Saturday, April 29, 2017

Another Tool in the Box

  In last week’s post about the progress of the Found Money Fund (FMF) I mentioned that I had dipped into the waters of buying my favorite Intel stock (INTC) and selling options to give someone the right to purchase the stock at an agreed upon price (the strike price) up to an agreed upon time (the expiration date). I also mentioned that since the FMF had finally accumulated 100 shares of one of its pillar stocks AT&T (T) I had sold an option to sell the stock at a price of $46 up to October 21st of this year. In January I wrote a post called 'Born To Lose' about my penchant for using the funds rolled over from previous employer’s 401k plans in my self-directed Fidelity account to purchase stocks and make sell options for less money than the stock was currently worth with the premium received for the option more than compensating for the loss in selling a stock for less than I paid (plus commissions). The idea behind this strategy is to make a quick percent or two on my investment and hopefully have the option exercised so I can execute the same strategy with the same money over and over.

  No one I talk to about investing had heard of this strategy of planning to sell stock at a loss and I knew that I wasn’t the first person to think of this so I went on the internet and found that a related strategy exists called In-The-Money Covered Call’. It is listed in “theoptionsguide” website as “a good strategy to use if the options trader is looking to earn a consistent moderate rate of return.” which certainly fits me to the letter although it doesn't quite fit in that I am buying the stocks specifically to sell the In-The-Money covered call. In ‘Born to Lose’ I wrote about three covered calls (2 for INTC and 1 for EMR that were likely to be exercised in the days after the post was published. All three options were exercised and I immediately went about looking for new buying opportunities. When my January 6th option for 300 shares of Intel was called I bought 300 more shares at 36.70 and sold the option at a strike price of $36 expiring on February 17th. The premium of 1.46 per share I received on the option would leave me a profit of over $200 if the option was exercised five weeks later. The option was exercised on February 17th and as a bonus I got an extra $78 when Intel declared their quarterly dividend of 26 cents a share for stockholders as of February 3rd. The entire transaction netted me $280.76 or 2.55% over 38 days (23.85% annually) which to me was much better than a ‘moderate rate of return’.
1/19/2017Buy 300 INTC @36.6959-11016.72
1/19/2017Sell 3 INTC Option @36 (1.46)
Expiring 2/17/2017
2/3/2017.26 dividend payable 3/1/2017+78.00
2/17/2017Sell 300 INTC @36.00
(option was exercised)

  My next option buys was another favorite Emerson (EMR) who I worked for and can personally attest to their commitment to their bottom line. On January 12th I bought 100 shares at 57.15 and received $3.25 a share to sell the option at a strike of $55 expiring March 17th. Two weeks later I made a similar play and on January 26th I bought 100 shares at $60 per share, and collected $3.10 a share to sell the option at a strike of $57.5 also expiring on March 17th. I was counting on collecting the .48 cent dividend on February 15th but the stock hit a huge upswing and with a price of 64.14 both options were exercised the day before the dividend would be mine, leaving me with smallish profits of $85.23 (1.49%) and $37.61 (.63%) over 34 and 20 days respectively which could be described as moderate.
1/12/2017Buy 100 EMR @57.15-5722.952
1/12/2017Sell 1 EMR Option @55 (3.25)
Expiring 3/17/2017
2/15/2017Sell 100 EMR @55.00
(option was exercised)
1/26/2017Buy 100 EMR @57.9761-6005.56
1/26/2017Sell 1 EMR Option @57.5 (3.10)
Expiring 3/17/2017
2/15/2017Sell 100 EMR @57.50
(option was exercised)

  My third option purchase was for Exxon (XOM),another old favorite which has wild fluctuations in prices depending on the various states of unrest in oil producing nations. On February 15th I bought 100 shares of Exxon at $82.925 and collected $223 for the option at a stike of $82.50 expiring April 21st. On March 30th, Exxon had taken a roller coaster dip from $83.87 to $81.84 in one day and the price of my option plummeted so I bought the option back for $1.10 a share and immediately sold another option at the same strike price of $82.50 only expiring a month later on May 19th for $1.80 a share. Less commissions I collected an extra $60 or .71% to extend the option out an extra month and there is the possibility of collecting a 75 cent a share dividend for Exxon in early May.

