I've been doing so much short term, hit-and-run trading, I haven't been in a position long enough to report it. I certainaly am trading though, although my results have been someone modest and I anticipate they will continue to be as I'm primarily a short seller, and this market doesn't lend itself very well to short selling when volatility is low, and the market seems to move up ever so slightly every day.
So, that said, I am in a position I want to tell you about. It's Enbridge Energy, (EEP), and I might add more today. I think it's oversold due to panic over a distribution cut. The only problem for those selling, is that they have now pressed the price so far down, it appears they've totally abandoned the idea that there's any value at all. As if the drop was more important than what the final result will be. I go into greater detail why I think fear is pushing the stock, and why the divident justifies an allocation in my article Enbridge Energy Powers High Yield Opportunity
Wall Street doesn't enjoy or value uncertainty, and EEP is full of that. In other words, the blood is on the street, and all one needs to do is simply reach down, pick up the money, and wait for the blood to dry. Even with a 40% drop in the distribution dividend, and I don't think anyone is predicting a drop that much, the yield remains way oversized, and it's a matter of time before the fear is pushed aside for greed.
We're already starting to see the panic disapate, and that's my motivation to buy shares on Monday. It's not a quick trade, but rather a holding I expect to get well above $20 for in realtively quick order. But, and this is were it gets good, even if it doesn't manage to quickly find an equalibrium much higher than the low $18s, even the management isn't providing numbers to suggest a yield below 6% in 2017. That means, I'll still receive an oversized yield while I wait.
I believe this is a heads I win, tails I break even, and the risk of buying into fear is grossly outweighed by the potential for a rebound in the next month. There's enough potential here that I'm willing to take the time to write about it because I feel just about any type of account can hold at least a few shares, including retirement accounts as long as it's not an unreasonable size.
The next stock I'm holding long is Twitter (TWTR). I'm not actually a share holder, but rather selling volatility via selling puts. So, I have a net long bias, and will continue selling puts as long as I believe there's the hint of a takeover, and people are willing to keep volatility high.