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George Acs

 
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  • Finding Someone To Blame [View article]
    In my past 8 Option to Profit WLT transactions (I had additional transactions in my personal trading accounts), only one was for the sale of puts. In general I sell puts much less frequently than doing covered calls. Part of the reason for that is that I like incorporating dividend capture to enhance ROI.

    These days WLT doesn't have much in the way of a dividend so that's really not part of the equation. There's not much reason that someone who is not disinclined to own shares couldn't enter via the sale of puts.

    Earnings are reported this week so the premiums should be higher than usual. I had purchased shares in each of the past two weeks and was happy to see them assigned. I think that the initial price spike received 10/16 when Peabody reported surprisingly good earnings may act as a proxy for any jump when WLT reports. I expect some selling on any good news so would only consider going in and selling puts if there is price weakness prior to the earnings release or possibly after the release if the response is overly adverse.
    Oct 27, 2013. 07:04 PM | Likes Like |Link to Comment
  • Finding Someone To Blame [View article]
    It was a little surprising a few months ago when the share price increased on word of the CEO's plan to retire, particularly since he was pretty well regarded as someone who knew how to conserve assets when pricing was adverse.

    The recent trend in steel, iron ore and metallurgical coal has been good, but I think could stand to take a breather and build some price support for a little while.

    What has had me a little confused lately is that there are signs of strength in this sector that usually is seen at early signs of economic expansion or sustained periods of growth. But at the same time we're not really seeing signs of such in most measures of consumer confidence, employment statistics or retail.

    I know that these companies are global in scope, but if it's not the US where the economy is heating up and Europe still appears to be slumbering, where is the nidus for support of iron & steel prices?

    Is China much healthier than we thought? Joy Global's strong move last week may be one sign that is the case.

    I continue to like Freeport McMoRan if that's the case and think that it could test highs in an accelerating fashion after its stealth run higher.
    Oct 27, 2013. 06:17 PM | Likes Like |Link to Comment
  • Finding Someone To Blame [View article]
    Besides, if you fire the guy who's responsible, you lose your scapegoat. Hanging out with the ugly crowd has its counterpart in the workplace.
    Oct 27, 2013. 04:04 PM | 1 Like Like |Link to Comment
  • Finding Someone To Blame [View article]
    Remember, it's not Jamie Dimon doing the complaining about the baggage that was assumed. It's other people, like me. Dimon expected the baggage and put nearly $30 billion aside in a "rainy day" fund. He must have assumed benefit in excess of $30 B
    Oct 27, 2013. 02:27 PM | 1 Like Like |Link to Comment
  • Finding Someone To Blame [View article]
    About a year ago management was praised for closing production down in anticipation of lower prices.

    Cliffs both grew revenue and cut costs, but more impressive is that its 3rd quarter results included some $120 million in adverse tax accounting reversals and reflects an anticipated increase in effective tax rate moving forward.

    It's too early to suggest this, but if iron ore prices stabilize or increase, so to may the dividend which would really propel price higher.
    Oct 27, 2013. 02:24 PM | Likes Like |Link to Comment
  • Finding Someone To Blame [View article]
    Thanks.

    It is a little hard to believe how poorly orchestrated this project was, but it was likely hampered by continually changing specifications despite the hard deadline. It was also a little laughable listening to congressional questioners using Amazon as a comparison.

    I wonder how many web sites through the history of the web have received as many visitors the first day and were tied to so many different databases, including the need for valifdation. I have a feeling that on day one Amazon was not quite as busy as the ACA web site and certainly nowhere near as complex.

    It probably also didn't help that the complexity was increased by so many states selecting not to create their own sites and instead relying on the Federal site.

    What struck me the most during the congressional testimony was hearing consultants say that it wasn't their role or responsibility to tell the government that the product was not ready for prime time. If not them, then who? How in the world can any consultant turn over a job to a client with knowledge or significant suspicion that it will not stand up to real stresses?

    If my consultant believed that it wasn't his responsibility to act as a consultant I would have some serious concern about their understanding of their role.
    Oct 27, 2013. 11:26 AM | 5 Likes Like |Link to Comment
  • Finding Someone To Blame [View article]
    Thank you.

    That would be hard to do, since I don't make all of the trades found in the weekly articles. Ultimately I decide which trades to make based on pricing dynamics when the week opens. I almost immediately ignore anything that opens strongly on Monday morning.

    Last week for example I made new trades in C, COH (puts), EBAY, EMC, IP, MRO, UNH and WLT - some from the list and others not. Additionally I made some trades that are not included in the Trading Alerts sent to subscribers (due to their higher risk nature)

    In addition, the weekly spreadsheet linked to in these articles lists different covered call strike prices so that people can decide what risk/reward proposition best suits their specific temperament, if they believe the particular stock thesis is a sound one.

