SHARPE INCOME … The ‘Itch’

Posted on Mar 16 2015 - 8:44am by Sharpe Trade

The original Sharpe Income post can be found here.

The Sharpe Income category be found by clicking on that red ‘Sharpe Income’ tag next to this post title, or by clicking here.

We continue the discussion from the last entry.


As you will note in the PDF attached at the bottom of this post, The Sharpe Income project now has $266.82 in cash after this Monday’s deposit.

Do you feel an ‘itch’ to purchase something?  With more cash available, do you feel a ‘pressure’ or ‘need’ to buy an asset?  Is the cash ‘burning a hole’ in your pocket?

Well … ignore that ‘itch’.  We do not make purchases to satisfy a ‘feeling’ or ‘itch’.  We do not bend rules to satisfy some ‘excitement’ that you may feel making a purchase.  Emotional control and discipline are absolutely vital in this business.

That being said …

The cash that I have in my personal Income account and for this project is burning a hole in my pocket.

Joking aside, per my own rules, there are a few ‘contenders’ that are close to having an order sent out for the purposes of this project …

Actionable View of Markets for ‘Sharpe Income’

American Express (AXP):  You could literally see an entry with an order show up here to buy AXP any day now.  The price has fallen after earnings, and it has done nothing but ‘congest sideways’; not breaking to make lower lows.  How much of the fundamental news is currently being priced in by the market … it’s impossible to say.

But I do knowAmerican Express AXP that I buy assets when they have fallen in price, and become cheaper.

American Express (AXP) fits that bill.

But usually, after a stock falls in price, I like to see it show just a bit more strength on a daily chart before making a purchase.  I am not yet seeing that strength with American Express (AXP).  At least not yet.

American Express (AXP) – Daily Chart (via Tradingview.com)

Chart of American Express (AXP)

We cannot predict the future, and American Express (AXP) may make new lows in the weeks to come.

So for now, here … we will simply wait and see how the stock trades in the future.  I want to see a bit more strength, before entering an order.

iShares 20+ Year Treasury Bond ETF (TLT):  I have not yet mentioned TLT for the Sharpe Income project.  But I will be using this ETF that is exposed to longer maturity U.S. Bonds.  

As you will note on the Google Drive spreadsheet (link below), TLT is to be considered part of the capital gains strategy.  And as I stated in the entry that discussed JNK and the capital gains strategy, I am not using TLT as a single piece. TLT will be used with PCY and JNK as well as some other instruments as part of an entire strategy for capital gains.

But as with American Express (AXP), I am not yet ready to put the order in to buy TLT.  Again, the price has not begun to break to new highs after the recent sell-off.

So I will simply watch … wait … and observe.

The link to the Google Drive Spreadsheet that you can view, that we will edit, build upon and refer to over time can be found at this link.

We continue the Sharpe Income project with this next entry.

The Sharpe Income PDF breakdown for Week 16 can be found here …

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