Option Assignment – IAMGold Corp

A closure in my portfolio — my covered call option that I wrote in June 2016 got called away closing my position in IAMGold Corp (IMG.TO). Its a company that I have held in my portfolio for a long time (approx 3 & 1/4 years) – through the depths of the gold & precious metals bear market. Now that the prices have recovered, I wanted to upgrade the quality of my gold mining company holding. IAMGold is a decent company, but has its problems with some management issues. There are better companies out there and I decided to upgrade with the purchase of B2Gold Corp (BTO.TO) last month.

Overall gains (including dividends and options premiums): 28%

Chatter Around the World – 158

Chatter Around the World is a curated weekly update of articles related to economics, investing, dividends and personal finance. In these weekly updates, I also capture my blog updates and news related to my portfolio holdings.

us-healthcare-system

U.S. Healthcare is a Global Outlier, and Not in a Good Way

chinainvest-capital-2300 Image Source: Visual Capitalist

Let’s dive into the links that caught my attention this week.

Continue reading

CSX Corp Dividend Stock Analysis

CSX Corp. (CSX) is the third largest publicly traded railroad company in North America. The company commands an impressive 21,000 miles of rail network. The following system map image demonstrates the scale and reach of CSX Corp. CSX Corp operates and services the east coast of the US and directly competes with Norfolk Southern (NSC). CSX Corp., however, has an advantage where it provides service to Florida, which NSC doesn’t.

CSX-SystemMap

The Railroad Industry

Railroads are considered a wide moat industry, as it entails immense capital requirements and new entrants in the industry are almost unheard of. Railroads are the pulse of the economy. Whether transporting crude, lumber, merchandise, agricultural or industrial products, railroads are what keeps the economy moving. Railroads are often closely observed by economists and analysts to get a sense of how the overall economy is doing. It is also considered a leading indicator for any recessions or slowdowns.

Continue Reading >

 

Do You Love Your Investment Holdings?

Consider your investment portfolio. Do you hold stocks (or other securities) in companies that you love? Do you tend to disregard or ignore articles that highlight the bear case for that investment? If yes, you could setting yourself up for a common pitfall when it comes to investing. Falling in love with an investment is one of the worst things an investor can do for overall returns. As humans, it is in our nature to like/love things that are familiar to us. This is not just applicable to stocks or investments, but for everything in life.

I was recently listening to the Masters in Business podcast with Daniel Kahneman. Daniel Kahneman is a world renowned psychologist, best known for his work on the psychology of judgement and decision-making. Even though he is a psychologist, he is a Nobel prize winner in economics (awarded in 2002). His research explained and shed light on why the investing world falls for the same traps over and over. One of his most cited study is the Prospect Theory, which among other things summarized that humans value gains and losses very differently. Losses have a far more emotional impact than equivalent amount of gains. For e.g., losing $5 has a stronger emotional impact on most people than finding $5. The overall psychological impact is charted as shown below from the Kahneman & Tversky study. As noted, the curve falls faster towards the left than it rises on the right, indicating the overall psychological impact.

prospect-theory

I highly recommend you listen to the podcast, but if you do not have the time or patience, have a listen starting at the 41:45 mark. As Prof. Kahneman explains, the familiarity of ownership makes humans think highly of that entity. In his words, “Almost everything that is familiar….you like better”.

Continue reading

Chatter Around the World – 157

Chatter Around the World is a curated weekly update of articles related to economics, investing, dividends and personal finance. In these weekly updates, I also capture my blog updates and news related to my portfolio holdings.

Berlin is the only capital city in Europe that is a drag on its country’s economy

Berlin is the only capital city in Europe that is a drag on its country’s economy

chinainvest-capital-2300

Image Source: Quartz

New Blog Posts

Let’s dive into the links that caught my attention this week.

Continue reading