Portfolio Management Updates

Recent actions taken within portfolios managed by American Money Management.

Pepsi Increases its Dividend

by Glenn Busch May 3, 2012
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The equity portion of our fund, the Fallen Angels Income Fund (FAINX), primarily invests in companies that we view as undervalued. We also are looking for stocks that pay a dividend, usually between 2-5%, and have the ability to grow their dividends over time. So it’s music to our ears when a position we own in the fund announces a dividend increase. Today Pepsi Co. (PEP) announced a dividend increase.

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Phillips 66 Spin-Off to Join ConocoPhillips in S&P 500

by Glenn Busch April 26, 2012
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ConocoPhillips (COP) has been a position in the Fallen Angels Income Fund (FAINX) and our Enhanced Dividend Strategy for a while now. One reason for it’s addition into both portfolios was ConocoPhillips’ announcement to spin-off its refining business, Phillips 66 (PSX), to shareholders. We will receive our shares in Phillips 66 after the close on Monday, April 30. An added short-term bonus will be the addition on Phillips 66 to the S&P 500, joining ConocoPhillips in the index.

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Position Update: Bank of New York Mellon Passes Stress Test

by Glenn Busch March 22, 2012
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Bank of New York Mellon is one the world’s largest custody banks and it is a position in our strategic dividend strategy and in our mutual fund, The Fallen Angels Income Fund (FAINX). Bank of New York Mellon is first and foremost a position in both strategies because we believe it to be undervalued. Second, it is a position in both strategies because of its current dividend and the potential for Bank of New York Mellon to grow its dividend.

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Position Update: JP Morgan Passes Stress Test and Raises Dividend

by Glenn Busch March 15, 2012
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JP Morgan (JPM) is a position in our strategic dividend portfolio and a position in our Fallen Angels Income Fund (FAINX). The equity portion of the Fallen Angels Income Fund and our strategic dividend strategy focus on finding not only finding undervalued dividend paying stocks but stocks that have the potential to grow their dividend. Entering this year we saw the financial sector, predominantly the large banks, having the potential to greatly increase their dividend payouts. They just needed to pass the Federal Reserve stress test and get any new capital plan approved by the Fed too. JP Morgan did both.

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Position Update: Exelon Clears a Hurdle

by Glenn Busch March 13, 2012
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Exelon (EXC) has been a laggard in both our strategic dividend portfolio and in the equity portion of the Fallen Angels Income Fund (FAINX). Besides depressed natural gas prices and a renewed negative sentiment on nuclear energy, Exelon’s share price has been dragged down by the status of its potential merger with Constellation Energy (CEG).

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December Option Expiration & Our Enhanced Dividend Income Portfolio

by Glenn Busch December 22, 2011
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The lone covered call that expired last week was for Exxon-Mobil (XOM). We previously sold an October call on this position and had it called away. Then, when all the major integrated oil & gas companies sold-off and we were able to re-establish our position in Exxon-Mobil for around the same price we were called away at. Again, the major integrated oil & gas companies rallied and we saw an opportunity to sell another call at short-term resistance levels.

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November Option Expiration and our Dividend Income Portfolio

by Glenn Busch November 28, 2011
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Option expiration for November 2011 was just over a week ago. We had four outstanding covered calls in our Enhanced Dividend Income portfolio, all expired worthless. I’ll run through each trade below.

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Two October Option Expiration Events in Our Enhanced Dividend Income Portfolio

by Glenn Busch October 28, 2011
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Our Enhanced Dividend Income portfolio invests in high-quality dividend paying stocks that also have the ability to grow their dividend over time. The portfolio also involves selling covered calls selectively and strategically on positions. We sold calls that expired last weekend on two positions, JP Morgan Chase (JPM) and Exxon Mobil (XOM).

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American Money Management LLC ~ Q3 2011 Letter to our Clients

by Glenn Busch August 11, 2011

Our big picture view of the investment landscape did not materially change over the last quarter. Specifically, we continue to see sustainable, albeit weak, economic growth in the coming quarters. Towards the end of the 2nd quarter market volatility increased on fears related to the European “debt crisis”, the end of the Fed’s 2nd round of money printing (QE2), the debt ceiling debate, and a spate of economic data suggesting the economy may be weaker than many had anticipated earlier in the year.

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Reducing Risk Assets, Increasing Market Neutral Position

by Glenn Busch May 19, 2011
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The summer of 2011 is looking a lot like the summer of 2010. European debt woes have intensified, quantitative easing is ending, U.S. and global economic data is softening. For these reasons we at American Money Management LLC have and will be moving capital from risks assets into market neutral strategies, primarily merger arbitrage.

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