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Bro, do you even lift?

Missed a workout on Monday.

music selection:  “Layla (Unplugged Live)” — Eric Clapton

waist-line:  38 inches

I missed my normal Monday workout.  I had an … intestinal thing.  And I was concerned squatting might produce … leakage.  Don’t want to embarrass myself and get kicked out of the gym.  My gut is back to normal and I made it in today.  Squatted 140# with no trouble and feel like I can probably go 200 or more before I start failing.  Got through all five sets on the bench press without trouble.  Barbell row is becoming challenging as my grip doesn’t want to support that much weight.

There are still no new collars to be found.  Next week, I’ll corner the manager again and try to find out if I can speak to his supervisor.  It seems to me the ‘big boss’ is denying approval to cover the expense.

Next workout includes a deadlift.  I don’t enjoy that lift at all.  I need to watch the form videos again and get accustomed to doing it right.  And I need to improve my grip.  I did buy a pair of fingerless gloves so the bar doesn’t tear my hands up.  That seems to help me squeeze tighter.

I believe this marks 10 weeks of Strong Lifts 5×5 program.  So far, I like this better than anything I’ve tried.  And I can’t argue with the results that show when I wrap the measuring tape around my midsection.

Devour your prey raptors!

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Monday Options Trades

Seven positions expired over the weekend.

music selection:  “Misty Mountain Hop” — Led Zeppelin

weigh-in:  195.8 (2.8)

I have six covered call trades today and two written puts.  I wrote a total of 1,260 in premiums today.  That was mostly for August expiries so August option income is now projected to come it at 2,029.

First is a covered call in BrightHouse Financial (BHF).  This is a position that has disappointed and threatens to stop out on a 25% trailing stop loss.  I sold BHF180817C00050000 for 10 cents a share.  The expected annualized return is a mere 2.81%.  The trade will be in force for 26 days.

Scott’s Miracle Grow (SMG) is a position with a lot of potential.  The company is poised to dominate the indoor agriculture and recreational marijuana market by extension.  Shares have failed to impress since getting assigned some months ago.  Today, I sold SMG180817C00090000 for 55 cents a share.  The expected annualized return is 8.58%.  I am hopeful this one will still turn in a favorable quarter and recover.  The trade will be in force for 26 days.

ON Semiconductor (ON) is fairing much better.  I was narrowly assigned over the weekend after finishing a few pennies in the money.  I sold ON180817C00025000 for 53 cents a share.  The expected annualized return on this trade is an impressive 29.76%.  I expect to step in and out of this trade for however long it offers fat premiums. The trade will be in force for 26 days.

Match Group (MTCH) took a tumble some month’s ago when Facebook declared its intention to compete with the firm.  Shares have recovered somewhat since but are still down.  I sold MTCH180817C00046000 for 29 cents a share.  The expected annualized return from that trade is 8.85%.  The trade will be in force for 26 days.

Macquarie Infrastructure (MIC) was called away with a nice capital gain as the previous covered call was well out of the money.  I’m going back with a written put and to that end sold MIC180817C00045000 for 1.85 a share.  The expected annualized return is the best of today’s trades at an astounding 57.71%.  The trade will be in force for 26 days.

My short position in AMCX stopped out and I am replacing it with a written put in AbbVie (ABBV).  I sold ABBV180831P00090000 for 3.60 a share.  The expected annualized return is impressive at 36.50%.  The trade will be in force for 40 days.

It is time to roll my Skyworks diagonal call again.  The trade is down 22.62% against my cost basis and is threatening to stop out.  I sold SWKS180831C00108000 for 15 cents a share.  The expected annualized return against my cost basis of 63.70 is 2.15%.  Not encouraging.  The trade will be in force for 40 days.

Finally, Venator Materials (VNTR) stumbled and is trading well below what I consider intrinsic value.  Raptors who do not yet have a position might consider entering the trade at the 15 strike.  I sold VNTR180921C00017500 for 15 cents a share.  The trade will be in force for 61 days and yields an unappetizing expected annualized yield of 5.13%.

I did something a little unusual and bought a new long position without adding an options leg.  The position is CSI Compressco (CCLP).  The thesis is that the share price has fallen substantially while the market for the company’s bonds has held strong.  This is a powerful indicator that the stock might double in the next 18 to 24 months.  If I’m wrong and the stock trades sideways or even slightly down, I get paid 12.08% annually to wait from the MLP distribution.  This also replaces some lost passive income from MIC being called away and leaves me with interest, dividends, and distribution income sufficient to cover 111.18% of my 25,000 annual budget.  Not too shabby.

Devour your prey raptors!

