Ford: Ready For More Gains? Part II [View article]
Hi Halito,
I'm glad it helped someone. Even if it didn't show up in the comment section or in my inbox (but it did), I was hoping that it would help someone who was new.
I wish I could tell you that you could collect 2%/week for the whole year! But odds are, the stock will pullback, either on its own or because of macro reasons, and you'll be assigned. Now, you've already stated you'd be fine with assignment, but this will eat into your profits from the 2%. It's also unlikely that you'd be able to continue to collect 2%/week annually. You'd beat the pants off the best fund managers in the world if that were the case.
I like to sell puts or put spreads when volatility is high or the premiums are more. For Ford, I just prefer the call options. However, I do like weekly calls. Selling weeklies can usually work better than buying (because of the decay), and I typically only use weeklies for a few names (SPY, QQQ, AAPL) on a net debit basis.
My thoughts are this: Ford is overbought, although I do like the stock tremendously. Premarket, we've got it to 13.20 -- under performing the SPY. That's usually a bad sign. Sales numbers come out the 3rd, which I think will be great #'s. This will probably push the stock even higher. We could see 13.50 by the end of the week, though I don't think we will.
Selling puts this week might work, maybe next too. But eventually this stock is coming back to Earth, or at least settling down. If you're cash-secured and okay with owning the stock, then I guess you're okay. I just prefer to buy calls and roll 'em up.
When they're a few months out, say Feb or Mar, then you can suffer through a pullback to the 50-day without worrying about the decay on your position, knowing in 2-4 weeks, the stock will be in rally mode. On the pops you can unload your calls, and by the next strike up. Wait through a draw-down, sell on the next pop! Sometimes you just gotta keep it simple!
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
The transaction tax is a completely different subject than the role which shorts play in the market. Shorts ARE Wall Street's regulators. Without them, everyone would do and manipulate everything. Saying bears/shorts don't belong in the market is a rookie comment.
They are vital...and how could you not have them? We just go up, up and away? Forever? The tax is different. The Fiscal Cliff is different. Your points are warranted. However, they have nothing to do with shorts. Greed ruined the economy, not the bears. They're the ones who keep 'em honest out there, not the SEC or anyone else.
Ford Is Starting To Make Some Big Waves [View article]
Thanks Phil, appreciate the kind words. I really like Ford and it got my attention in September. I wish I would've then, but I didn't put on a position until November, when I was more sure things were okay.
But it is doing a lot of the right things and it looks like it is headed higher. I have been rolling up and out of my calls and have now sold the 13's against my 12's because of the overboughtness of the stock.
I don't know if this will prove to be a good idea yet, but I can always create different positions to take advantage of it. If you are looking for a position, I think near the 20-day or 50-day would be good, though if the sales numbers are good, it might be hard to catch!!
Foreign automakers made it tough for the American made vehicles to stand a chance. After a few years though, they've finally got their footing and expect them to start controlling the market.
Ford Is Starting To Make Some Big Waves [View article]
Thanks for the kind words, both of you.
Cbroncos -- I don't know about the dividend. I think they could increase it, but Mulally and the rest of Ford want to make sure that it can sustain this dividend payout without ever cutting or reducing it. They will likely wait until they are 100% sure they can do this, even if it's well past the point when they could.
The European economy could also take longer to fix than expected. But with Chinese and domestic sales doing so great for Ford, as long as they can continue to cut losses in the region until pent up demand returns, the better.
Worries over Europe is what held this stock down for so long IMO... I was bearish in the spring with about a 6-9 month timeframe. At the end of it, I could've remained bearish, but I am now bullish Ford. I think they are doing all the right things to continue to grow profits and cut losses. Mulally is a great CEO for this company.
Ford Is Starting To Make Some Big Waves [View article]
You could yes. There are a lot of ways to play it. I have an article that goes more into options positions regarding Ford -- including using LEAPs or stock replacement. Personally, options fit me best and it's what I use most, so that's how I will plan to play Ford. Good input/advice to others though regarding the tax situation.
Ford: Ready For More Gains? Part II [View article]
Perhaps I won't. But I own the 12's, so it will cap my gains, but still offer a favorable risk/reward payout. I am also pretty active in the March calls, as you can see in my maneuvers above.
If I can buy them back at a gain, then I'll be very happy, but if it goes above and beyond 13, then that'll be okay too. I expect some sort of pause or pullback though. Stocks overbought.
I'm not sure if you checked out Part II, but I kind of went over this in that article. Essentially I have buying slightly in-the-money call options and sell them to take gains/lower risk and then purchase the next strike up.