2/15/2017Buy 100 XOM @82.925-8300.45
2/15/2017Sell 1 XOM Option @82.5 (2.32)
Expiring 4/21/2017
3/30/2017Buy 1 XOM Option @82.5 (1.10)
Expiring 4/21/2017
3/30/2017Sell 1 XOM Option @82.5 (1.80)
Expiring 5/19/2017
5/19/2017Sell 100 XOM @82.5
(if option is exercised)

  All three of the options have something in common – they were for stocks I just bought and the option strike price was less than I paid for the stock with the expectation that the option would be exercised and I will sell the stock and get my money back along with a 1 to 3 percent return over a month or two. I wouldn’t feel awful if the price of Intel, Exxon, or Emerson tanked and I got stuck with the stock because these companies have been around for years, pay healthy dividends, and are bound to be back up at some point but I want the options to be exercised to I can keep cycling through my strategy for a percent or two return.

  There are some stocks that I feel like I have as investments and would like to boost my earnings by selling options but I would rather not have these options exercised. The 100 shares I have in AT&T in the Found Money Fund is an example. When I went looking to sell an option for AT&T I had to think about a) what kind of return I wanted and b) what kind of price would make me OK with selling the stock. I decided that I would want the quarterly dividend payout (.49 cents a share) as a return and I would feel comfortable selling AT&T if they were at their year high. AT&T’s 52 week high was 43.89 on July 5th 2016 and I saw that I could sell an option at a strike of $44 expiring in August and get $40 but I decided to go a little longer in time and a little higher in stike price so I went for an October 21st option for a strike of $46 and collected $45 after commissions for the option. I’m only getting an annual return on the option of a little more than 2% but that’s fine because this time I’m definitely going for a ‘moderate’ return. If AT&T breaks above their year high I’ll sell the stock for $46 and be pretty happy to grab a great profit. In the month since I sold this option AT&T has gone from almost $42 to under $40 and I can buy this option back for $12, banking a profit of $28 after commissions. I am waiting until the price of the option goes to $10 so I can buy it back commission free.

  I felt pretty good about this idea of collecting an extra dividend payment and possibly selling a stock at a year high so I did it again with the 100 shares of EMR stock I’ve owned since late 2014. The initial purchase price was 61.44 and the stock has gone between $50 and $65 in the interim but by collecting a healthy dividend and selling options I currently show a profit of over 13.3% (5.6% annually) on a stock whose price is virtually unchanged (61.22 on April 25th) over the 2 and a half years I’ve owned it. I’m pretty attached to these particular shares so when I decided to make a little extra money on them I went for the same strategy. Emerson’s 52 week high is 64.37 on February 10th. On March 6th I collected $58 to sell an option to sell Emerson for a $65 strike expiring June 16th. At the time Emerson was trading at $60 and last Friday it is selling at $59 with the price of the option dropping to $14. I am following the same strategy as T and will buy the option back if the price goes down to $10 so I can save the $5 commission.

  Since I've brought up the commission a few times I should mention that earlier this year Fidelity lowered their commission for trading stocks on their site from $7.95 a trade to $4.95 a trade. The $3 savings per trade is a significant factor in options as the payouts are smaller and the commission percentage is larger and it is a nice bonus for a small fish like me that only trades an option or two at a time. If I was trading 10 or 20 options at a time the commission would be no issue since it would be less than a penny a share.

  My new option strategy of having some keeper stocks that I am only willing to sell high and will accept less in options premiums along with stocks that I buy in order to collect more money for options that I expect to be exercised makes it seem like I have a bit of a split personality disorder as I read this post a day after writing it. I see it as a process of getting familiar enough with options to use them in different ways. I started out by selling short term options that would guarantee me a profit if exercised as a way of making extra profit on a stock transaction. Then I discovered a way to make a short term profit on cash by buying a stock and selling the option at a lower price than I paid in order to again make a short term profit. Now I am playing more of a long game by squeezing an extra percent or two out of stocks I have as long term investments by selling options for high prices way out in the future. All three strategies have their place in my toolbox and all three fit my profile of wanting to maximize my profits without taking undue risks.

