Our fearless, intrepid investor lost $65,700 in 2021, writing (selling) covered calls on Novavax (NVAX) in her “fun” portfolio. Attempting to outperform the market, “fun” portfolios ignore one or more of the six habits promoted by the Monday Morning Program. Most of the time, they are not much fun; they underperform the market.
In fact, every investment mistake, past or future, was or will be the result of departing from one or more of the six habits of the Monday Morning Program.
Last Friday, February 25, NVAX closed at $81.63. Morningstar now states that NVAX is undervalued at a 48% discount so she will hold the stock and not write covered calls on it but wait for the market to realize that this security is undervalued.
At $81.63, NVAX is down 2.17% for the week. The S&P 500 is up 0.17%.
That vindicates the validity of habit number 3, which is to buy the US economy as a whole and not to pick individual stocks. (Investors can do that by buying an exchange-traded fund which tracks the S&P 500. SPY is an excellent example.)
What does she plan to do with NVAX when the market opens at 9:30 AM today? Does she plan any further derivatives selling?
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