In this in particular case, with the wild, frantic run up to almost $13, I sold-to-close my 11 strike options and purchased the 12 strike. I felt that Ford was overbought and due for a correction, so I sold-to-open the 13 strike options. We'll see how it pans out, but I expect Ford to come back down to either 20-day or the 50-day sma.
Panera Or Chipotle: Where Should An Investor Dine? [View article]
Nice piece. You got my curiosity because I am looking at establishing a long-term position in PNRA. The only thing I'd say is, be careful with growth averages.
When looking at CMG there was a year with 11% growth and a year with 66% growth. You're average is about 35%, but could be misleading (either yourself or others) that growth has consistently been in the range, when it has not. Even next year it's only projected at 21%.
But great article, I appreciate the insight and the comparison. Watch out for Einhorn ;)
The FBI arrests hedge fund manager Matthew Martoma in what's reported to be the most lucrative insider-trading case ever. Martoma - who used to work for a fund affiliated with SAC Capital - is said to have profited on illegal gains involving drug makers. [View news story]
congress could trade on info they knew would effect markets. IE fiscal cliff last year.
Apple Up Or Down? With Qualcomm, Who Cares? [View article]
Hey,
Thanks for the kind words, I really appreciate them! I like QCOM as they have such a huge position in the smartphone and tablet market. These two areas I see having huge growth areas and are this will really benefit QCOM. People think that because AAPL is so big, that when they fall, QCOM will too.
The truth is, if AAPL falls, someone else will rise. That someone will probably have QCOM chips inside :)
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
Helix,
I agree, and I hope my message wasn't misconstrued. When I stated the author didn't defend his statement about the short sellers, I simply meant that you had stated in the above article, but was not something you took a stance behind. More of a generalization by some, but not necessarily agreed or disagreed.
I was mostly directing the response to Pinocchio, who thought short-selling should be banned. It's a fairly irrational request. Short selling and steep sell-offs can be excessive and overdone, but so can buying and parabolic moves. Hope we're on the same page!
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
So we should have a long-only market? That doesn't seem fair nor intelligent. While I try to honor both sides of the plate -- bull and bear -- I typically pull bullish over the long-run. I'm a better bull than bear, but do appreciate each approach.
The presentation was good, by Ackman. While the author didn't defend the statement of "sometimes shorting can be excessive," it goes both ways. Sometimes buying can be excessive, for instance when a stock goes parabolic.
I think it's appropriate for both bulls and bears to be in the market. They keep each other in check. Bears typically enjoy a better short-term movement, while bulls enjoy better long-term moves, ie: the stock market might take 2 weeks to go up 2%, but 1 day to drop the same amount. But over the course of decades, the markets appreciate, a win for bulls.
They both serve their purpose. Having a long-only market would be as irrational as having a short-only market...
Ford: Ready For More Gains? Part II [View article]
I'm glad it helped someone. Even if it didn't show up in the comment section or in my inbox (but it did), I was hoping that it would help someone who was new.
I wish I could tell you that you could collect 2%/week for the whole year! But odds are, the stock will pullback, either on its own or because of macro reasons, and you'll be assigned. Now, you've already stated you'd be fine with assignment, but this will eat into your profits from the 2%. It's also unlikely that you'd be able to continue to collect 2%/week annually. You'd beat the pants off the best fund managers in the world if that were the case.
I like to sell puts or put spreads when volatility is high or the premiums are more. For Ford, I just prefer the call options. However, I do like weekly calls. Selling weeklies can usually work better than buying (because of the decay), and I typically only use weeklies for a few names (SPY, QQQ, AAPL) on a net debit basis.
My thoughts are this: Ford is overbought, although I do like the stock tremendously. Premarket, we've got it to 13.20 -- under performing the SPY. That's usually a bad sign. Sales numbers come out the 3rd, which I think will be great #'s. This will probably push the stock even higher. We could see 13.50 by the end of the week, though I don't think we will.
Selling puts this week might work, maybe next too. But eventually this stock is coming back to Earth, or at least settling down. If you're cash-secured and okay with owning the stock, then I guess you're okay. I just prefer to buy calls and roll 'em up.
When they're a few months out, say Feb or Mar, then you can suffer through a pullback to the 50-day without worrying about the decay on your position, knowing in 2-4 weeks, the stock will be in rally mode. On the pops you can unload your calls, and by the next strike up. Wait through a draw-down, sell on the next pop! Sometimes you just gotta keep it simple!
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
They are vital...and how could you not have them? We just go up, up and away? Forever? The tax is different. The Fiscal Cliff is different. Your points are warranted. However, they have nothing to do with shorts. Greed ruined the economy, not the bears. They're the ones who keep 'em honest out there, not the SEC or anyone else.