Friday, April 21, 2017

FMF – Go With What You Know

  It has been a tumultuous seven months since I last reported on the Found Money Fund (or FMF). The FMF was started in 2015 as the dropping off point in a Fidelity stock brokerage account for the extra money I get from giving chess lessons, supporting the shoe store software I stopped writing a decade ago, tax returns, side programming jobs, money I find on the ground walking my dogs, and any other unanticipated income. I started using my found money to buy four stocks: Phillip Morris (PM), AT&T (T), Coca-Cola (KO), and mortgage real estate trust company American Capital Agency Corp. (AGNC). All four stocks pay dividends which I reinvest back into the stocks commission free. In September the AGNC stock lowered its dividend from 20 cents a share to 18 cents a share and I was considering selling the stock because I expected the stock price to go from $19.50 a share to $18 a share since I remembered the stock price going from $22 to $20 a share when the dividend was cut from 22 cents a share to 20 cents a share.

  I had placed a sell order for 102 shares of AGNC stock with a stop limit of 50 cents, meaning that the sale would be executed when the price went down 50 cents from the peak price AFTER I placed the sell order. The stock drifted a little over $19.50, reached $19.81 and then took a severe downturn whereupon my sell order was executed for $19.31 on September 9th. The stock drifted between 18.50 and 19.50 over the next couple of months and hit a low of $17.53 on December 15th, leaving me feeling very smart indeed about my decision to sell this mortgage real estate investment trust (mREIT) that I really don’t understand. I am feeling a lot less smart about my decision in the last two months since a rise in interest rates with the prospect of more to come has given the stock a second wind to currently trade over $20.50 a share. I kept 11.443 shares of the stock as my profit and still receive $2 a month in dividends so it’s not a financial disaster but more of an opportunity cost due to not understanding this stock since by simply doing nothing I would have made an extra $300 in profits.

  Aside from the AGNC misfire, the other three pillars of the FMF have been performing nicely with Phillip-Morris my top performer, Coca-Cola bringing up the rear, and AT&T solidly in the middle with massive fluctuations depending on how the investment public views the prospects of their upcoming merger with Time-Warner. At the time of my last post, the FMF had shown an all-time profit of $1347, down from the high of $1615 on July 6th, 2016. The uncertainty surrounding the election and the surprise election of President Trump sent my stocks into a tailspin and the profits had dwindled to under $500 on November 14th. Then stocks took a dramatic turnaround. My profits went back over $1000 on December 9th, again reached the $1500 mark on February 3rd, and hit a new all-time profit of $1659 five days later. In the next two months I hit 18 new profit records with the latest high of $2377 set on April 18th. Meanwhile I had a decent time getting found money and was able to make 8 buys in my preferred purchase amount of $500.

DateTransactionDJIAStock +/-FMF +/-
September 9, 2016SELL 102 AGNC @19.3218,085216.631,037.16
December 5, 2016Buy 12 T @38.806219,216308.56629.82
January 17, 2017Buy 12 KO @41.13619,826-18.081,247.29
February 23, 2017Buy 5 PM @105.466120,810779.431,916.70
February 23, 2017Buy 12 T @41.676120,810629.271,916.70
March 6, 2017Buy 5 PM @110.041920,954912.272,011.67
March 6, 2017Buy 12 KO @42.24520,95482.872,011.67
March 6, 2017Buy 12 T @41.7920,954640.822,011.67
March 17, 2017Buy 12 KO @42.2620,91467.072,242.58

  You may have noticed that even though I sold 100 shares of AGNC on September 9th there were no buys until December and if you did you may have wondered what I did with the proceeds of the sale. I held onto the money and even held out the next three scheduled buys until I had enough cash saved to introduce the FMF to my favorite stock – Intel (INTC) and my favorite strategy of buying 100 shares of a stock and selling a covered call option to sell the stock at a future date for an agreed on price. This is a strategy I’ve been using for three years on my 401k plan and it is a plan that I understand even though it may not be the preferred method of the experts whose strategies I read about every so often.

