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odyd

Trading Strategy

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The dividend walk will be impacted by an immediate reduction in the share price upon dividend payment (or ex-dividend date). Of course one way to beat it is to buy lower than the price minus the dividend, second to wait long enough to get paid and have equity come back after such payment.  In order to transition to another payment, a couple of things are required: another stock(s) and an actual timeline allowing for a jump and, of course, no loss of equity. I am not going to jump otherwise.

I am not trying to say that the drop will not be there after the payment, but I am hoping that drop will be indifferent as the stock was bought cheaper than the after-the-reduction price. If not, I am hoping it will recover before the jump needs to take. To make a jump one need to have more than one option to do a jump. It would be the best to have variable timelines as well.  The concept is not that hard, but it takes a lot of data mining.  I am sure someone is already doing it.

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Going after AMTG, the object of the takeover by ARI would be a better deal than ARI, at least as it appears today. The stock pays $0.48 per share and just went ex-dividend today, payment being made only by April 29th mind you. It already added half gain versus the dividend. The case of PEGI which also went ex-dividend today, gaining numbers from yesterday's drop, shows that not all ex-dividend dates cause drops in price. Most of the energy stocks had gained today on the ex-dividend date. I am not sure if this is going to be a pattern, but certainly the formula of the drop in value is not obvious.

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It is painful to watch and I am not patient. I sold ARI and bought PMT, small gains, but gains nevertheless. I am staying cash at 60% right now, checking in to solar

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Currently, if all equal I am looking at PMT, CSIQ and NYLD as potential purchases. CSIQ under 19 looks good while I still consider lower prices. I am wondering if Q1 release will be impactive outside what we already know. JKS seem expensive at current pricing.

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On 2016-03-24 at 5:06 PM, explo said:

At the end of each quarter I will post an updated chart in my profile of the daily portfolio, TAN and S&P 500 development since the implementation completion and inception of this new strategy on January 1 this year. The initial chart will be posted April 1.

Attached are the charts (they will also remain on the "About Me" tab in my profile).

Quick comments.

The portfolio outperformed the TAN and S&P 500 for much of the quarter, but the S&P 500 came out significantly on top end of March as the portfolio was hit by simultaneous weakness in its funds, the USD and solar stocks in March.

The S&P 500 ended flat after a weak start. The portfolio ended close to the quarter low. The TAN started the quarter horribly and never recovered.

Looking at the two portfolio components the funds outperformed the stocks for much of the quarter, but dropped off a lot in March, partly due to a large USD exposure, leading to the stocks ending on top.

Looking at the FOREX effect the USD was down 3.6% to my local currency in the quarter. With the portfolio having around 125% exposure to the USD on average in the quarter the USD contributed with a loss of around 4.5% or around 70% of the total portfolio loss of 6.6% in the quarter. I hope this FOREX loss can be reversed and muted or turn into a gain for the rest of the year.

Considering that the stocks portion of the portfolio is solar stocks focused and having more than a third of the stock exposure in the volatile SUNE yieldcos the total portfolio performance being a lot better than the TAN during the quarter is a bit of a testament to purpose fulfillment on the risk management side of the portfolio strategy.

16Q1_return.PNG

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11 hours ago, odyd said:

It is painful to watch and I am not patient. I sold ARI and bought PMT, small gains, but gains nevertheless. I am staying cash at 60% right now, checking in to solar

After a couple of "walks" it would be nice to see some gains metric like percentage of gain to dividend, i.e. 20% if the dividend was $0.50 and "only" a total gain of $0.10 could be pocketed. As long as it is positive it works even if full dividend can't be harvested, but it might need to be put into a risk perspective to be more relevant. A risk measure could be based on how much and how long the position was out of the money even if it at some point time offered a close in the money. I think it is still to early for this analysis, but if you run the strategy for a year it could be interesting to summarize over the year.

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35 minutes ago, explo said:

After a couple of "walks" it would be nice to see some gains metric like percentage of gain to dividend, i.e. 20% if the dividend was $0.50 and "only" a total gain of $0.10 could be pocketed. As long as it is positive it works even if full dividend can't be harvested, but it might need to be put into a risk perspective to be more relevant. A risk measure could be based on how much and how long the position was out of the money even if it at some point time offered a close in the money. I think it is still to early for this analysis, but if you run the strategy for a year it could be interesting to summarize over the year.

The gains seem insignificant versus the amount of money involved and particularly seeing swings in many percentage points trading solar equity. Time investment is also significant plus the work involved. I think I have not enough money to make this work in this fashion.

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5 minutes ago, odyd said:

The gains seem insignificant versus the amount of money involved and particularly seeing swings in many percentage points trading solar equity. Time investment is also significant plus the work involved. I think I have not enough money to make this work in this fashion.

So I guess you've concluded the strategy then as not worth the effort and risk to continue for you at this point (although there are some small gains that can be harvested)?

 

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48 minutes ago, explo said:

So I guess you've concluded the strategy then as not worth the effort and risk to continue for you at this point (although there are some small gains that can be harvested)?

 

Basically,

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