Replies to post #1051 on Northern Tier Energy LP (NTI)

[pete807]

As the article I posted states: 7-30 days post ex-date for low point... That would be mid June if that theory is correct.

Using NTI as the example, which is a quarterly paying dividend stock, I recommend you buy the stock between 7 to 30 days after the ex-dividend date, usually after the stock pays the dividend, when most investors are looking elsewhere. This is the low point on the stock, the high point will be just prior to the next ex-dividend date.

The author gives two options. The first tries just to "capture" the distribution. I fit into option 2 category so, as Catdaddy puts it, "I don't have to bird dog the stock." I like to go fishing without worrying about the markets or trying to pick bottoms for flipping purposes. it has proven successful over the years especially with MLP's.
That said if it goes below 25 I may add more even though I have enough... It all depends on the situation at the time. I have dry powder that is not earning any yield at the moment, as I feel investors believe in the sell in May cliche. Those post fire 18's sure look good now... GLTA!

[pete807]

Never even touched mid 26's. It does move easily in both directions but the low was 26.88 after it went ex-div a week before pay date. Retail gas is pretty high at the moment.
While the entire Bakken surpassed the 1 million bpd a while ago the North Dakota only portion made a big front page headline in the Mpls Star Trib of One Million Barrels last week.
We are seeing incredibly long trains along the northern border with as many as three extra engines in the middle of over 150 rail cars, mostly black tankers heading east loaded with very volatile light sweet crude likely from N.D. GLTA!

[leemalone2k3]

Here's a strategy to generate income if the stock stays flat or pulls back for the next 4-5 weeks.

Consider selling some at the money or slightly out of the money call options against your stock position instead of just waiting for the stock to come down to add to that position.
If the stock pulls back and closes below the strike you sell on expiration, you keep your option premium, which lowers the cost basis of your stock.

Example:
For every 100 shares of stock you own, you could sell short 1 July 28.00 call for .60. As long as it stays below 28.00 on the 3rd friday of July (expiration date of the option)you keep $60.00/contract as the option expires worthless. Do this trade every month if you think the stock is going to pull back or stay flat.
You make a maximum of 60.00/ contract if stock stays below 28.00 and the option expires worthless
If stock closes at 28.00 or above you are forced to sell your shares at market and keep the premium. You won't lose money on your option unless stock closes above 28.50, but you make money selling your stock.

You can close the option any time prior to expiration by buying it back. If I can get 85% of the max gain with lots (week or two)of time until expiration, I usually buy it back.