Hey There Income Hunters,
A big nothingburger at this week’s GameStop (Ticker: GME) hearing …
It was basically the guys who control the rigged “Wall Street Casino” crying because someone beat them at their own game.
In other words, they were sad because the house, for once, DIDN’T win.
Just think about how the Fed and the banks have been doing the same thing over the past 40-year. In their case, they’ve been playing all Americans by devaluing our money to better themselves …
Plus, they had a bit of an advantage … they were able to print as much money as needed so they couldn’t lose!
On the Gaming Floor
I, for one, salute the Reddit retail trading champs …
And go absolutely nuts with the chest-bumping and and the high-fiving every time they win.
And go nuts with the chest-bumping and and the high-fiving every time they win.
Now, for me, the seasoned pro over at the blackjack table, the reflation trade had a bad week.
But I’ll explain why (and why bad times won’t last) and show you a good non-reflation trade play ….
The Death of Bonds…
Bonds got their butts kicked this week because inflation is rearing its ugly head.
That is great news for gold longer-term. However, gold is patient and will not get all bulled up until inflation spikes higher …
So I went to work with the Power Income Valuation Model (PiVM) to lock in on a non-inflation trade …
And, look, week-in and week-out, Power Income readers are receiving awesome picks (for the near-term and longer-term) … just by reading.
Stick with me folks, we have some big things planned for the months ahead.
My Proprietary Pick
My latest non-inflation play is British American Tobacco PLC (Ticker: BTI).
BTI is trading at 36.27, a 30% discount to $51.79. Let’s see how it looks in my proprietary PiVM model …
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Those numbers are very nice, and you should also know BTI is a great income stock, with an almost 8% yield.
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The 69.6% payout ratio tells you they only use 70% of earnings to cover dividends and the 6.5% growth rate of dividend is excellent.
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Combine the growth and dividend yield to see total return … 14.5% is awesome with bond rates so low.
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This is the type of stock you build generational wealth on.
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I am buying it outright and selling the 40 June calls at .60 just to get a little extra income…
Bring It Home
OK, so I was licking my wounds yesterday …
Then I started to realize that, yes, the reflation trade is bleeding money — but we are seeing inflation numbers rise and gold just doesn’t get ahead of itself.
This is when you have to find a way to stay in the game…
So, I sold covered calls against these positions:
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First Majestic Silver (AG) sold Mar-19 19 strike calls at 1.07
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Anglo Gold Ashanti (AU) sold Mar-19 22 Strike calls at .81
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B2Gold Corp. (BTG) sold Jan 22 7.5 strike call at .57
(Quick Income Hunter Note: A covered call is when you have a position in underlying shares and you sell a call option on that particular stock above its current price
You immediately receive the premium that you sold the call option at … and if the stock expires above the strike then you close the position and keep the premium plus any profit on the sale.)
My other positions are call spreads …
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Enbridge Inc (ENB)
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Barracks Gold (GOLD)
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Sandstorm Gold (SAND)
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SLV
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Total (TOT)
I am down right now, but I am VERY confident we are on the right track with inflation coming later this year thanks to massive stimulus.
Bottom line: this portfolio will bag MULTIPLE victories by year’s end.
Here’s to a great weekend and as always …
Live and Trade With Passion My Friends,
Griff