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Friday Fixed Income

More discounted bonds.

music selection:  “Don’t Let Me Down” — The Beatles

I visit investments in the fixed income space each Friday.  Fixed income is essential the early retiree to mitigate sequence of returns risk.  With the current bull market long in the tooth, it makes a lot of sense to have some non-correlated and income generating assets in your asset allocation.  Today, I’m focusing on discounted high yield bonds.

On 5JUL2018 two of nine bonds with a good till canceled order cleared the market.  That was the Revlon 15FEB2021 maturity 5.750 coupon bond (CUSIP: 761519BD8).  Those cleared at 75.50 cents on the dollar.  The price moved upward and I adjusted my limit order to 77.00 cents on the dollar.  The remaining 7 bonds cleared the market on 16JUL2018.  Yield to maturity comes to about 19.01%.

I have two more limit orders open.  These are the Alliance One 15JUL2021 maturity 9.875 coupon (CUSIP: 018772AS2) with a bid of 87.00 cents on the dollar.  That bond currently trades for 94.94 cents on the dollar and I am waiting patiently for a fill.  I also have a good till canceled limit order on the CEC Entertainment 15FEB2022 maturity 8.000 coupon (CUSIP: 125137AB5) with a bid of 85.00 cents on the dollar.  That bond last traded for 94.10 cents on the dollar.  It could be some time before I get a fill as the bond is currently in a strong uptrend.

Devour your prey raptors!

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Velociraptor

Devour your prey raptors!

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Bro, do you even lift?

Another good workout.

music selection:  “Cherub Rock” — Smashing Pumpkins

waist-line:  38.5 inches – progress!

It has been a week since I castigated the Gold’s Gym manager about the lack of collars.  Still no collars.  I’m going to try going on the Facebook page and see if I can catch the attention of someone at corporate.

All the cages were occupied when I got to the gym.  I normally go at 9 AM but was about 15 minutes early.  Have to not make that mistake again as the cages are open by 9.  So I squatted in the Smith machine as an alternative.  It felt awkward.  I don’t want to use the machine anymore if I can avoid it.

The cell phone app had me de-load on bench press after three consecutive failures.  Ten pounds made a huge amount of difference.  I completed all five sets of five with ease.  The bent over row is rapidly growing more challenging.  I’ll probably start failing soon.  I also am going to struggle with building my grip.  Anyone have tips for building grip strength?

Devour your prey raptors!

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Roll Diagonal Call GrubHub (GRUB)

My short call in GRUB expired over the weekend.

music selection:  “Let’s Groove” — Earth, Wind, and Fire

weigh-in:  198.6 +2.0

My diagonal call in GRUB is performing nicely.  I am up 17.4% since early March.  I sold new diagonal calls this morning.  To set up the trade, I sold GRUB180831C00130000 for 1.75 a share.  The trade will be in force for 47 days and yield an expected 18.98% against my cost basis of 71.60 in the long calls.

There is room for 18.94 in short term capital gains before I would have to roll my call.  If the call expires worthless.  I will repeat the trade, hopefully at an even higher strike.

Coming Friday – more discounted bond action!

Devour your prey raptors!

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Friday Fixed Income

Three municipal bond funds.

music selection:  “Bringin’ On The Heartbreak” — Def Leppard

Friday is the time for Fixed Income investments at the raptor.  About once a quarter, I like to highlight three possibilities in the closed end fund space that feature federal tax exempt municipal bonds.  This is arguably the safest income investment category out there.  And yields are often over 5%.  I would expect most raptors in the accumulation phase to be in the 22% tax bracket (US).  So the effective yield for most readers is actually over 6.1%.  Not too shabby.

Invesco Advantage Municipal Income II (VKI) is a closed end fund that seeks  high current income exempt from Federal income tax with capital preservation through investment in investment grade municipal securities.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 9.14%
  • Yield – 5.81%
  • Effective leverage – 42.84%
  • Expense ratio – 2.21%
  • Learn more

BlackRock Long Term Municipal Advantage (BTA) is a closed end fund that seeks current income exempt from regular Federal income tax through investment in long term investment grade municipal securities.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 9.49%
  • Yield – 5.83%
  • Effective leverage – 39.53%
  • Expense ratio – 2.32%
  • Learn more

BlackRock Muni Yield Investment Fund (MYF) is a closed end fund that seeks current income exempt from regular Federal income tax through investment in investment grade municipal bonds.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 4.46%
  • Yield – 6.09%
  • Effective leverage – 41.45%
  • Expense ratio – 1.57%
  • Learn more

Devour your prey raptors!

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Bro, do you even lift?

Does Gold’s Gym suck?

music selection:  “Unbelievable” — EMF

waist-line:  39.5 inches

Can I speak with a manager?

