Rocky’s Weekly Stock Picks
Wow, everything is going up!
Kind of, but not really. Hard to say. The S&P is resting closer to that $4000 mark we were looking for back in July. BitCoin has been creeping steadily upward, and Pinterest seems to be staying comfortably above $26. Workhorse can’t get too far beyond $2, though.
Income funds have unsurprisingly been among our better holdings, as well as REITs and preferred stocks. Not just in consistent payout, but also in terms of share price.
To be clear, share price doesn’t mean a whole lot to us, as we prefer to hold on to shares in perpetuity. It does, however, affect our ability to use margin or collateralize our portfolio for taking out cash loans. The main thing it affects is whether or not we have enough value in our portfolio to have access to unrestricted day trading. (Spoiler, we don’t.)
In order to day trade without restriction, you require a portfolio value of $25,000 (at market close the previous day). SEC rules.
FATBP - $16/share, ex-div 2/09, 12.89% annualized yield. This is one of our favorites overall, and easily our favorite preferred stock. It’s cumulative, perpetual, and callable at coupon value ($25).
Yes, this means if shares are called in, you get $25 per share (with a premium that diminishes gradually until 2025).
Why doesn’t everyone go all-in on preferred stocks? Well, they vary greatly from one to another. You must, must, must do your due diligence - even between different series issued by the same company. Oh, and your brokerage probably has very little information to offer.
TD Ameritrade, for example, tells you practically nothing about preferred stocks. That’s why we like stockmarketmba.com.CS - $3.46/share, this is an ADR from Credit Suisse. We’re fans of Credit Suisse, even if Switzerland is the current world capital of evil. Greed is a double-edged sword, and we suspect that Klaus Schwab will be the one eating the bugs before too long. In any case, it’s safe to say that the Swiss are quite adept when it comes to making money.
Options trade weekly on this security, and have a set of strikes that we here at Rockydennis Presents have not seen until now. You have $0.50 differences between strikes, with $x.40 and $x.90 strikes added in. This means you can open spread positions with a $10 maximum risk. Excellent, Smithers.
And before we forget, semi-annual dividends annualized at 2.91%. Now, release the hounds.RUM -$9.64/share, Rumble’s share price has held up decently well since it went public. If you got in early, now seems like a good time to average down a little bit. As YouTube continues to drive away both audiences and creators, and suffers a financial hit due to weakened advertising sales, Rumble continues a steady pace of sustainable development.
No, not the Greta Thunberg kind of sustainable. That ESG crap has no place here.
Options trade weekly.ET - $12.77/share, weekly options, quarterly dividends annualized at 8.31%. No ex-div has been announced yet, but we expect it’ll be mid-February. Energy Transfer has not only continued to increase in price year over year, it has consistently retained those gains. Whereas many energy stocks experience inter-year volatility, ET is generally stable.
They also operate as an LP. So unless a K-1 is a deal-breaker for you, consider this a permanent hard Buy.SPIP -$26.28/share, this ETF is 80% or more invested in US Treasuries, and is meant to track the prices of TIPS. This is a great way to get exposure to TIPS, while maintaining liquidity. We’re not opposed to buying direct from the Treasury by any means, but this allows you to bypass the limitations of brokerages.
For example, one of our accounts requires a minimum of $1000 to purchase any kind of treasury security or municipal bonds. That’s nice, but we’re poor. I’ve got $50 and want inflation protection. SPIP it is!
Do note, however, that an ETF tracking the price of TIPS is not going to offer the same level of protection as the actual TIPS themselves. With TIPS, you won’t ever lose your initial investment if held to maturity. With SPIP, you could technically lose your investment (but not really).
