Trading Portfolio for 2013

We have spent a good bit of the last two months away from our hedging activities to rest up, reassess the market going forward, and maybe get some of the old thrill back.  We believe that has been accomplished to some degree. We cleared out much of our portfolio with the expiration of options on Dec. 21 and begin to build into a new portfolio that is not too different than the one we formerly traded.  Trading requires knowing your securities.

 The reasons are simple run and gun hedge trading is basically dead in this new Obama world as no one can trust him.  This lack of trust means any stock or industry is subject to being ridiculed or regulated out of existence by Obama. Therefore the positions we will use going into 2013 will be certainly safer than in the past.  We will use much tighter hedging pricing to keep us less vulnerable to silly proclamations from this administration. What this will do is limit our profits a good bit going forward, but since as we mentioned before we are playing with house money if we do not play we have absolutely no chance of profits. 

Below we present our portfolio and most important pricing positions for trading in 2013.  

BCE...This Canadian communications company returns but our price for entry will not be $40 instead of $45. 

CTL...This legacy communication company returns with again pricing set lower at $38. 

T...The largest telecommunications company is added with pricing at $34

NNN...This triple net lease REIT is an old standby and is the longest running stock in our portfolio and is without any doubt the soundest one bar none. Pricing at $30.  We will double our hedging on this one as a reward. 

NCT..This REIT which was added late in the year has a nice upside and good options premiums.  Pricing at $7.50.  We will also trade this one in our long term portfolio. 

O...We will admit Realty Income surprised us with strength at $40 and we will keep it there. 

JNK...We will keep this one, but keep it close in time due to some worry regarding interest rate risk.  Pricing at $40. 

ARCC...This BDC is a solid performer and high yielder.  Pricing at $17. 

SO ...We believe SO has now moved down enough to make the price more interesting.  SO has also cut a good number of coal fired plants and replaced them with gas fired ones that are more acceptable to the EPA.  In the end this company operates a electric utility in the best regulatory states environment period.  Pricing at $42

BP...Dare we take a chance on this one?  We are going to try since it appears BP has set a good base at our entry price of $40. 

ERF..We have been rewarded and burned so much on this one we keep it with concern.  However ERF in our opinion has finally set a base and should be rewarding from here.   We are setting a base at around $13. However we carried this stock over in our portfolio from 2012 and are holding a lost in it currently.  

FTR...We continue to like FTR going forward, but will only use long term options in hedging here.  $4 or $4.50. 

Long term option candidates.

TCAP..Long term option if can get in at $22.50.

SBY..We are awaiting options trading here.  Note an earlier post on this new issue. Entry price $18.50.

LO...We will not be fooled again here with Obama and his FDA.   We will long term option it with an entry price of no more than $110.