  On November 30th I bought 100 shares on Intel at the market price of 35.16 and immediately collected $55 to sell someone the right to buy the shares for $35.5 on January 6th 2017. Intel dipped to 33.56 the very next day but rebounded in spectacular fashion, breaking $35 on December 7th, $36 on December 12th, and $37 on December 20th before settling between $36 and $36.5 until January 6th at which time my option was called and I sold the stock as agreed upon for $35.5. My profit for the 37-day investment was $72.42 or 2.05%. The next Monday I bought 101 (using some of my profit for the extra share) shares of Intel at $36.70 and made $132 by selling the option to buy the shares at $36 on February 10th. If the option was exercised I would sell the 100 shares and my profit would be $54 after commissions. In The ensuing 32 days Intel went over $37 again on January 20th and reached $38.45 on January 27th before settling back under $37 on January 31st. On February 2nd the stock closed at $36.68 and I was sure my option would be called early since owners of the stock as of February 3rd receive a dividend of 26 cents a share. I was surprised when my option wasn’t called but maybe the experts know more than me since on February 9th Intel went from $36.50 to $35.46 and stayed well below $36 on the expiration day of February 10th.

  On February 10th I could have let my option expire but I decided to spend $1.04 to buy back the option to sell another option at $36 that would expire on May 19th. I could have saved the $1.04 by letting the option expire but I wanted to get my next option play in the books before the weekend. I didn’t like going three months out on the new option but that seemed to be the best deal at the time. I could have waited for the option prices to go up on Intel’s next big move up but to me that seemed like gambling (there could also have been a big move down) and I don’t want to gamble – I want to ensure a solid return. I received $97 to sell the option which brought my proceeds on this 100 shares of Intel to $219 in options and $26 in dividends for a grand total of $245 or 6.9% of the purchase price and I still own the stock. If the option is called I will mark up a loss of $70 but I may get another dividend of $27.25 (Intel raised their quarterly dividend from 26 cents a share to 27.25 cents) if the option isn’t called before May 3rd. Here is the complete accounting:

November 30, 2016Buy 100 INTC @35.166-3524.55+100
November 30, 2016Sell 1 INTC Option @35.55 (.63)
Expiring 1/6/2017
January 6, 2017Sell 100 INTC @35.50
(Option was exercised)
January 9, 2017Buy 101 INTC @36.695-3714.15+101
January 9, 2017Sell 1 INTC Option @36.00 (1.40)
Expiring 2/10/2017
February 3, 2017Dividend INTC (Payable 3/1/2017)+26.00
February 10, 2017Buy 1 INTC Option @36.00 (.01)
Expiring 2/10/2017
February 10, 2017Sell 1 INTC Option @36.00 (1.05)
Expiring 5/19/2017
March 1, 2017Reinvested Dividend -26.00+.722
May 19th, 2017Sell 100 INTC @36.00
(if option is exercised)
Total (If option is exercised)+181.211.722

  So if the option is exercised and I sell 100 shares of Intel at $36 on or before May 19th I will show a profit of $181 which is 4.8% AND I would still own 1.722 shares. If the option is not exercised I will own the 101.722 shares of Intel at a net cost of $3,413 or $33.80 a share which is far less than I paid. Currently Intel is hovering between $35 and $36 a share. I have no idea if the option will be called or not. My best case scenario is that the stock stays right around $36 so if the option is exercised I can start the process all over again and if the option is not exercised I will just sell the option all over again and bank more profit. Practically speaking I would have had better results sticking with AGNC but I just don’t understand why the stock price is so high after the company has reduced its dividend from 22 cents to 20 cents to 18 cents a share. I much prefer to stick with Intel and playing the options carousel since it is something I understand even if I must take a much more active role than I like. For completeness sake I will include the status of the FMF as of April 18th.

Profit on
April 18th

  Profits do not include options that are in the money For example when I sell an option to trade Intel at $36 and Intel is trading at $36.25 I have to subtract $25 from the Intel profit since that will belong to the buyer if the option is exercised. My monthly dividend has only gone from $48.60 a month in September to $55.29 a month despite adding 8 buys and every stock except AGNC raising their dividend. This is a consequence of trading out $20 a month of AGNC dividends for $9 a month of Intel. The upside is that I am accumulating cash by playing the options game with Intel (reflecting in the reduced purchase price of the stock) that I am using to make buys of the other three pillars of the FMF. I hit a milestone when I accumulated 100 shares of AT&T. Options trade in lots of 100 shares and I jumped in by trading an option to sell 100 shares of T at a price of $46 on October 21st. Why so far out in the future? That will be the subject of my next post.

