Facebook Friday: Finally Something To Get Excited About? [View article]
That's the one!
My Mom is bad but I ended up sleeping at her friend's house when Mom's was full and I woke up at 2am and she's sitting there still playing that damned game since after dinner - it's scary!
Facebook Friday: Finally Something To Get Excited About? [View article]
Yeah, I wasn't trying to take a serious stand against Social Networking - judging from my Mom and her friends the real criminal is whoever makes that crystals game for the IPad....
On F, the 2014 $10 put is $1.90 at the moment but same concept, we're not so confident the market won't drop 20% that we want to buy F at $10 but we sure don't mind buying it at $8 (in this example, really we won't play F) because, even if they fall to $6 in a 40% drop, then we're happy to DD at $6 and own 2x at net $7, down 14% on the 2x position and we can certainly then sell 2016 $7 calls for $1.50ish to drop our basis to $5.50 with a call away at $7.
Meanwhile. if we are not so lucky as to get 2x of F at $7 or less, then we will console ourselves by keeping the $1.90, which is about 25% of the $8 we committed but 50% of the margin we may have put aside to own it and TOS tells me the net margin on the sale is under $2 so it's a 100% return on margin while you still have $6 in cash left to play with.
The mistake most people make with options is being greedy - if you just use them as simple hedges or for leverage to REDUCE your cash exposure to positions (but without risking more cash than you intended), they can be wonderful tools.
This is from a good article in USNews by the author of Currency Wars which sums it up nicely and applies to all CBs and their pet Banksters: http://bit.ly/JfxbKV
What he does not explain is that J.P. Morgan's "earnings" are actually not earnings but are a form of theft from savers, retirees, and others pursuant to the Federal Reserve's zero interest rate policy.
The Fed has engineered a massive wealth transfer from everyday Americans to large banks. They do this by holding interest rates near zero. Savers get nothing for their hard earned savings. However, banks get free money because they pay almost no interest. Banks then invest the money in Treasury notes and earn the difference. The Fed permits this to rebuild the capital of the banks. The Fed doesn't mind hurting everyday Americans if they can prop up bank capital.
They are now trading below book value but the sector is very out of favor and it will be a long, long time before they come back (and bankruptcy is a possibility in between). We still like them and added today but just be aware of the risks - it's a speculative play at best.
Thanks Subtilisin - We haven't even put in a Buy List for Members yet on the Twice in a Lifetime list as we're not sure we have a bottom (or a top to the VIX) - at the moment, it's just a Watch List with very few we are pulling the trigger on so far and, even then, we're only at a 1x entry in our scales.
As I said above (and all week) - it's 1,360 or bust on the S&P for the week and, so far, it's looking very much like a bust and only Facebook can save us...
That's the point. They are doing a great and highly coincidental job of flushing people out ahead of what is likely to be the biggest IPO of all time. Scam or not, it's very likely FB will set off a buying frenzy in the space and we finish the week off with a bang. If that doesn't happen – I will be very, very bearish but from what I'm hearing and the way they are extending the offer and raising the price – it's way oversubscribed. Also, we have to consider that people are cashing out 1-5% of their holdings to raise cash for FB on Friday – sure it's moronic, but that's what people do.
This morning's note to Members (just the end):
So it's the usual madness this morning and still – there really is nowhere to put your money except Dollars, US Equities and TBills.
We will need a few disaster hedges because, if Facebook does fail – disaster will be a completely inadequate description of what is going to happen next week.
Of course FB could do well but the hyenas could succeed in taking down AAPL and the Nas anyway or possibly JPM could fail and wreck the Global markets or Greece could exit the EU and rip a $500Bn loss through the Financial sector anyway…
Remember the good old days when we used to only worry about Iran closing the Strait of Hormuz? What every happened to those wacky kids anyway?
It is very frustrating when you hear little positives and jackasses like that take the floor (although I see his comments have been removed, which does warm my heart!).
As to TEO - didn't I warn you that Argentina was dangerous because of the connections to Spain? If not, my bad...