    Now for subscribers who receive Trading Alerts each position is followed until its close and all transactions related to it, including rollover premiums and dividends are included in calculating its ROI. That's easy to do because the trading alerts provide specific pricing details and strike prices for opening and closing positions.

    Thus far, for 2013 there have been 239 of those positions opened and subsequently closed. The average ROI has been 3.1% compared to 2.2% for the S&P 500 (calculated for the specific time each position was held.) That's actually below the 1.0% threshold that I set, reflecting what has by and large been a continuously higher moving market which is to the detriment of a covered option strategy

    Given that I write about 10 or so stocks each week, after about 40 weeks in 2013 that would amount to about 400 new positions. In addition to the 239 open and closed in 2013 are another 47 still open, representing a total of 286 new positions in 2013. That's much less than the 400 possible trades and as demonstrated this week not all of those trades were from the week's list, although they are highly likely to have come from a recent week's list.
    Oct 27, 2013. 11:07 AM | 1 Like Like |Link to Comment
  • I Love Caterpillar [View article]
    In the case of Apple, the P/E was used as a reason to believe that shares were under-valued and would only go higher once the market realized just how low of a P/E Apple was trading.

    That argument had been made for years, as if it was a great secret and someday the market would suddenly awaken and propel shares higher.

    People see and believe what they want to see and believe.
    Oct 26, 2013. 10:19 AM | 1 Like Like |Link to Comment
  • NQ Mobile crashes as Muddy Waters calls company a "massive fraud' [View news story]
    By and large I agree with your comments and I also believe that those who seek to point out situations in which there may be accounting irregularities or outright fraud are doing the investing public a great service.

    In the past, my rule has been to stay away from Chinese companies, with the exception of Baidu, which I believed to have had reasonable transpareny and utilizing commonly accepted accounting standards.

    However, I have also attempted to capitalize on some previous Muddy Waters positions by selling puts in a couple of companies that they had targetted. I recently did so for NQ. I do take some exception to the highly charged manner in which Muddy Waters makes its claims and the personal short term gains that they may derive from promoting investor (over)-reaction. They take on a role of judge and jury, as opposed to bringing issues to light in a methodical manner and letting market and regulatory mechanisms sift through data. Additionally, they imperil exisiting investors ostensibly as they derive benefit.

    The concern that I have with your comment is that you state that "MW has been proven right most of the time."

    Given the nature of MW's allegations in the past I believe their threshold should be 100% and not "most of the time." They allegations against FOcus Media and Spreadtrum Communications were pretty bombastic and appeared to be without merit. However, the initial impact on shares was no different from those just seen with NQ.
    Oct 26, 2013. 10:13 AM | 2 Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    No, I wasn't suggesting that. Just saying that earnings or the quality of a company's products aren't necessarily correlated to stock price at a given moment in time.
    Oct 25, 2013. 05:30 PM | Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    It's often very difficult for people to make the distinction between the company and the stock.

    Apple is such a great example. Back in 2012, I was amazed at responses that I received to a few articles that I had written that were cautionary. So many people commented that it was absolutely ridiculous to think that shares could do anything other than go higher because Apple made the very best products.

    At some point people may realize that quality of product isn't that important when it comes to share price. After all if companies like Amazon can keep losing money and still climb to new heights, obviously profits aren't even an important correlate. Why should quality be any different?
    Oct 25, 2013. 04:01 PM | Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    Ultimately, I really don't pay too much attention to those kind of details. For me, they are only background noise, as they've been widely devoured and discounted. I really only think of Caterpillar in terms of its ability to maintain trading within a reasonable price range and while doing so develop sufficient option premiums and dividends to have made it a worthwhile holding.

    In so far as those overhangs prevent Caterpillar from climbing too high and its underlying business keeps it from sinking too low, I'm very happy
    Oct 25, 2013. 08:01 AM | 1 Like Like |Link to Comment
  • I Love Caterpillar [View article]
    You're probably right and that's exactly why Caterpillar has been such a great covered call position for a while. I always comes back and then falls, comes back and falls.
    Oct 25, 2013. 07:34 AM | Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    If you're a little more daring follow price dynamics of solid companies like CAT that suffer precipitous losses after an expected event, such as earnings, and look at slightly out of the money short term put sales, if necessary, rolling over if heading for assignment.

    For stocks that you wouldn't mind owning, it may be a good way to generate quick premium income..
    Oct 24, 2013. 09:09 PM | Likes Like |Link to Comment
  • NQ Mobile crashes as Muddy Waters calls company a "massive fraud' [View news story]
    Absolutely and I think they got giddy with their early correct call. But they really had two big misses in succession and Carson Block put in an abysmal appearance in an interview with Herb Greenberg that called him on his approach and significantly questioned the credibility of a short selling house offering the kind of bombastic analyses that they specialized in putting forward.
    Oct 24, 2013. 05:35 PM | 1 Like Like |Link to Comment
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