Saturday, November 14, 2015

Financial Planning Weekend Update: November 14, 2015

 Monday, November 9

Although the market as a whole survived the big beat jobs number on Friday (except of course for interest rate sensitive issues like ED and HCP) it sold off about 1% today. Utilities like ED seem to have stabilized but REITs continued to get hammered, HCP to the tune of another 2.68%. Everything except MRK is now way out of the money and it wouldn't surprise me to see that position slip a bit more.

Tuesday, November 10

Nothing much happened today.

Wednesday, November 11

Well now! Thomson Reuters (TRI) is "exploring strategic options for the future of our IP & Science business unit." I happen to work for IP & Science. "Exploring strategic options" is MBA talk for "you're going to be sold".

As an investor I've kept a close eye on this sort of thing when it pops up in companies I'm interested in. So I'm pretty sure it will be at least a couple months until anything of substance happens, more months after that until the transaction(s) actually take place, and still more time will pass before anything that directly effects me will happen.

But... The part of IP&S I actually work for represents only about 2% of overall sales so we could be a target if TRI decides to lighten ship to make IP&S more attractive to buyers.

My prediction: In mid-Q1 '16 we'll hear about the sale in some detail. In 2015 the share holder's meeting was held on May 6 so I'll go out on a limb and suggest the board will ask for shareholder approval at the annual meeting about the first week in May 2016. After approval it will take a few more months for the deal to be completed.

Whatever happens, the market seems to like the news; TRI closed up almost 2% on a down day.

Thursday, November 12

Red ink everywhere today with indices down 1% or more. TRI has given up nearly all yesterday's gains, down better than 2%. For some reason HCP closed up a couple cents.

Friday, November 13

More red ink at the open and it looks like another major downer. My positions were holding up pretty well at 10:00 but fell with the market again. It's not fun to watch value bleed away, but this portfolio is meant to provide income from dividends and covered calls. But... as the market drops, volatility increases and that increases my income when I write the calls.

Should Have Waited A Few Hours
I bought another 100 shares of VZ at $44.80 (plus $8.95 commission). This lowers my cost basis by $0.21 and increases my annual income $226.00. With expiration a week away it also gives me another contract to write on a stock that has weekly options for more flexible "writes".

All in all a crappy week. in the middle of a crappy month (so far). Even so, I expect to see total income from options and dividends of nearly $2,000.00. We'll see how close when I write new contracts on the 23rd.

There's nothing happening next week until Friday's expiration. Everything except MRK is well out of the money so I don't expect to have to roll anything out. Thanksgiving week HCP will pay its dividend on the 24th and MRK should declare it's January dividend about the same time. MRK's ex-dividend date will be in early December so if that position is still in the money it may need to be rolled out.

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