CHK is killing everyone and, you know what? So was BP at $26.50 and so was BA at $30 in 2009 and AAPL at $85 - sometimes you have to put your foot down but you can be the greatest trader in the World and, if you don't know how to manage your portfolio - you're still going to get in trouble.
Take the time to learn good Portfolio Management Techniques (something we teach our Members and there are articles about it in our Education Section that may be available for free).
ANR is in the same trouble as all commodities. With nat gas this cheap, there's no reason for anyone who can possibly burn gas to burn coal. Construction is still in the dumps and ships aren't being built and China's electric demand is falling with their economy so coal demand is in the tank and won't recover soon.
The only coal company we like is BTU and we don't like them much at the moment either but we are willing to buy and hold at this level ($25) for the very long-term.
You should be careful though as you're not too diversified betting CHK and ANR at the same time.
By the way, a nice trick for CHK is - let's say you bought it for $18 and you are a dumb-ass who doesn't hedge or cover or enter by selling puts and now CHK is $14. You can sell the stock ($14) and sell the 2014 $10 puts for $3.30 and buy the 2014 $10/20 bull call spread for $4 and that means you are left in the $10 spread that's $4 in the money for net .70 so all CHK has to do is flatline at $14 and you make $3.30 back but you free up $13.30 in cash (using some margin for the short puts) and you get all of the upside to $20 with a max profit of $9.30 less the $4 you lost in the first place is still a respectable $5.30 if CHK gets back to $20, which is way better than you'd do with your $18 basis.
Meanwhile, your worst case to the downside is CHK is put to you at net $10.70, which is 23% lower than it is now so - FOR FREE - you are getting 23% of additional downside protection, drastically lowering your break-even and taking 90% of your cash off the table.
THIS is why people subscribe to Philstockworld - we teach you how to do this stuff!
ROFL! Are you seriously the same bigbaboon57 that said on April 25th, first quoting my statement: http://bit.ly/Jg4xIH
"How can we expect the markets to react when Uncle Ben tells us we're not getting our fix today? They will howl and they will scream and they will have a little tantrum and that's how we're going to play it this morning - taking the opportunity to add to our bearish bets - assuming they survive into the bell. "
And then YOU said:
Well, this was certainly a WRONG call on your part. Ben didn't announce a fix for the markets today, and yet they continued strong into the end. Why don't you write an article with regards to this wrong call on your part and how your "bearish bets" worked out into the end of the day? Oh, I know, when the markets finally correct again, you'll come on and claim all your "bearish bets" paid off big.
ROFL!!!!
That was what 500 Dow points ago? God bless you, man - we need the counterparties but how about get your head out of your ass and listen to someone's opinion other than your own once in a while and maybe you'll learn something.
Monday Market Meltdown: All Fall Down [View article]
Actually we're really bearish but playing for a bounce at the moment. If the bounce doesn't come, we're technically bearish too. The market dropped to the point where we expect intervention from the Central Banksters so it's now dangerous to play bearish since intervention is more likely than not.
I don't think we're confused, I think it's our policy makers that are confused as well as people like JPM, who are making massive bets on the wrong side of the market.
I have said for a very long time, the entirety of the bull case is the expectation of more stimulus/QE. This is not a premise on which to build a lasting rally. We need jobs - until we build jobs - there will be no lasting turnaround in the broader economy so we will continue to be skeptical of any rally that merely celebrates another cash dump on the top 1% that piles up more debts on the bottom 99% to "fix" things.
Monday Market Meltdown: All Fall Down [View article]
We lost interest in shorting USO and Gas (although generally we play gas bullish on Friday morning and out by 2:30) and, in fact, adjusted a long-term play to slightly bullish - in that we don't expect oil to fail $80.
Our tendency is to short things that are overpriced and go long on things that are underpriced. In the middle - we'd rather just wait. With oil, the range is roughly $85-$105 where we like to play it so $95 is the worst possible price for guessing but we figure $92.50 is likely to hold on this sell-off.
Monday Market Meltdown: All Fall Down [View article]
We're playing this to be a possible bottom until it breaks but we have some very aggressive downside hedges to cover our early bottom-fishing and, of course, we're playing with house money as we were very bearish at the top and are sitting on huge gains.
