Viewing Expert Richard Croft | StockChase
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Compiling comments that experts make about stocks while on public TV.

Viewing Expert

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
2016-12-09 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Market. Trump has some very good economic policies, which is positive for the economy. The issue we are going to face is, are we going to have the candidate Trump in the president’s office or are we going to have a president Trump. He assumes that he is what his family says he is. If so, his policies on the economy are very good. He will get tax cuts through fairly quickly. Believes that in his first 100 days he will stop regulations in their tracks, and do a review department by department to find out how many of those regulations they actually need, and which ones they can get rid of. Corporate tax cuts are going to be important for the bottom line of earnings, and the economy may actually pick up some steam next year. The first 3 or 4 weeks following the election was a sector rotation moving out of dividend paying. The banks along with everything else are starting to react, and he thinks that is the shift that is coming out of the bond market. The credit quality of borrowers has improved. We have now been 6 years since the financial crisis. There has been massive deleveraging going on in the US. People that couldn’t get loans 3 years ago, actually qualify today. Banks are now loaning pretty close to where they were at the time of the financial crisis, which has been a short-term phenomenon within the last 6 months. A 1% rise in interest rates has a 16% hit to the bottom margins of a bank, an amazing leverage factor. The banks are well positioned and well capitalized.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
_N/A
2016-12-09 COMMENT Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

What do you think of Scotia Bank Split Shares? Scotia essentially bought their own stock and managed it as a fund. They basically split their shares in half, which means investors can buy capital shares which participates in the growth of the bank and any growth in the dividend; or they can buy the preferred shares which captures the excess dividends that the company pays. The preferred shares are very safe in this product. Think of them as a deep in the money covered call write. The capital shares are effectively a Call option, and the way you make your money on that is that they distribute the excess gain and dividends to the unit holders, on a monthly basis, which is why there is a fairly hefty dividend. He likes the banks.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
2016-12-09 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Is Black Scholes still relevant? Black Scholes is the model used to price options. One of the factors in this model is interest rates. In theory, if interest rates are declining, you would suspect option premiums to be lower. That is not exactly true. Interest rates are only one factor in the equation. The other offsetting factor is dividends. So really, when you are pricing an option, you are pricing a Call versus a Put. That is the arbitrage Play. If he buys a stock, collects the dividend, and sells a Covered Call against it, he is getting a dividend and that is part of the pricing of what affects that Call option. He can write a Put option, and put the money that he would’ve put into the stock into cash, which is exactly the same position. The Put option needs to pay him more in today’s environment, because if the underlying stock has a 4% dividend, the risk-free rate of return on that cash is actually only 1% or less. Because of this, he gets a higher value for the Put and a lower value for Calls. If interest rates rise, one would think that that parity would start to narrow.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
_N/A
2016-12-09 COMMENT Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

An ETF that tracks the Russell 2000 or one that tracks US regional banks? In a stronger economy, small caps are going to benefit. One would look at a number of regional banks in the US, and they would actually fall into that small-cap category. Neither one of these is a bad play on the US economy. His inclination would be to move to the Russell 2000, as he thinks it is more diversified.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
2016-12-09 COMMENT Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

A strategy for a retail investor to play a lower Cdn$ vs the US$? There is a US currency ETF that trades on the Philadelphia exchange. You can buy a Cdn$ one and buy puts on it. He is not sure that there is going to be a problem with the Cdn$, and would encourage you to look at the performance of the dollar since the election. The US$ has been on fire, and of course the world hears that, and tends not to hear too much else. The Cdn$ has actually held in pretty decently against the US$, and many other currencies have not. It leaves him to think that 1) we have some strength in the value of oil, which has been a reason it has bounced up just recently, and 2) he doesn’t think Trump is going to come down hard on NAFTA, but is going to tweak it.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
2016-12-09 COMMENT Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

A dividend ETF with some growth for a retiree? If you are a retired person drawing income, then he would look at something like the Premium Income Corp Preferred A (PIC.A-T). However, if you are looking for dividend growth, you could look at iShares Cdn Dividend (XDV-T).


