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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (6610)	1/22/2019 4:18:04 PM
From: robert b furman	1 Recommendation Recommended By Kirk © Read Replies (1) \| Respond to of 26631

Hi kirk,I sold 15 puts ($18.00 strike) in my IRA account on 2/5/18 for $2.25. $18.00 - $2.24 = net purchase price of $15.76. By the next ex-dividend date, KMI will have declared a 25 cent quarterly dividend as reconfirmed in this month's earnings webcast. So $1.00 / $15.76 = 6.345% IF as they've stated they maintain their expected dividend rate of $1.25 in 2020 - it will be yielding 7.93 % in about 15 months. In my taxable account I sold 60 $18.00 puts for $2.25 (back in September 2017 and again in February 2018, all averaged for $2.24. Natural gas and oil pipelines out of permian to Corpus Christi and Houston for export are 100% sold on a long contract basis. These two lines are 42 inches and both are over 400 miles long - one coming in OCTOBER this year: screencast.com screencast.com due late 2020 Exporting LNG out of Elba Island - Savannah Georgia online this quarter: screencast.com All big revenue drivers The premiums received averaged a low of 10.00% to a high of 16.78% on an annualized basis. So I wanted the repeatable income - especially if it goes with the $1.25 dividend in 2020, but the annualized income was better than any bank pays. I view using my core holdings equity, as collateral for the sale of these puts, as additional income over what the dividend's generate. I do not mind over levering the equity in the account, but I always look at what cash I have and how much the dividend stream will bring in over time. If a great company like XOM and /or T is assigned and I'm short funds - I'll raise cash by selling a lower yielding dividend stock, in an effort to diversify out of my undue exposure to semi equipment stocks i.e Cohu which is yielding less than 1.35%.