How Fat Does the Div Have To Be?

Anyone who has followed Quill’s postings over the years knows Quill thinks that investing in dividend-paying stocks (which includes div-paying ETFs) is A Worthwhile Thing. But if you review the lists of divvie stocks he advocates for, and compare their present prices to what he likely paid to buy them, you can see that he’s probably losing more on market price than he’s gaining from the divs. And I’ll freely confess to suffering the same fate from most of the preferreds I’m carrying and from some of the divvie ETFs.

So, this question asks itself: How fat does the div have to be before it can offset what one might lose in market price? Alternatively, How resistant to downturns in market price does the divvie vehicle have to be before the div is worth chasing? (Note, here, I’m not talking about ‘dividend capture’, which is a separate game, in which one buys just ahead of the record date, collects the div, and then closes the position, and, yeah, it’s a bit more complicated than that. But that’s the gist of it.)

And so that things are “real” --and not just “theoretical”-- let’s dig into some options-based ETFs I own a lot of --at least for me, anyway-- namely, USOI, OILK, SLVO, and GLDI. I’ll leave it to you to pull charts for them and their div history. Instead, let’s focus on some larger issues.

Depending on whom you want to believe and how evidenced their arguments are, the US is going to muddle its way out of its current economic and financial troubles, or maybe not for a very time (@ Jim Rickards). In either case, one’s gotta have a plan that’s more than just HDAH (Hunker Down And Hope). So my thinking was this. If the economy crashes, precious metals (PMs) will catch a bid, as will derivatives based on them. If it doesn’t crash, the price of the derivatives will decline, but the calls they write will pay well. I’m pretty sure Rickards is right, and I’d like to hedge my portfolio. So I had to ask myself, “What might be the best way for me to do that?”

Due to being massively called the last 5 years or so, my nearly all-bonds portfolio has been cut in half, leaving me with a lotta cash. But due to the Fed’s easy money policies, the bond market now offered few opportunities to redeploy. Stocks are over-priced, and they have been for years. Everyone knows that. So that wasn’t a place to park (a lotta) money, either. OTOH, given my age, the fact of having no debts, and a Current Ratio of 3x, sitting in cash wasn’t a damaging choice. In short, my days of needing to accumulate wealth were far behind me, and I really was in a position that I could HDAH without negatively impacting my modest, beer-and-bait lifestyle (not with house, car, and toys all paid for, and enough lumber and marine ply still on hand to build more boats than I’ll ever want to).

But markets are a beguiling mistress I’ve courted for decades, sometimes winning her favors, sometimes being scorned, and investing and trading have been part of my life since I was five or so and my parents helped me open a passbook savings account, and certainly, since age ten when I bought my first stock. So I took a lesson from my favorite mentor, Ben Graham, set aside 5% of AUM, and decided to see what I could do in an adverse market by running experiments, which led me to things like USOI and SLVO about which I still haven’t made up my mind.

Rickards argues the Fed will lose their fight against inflation, because they don’t understand it. But they are likely to crash the economy, which will quash demand and --as a secondary effect–dampen inflation. Meanwhile, ‘disinflation’ is likely to become ‘deflation’, which our dear government fears, because they can’t tax it. In a deflationary environment, cash is king, or at lest offers a positive return due to increasing purchasing-power. Rickards advocates carrying 30%, which creates both a hedge and optionality. He likes the 10yr note and would allocate a 10% holding. But I think he’s early on that call. He likes commodity plays, as do I, for another 10%. He’d put another 10% in to PMs. Etc. In other words, rather that run a typical, equities-heavy portfolio, which is essentially just the same, single bet made over and over again, he advocates for wide diversification across multiple asset classes.

I’ve never been a PM guy in terms of owning the physical, and I’ve got no urge to start now. But I am a value investor, and that game never changes. What’s ‘over-bought’ will get sold down to ‘fair value’. What’s ‘over-sold’ will correct back up to ‘fair value’. So I’m not willing to buy the stocks Quill advocates for at their still inflated prices and their tiny, 3%-5% yields. But something that offers 20% to 30% does interest me. It’s just a matter of figuring out how to manage their obvious risks, one of which is ‘market risk’.