Friday, April 14, 2017

21st Century NBA Basketball Prediction Program - The Idea in Practice

  The 2016-2017 NBA regular season ended on Wednesday and the playoffs will start on Saturday. This was the season I put my 30+ year old basketball prediction program to the test of real betting. I spent last summer entering in four seasons worth of scores from and betting lines from Then I used my program to retroactively measure over a thousand formulas against the data. I found a formula that produced a winning margin over the magic break even betting winning percentage of 52.4% (11 wins for every 10 losses) for each year and opened a $500 account on on October 5th. I signed up for a $250 welcome bonus that was paid out in increments between a dollar or two every time I hit one of the bovada milestones towards the $3750 I needed to wager to get the full $250. The season started on October 25th but the program didn’t have enough data for predictions until November 5th. When the betting started my program was a wonder to behold as I won my first five bets and was $50.53 up by November 12th. After that the program tread water and on November 17th was 9-3 and $56 to the plus side. And then things went south. The program went 2-8 over the next week to put me at 11-10 with $1.59 in losses on November 21st Another week of treading water left me at 16-16 on November 26th but a 4 game losing streak left me at 16-20 and $61 in losses at the end of November. December and January weren’t much better and on January 17th I hit my low point of $146.63 in losses and 9 games under .500 at 46-55.

  Then I got an unintended vacation. When I made my $500 deposit to Bovada in October my credit card statement had a charge of $539.95. When I signed up the customer service people at Bovada told me there was no service charge for the initial deposit. I wrote to Bovada asking what the $39.95 charge was for. Bovada said they only received $500 and I would have to ask my credit card company. I asked my credit card company and they immediately credited my account for $39.95. On January 18th I went to log into my Bovada account and was greeted with a screen telling me my account had been suspended for having a credit card chargeback. My email inbox had a note from Bovada telling me my account was suspended and that I should call the customer service number because “any and all uncollected negative balances are subject to a 3rd party collection agency, which we are trying to help you avoid.”

  I called the customer service department who insisted I deposit another $500 using a credit card immediately. No matter how many times I explained that the only chargeback on my credit card account was the $39.95 that Bovada insisted was not their charge the only solution the Bovada customer service department had was for me to give them another $500. This sounded like a scam to me so I stopped calling customer service and kept logging my basketball picks to see if I needed to change my program or if the disastrous record over the past two months were an anomaly. The program went on a winning streak which made me happy to think the program was working but enraged that I was not erasing my losses at Bovada.

  I was resigned to the loss of my balance at Bovada when I got another Bovada email on February 1st asking me to call the customer service line to avoid any collection agency issues. I called and got a different customer service rep who also wanted me to deposit $500 in the account that still had the initial $500 deposit (less my losses). The rep started talking about a collection agency and I mentioned that if I heard about a collection agency again I would call my credit card company and dispute the initial $500 deposit. This changed the tone of the conversation and the rep asked me to send him the credit card transactions from my last three statements. I sent them and my account was restored on February 3rd.

  During my 16-day hiatus my program was 11 games over .500 and the improvement proved to be real as I slowly and steadily chipped away at my losses to even my record at 70-70 on March 9th with a $73 loss.

  After another dip in late March, the program caught fire and went 18-5 from March 24th to April 2nd to trim my losses to $24 with a 98-91 record. The program has always been a proponent of picking road underdogs and I noticed that many of the losses were from very bad teams getting points against very good teams. I decided to reduce the bets on games involving losing teams at winning teams to half the normal $11 wager. I also doubled the wager when the program picked a top level team like the Warriors and Spurs at home. The strategy was reasonable but ultimately pointless as my half bets went 19-17 for a profit of $1.58 and my doubled bets went 2-1 for a profit of $9. I do know I would have been over $50 in the black if I hadn’t had my account suspended by Bovada during one of my program’s hot streaks and possibly over $150 in the black if the suspension had come 2 weeks earlier. In the end the computer and I finished 113-106 with a loss of $27.73 on the bets I did make.

