Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : (Buying) Options -- Ignore unavailable to you. Want to Upgrade?

To: Lance Bredvold who wrote (222)	2/2/2022 6:02:05 PM
From: petal	Read Replies (1) \| Respond to of 249

Yep am looking to get back in to OPRA, maybe tomorrow already. I just can't not sell after such a large 1 day return... (It's in my DNA ¯\_(",)_/¯) Especially not since cap gains taxes are literally zero on trading in Sweden, and the cost of trading in-and-out is thus very low (only commission and, in this case, f.x. fee, usually totalling between 0,7% and 1% for the round trip, depending on how much commission you pay (which ranges between 0.09% and 0,25%, in its turn depending on trade size)). And the 'trading around the position' seems to be the thing I do least badly. So I try to do that – in this case, I've already made up for the commission cost (sale was at $7.25, now its at $7.06, leaving me with a 1% re-entry gain in addition to the 11% gain yesterday – many 1% streams make a great river...) I am liking FCF more and more, actually, not least to compare with reported earnings. If a co. reports great earnings year after year, but has stubbornly (and sometimes/often also increasingly) negative FCF, that's a warning signal (see e.g. Swedish co. Embracer). When it's the other way around – if a co. reports abysmal earnings despite good FCF, and a seemingly good business – that may be because the management wants too keep stock price low in order to buy it all up/keep it to themselves. The profits are of course real even if they aren't reported as earnings. They may take the form om dividends – the likely future development of which I am paying increasingly more attention to. I was inspired to do this when reading about the great Hungarian-Swedish investor László Szombatfalvy, who averaged 30% a year for 30+ years, by using a self-made dividend discount model (a version of Gordon's formula, I am told, which he supposedly arrived at independently of this Gordon). Also, by this other guy who was a worker at Swedish railway all his life, saved some money and continually invested in dividend-paying stocks and became a billionaire. It does seem like dividends are a great way to become rich! Or preserve one's riches – which brings me to your bringing up QCOM: it seems that it might be causing you some headache worrying about it. Why not sell a part of it, enough so that you do not feel it is such a large part of your net worth? Might be better than selling puts on it, long term. (Do note that I do not know much about selling of options, though. May well be very wrong.) And then invest the proceeds into very safe, low-valuation div-payers? That being said, if you have very high conviction in the co., and feel sure that it will be around for a long, long time, one can usually do a lot worse than hanging on to a seemingly great co. at a pretty reasonable multiple. (P.S. You OBVIOUSLY do not want to take anything I say as advice, especially not when in regard to a specific stock, and especially, especially not one that I know close to 0 about, and you a lot. :-))