Our trading portfolio has changed some over the last month as we have dropped some stocks and added back some old ones as those old names have sold off a bit and reached value territory.
AIG...new entry to our portfolio with a single digit PE. Yes one will notice we have four insurance based stocks in our trading portfolio now. All like AIG are single digit PE and have upside potential when interest rates go up in the meanwhile they are at a point where downside risk is minimal.
AAPL..Our largest trading position. Apple at this point in the cycle has little downside risk and rich option premiums. The only fear comes at some point in the cycle where traders start taking long term capital gains, which is a few months off. Still a fairly low PE of around 14 and we have a strike price of $87.50
AFL..This insurance stock continues to be a steady eddie for us producing regular income with little risk. Strike price of $57.50 might be lowered soon.
BP...We are back in BP after the recent court decision finally put a high end figure on the fees that will get paid for the Gulf spill. The best part is that payment is years out and the stock is trading again at a single digit PE. Best value in the oil patch and we have it at $42. Little downside risk even in a market selling off oil.
IBM..We are not true fans of this tech company, but we love their stock buy backs and the huge footprint the company has worldwide. Our price is $175.
JPM..Still the best bank in the country. Another single digit PE and our strike price is $52.50. Bad news is priced in on this one.
MET...Insurance giant which is trading in a single digit PE. We like it because it is value priced with little downside risk and has upside potential if interest rates really do move up. Strike price of $50.
NNC..We continue to hold a very large position in this closed bond fund. With the recent sell off due to interest rate concerns we will be buying more soon once we believe it has set a bottom in price.
O...Due to interest rate rising fears this stock has come back down into our price territory of $40. We love Realty Income and its monthly dividend.
PM..Another stock that has come back into our price zone at $80. Phillip Morris has been hit by currency rate concerns as well as the new E cigs. Both we believe it can overcome with its huge cash flow.
PRU..Another insurance biggie. Does the insurance idea come through here? Insurance with large holdings of stocks, bonds, and other securities does much better with higher interest rates which helps them make more cash from these holdings. Our strike price is $82.50
SF...We continue to trade Stifel Nicolaus because we like the company. The management has proved to be wise in bolt on acquisitions and making money. Our strike price is $40.
SHLD...We are underwater in this stock. We have made a good bit of money from this stock, but it looks like we will be burned this time and good with a strike price of $29.50. Sears Holdings might really be going down.
T.. Solid telecom stock at $34.
VZ...Ditto solid telecom stock at $47.
All these stocks would make good choices for your portfolio except SHLD.
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