"Of course it's hard. It's supposed to be hard. It it were easy everyone would do it. Hard is what makes it great." Tom Hanks in A league of their own.
Two statements that sum up the first half of the year.... The first quarter was our best ever net profit wise. The second quarter was our worst ever net profit wise. That sums it up that basically it was a break even six months and maybe we should be happy considering the horrible political environment in the US.
Trading on leverage is hard, very hard, and always has been. Lots of practice and study is necessary if one is to win at this work. If it was not hard more people would do it and frankly then some of the enjoyment of trading a winning hand would be gone. As noted in our opening sentence "hard is what makes it great". If we wanted to we could just settle for the 5% plus that most people are making on their invested assets and call it a day. Not us, not never, at least until the mind gets where it can not do it or November brings election results where we decide to call it quits and go to the beach permanently. This is mental work not physical work and we suppose there are positives in exercising the brain and warding off dementia a little longer. So with said let the final half of this 2012 begin.
June was a lackluster month of trading and again reminded us of the long hard won knowledge that most times the first price is the best price. We started the June trading week with decent option premium pricing, but held out for a little more, which quickly became a good bit less. Our initial trades in BCE and LO produced above average profits and from there trades tailed off into almost boring trades as we waited too long. We did pick up another nice premium from our big loser this year ERF. With our loss in this security baked in we can now just use the remaining corpse as trade bait and did so this month.
Cash flow was weaker than normal as noted above, but we still had a profitable month of trading. Again trading fees were lower than last year and margin costs were controlled despite some puts assigned us last month. The timing of the puts as planned produced excellent dividend income as well this month more than offsetting any margin costs.
Again the driver this month were the net losses and pending losses in the fund all now in one security ERF, which will draw down almost all gains for the first six months. Our annualized yield for the first six months was 4.6%, in our universe hardly worth the trouble to trade.
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