There has been much discussion in the press about earnings dissapointments coming.

In my experience, when the pessimism gets that high and stockks refuse to sell off, then we have a rally coming.  Call options are still cheap.  Dividend payers are still a good buy and will keep growing.  I have brought up my equity exposure to15% from a low of about 7% recently.  The options I bought would increase my exposure to the 35% level if we continue to rally.

Banks continue to show some improvements despite rate pressuring their bottom line.  This is a direct result of the balance sheet repair imported from the QE.  This effect is also helping homeowners with refinancing and companies for the same reason.

Bonds have come off a bit (TLT) and I think at these levels provide a reasonable hedge against the market selling off due to a surprise.  In addition, with the low growth environment and QE, I do not think there is currently a risk of bonds having a big selloff.  That will come in time, but not now.


http://online.barrons.com/article/SB50001424053111904757804578032721106626626.html


A good article on ETF's and yield investing.  Please make sure you consider the premium to NAV when looking at funds.  MHN is one that I invest in and fluctuates considerably around NAV.  The issue with some of these is that it is hard to take advantage of fluctuations.  MHN for example, I wrote a few days ago that I was selling a bit when it was trading at a 5% premium.  I was correct, as it dropped to about a 1% premium, however, I only sold a small portion of what I wanted to sell because I impacted the price too much.  Even a few thousand shares of a stock that doesn't trade too much can have an impact.  So consider that as well when making your trading decisions.  Impact is why for me, this stock is a buy and hold and I only trade a small amount at the margin.

I am going to be taking a good look at the Sprint deal.  My first quick analysis makes it look pretty attractive.  The basic idea is that Softbank is going to be paying 7.3 for 55% and there will be some more support at 5.25.  With the stock trading at 5.75, the value for the remaining 45% seems to low to me.  It should be worthwhile looking through the prospectus.   Here is an article I found doing some of this analysis:

http://seekingalpha.com/article/926991-sprint-s-unreasonable-post-deal-valuation?source=intbrokers_regular