What I like about Walmart: WMT has global diversification, a recession-proof profitable track record, steady growth, strong financial controls and makes a far "safer" investment, in my mind, than treasury bonds, notes or bills. What makes Walmart unsafe is that it is a stock, and stocks values can change dramatically in a short period of time. However, if you don't need your principle, and can just sit back and focus on the dividends, then you can take your mind OFF of the stock price. As soon as you do, then you can really see this stock for what it is and what it can mean for you over time. Keep your focus on the important things: the balance sheet, the income statement and the quarterly and annual reports, then you will be in a far better place than owning loans to the US Government which are paying you almost nothing (adjusted for taxes and inflation, you are losing money for sure).
By: Technical (&Fundamental) Tim, Dec 20, 2011 12:12PM EST
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Stockman34
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Agreed.
timwest
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WMT's pullback to near $58 now looks like a bottom. With the stock lifting above $59 and its earnings (margin compression due to competitive grocery pricing) behind it, I believe it has found a reasonable base. I may sell the June 60 puts to generate several dollars a share in income or I may just buy shares here. Cheers. Tim 12:57PM EST Feb 29, 2012
timwest
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$2.75 bid for the June 60 puts in WMT. I like my return for this position as a cash alternative. $1.75 in time premium is a 3% yield for roughly 4 months of time. If I get the stock then I'm happy also because I'll own WMT at a net cost of $57.25 and the yield at that price will be close to 3%. It's a slow-grind way to make money. I trade away the upside potential for a nice cash flow.
timwest
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WMT did have a nice lift back up to $61 now. Although it isn't a large return, it was a low-volatility return. I hope some of you did well on this "add-on" idea. Cheers. Tim 2:37PM EST Friday, March 16, 2012
charttrader
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Thank you for the update.
charttrader
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It's 74 now! What a profitable trade.
timwest
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WMT is doing well - slowly moving higher as short-sellers likely cover their positions and as long term value investors step up their purchases. WMT is doing especially well relative to long term bonds since this publication.
timwest
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Motley Fool put up an analysis of WMT this morning that I just found at Yahoo Finance. WMT yields 2.5%, but that dividend has been growing steadily such that over time that yield will grow to 5% in 10 years or more, if history continues. Also, by selling 1 year call options against WMT, you can add a tremendous income to your account, but it gives away upside potential. For example: Selling the Jan 2013, 60-strike calls can generate income of $3.50, or nearly 6% additional return to the 2.5% dividend yield. Take your pick. And don't blame others when your choices in life don't pan out. Learn. Ask questions. Don't just sit there and do nothing. Just because someone offers you something doesn't mean you have to accept it. But that is what we are all doing when we leave our money in the banks earning nothing. They (the banks) are offering us nothing, other than security and access to our money.