How to Become a Millionaire / How to Become Rich - YouTube - 25 stock portfolio which I use in duplicating his portfolio.

I have a 12-dividend portfolio broken down into 15 stocks per portfolio. Currently I own all of monthly portfolios 1, 2, 3. and O , MAIN, PSA, GOOD, AGNC.

I have lists of Quarterlies that pay greater than $0.34 per share.

Each portfolio is broken down by weeks and expect a check during that week.

                       Jan       Feb       Mar      Apr      May       Jun       Jul       Aug      Sep      Oct        Nov      Dec
                       wk5     wk1      wk2      wk3     wk4       wk5     wk1    wk2      wk3     wk4       wk5     wk1
Monthly Portfolio # 1

wk 1    jnk                18.17
wk 2    igib               14.96
wk 3    vgi    31.50  
wk 4    edf    30.18
wk 5    pcef   33.04

wk 1    pcn    48.60  48.60
wk 2
wk 3
wk 4
wk 5

wk 1   acv    111.30  53.60
wk 2
wk 3
wk 4
wk 5


                          WEEK 1  WEEK 2    WEEK 3    WEEK 4    WEEK 5
calendar dates    1 --7      8 -- 14      15 -- 21     22 -- 28    29 -- 31

I don’t chase yields but only look for stocks that pay $ 0.11 per share monthly, $ 0.34 per share quarterly or $ 1.34 annually. I am only interested in Dollars that pay the Rent while yields don’t pay the Rent and put food on the table. I have over 150 stocks as backups just in case the stock mergers or has been simply removed.

when reviewing the huge lists from dividend dot com or MarketBeat dot com, I cross off any stock that is not paying more than $ 1.34 annually as a starter. Monthlies first then Quarterlies next.

I have seen High Yields only pay pennies per share, while 3 4 5 percenters pays a buck or more.

Arindam will come back and start yelling at me because I am doing things all wrong. It is okay, every morning I push the Ca - Ching button to tell my wife we made money today.


Any idea why OILK hasn’t paid a dividend in months? They were paying every month…doc

SLVO looks interesting. Its price is down closer to lows than highs. The dividend is excellent. The only thing that I don’t like is that the dividend has been good for some six months but in the past it was not so good. It could be three or five cents next month. GLO QYLD OILK are different in that the dividend has been above ten % for years I believe. GLO has had a drop from $7 to below $5 the last seven months and the loss isn’t offset by the dividend. I sold GLO because of the price decrease. The dividends were solid. Of course imho…doc

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“SLVO looks interesting…The only thing that I don’t like is that the dividend has been good for some six months but in the past it was not so good.”


I haven’t dug into SLVO (and other options-based) ETFs as deeply I should. But I’d strongly disagree with your comment on the variability of its div.

What’s the source of that div? Profits from the calls being written. As the price of the underlying rises, those calls are going to get exercised. As the price of the underlying falls, the writer will collect prem. That prem is the source of the div. Therefore, the div is going to vary.

You options guys correct me if I’m wrong.


Credit Suisse Silver Shares Covered Call ETN (SLVO) Dividend History | Seeking Alpha I own SLVO in several portfolios.
Clough Global Opportunities Fund (GLO) Dividend History | Seeking Alpha
Global X Funds - Global X NASDAQ 100 Covered Call ETF (QYLD) Dividend History | Seeking Alpha I own QYLD
OILK last payment was on 9/9/22 Most likely no divi’s sell the stock and move on.
What is ProShares K-1 Free Crude Oil Strategy ETF's (OILK) Current Price? -

However, as a Swing Trader we can still make money no matter the stock does per the two (2) simple rules.
Last week I was at my Heart Doctors office and I gave him a crash course with an hours worth of training on how to trade Simon Sez III. Will give him another test at the next follow up visit.