Ford Is Starting To Make Some Big Waves [View article]
But it is doing a lot of the right things and it looks like it is headed higher. I have been rolling up and out of my calls and have now sold the 13's against my 12's because of the overboughtness of the stock.
I don't know if this will prove to be a good idea yet, but I can always create different positions to take advantage of it. If you are looking for a position, I think near the 20-day or 50-day would be good, though if the sales numbers are good, it might be hard to catch!!
Foreign automakers made it tough for the American made vehicles to stand a chance. After a few years though, they've finally got their footing and expect them to start controlling the market.
Bret
Ford Is Starting To Make Some Big Waves [View article]
Cheers,
Bret
Ford Is Starting To Make Some Big Waves [View article]
Cbroncos -- I don't know about the dividend. I think they could increase it, but Mulally and the rest of Ford want to make sure that it can sustain this dividend payout without ever cutting or reducing it. They will likely wait until they are 100% sure they can do this, even if it's well past the point when they could.
The European economy could also take longer to fix than expected. But with Chinese and domestic sales doing so great for Ford, as long as they can continue to cut losses in the region until pent up demand returns, the better.
Worries over Europe is what held this stock down for so long IMO... I was bearish in the spring with about a 6-9 month timeframe. At the end of it, I could've remained bearish, but I am now bullish Ford. I think they are doing all the right things to continue to grow profits and cut losses. Mulally is a great CEO for this company.
Cheers,
Bret
Ford Is Starting To Make Some Big Waves [View article]
Bret
Ford Is Starting To Make Some Big Waves [View article]
Bret
Ford: Ready For More Gains? Part II [View article]
If I can buy them back at a gain, then I'll be very happy, but if it goes above and beyond 13, then that'll be okay too. I expect some sort of pause or pullback though. Stocks overbought.
Ford: Ready For More Gains? Part I [View article]
I'm not sure if you checked out Part II, but I kind of went over this in that article. Essentially I have buying slightly in-the-money call options and sell them to take gains/lower risk and then purchase the next strike up.
In this in particular case, with the wild, frantic run up to almost $13, I sold-to-close my 11 strike options and purchased the 12 strike. I felt that Ford was overbought and due for a correction, so I sold-to-open the 13 strike options. We'll see how it pans out, but I expect Ford to come back down to either 20-day or the 50-day sma.
Thanks for your input,
Bret
Panera Or Chipotle: Where Should An Investor Dine? [View article]
When looking at CMG there was a year with 11% growth and a year with 66% growth. You're average is about 35%, but could be misleading (either yourself or others) that growth has consistently been in the range, when it has not. Even next year it's only projected at 21%.
But great article, I appreciate the insight and the comparison. Watch out for Einhorn ;)
Bret
Does Share Dilution Warrant Concern For Ford Investors? [View article]
Good article, pretty thorough. Enjoyed reading and will link to it soon.
Bret
The FBI arrests hedge fund manager Matthew Martoma in what's reported to be the most lucrative insider-trading case ever. Martoma - who used to work for a fund affiliated with SAC Capital - is said to have profited on illegal gains involving drug makers. [View news story]
Apple Up Or Down? With Qualcomm, Who Cares? [View article]
Thanks for the kind words, I really appreciate them! I like QCOM as they have such a huge position in the smartphone and tablet market. These two areas I see having huge growth areas and are this will really benefit QCOM. People think that because AAPL is so big, that when they fall, QCOM will too.
The truth is, if AAPL falls, someone else will rise. That someone will probably have QCOM chips inside :)
Thanks again,
Bret
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
I agree, and I hope my message wasn't misconstrued. When I stated the author didn't defend his statement about the short sellers, I simply meant that you had stated in the above article, but was not something you took a stance behind. More of a generalization by some, but not necessarily agreed or disagreed.
I was mostly directing the response to Pinocchio, who thought short-selling should be banned. It's a fairly irrational request. Short selling and steep sell-offs can be excessive and overdone, but so can buying and parabolic moves. Hope we're on the same page!
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
The presentation was good, by Ackman. While the author didn't defend the statement of "sometimes shorting can be excessive," it goes both ways. Sometimes buying can be excessive, for instance when a stock goes parabolic.
I think it's appropriate for both bulls and bears to be in the market. They keep each other in check. Bears typically enjoy a better short-term movement, while bulls enjoy better long-term moves, ie: the stock market might take 2 weeks to go up 2%, but 1 day to drop the same amount. But over the course of decades, the markets appreciate, a win for bulls.
They both serve their purpose. Having a long-only market would be as irrational as having a short-only market...