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David Pinsen

 
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  • Alloy Steel International: Weak Hands Sell The Headline To Their Detriment [View article]
    Don't they have to file an annual report or something with the state of Delaware?

    Good article, btw.
    Sep 13, 2014. 12:15 AM | Likes Like |Link to Comment
  • Why I'm More Confident Of My Herbalife Short Position Today [View article]
    Protein shakes are fraudulent products? They are a way to lose the weight one gains eating McDonald's burgers. Of course, you can get protein shakes from stores too; the Herbalife difference, as John Hempton has pointed out, is the community support of the clubs. It's easier to stick with a diet with community support.
    Jul 23, 2014. 04:12 PM | 3 Likes Like |Link to Comment
  • Why I'm More Confident Of My Herbalife Short Position Today [View article]
    McDonald's advertises to poor people too. Do you want to short it?
    Jul 23, 2014. 02:44 AM | 3 Likes Like |Link to Comment
  • Correction 2014: Take Cover [View article]
    Realtoi,

    You can use the Portfolio Armor hedged portfolio approach with an account as small as $30k. PA will automatically only present you only with round lots of securities that will fit your portfolio size, taking hedging cost into account (in some cases, that hedging cost will be negative).
    Jul 7, 2014. 12:30 AM | Likes Like |Link to Comment
  • Is Annaly A Sleep Well At Night Investment? [View article]
    Annaly could be a "sleep well" investment if one is hedged. I went into a bit more detail on that in this instablog post: http://seekingalpha.co...
    Jun 30, 2014. 06:17 PM | 1 Like Like |Link to Comment
  • Correction 2014: Are You Prepared? [View article]
    If the market goes down 10% and you're hedged against a >20% drop over the next 6 months, whether your hedge will help you depends on when that correction happens. If it happens near the end of that 6 months, when your hedge is near expiration, it won't be much help. If it happens close to when you opened that hedge, when your puts still have plenty of time value left, they may soften the blow of a smaller correction even if they were designed to protect you against a larger one. Here is an example of that in action, with a hedge on an individual stock: http://seekingalpha.co...
    Jun 11, 2014. 04:49 PM | 1 Like Like |Link to Comment
  • Correction 2014: Take Cover [View article]
    I agree, and sketched out how that could make sense in a couple of different market scenarios in a comment on another correction article yesterday: http://seekingalpha.co...
    Jun 8, 2014. 12:07 AM | Likes Like |Link to Comment
  • Correction 2014: Are You Prepared? [View article]
    If there is a major correction here, chances are most foreign stocks will drop too.
    Jun 6, 2014. 06:57 PM | 13 Likes Like |Link to Comment
  • Correction 2014: Are You Prepared? [View article]
    Not necessarily - it depends on how you hedge and what the market does.

    Right now, the cost of hedging against a >20% drop in SPY over the next six months is less than 0.6% of position value (see: http://bit.ly/1i9KY1o ). Let's compare hedging that way and taking 20% out of your equity out of the market under three scenarios:

    1) The market goes up another 10% over the next six months.

    A) Hedged result: the 0.6% of your portfolio allocated to the hedge goes to 0 (assuming you don't roll the protection), and the other 99.4% of your portfolio goes up 10%. If you started with $100k, your portfolio would be worth $109,340 at the end of six months.

    B) Pulled out equity result: the 80% of your portfolio allocated to equities goes up 10%, and the 20% of your portfolio allocated to cash is flat. If you started with $100k, your portfolio would be worth $108,000 at the end of six months.

    2) The market is flat over the next six months (for simplicity, I'm ignoring dividends and money market yields here).

    A) Hedged Result: Your initial $100,000 is worth $99,400.

    B) Pulled out equity result: Your initial $100,000 is worth $100,000. In this scenario, pulling out equity beats hedging.

    3) The market tanks 40% over the next six months.

    A) Hedged Result: Your initial $100,000 is worth no less than $80,000.

    B) Pulled out equity result: Your $80k in stock is worth $48,000, and your $20k in cash is worth $20k, so your initial $100k is worth $68k.
    Jun 6, 2014. 06:51 PM | 21 Likes Like |Link to Comment
  • Optimal Puts Versus Inverse ETFs for Hedging [View article]
    The comment was specifically about the transaction cost (i.e., the commission charged by Scottrade to purchase the options), which was $17.
    Jun 3, 2014. 08:55 AM | Likes Like |Link to Comment
  • Make 70% A Year With Math [View article]
    Ideally, I think you ought to include 2008. I'm backtesting a couple of strategies now, and I'm using the period 2003 to 2013 for that reason.
    May 29, 2014. 08:09 PM | Likes Like |Link to Comment
  • Make 70% A Year With Math [View article]
    Why not include the black swan hedges as part of your strategy?
    May 29, 2014. 08:06 PM | 2 Likes Like |Link to Comment
  • Rethinking Risk Management: A New Approach To Portfolio Construction [View article]
    Sell orders won't protect you if a security you own gaps down in price. See, "HOW PUT OPTIONS CAN BE USED TO HEDGE YOUR RISK" here - http://bit.ly/1oascMw - for more on that.
    May 25, 2014. 09:31 PM | Likes Like |Link to Comment
  • Alloy Steel International: Founder's Death Will Have Significant Implications [View article]
    It probably depends on what was arranged by Gene. I'd be surprised if he hadn't given thought to estate and business succession planning.

    If his sons didn't work for the company, I think there would be more chance of AYSI being acquired.

    It's too bad Alloy Steel is too small to move the needle for Berkshire Hathaway. Otherwise, I think this is the kind of business Buffett would be happy to acquire (provided that royalty business were put to bed first, perhaps by AYSI buying Gene's intellectual property first for a nominal fee). And a Berkshire-type acquisition would be a great deal for the family, in that they could keep running the company.
    May 22, 2014. 09:01 PM | 1 Like Like |Link to Comment
  • Alloy Steel International: Founder's Death Will Have Significant Implications [View article]
    I believe Brody Kostecki is the grandson, not the son, of Gene Kostecki.
    May 21, 2014. 04:33 PM | Likes Like |Link to Comment
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