{"id":14440,"date":"2011-03-15T23:05:25","date_gmt":"2011-03-16T03:05:25","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=14440"},"modified":"2011-03-15T23:05:25","modified_gmt":"2011-03-16T03:05:25","slug":"clearing-up-the-confusion-over-split-shares","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=14440","title":{"rendered":"Clearing up the confusion over split shares"},"content":{"rendered":"<p>John Heinzl has <a href=\"http:\/\/www.theglobeandmail.com\/globe-investor\/investor-education\/investor-clinic\/clearing-up-the-confusion-over-split-shares\/article1943257\/\">written an article with the captioned title<\/a> that follows up his earlier piece titled <a href=\"http:\/\/www.prefblog.com\/?p=14244\">Ups and downs of doing the splits<\/a>.<\/p>\n<p>&#8220;Jim from Victoria&#8221; wrote in and said (among other entertaining things):<\/p>\n<blockquote><p>Also you failed to mention that the shortfall in dividend income for the capital shares is made up from writing covered calls, one of the most secure and safest types of income investing one can do IF you know what you doing.<\/p><\/blockquote>\n<p>I was asked for comment:<\/p>\n<blockquote><p>Regarding your point about selling options to generate income, I asked split-share expert James Hymas of Hymas Investment Management to comment generally on the strategy of writing covered calls to fund dividends on the capital shares. (When an investor writes a covered call, he earns cash in exchange for granting the right to another investor to buy his shares at a specific price on a certain date.)<\/p>\n<p>Here\u2019s what Mr. Hymas had to say: \u201cThere does not appear to be any support for the claim that the strategy is doing anything useful at all for the split share corporations. None of them break out their books in sufficient detail for an assessment to be made; none of them or their subadvisers provide any actual performance data to support such a claim.<\/p>\n<p>\u201cThe only thing that can be said for [selling covered calls] is that it will produce income, at the expense of potential capital gains. There is a tradeoff there.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>John Heinzl has written an article with the captioned title that follows up his earlier piece titled Ups and downs of doing the splits. &#8220;Jim from Victoria&#8221; wrote in and said (among other entertaining things): &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-14440","post","type-post","status-publish","format-standard","hentry","category-press-clippings"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14440","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14440"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/14440\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}