Riding The Storm Out

Little bit of a late start on a very gloomy day for the market.

I flipped on CNBC and there is a confluence of news fronts that are all working to hit the market very hard at the start. Not that it matters but but it would not be shocking to see some sort of meaningful bounce back, relative to the open but we'll see.

A reader left a comment asking about something he read suggesting buying Pfizer (PFE) to get what the reader said was a 5.6% yield then selling long dated calls to pay for put purchases so that any downside is protected.

Well I have not liked Pfizer going back before I wrote about the stock for Motley Fool four years ago. I did not expect it to drop by 40% which it has but more like not go up at all.

There is no way I think it makes sense to buy a stock in this context unless you think it can go up and to be clear maybe it will (but it would be without me) but you need to think it is going to go up.

The idea of putting a collar on a stock (that is what this trade is called) is not bad in generic terms for anyone willing to add that layer of complexity (not rocket science but still) into their portfolio but this is not how I play defense. The stocks I own are all good proxies for the respective sectors, countries and whatever else (of course that is just opinion which is either right or wrong) and I don't might if the price drops because I use other tools manage the volatility of the bottom line.

The picture was about an hour or so before the first pitch but the weather blew out and obviously we had a game.