Tuesday, September 06, 2011

Alpha-D Update for 09/06/11

Well, those covered calls on GDX are working out alright.  My GDX holdings rose through the calls' strike price last week; I repurchased most of what was sold off in my taxable account and all of what was sold off in my IRA.  What was sold away in my taxable account will be a long-term capital gain.  I renewed the covered calls to expire next week.  The cash flow is nice, but what's even nicer is that I can gradually reduce my holdings of GDX at large gains.

I believe gold is doing what I anticipated it would do when I first started accumulating it via GDX several years ago.  I do not think gold will do as well if foreign investors spark a run on the dollar by dumping dollar-based assets.  That will push up real interest rates and make gold less attractive as a dollar alternative. 

I made no other portfolio changes, although I am looking at merger action for special situation plays. More on this as developments warrant commentary.