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Compiling comments that experts make about stocks while on public TV.

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Richard Croft , President

R.N. Croft Financial Group Inc.

Address
218 Steeles Ave East
Thornhill, ON
L3T 1A6

Contact Info
Telephone: (905) 695-7777
Toll Free: 1-877-249-2884
Fax: (905) 695-9777
Email:
Website: http://www.croftgroup.com/index.htm

Bio:

R. N. Croft Financial Group Inc. is a boutique portfolio management company, providing fully customized discretionary asset management to discriminating investors. Our investment approach combines low cost tax-efficient indexed investment strategies, with targeted active management, and sophisticated options techniques to maximize client returns at any risk level. Our portfolio processes are unique, flexible and comprehensive.

Date Signal Chart Symbol Company Opinion Price
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

US Economy. Feels the 2nd half is going to be solid. Longer-term he feels the economy is going to be pretty good. The healthcare system they are putting in place, as bad as it is right now, in time will prove to be somewhat similar to what we have in Canada, which means costs certainty for a lot of corporations and a lot of people. That will be good for the economy. Also, something that has not been talked about nearly enough is energy independence, which they are talking about as early as 2015. This is huge for the US economy.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

European Economy. The surprise will be if they do a major stimulus program and he thinks that they might. Negative interest rates are not going to help anything. Japan lived through that exercise for 20 years and it didn’t work. The stimulus that Japan put in last year helped, but was a temporary measure. Not a big fan of stimulus for stimulus sake, but this is probably where they are going to have to go in Europe. It would be nice if the ECB took that stand now rather than later. They are already about one year behind the US in terms of stimulating and doing what they need to do for the economy.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

TSX. About 400 points away from its all-time high it hit in 2007-2008. If you look at the Canadian market and compare it to the S&P 500 and you overlay a chart, one against the other, the correlation between the 2 markets has been extremely tight for a long time. It drifted apart at the moment QE3 started and when the US market took off. Had thought Canada would play catch up this year. Canadian economy last year played off real economic activity, which was very positive. Thinks Canadian economy will go a long way to catching the US markets this year. Wouldn’t be surprised to see us at record highs sooner than later this year.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Covered writing. Using Goldcorp (G-T) as an example, it is trading at around $26 a share, which isn’t a bad price. You might buy the stock and then write a $20 Call 3 or 6 months out, depending on your time frame. You would get a premium for selling that option. The premium might be $1-$2 a share depending on the strike price and the distance to expiration. That is yours to keep no matter what happens. You still own the stock. If the stock rallies, which he doesn’t really see for any of the gold companies, or gold itself, you will be called away at $28 a share. You are giving up upside for immediate cash flow, that is really all that covered writing is. Taxed as a capital gains which is tax advantage strategy for Canadian investors.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Convertible debentures, 5-year term or less with an attractive interest rate? If these have an attractive interest rate, this is usually telling you that it is a higher risk company and you have to look at the credit quality of the company that is issuing the debentures. Putting that aside, he actually likes convertible debentures. They have been priced more efficiently in the last 20 years, since options have become so popular. If you really think about a convertible debenture, all it really is is a call option on the stock and the fixed income investment in the same company.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Covered call ETFs? This comes down to how much of this do you want to do yourself. Writing covered calls against ETFs is certainly a good strategy. You could buy the TSX 60 (XIU-T) which has a 15 basis point MER, virtually no cost to running it. You could write your own covered calls. You also might want to think about that when talking about Covered Calls ETFs which tend to be writing options against individual stocks within the ETF. Options on stocks tend to have a higher premium than options on an index because the index, by definition, is of less risk than individual stocks. The risk in this strategy is that if you have a diversified portfolio to start with and you start writing options against all of it, the good stocks are called away and you are left with the ones that didn’t do so well. When you rewrite, you are buying high and it doesn’t work very well.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Which is riskier; owning bonds, or owning bond ETFs? If you own bonds, they are going to mature at some point. That is the risk of one versus the other. It comes down to the durations of the ETF, the ETF will never mature, so psychologically there’s something about having a product that at some point you know exactly what you are going to get back. Bonds are emotionally easier to hold onto. An ETF is always going to have a rolling duration. That maturity factor gives comfort to a lot of people.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Energy. Thinks there is going to be energy independence in the US in 2015. Not a believer that energy is going to take off into the stratosphere. If anything, more supply coming on to the marketplace may actually suppress prices. Russia’s deal with China was interesting and feels that fact could also put somewhat of a cap on energy as we go forward.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

In a TFSA, is it better to buy ETFs or common stocks? This is really a small component of a portfolio because you can only have $30,000 in  an TFSA based on your contributions. He tends to buy common shares such as Bank of America (BAC-N) and Bank of Montréal (BMO-T). He is looking for growth.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Generating regular income using weekly options? Perhaps a Canada covered call? Weekly options have come into the marketplace and they expire every week, so you have an opportunity to write an option, see the stock get called away, and then write another one. In order to make that have any real sizzle to it, you have to look at companies that have a little bit of volatility to them, so that brings up names like Twitter (TWTR-N), Facebook (FB-Q). Somewhere down the line, you are going to have a stock go in the other direction and you’ll have an option expire without much downside protection. That is the risky play in this field.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
_N/A
2014-05-26 PAST TOP PICK Must be logged in to use chart BAC-N Bank of America

(A Top Pick July 30/13. Down 44.69%.) (Bought Jan 15 Calls at US$1.79.) These expire in 2015. They were up over $3.90 at their high. This bank fell precipitously when they announced the mispricing of some of the derivatives that they had.


Price:
$14.720
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
Yes
2014-05-26 COMMENT Must be logged in to use chart BNS-T Bank of Nova Scotia

$66 Puts for October? Insurance is cheap right now because implied volatility on most of the banks is very cheap and they have actually had a very good run. The price today was $68, so you are $2 out of the money. 6 months out is typically what he would use, so October is fine. When you are trading stocks that have high dividends, you are going to pay more for the Put then you are for the Call options. Aside from that, there is nothing wrong with this strategy.


Price:
$68.000
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
Unknown
2014-05-26 COMMENT Must be logged in to use chart BTE-T Baytex Energy Corp

Sold a $42 October Put for $1.10 and also bought a $48 Call for $.50. Thoughts on the strategy? The strategy was synthetic Long positions, basically selling a Put and buying a Call. If you look at the performance of those 2 instruments based on the performance of the underlying stock, it would look very similar.


Price:
$45.870
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
Unknown
2014-05-26 COMMENT Must be logged in to use chart CBO-T iShares 1-5 yr Ladder Corp Bond ETF

Writing naked puts to keep a fair bit of US/Cdn cash on hand. Concerned about rising interest rates. What about high yield bond funds? He would not put it in a high-yield bond fund because, in effect, what you are doing is cash securing a put option that you’ve sold. CBO is a good place and there’s nothing wrong with this. An interesting product only because the portfolio tends to be holding longer-term bonds issued by banks and credit worthy customers, but they are callable bonds within 5 years. CBD-T is another product you could use.


Price:
$19.730
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
Unknown
2014-05-26 TOP PICK Must be logged in to use chart ERUS-N iShares MSCI Russia Capped ETF

This has a little higher yield at about 1.7% and an 8 PE. When you are dealing with a Russian ETF or Russian stocks in general, you don’t get a nice, steady move up and down. He just thinks this is cheap. At 8X PE, something will drive that economy, which will turn it around and cons one of these sharp moves to the upside, in his opinion. Doesn’t think there is much downside risk at this point. Not a long-term hold.


Price:
$19.930
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
BULLISH
Owned:
No
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