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David Pinsen  

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  • Is The Long Awaited Correction At Hand? [View article]
    If you think a correction may be at hand, here is a step-by-step way of hedging a million dollar portfolio against one:

    That example shows how to hedge against a >20% correction, but you could use the same method to limit your downside risk to a smaller percentage (although it would be more expensive to do so).
    Apr 6, 2015. 04:38 AM | 1 Like Like |Link to Comment
  • Protecting A Million Dollar Portfolio [View instapost]
    If you think your securities will drop in price, selling them before they drop is certainly an effective and less expensive way to limit your downside. But if you did that at the start of 2013, you would have missed on what percentage gains? A lot more than a couple percent, right? So, if hedging in this manner were the price of giving you the piece of mind to stay invested in the market, rather than go to cash, it may have been a price worth paying.
    Apr 6, 2015. 04:33 AM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Correction Looming? [View article]
    This is an impressively detailed roundup. After reading it, I feel better informed, but I still don't know whether a correction is looming. I guess none of us really does.

    If you are concerned about a correction though, here is a step-by-step way of hedging a $1 million portfolio against market risk:

    Good luck and Happy Easter and Happy Passover to those who are celebrating.
    Apr 5, 2015. 04:51 AM | 4 Likes Like |Link to Comment
  • Protecting A Million Dollar Portfolio [View instapost]
    These are the current optimal puts on SPY to hedge a $1 million portfolio against a >20% market correction between now and September:
    Apr 5, 2015. 04:50 AM | 1 Like Like |Link to Comment
  • DaVita Healthcare Partners CFO exits to return to biopharma [View news story]
    For any interested DVA longs, here are two ways to hedge it:
    Apr 3, 2015. 01:53 AM | Likes Like |Link to Comment
  • Infinera -3.1%; Goldman downgrades following big run-up [View news story]
    Here are a couple of ways of hedging INFN, for any interested longs:
    Apr 3, 2015. 01:44 AM | Likes Like |Link to Comment
  • Solar stocks rally in spite of market selloff [View news story]
    A couple of ways of hedging SUNE, for those interested:
    Apr 2, 2015. 02:57 AM | Likes Like |Link to Comment
  • Micron Technology's (MU) CEO Mark Durcan on Q2 2015 Results - Earnings Call Transcript [View article]
    For any MU longs considering hedging it, here are a couple of ways to do that:
    Apr 2, 2015. 02:53 AM | Likes Like |Link to Comment
  • Gilead Versus Celgene: Value Play Versus Reinvestment Opportunity [View article]
    Our expected return calculator, which doesn't consider fundamentals at all, just historic price movement and options market sentiment, currently shows a 6 month expected return of 21% for CELG and 2.7% for GILD.

    We backtested that expected return calculator over an ~11 year period, comparing our 6 month expected returns every trading day to the actual returns over the next 6 months, and found that the average actual return was about .3x the expected return. So, a ~7% return is probably more likely for CELG over the next 6 months. More details on that, and an example of a CELG hedge on this instablog:
    Mar 31, 2015. 05:59 PM | 2 Likes Like |Link to Comment
  • Amazon launches Home Services site, takes on Angie's List [View news story]
    It's interesting to compare the costs of hedging AMZN and ANGI, given this news. Here's a look at that (tl;dr version: ANGI is >10x as expensive to hedge):
    Mar 30, 2015. 08:24 PM | 1 Like Like |Link to Comment
  • Shorting The VIX: How To Protect Profits In A Volatility Spike [View article]
    For those who are considering going long VXX for a limited time period, an optimal collar hedge is a way to limit your risk. Here's an example of one such hedge that, as of earlier today, would have enabled an investor to collect $1,680 while limiting his downside risk to (and capping his upside potential at) 15%:
    Mar 30, 2015. 06:55 PM | 3 Likes Like |Link to Comment
  • Rite Aid Is Likely To Be Acquired, Just Not By Kroger [View article]
    If you're worried about downside risk, here are a couple of ways of hedging Rite Aid:

    1) Expensive, but uncapped upside:

    2) Pays you, but caps your potential upside at 16%:
    Mar 28, 2015. 07:20 PM | 1 Like Like |Link to Comment
  • BlackBerry's (BBRY) CEO John Chen on Q4 2015 Results - Earnings Call Transcript [View article]
    Just checking the costs of hedging BBRY now. It's too expensive to hedge against a >15% drop between now and September using optimal puts:

    But, if you're willing to cap your upside at 15% over the same time frame, you can get paid $90 to hedge BBRY against a >15% drop:
    Mar 27, 2015. 07:13 PM | 2 Likes Like |Link to Comment
  • BHP Billiton: Increasingly Attractive For Dividend Investors After The Demerger [View article]
    Nice drill down here.

    Incidentally, for those who are interested in this sector and who also have the risk tolerance to consider microcaps, one of BHP's suppliers has been written up by a few Seeking Alpha writers (including me, a while back): AYSI
    Mar 18, 2015. 06:28 PM | Likes Like |Link to Comment
  • I Want Book Value: Annaly's Weakness Is Not The Dividend [View article]
    Ha, your Sprint title was great too.
    Mar 17, 2015. 12:18 AM | Likes Like |Link to Comment