It would not be very surprising to see another 10% drop if Europe blows up but, as I mentioned above, we can sell puts against JPM, CHK, WFR, HOV - that give us 30% cushions so we're happy to dip our toes in here but we haven't gotten stopped out of our Long Put List either.
Fall-Down Friday - JPMorgan's Face Plant Might Give Us A Bottom [View article]
Matt's (our programmer) note on access issue from this morning:
After some dialogue with webair, it seems that they had one of their providers giving them trouble this morning. It would only have affected people with certain ISP's, which seems to have been the case with us. They have re-routed traffic so hopefully it shouldn't be a problem any more. Let me know if people keep complaining.
Please let us know if anyone is still having trouble but that should clean it up. Thanks.
Facebook Friday: Finally Something To Get Excited About? [View article]
My Mom is bad but I ended up sleeping at her friend's house when Mom's was full and I woke up at 2am and she's sitting there still playing that damned game since after dinner - it's scary!
Facebook Friday: Finally Something To Get Excited About? [View article]
Free-Falling Thursday: Facebook Faces Fatal Friday Follow-Through [View article]
Meanwhile. if we are not so lucky as to get 2x of F at $7 or less, then we will console ourselves by keeping the $1.90, which is about 25% of the $8 we committed but 50% of the margin we may have put aside to own it and TOS tells me the net margin on the sale is under $2 so it's a 100% return on margin while you still have $6 in cash left to play with.
The mistake most people make with options is being greedy - if you just use them as simple hedges or for leverage to REDUCE your cash exposure to positions (but without risking more cash than you intended), they can be wonderful tools.
Which Way Wednesday: Hurts So Good [View article]
What he does not explain is that J.P. Morgan's "earnings" are actually not earnings but are a form of theft from savers, retirees, and others pursuant to the Federal Reserve's zero interest rate policy.
The Fed has engineered a massive wealth transfer from everyday Americans to large banks. They do this by holding interest rates near zero. Savers get nothing for their hard earned savings. However, banks get free money because they pay almost no interest. Banks then invest the money in Treasury notes and earn the difference. The Fed permits this to rebuild the capital of the banks. The Fed doesn't mind hurting everyday Americans if they can prop up bank capital.
Which Way Wednesday: Hurts So Good [View article]
Which Way Wednesday: Hurts So Good [View article]
As I said above (and all week) - it's 1,360 or bust on the S&P for the week and, so far, it's looking very much like a bust and only Facebook can save us...
Which Way Wednesday: Hurts So Good [View article]
That's the point. They are doing a great and highly coincidental job of flushing people out ahead of what is likely to be the biggest IPO of all time. Scam or not, it's very likely FB will set off a buying frenzy in the space and we finish the week off with a bang. If that doesn't happen – I will be very, very bearish but from what I'm hearing and the way they are extending the offer and raising the price – it's way oversubscribed. Also, we have to consider that people are cashing out 1-5% of their holdings to raise cash for FB on Friday – sure it's moronic, but that's what people do.
This morning's note to Members (just the end):
So it's the usual madness this morning and still – there really is nowhere to put your money except Dollars, US Equities and TBills.
We will need a few disaster hedges because, if Facebook does fail – disaster will be a completely inadequate description of what is going to happen next week.
Of course FB could do well but the hyenas could succeed in taking down AAPL and the Nas anyway or possibly JPM could fail and wreck the Global markets or Greece could exit the EU and rip a $500Bn loss through the Financial sector anyway…
Remember the good old days when we used to only worry about Iran closing the Strait of Hormuz? What every happened to those wacky kids anyway?
Which Way Wednesday: Hurts So Good [View article]
It is very frustrating when you hear little positives and jackasses like that take the floor (although I see his comments have been removed, which does warm my heart!).
As to TEO - didn't I warn you that Argentina was dangerous because of the connections to Spain? If not, my bad...
CHK is killing everyone and, you know what? So was BP at $26.50 and so was BA at $30 in 2009 and AAPL at $85 - sometimes you have to put your foot down but you can be the greatest trader in the World and, if you don't know how to manage your portfolio - you're still going to get in trouble.
