.

I plan to sell the Feb 20th 25 calls as soon as it fills ( if it does). That will allow me to capture the dividend, collect the call premium, and if it gets to 25, collect almost .80 cents on the shares all in 11 days time.

If the entire process plays out, I will net about 5% in less than 2 weeks. It is a lot to ponder, but I have a plan, and I am going to follow it.

Also, the T dividends that I collected last week and the call proceeds that I collected in the last 3 weeks have been rolled into the total, so it will be compounding itself. We will see how it goes.

I have also placed new sell to open calls on FE for Feb 20th 40’s. If they fill, I would essentially be writing the same call I just closed. If it fills, all the better. If it does not, nothing will be lost and I will write calls out to March or April.

Well, I cannot wait until Monday. I am going at this full speed. I can’t predict the market, however, I do know that the market fluctuates and going straight up is probably not what it is going to do. I am going to buy low (I hope), and sell high (I hope even more). Either way, I am going to be collecting dividends and selling calls at prices beyond my actual cost for each share purchased.

I have placed all of my orders and will be waiting for the markets to open. If things go my way–great. If they do not, I am still doing ok.

Just a little something for thought. My original purchase in my trading account was 486 shares of GE at $24.87 for a total of $12086.82 on October 10, 2014. If I would have let it just sit there, I would have collected 45 cents in dividends since that day and the shares would be sitting pretty much flat. However, I have traded those shares 6 times and reinvested the dividends to end up with $13645.52. At this moment, I am $1558.70 in the black for a total return of 12.9% in 83 days.

Since it is in an IRA account, the money is constantly rolling into the next purchase and compounding.
I am very happy with the return. Hopefully, it continues in the right direction.

Any thoughts will be greatly appreciated. Good luck to all.

Keep cranking,

Robert the DividendDreamer

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About dividenddreamer

Doing what I can to make the best of today and the most of tomorrow.
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4 Responses to Am I Crazy?

  1. DivGuy says:

    I prefer looking at my dividend portfolio with a long-term mindset, so I probably wouldn’t sell and buy 6 times like you did, but your results are there! What could I say? It might be risky but it might be worthy… Things is, nobody knows! Been there, done that! 😉

    • I have a long term portfolio setup also. I just wanted to give my idea a try again. Since the money is in an IRA, I do not have cap gains or taxes on the divs. Anyway, just went back into T and picked up the extra shares with the profits from the last trade. Thanks for stopping by.

      Keep cranking,

      Robert the DividendDreamer

  2. TwoInvesting says:

    Robert,

    Not related to investing, but I just realized that your second picture is actually a flexible guy. The first time I saw it and when I added you to my feedly page I thought that it was actually a silhouette of some guys long hair! A Bob Marley hair silhouette so-to-speak.

    Keep up the great posts. I’ll have to read through them in more detail when I get more time.

    Scott

    • I had somewhat of the same thought as you. It reminded me of a picture of Jesus that my brother painted in the late 60’s that I always saw when I was a kid. It kind of has that 60’s vibe and the big hair with all the psychedelic colors.

      I guess the picture is like a Rorschach test (ink blots) and you see what you think it is.

      Thanks for stopping by.

      Keep cranking,

      Robert the DividendDreamer

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