Stock Price Does Not Matter

Share price does matter, obviously. It just doesn’t always matter very much at all.

“Because of dividends, right?” you ask confidently.

Well, kind of. Actually no, yeah, let’s do that.

Okay, so let’s say you have some shares that cost you $100, but now the price is $95. The particular stock pays a quarterly dividend of $1.35. At the end of the year, that $100/share investment has returned .4% profit. Or in other words, you have $100.40 (if you were to sell the $95 shares for $95).

“But Rocky!” you say, “I can’t quit my job on that kind of return! And the price just fell again to $90!”.

These are fair points. Firstly I would say that even if you quit your current job, you will end up having to work in some form or another. You can make it work just fine and blend in with normal society, but guess what? That society is going to suck. Not only will you become more and more unrelatable to normal people with each passing day, the surrounding environment will suffer as a direct result of your lackadaisical approach to life.

You need a day job, because that’s how you contribute to society and the economy. It can be mowing lawns, or it can be leasing industrial real estate specifically for nuclear energy related use. It doesn’t matter if you’re flipping fries, or firing guys, we just need your physical and mental input to make things go.

But yeah, I hate my job, too. Quitting might have to be a 2022 goal. Now moving on to

POINT NUMBER TWO - The price did fall, but your dividend is still getting paid, right? Dividends are affected by share price differently, depending on which stock it is. Some of the highest share prices offer the lowest returns. Check out TPL.

”But Rocky!” you interrupt impatiently, “The dividends aren’t enough!”.

Jesus Christ, let me get to that point. If I just outright say, “covered calls”, you won’t learn anything. You need to figure it out for yourself.

That’s really it, just writing covered calls on those shares. No reason to sell.

“But Rocky!”, you say, “What if this stock isn’t optionable?”,

Well goddamn, then you’re SOL. Make better choices next time. Here’s a picture to illustrate my point.

Remember, when you fail to plan, you’re planning to fail. And when that happens, John Kerry wins.

Don’t let John Kerry win. Don’t get caught holding a bag with no options. D

Double(-meaning) Word Score!