Take the time to learn good Portfolio Management Techniques (something we teach our Members and there are articles about it in our Education Section that may be available for free).
ANR is in the same trouble as all commodities. With nat gas this cheap, there's no reason for anyone who can possibly burn gas to burn coal. Construction is still in the dumps and ships aren't being built and China's electric demand is falling with their economy so coal demand is in the tank and won't recover soon.
The only coal company we like is BTU and we don't like them much at the moment either but we are willing to buy and hold at this level ($25) for the very long-term.
You should be careful though as you're not too diversified betting CHK and ANR at the same time.
By the way, a nice trick for CHK is - let's say you bought it for $18 and you are a dumb-ass who doesn't hedge or cover or enter by selling puts and now CHK is $14. You can sell the stock ($14) and sell the 2014 $10 puts for $3.30 and buy the 2014 $10/20 bull call spread for $4 and that means you are left in the $10 spread that's $4 in the money for net .70 so all CHK has to do is flatline at $14 and you make $3.30 back but you free up $13.30 in cash (using some margin for the short puts) and you get all of the upside to $20 with a max profit of $9.30 less the $4 you lost in the first place is still a respectable $5.30 if CHK gets back to $20, which is way better than you'd do with your $18 basis.
Meanwhile, your worst case to the downside is CHK is put to you at net $10.70, which is 23% lower than it is now so - FOR FREE - you are getting 23% of additional downside protection, drastically lowering your break-even and taking 90% of your cash off the table.
THIS is why people subscribe to Philstockworld - we teach you how to do this stuff!
Which Way Wednesday: Hurts So Good [View article]
"How can we expect the markets to react when Uncle Ben tells us we're not getting our fix today? They will howl and they will scream and they will have a little tantrum and that's how we're going to play it this morning - taking the opportunity to add to our bearish bets - assuming they survive into the bell. "
And then YOU said:
Well, this was certainly a WRONG call on your part. Ben didn't announce a fix for the markets today, and yet they continued strong into the end. Why don't you write an article with regards to this wrong call on your part and how your "bearish bets" worked out into the end of the day? Oh, I know, when the markets finally correct again, you'll come on and claim all your "bearish bets" paid off big.
ROFL!!!!
That was what 500 Dow points ago? God bless you, man - we need the counterparties but how about get your head out of your ass and listen to someone's opinion other than your own once in a while and maybe you'll learn something.
Technical Tuesday: 1,360 Or Bust On The S&P - Again [View article]
Monday Market Meltdown: All Fall Down [View article]
I don't think we're confused, I think it's our policy makers that are confused as well as people like JPM, who are making massive bets on the wrong side of the market.
I have said for a very long time, the entirety of the bull case is the expectation of more stimulus/QE. This is not a premise on which to build a lasting rally. We need jobs - until we build jobs - there will be no lasting turnaround in the broader economy so we will continue to be skeptical of any rally that merely celebrates another cash dump on the top 1% that piles up more debts on the bottom 99% to "fix" things.
Monday Market Meltdown: All Fall Down [View article]
Our tendency is to short things that are overpriced and go long on things that are underpriced. In the middle - we'd rather just wait. With oil, the range is roughly $85-$105 where we like to play it so $95 is the worst possible price for guessing but we figure $92.50 is likely to hold on this sell-off.
Monday Market Meltdown: All Fall Down [View article]
It would not be very surprising to see another 10% drop if Europe blows up but, as I mentioned above, we can sell puts against JPM, CHK, WFR, HOV - that give us 30% cushions so we're happy to dip our toes in here but we haven't gotten stopped out of our Long Put List either.
Fall-Down Friday - JPMorgan's Face Plant Might Give Us A Bottom [View article]
After some dialogue with webair, it seems that they had one of their providers giving them trouble this morning. It would only have affected people with certain ISP's, which seems to have been the case with us. They have re-routed traffic so hopefully it shouldn't be a problem any more. Let me know if people keep complaining.
Please let us know if anyone is still having trouble but that should clean it up. Thanks.
Fall-Down Friday - JPMorgan's Face Plant Might Give Us A Bottom [View article]