I met with “Colin”.  Tell me something Colin, “is it your goal to provide every customer with a clean and safe environment to exercise?”  “Yes.”  “Great”, I said, “let me show you something.  Here is a bench press station.  Show the collars at this station.”  Colin muttered something along the lines of “Um.”  So, I showed him three more bench press stations.  No collars.  I showed him a decline station, two incline stations, an overhead press station and more.  No collars.

“Colin, I’ve scoured this entire gym and out of 13 stations that need collars exactly two have them.  Does this in your opinion exceed customer expectations for safety?”  Busted.

To Colin’s credit, he took time to explain to me the policy that no gym bags are allowed on the gym floor.  Reason being, collars, pins, carabeaners, and even plates tend to disappear.  They have a budget and will be reordering.

Frustrating.

Devour your prey raptors!

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Write Puts Century Link (CTL)

CTL was called away over the weekend.

music selection:  “Tall Cool One” — Robert Plant

weigh-in:  196.6 (1.2)

I originally purchased 600 shares of CTL for 17.38 on 16APR2018.  I wrote covered calls at the 19 strike twice.  On Saturday, shares were called away.  I earned 1,206 on 10,428 in capital at risk over 81 days for an annualized return of 52.12%.

I’d like to get reassigned shares so I’m writing an in the money put today.  I sold CTL180817P00020000 for 78 cents a share.  The trade will be in force for 40 days and yields an expected 35.59% annualized while enjoying 3.37% downside protection.  The intent of this trade is to get assigned and write calls at the 21 strike or higher.

I regularly monitor a basket of property and casualty insurers with a history of strong underwriting.  These companies can be powerful compounders of wealth when purchased at an attractive price.  Currently AXIS Capital Holdings Limited (AXS) fits the bill.  It sells for a discount to its float and has a decades long history of strong underwriting.  It is a little beaten up after taking some losses on the three hurricanes last year but should rebound nicely.  I expect anyone who buys at today’s price to compound their wealth at 12-15% a year for decades.  I already have a full position however and will not be adding more.

Devour your prey raptors!

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Friday Fixed Income

Something different.

music selection:  “Stone Cold” — Rainbow

Ordinarily, on Friday’s I highlight three possibilities in closed end funds invested in debt and debt like instruments.  I much prefer to invest in steeply discounted corporate bonds.  I haven’t done that recently as there has been some mania in the pricing of high yield bonds lately.  The credit cycle may finally be turning over and I have found three bonds that I consider worthy of buying at the available price.  This is my preferred way to invest.  The yields are excellent and the risk is much lower than with stocks or options.

I sold three closed end funds that were under performing to raise capital for my bond purchases.  I sold 1,250 of JRO, purchased at 12.00 for 10.58.  My long term capital loss is 1,775.  I sold 337 units of EFR, purchased at 14.83 for 14.24.  My long term capital loss is 199.  I sold 2,488 shares of GIM, purchased at 8.04 for 6.11.  My long term capital loss is 4,799.  It should be noted that these investments were in the black after considering the distributions collected during the holding period.  These efforts raised a little over 33,000 for redeployment in more attractive assets.

On 3JUL2018, I bought 9 units of the Community Choice Financial 10.750 coupon 10MAY2019 maturity bonds (CUSIP: 20367QAB3).  I paid 75 cents on the dollar.  That makes my coupon yield 14.33% and my potential capital gain 33.33% over 311 days.  CCFI is a payday loan lender with fat profit margins.  They have run into some regulatory pressure that has driven down the price of the bonds.  With the election of Trump, it is evident that regulatory pressure is easing.  I expect the bond to pay in full as I think the company can refinance.

On 2JUL2018, I bought 10 units of the Monitronics International 9.125 coupon 1APR2020 maturity bonds (CUSIP: 609453AG0).  I paid 65 cents on the dollar.  My coupon yield is 14.04% and my potential capital gain is 53.85% over 639 days.  Monitronics International is a home security monitoring firm that has suffered a recent loss of revenue.  The key to the business is customer retention as the cost of acquiring revenue is often greater than a year’s subscription payments.  The company has recently licensed the Brink’s name which is expected to improve customer retention and thus profit margins.  I expect the company to be able to refinance.

On 5JUL2018, I put in a good til canceled order for 9 units of the Revlon 5.750 coupon 15FEB2021 maturity bonds (CUSIP: 761519BD8).  Two of the nine bonds cleared market and I’m waiting for a fill on the rest.  I paid 75 cents on the dollar.  My coupon yield is 7.67%, which is enough to make waiting for capital gains worth my while.  The potential capital gain is 33.33% over 956 days.  The company is majority owned by a former executive and board member.  Thus, we have an influential member of management with billions of dollars of skin in the game.  I expect him to pull out all the stops to ensure the company can refinance.

Devour your prey raptors!

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