  Going through the season betting real money was very different than picking a game with a mythical bet. I followed the games a lot closer and woke up in the middle of the night a few times when I had a bet on a west coast game that finished well after midnight. I would follow games I had a wager on using the CBS or ESPN apps on my iPod over the last few minutes to see if I had won or lost. I had some terrifically lucky results like the Oklahoma City Thunder at Orlando Magic game on March 29th. I had the Thunder giving 6 points to the Magic. The Thunder were trailing by double digits for most of the game until the amazing Russell Westbrook took over and scored 13 points in the last three minutes including a 3 point shot with eight seconds left to tie the game. The only way I could win the bet was to have the game go to overtime AND have the Thunder cover. I had to sweat out last second missed shots by both teams and the Magic getting the first 3 points of overtime before the Thunder took an eight point lead with 30 seconds left. The game was decided but my bet wasn’t won until the Magic missed a 3 point shot that would have covered the spread and the Thunder ran out the clock, leaving me a winner on a $10 bet.

  Of course, it seemed for every lucky result there were two bad beats like on April 7th. I had 4 computer selected bets. The Hawks beat the defending champion Cavaliers in Cleveland as a double digit underdog for the first game to finish. Then the Knicks were trailing the Grizzlies by 10 points with time running out. I had the Knicks and 13 points and had mentally put the game in the win column when the CBS app flashed the final score as 101-88 Grizzlies. It seems Wade Baldwin IV made his third three-point basket of the season (out of 21 attempts) as time expired to make the game a 13 point spread and a push (no money won or lost). My third game was a winner as the Timberwolves held on for a 7 point loss in Utah against the Jazz (I was getting 11 points). The fourth game of the night was the Kings getting 2.5 points in Los Angeles against the woeful Lakers. The game ended well after midnight and was close throughout. With one second left the and the Kings trailing by four Buddy Hield made a basket to bring the Kings to 2 points and make me a winner except Hield then fouled Lakers guard D’Angelo Russell, who made 2 free throws with less than a second left to turn my victory into a loss! There was not much sleep that night as a 4-0 night ended up as 2 wins and a loss and felt more like 0-4!

  Lucky wins and bad beats are all part of the game and I’m looking forward to the playoffs where I’ll be on my own with no computer program to assist me. I learned a lot about my risk tolerance and the difference between betting in theory and betting in practice this year. My biggest problem with Bovada (aside from having my account suspended) was the many times the betting lines came out late in the afternoon., which left me little time to get my bets in when I had an evening appointment or activity. A big difference between betting for real and betting in theory is the point spreads are ever changing on Bovada as opposed to getting point spreads years later from A late scratch can move a spread by 5 points or more which is something I’ll never know happened in previous years without more research than I’m prepared to do. Something I loved about Bovada was that they gave me $130.39 as a welcome bonus (a prorated portion of the amount I wagered over the first six months I used the site) and a $5 bonus to celebrate their 5th anniversary. In addition, I received $70 in PayPal donations to provide my picks in advance at the rate of $10 a month. This gave my regular season a profit of $172.66 and anyone who made the exact same bets on Bovada that I did would have realized a profit of $102.66 if they took the welcome bonus. When the playoffs are over I will attempt to withdraw my money from the Bovada account and if I can do so successfully I will use them for another year. In either case I will report the result of my attempts as well as my playoff results after the season is over in June.

Friday, April 7, 2017

TV Review - The Walking Dead Season 7 Part 2 (Episodes 11-16)


The zombie carnival was a highlight of the back half of season 7!

  AMC’s The Walking Dead concluded it’s much anticipated seventh season on Sunday. didn’t care much for the first half of the season but the two month-long mid-season break brought two action-packed episodes that made me as enthusiastic about the show as I have been in a long time.

  I thought a lot about what it is that I like so much about the Walking Dead when I do like it and finally found my answer after watching 13 hours of the mostly angst-filled Iron Fist two weeks ago – I like action and a show set in the zombie apocalypse can provide action in droves by having a horde of zombies or a well-placed instantly appearing zombie or two at the most inconvenient time. I like to see the protagonists in the direst of circumstances and I don’t mind the most improbable of escapes since it is a television show after all and I can see it all over again the next week.

  The action is enhanced if characters I care about are participating and the Walking Dead has always done a good job of getting me acquainted enough with the intrepid cast of zombie apocalypse survivors to make me root for them in their never ending fight against zombies and other apocalypse survivors but around the time the group arrived in Alexandria the show went from mostly action with some character development to almost non-stop character development interrupted by a little action here and there.