09/01/2022	CASH	$0.828147	08/31/2022	09/02/2022	09/09/2022
08/01/2022	CASH	$0.836969	07/29/2022	08/02/2022	08/08/2022
07/01/2022	CASH	$1.354402	06/30/2022	07/05/2022	07/11/2022

Nov 13, 2022 — With oil prices falling, oil companies reduced their variable dividend payments in the third quarter. That’s the downside of variable dividends.

Why would a company stop paying dividends?
Companies that don’t pay dividends on stocks are typically reinvesting the money that might otherwise go to dividend payments into the expansion and overall growth of the company. This means that, over time, their share prices are likely to appreciate in value.


You’re a friend, and I love you dearly. But you build ugly charts.

Yeah, yeah. I know you like OHLC bars for finding them easy on your eyes. But they’re just messy, chicken scratches across the page, nor is the confetti clutter of the price labels helpful.

So, here’s an alternative version of SLVO (black line) when the divs are backed in, the green line is the equal-weight SP500 index (the best general benchmark there is), and the purple line is a 5-period, Triangular MA. The chart is based on weekly bars --which most ‘investors’ should be using-- with BarChart’s default 1-year lookback.

Take a look at how much money could have been made in the past six months. There was one midsummer whipsaw that caused a tolerable, (-2%) loss. But once onboard the trend in late Aug, there was nothing to do but clip coupons until the third week of Jan, for a (roughly) 25% gain. THAT’S SERIOUS MONEY! for a no-brainer, low-risk, low-effort trade.

Now, of course, come some realities. I built the chart using percentage scaling, rather than log scale, and percent scaling repaints as the chart is scrolled forward or backward. Also, we can’t trade div-backed charts, just those based on actual price. So, let’s clean up the chart and do a repeat, this time tweaking the MA to 8-periods.

There’d again be a tiny, mid-summer whipsaw, and we’d be later getting in. But grabbing the trend in Oct and getting in out in Jan would have offered around 12%, which is a gain that would have to be increased by the divs collected which would add roughly another 9%, for total gain of around 21% for a six-months campaign. THAT’S SERIOUS MONEY! In fact, the money is so good that I got sloppy and failed to trade out of SLVO when all of us should have. (Oh, well. I’ll get it right next time, right? LOL)


Back at acha, Very nice kewl chart work

Simon woke up and decided to play for some pin money.
In on July 18, 2022
Out on Aug 15, 2022, for a nice 8.04104 percent profit. Zero loses.

And Simon did it again
In on Sept 7, 2022
Out on Feb 6, 2023, for a nice 22.3653 percent profit. Zero loses. Simon tries to avoid any losses.

Enjoyed nice dividend checks on 1/19/2023 and each month going backward to April 2022.

09/20/2022 CASH $0.0344 09/01/2022 09/21/2022 09/26/2022
08/19/2022 CASH $0.0275 08/04/2022 08/22/2022 08/25/2022
07/19/2022 CASH $0.0327 07/07/2022 07/20/2022 07/25/2022
06/21/2022 CASH $0.0466 06/07/2022 06/22/2022 06/27/2022
05/19/2022 CASH $0.0629 05/06/2022 05/20/2022 05/25/2022
04/19/2022 CASH $0.1349 04/06/2022 04/20/2022 04/25/2022
03/21/2022 CASH $0.0616 03/04/2022 03/22/2022 03/25/2022
02/18/2022 CASH $0.0568 02/04/2022 02/22/2022 02/25/2022
01/20/2022 CASH $0.0642 01/06/2022 01/21/2022 01/26/2022
12/21/2021 CASH $0.082 12/08/2021 12/22/2021 12/29/2021
11/19/2021 CASH $0.0523 11/05/2021 11/22/2021 11/26/2021
10/19/2021 CASH $0.0244 10/07/2021 10/20/2021 10/25/2021
09/21/2021 CASH $0.0308 09/08/2021 09/22/2021 09/27/2021
08/19/2021 CASH $0.0504 08/06/2021 08/20/2021 08/25/2021

Here are the dividends from 8/21 to 9/22 and these are significantly lower than the last 6 months fwiw…doc