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
2016-12-09 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Strategies behind selling Puts? This is an interesting concept. If you were selling a Put, what you are really doing is taking out an obligation to buy an underlying security at a specific price. EG. If he sold a Put option at $110 on a stock trading at around $111 today, all he has really done is committed to buying the stock at $110, and he gets a premium for doing that.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
_N/A
2016-12-09 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Options versus Leaps? The problem you have with Leaps is that the liquidity is not as strong as it is on shorter term options, and the Bid/Ask spread can be quite wide. Rising interest rates won’t have an impact on the premiums as a whole. The only impact it will have is the value of a Call relative to a Put, which is nothing more than the arbitrage which creates the structure that allows you to take a position with Calls or Puts in exactly the same position. If he buys a Call he is going Long, it is exactly the same as buying a stock plus a Put to protect his downside.


Price:
$0.020
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
_N/A
2016-12-09 TOP PICK Must be logged in to use chart BAC-N Bank of America

Synthetic Long Position. He is looking out to January 2018. He buys a $25 Call and sells a $25 Put. That is exactly the same as if he went out and bought the stock. He is going to get exactly the same return, whether the stock goes up or down. The risk is all the way to zero, and the upside is unlimited. The synthetic is a way to participate in this, without getting involved in the currency issue. The $25 Call is going to cost you less then the sale of the $25 Put. You are going to end up with about a $2 US credit, so you have no money outlay.


Price:
$23.090
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Yes
2016-12-09 COMMENT Must be logged in to use chart DFN-T Dividend 15 Split Corp.

This holds 15 stocks, both Canadian and US banks. He likes this. If you are going to the capital share on that, that is probably the way he would play it if you are a growth investor. If you are an income seeking investor, he thinks you can be pretty comfortable with the dividend and the preferred share will stay intact, and you will be fine.


Price:
$10.870
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
2016-12-09 PAST TOP PICK Must be logged in to use chart FB-Q Facebook

(A Top Pick Dec 10/15. Down 100%.) Bull Call Spread. On this he was buying the call, selling a call at a higher strike, so he had a debit position. The stock didn’t go up, so you lost the net cost of the spread.


Price:
$119.680
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Yes
2016-12-09 COMMENT Must be logged in to use chart INDA-US iShares MSCI India ETF

He is not excited about India, nor is he excited about China. The story right now is probably North America. He does like Europe and would put that in behind the US, and then he would look into places like India.


Price:
$0.000
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
No
2016-12-09 TOP PICK Must be logged in to use chart MS-N Morgan Stanley

Synthetic Long Position. He is looking out to January 2018. He buys a $45 Call and sells a $45 Put. That is exactly the same as if he went out and bought the stock. He is going to get exactly the same return, whether the stock goes up or down. The risk is all the way to zero, and the upside is unlimited. The synthetic is a way to participate in this, without getting involved in the currency issue. The $45 Call is going to cost you less then the sale of the $45 Put. You are going to end up with about a $2 US credit, so you have no money outlay.


Price:
$43.730
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
No
2016-12-09 PAST TOP PICK Must be logged in to use chart NFLX-Q Netflix Inc.

(A Top Pick Dec 10/15. Down 163%.) Bull Put Spread. He had been trying to show different examples of how you could play strategies from both sides of the play.


Price:
$122.880
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
No
2016-12-09 COMMENT Must be logged in to use chart PIC.A-T Premium Income Corp. (A)

This fund has 5 banks, and they split the capital shares, and the preferreds represent the dividends. A very good income producing pick, because it is about a 6% yield. If you think banks are going to continue to go up, which he does, you will continue to get a high dividend.


Price:
$6.920
Subject:
OPTIONS & ETFs
Bias:
OPTIMISTIC
Owned:
Unknown
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