  I had high hopes that the show would become more action-oriented after the arrival of the villainous Negan and the Saviors at the end of season six but the first half of season seven was filled with our survivors collective angst at Negan murdering Abraham and Glenn in the season opener as well as their new subservient status to the Saviors. The action was limited to Negan’s random acts of violence which would be inevitably surrounded by Negan’s lengthy monologues.

The Negan-centric episode 11 substituted tension for action...

  The first two episodes of the second half of the season were full of action but the pace slowed to a crawl in the third episode which was mostly concerned with cowardly Eugene’s adjustment to being moved to the Saviors compound. Luckily the action picked back up in episode four with Rick and Michonne battling a zombie carnival full of armed soldier zombies which allowed our heroes to get some of the guns they promised the weirdo trash people in return for their help in fighting Negan.

  Sadly this was the high point in the back half of the season until the finale as the next three episodes featured Sir Richard of the Kingdom conducting some palace intrigue to try to get the Kingdom to fight Negan and a half-baked plot conducted by Rosita and Sasha to kill Negan. Sahsa (who was on kill watch once she was named to be as a star on the new CBS Star Trek show) was promptly captured and spent episode seven being recruited by Negan to join his crew while Rick and company had an encounter with the heavily armed group at Oceanside which could have been filled with action but instead consisted of a few minutes of fighting with an awesome assemblage of barnacle encrusted zombie and an awful lot of discussion about why Rick’s group wants to fight the Saviors and why the leader of Oceanside wants to stay out of the conflict and keep her group hidden.

  And then we get to the finale which was 90 minutes long with the extra 30 minutes used as a Sasha-fest in which we are shown numerous flashbacks to her very brief romance with the departed Abraham and her brief time as Maggie’s BFF at the Hilltop. The first half of the episode was full of tense music as our group in Alexandria made preparations for Negan’s coming visit with their new trash people allies. Negan arrives and it becomes clear that the trash people were in Negan’s camp and turn on our heroes using the very guns that the Alexandrians provided as payment for their help.

  For some bizarre reason, Negan kept Sasha alive in a coffin to threaten Rick and when he opens the coffin out pops zombie Sasha, who has poisoned herself so she could come out as a zombie. Zombie Sasha attacks Negan and in the ensuing chaos the Alexandrians fight back along with some exceptionally timely help from Hilltop and Kingdom forces. The highlight of this fight was the appearance of Shiva the CGI Tiger from the Kingdom who mauled several Saviors. The rest of the CGI this season was lame but these tiger attack scenes more than made up for it. The fight scene was the best one since the prison battle with the Governor in the middle of Season 4. We got to see our heroes in all their glory shooting and stabbing and driving the Saviors and Trash People to a hasty retreat and then it was back to speeches and plans for the all-out war that will hopefully ensue in season 8.

An epic zombie apocalypse fight scene compete with Shiva the CGI tiger!!

  The ratings for seasons seven stabilized at the 10 million mark which while down from the 14 million viewers in season five is still the most watched cable television drama. Judging from the episodes in the back half of season seven I think the showrunners have found out that Negan is better in small doses than featured episodes and that the viewers want more action and zombies and less character development and intrigue. It doesn’t matter how contrived the scenarios our heroes find themselves in if there are plenty of zombies to slaughter and survivors to battle. I would also point out that there is probably nothing to develop or reveal character for our survivors and the lucky ‘red shirts’ that will become cast semi-regulars than to have to fight their way around, over, or through a zombie horde that suddenly appeared just before a commercial break. One part of character development I did like this season was how while Negan’s henchman are goons and Negan is a violent jerk, he is increasingly being portrayed as truly believing he is bringing order to the chaos of the zombie apocalypse. He has succeeded in bringing together the largest group of survivors to date and seems to give the communities that pay his Saviors tribute a large amount of autonomy as long as they follow the rules. Don’t get me wrong – I still think Negan is an unwatchable clown that talks way too much but showing his motivations makes him a little less unwatchable.

  Season eight is set up for a non-stop action packed 16 episodes. There will surely be some slow parts but our group of survivors will have plenty of adversaries to battle and the need for arms and supplies will provide many opportunities to head to new locations and fight loads of zombies. I’m looking forward to the next season more than I have in the past few years. Hopefully the show will be able to deliver on its promise of more action.