Born To Sell Seller's Paradise 
Oct 1, 2013 
Market Rises During 1995 Government Shutdowns

What will the market do now that the government has shut down? Let's look at the last shutdown that took place in 1995...

government shutdownIn the 1994 midterm elections the Republicans won control of both the House and the Senate. But the budget crisis that followed in 1995 led to two government shutdowns, one in November that year and one in December. Despite that, the stock market did not crash. Defying logic the market actually went *up* during both shutdowns. That's because the shutdowns were widely expected (i.e. priced in well before they happened) and short lived.

That doesn't mean that this time will be the same. Nor does it mean the market will go up this week. In 1995 we didn't have a pending debt ceiling crisis, for example, immediately following the shutdown. Mark Hulbert of MarketWatch discusses this in his article A walk down memory lane.

Dividend Champions Covered Calls

When discussing dividends, consistency and increases are key. There are some companies that have both in spades. Dividend Champions are companies that have raised their dividends for 25 years in a row or more.

Given their long history of increasing dividends, it is likely they will continue to do so. Wouldn't it be nice if you could predict when they would next increase their dividends, and buy some shares to write covered calls in advance of that?

Our article Dividend Champions Covered Calls shows 18 companies that are within the window of "about to increase their dividend" based on past behavior and last year's dates. Check it out and consider buying before the increases are announced (and, of course, write some calls against them for extra protection and income).

Portfolio Hedge That Generates Income

free insuranceThe best portfolio hedge is one that costs nothing and gives you lots of protection. What's not to like about that? Kind of like free insurance.

Buying put options is effective but expensive. What we need is a way to profit (or at least not lose) in down markets that doesn't cost a lot.

While we don't have an iron clad strategy to prevent all losses during a downtrend (other than being in cash), we can show you how to use inverse ETFs to reduce (but not eliminate) risk. It's a hedge that has the potential to generate income for you in addition to providing a bit of portfolio hedge (although there is a trade off between amount of income and amount of hedge).

It's not perfect and you could still lose money, even if hedged. But this method could give you some extra downside protection and possibly even pay you to do it during a flat or falling market. For details, see our article on Inverse ETF Covered Calls.

AMRN And 3 Other Covered Calls For Oct 19 Expiration

With just under 3 weeks to go until the October options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity):


(Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.)

MSFT And Other Covered Call Watchlist Stocks

Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity):


(Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!)

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Happy Trading,

The Born To Sell Team

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