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George Acs  

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  • This Roller Coaster Only Goes Higher - Don't Fight It [View article]
    I do like those days off that often seem to pay me, anyway, but I would so much rather that they paid better than in this current environment. The forward weeks are offering very little motivation to extend risk, but that's what I did last week, essentially bypassing the July 3 expiration on 8 of 11 trades.
    Jun 28, 2014. 06:03 PM | Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    Let me understand this.

    You're asking for someone to prove that an unsubstantiated rumor is false, yet the proof would require presenting evidence of no action. That is to say you're asking for proof that the Federal Reserve did not but shares in stocks.

    The logic of that proposition requires that there be proof of the action that is alleged. So that really puts the ball in your court.

    Your assertion is no different from saying Area 51 is used by the government to house extraterrestrials and then challenging someone to "Prove to me that it isn't the case."

    Even demonstrating all of the uses of Area 51 could never satisfy your demand for proof, because if something doesn't really exist, it's lack of existence can never be directly demonstrated because there are no markers nor indicators of being.
    Jun 28, 2014. 05:58 PM | 9 Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    That's exactly why there has to be a roll for government, but ideally that roll would identify problems during their nascent stages, be more of a preventive nature and not have to be an over-reaction to the problem as identified.
    Jun 28, 2014. 05:36 PM | 4 Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    Unfortunately, the problem is that without regulation most everyone is trying to game the system and you find many living their existences at the fringes of what most people inherently know to be the border that straddles right and wrong.

    When regulation is diminished people and institutions tend to take advantage. That is simply human nature and the less aggressive are the ones who get trampled by those seeking to position themselves at an advantage.

    History is filled with examples of bad outcomes when there is little to rein in behavior and the result is the need to over-react by government in an effort to control, eliminate or regulate those behaviors. It's the over-reaction and the broad nature of actions that often has the unintended consequences.
    Jun 28, 2014. 05:35 PM | 3 Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    Glad that worked for you. Like most things, you just never know, but it always helps to have an escape or coping strategy
    Jun 28, 2014. 12:15 PM | Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    That's actually a strong possibility for HFC. The key will be, if having to rollover, being mindful of the approaching dividend so that the dividend is captured as an owner of shares, rather than subsidized as a seller of puts.
    Jun 28, 2014. 12:14 PM | Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]

    I actually wrote an article a few months ago that looked at the use of a margin account specifically to write puts without incurring margin expenses as a means to supplement income flow. The key was making certain not to get assigned and rolling over, as needed, until expiration could occur.
    Jun 28, 2014. 12:13 PM | 1 Like Like |Link to Comment
  • Beware The Hand Of Government [View article]
    Thank you, as always Rose.

    In general, I have no problem with government's role in our lives. While I don't always believe in the specifics of a given policy or action, I tend to believe that their intentions are well founded. However, they often suffer from horrible execution and without thorough analysis of the unintended consequences. That tends to be true regardless of which party or side of the aisle is promulgating at the moment.

    The decision regarding oil, for example, may easily result in increased prices for crude as there will likely be increasing bidding for crude, now that refiners can be bypassed. The IRS decision could also open up companies like Federal Express seeking to convert or spin off their real estate holdings specifically to reduce tax consequences. It goes on, just as we've seen that the Affordable Healthcare Act (of which I'm a proponent) may have had a hand in the decreased GDP for the first quarter.

    It's complicated, but that's why we have elected officials. They're supposed to be on top of these things instead of being nothing more than a self-perpetuation machine that spends all of its time seeking re-election.
    Jun 28, 2014. 11:19 AM | 6 Likes Like |Link to Comment
  • This Portfolio Has 50% Upside And Will Outperform The Markets Again In 2014-2015 [View article]
    Nicely written article.

    You do mention the concept of diversification early in the article as it applies to all assets. However, it's not entirely clear to me that it is practiced in this portfolio.

    Among the questions I would have is the heavy representation of Chinese stocks in this portfolio, representing nearly 50% of the holdings. That represents considerable risk, just as at the right moment it may have presented considerable reward. What it doesn't represent is diversification, nor balance.

    Additionally, the average beta is very heavily skewed to 2, with the average being slightly greater than that. Surely that gives the potential for robust gains, but as these stocks have shown nice gains in 2013 their risk for out-sized losses can't be minimized.

    While you suggest that your portfolio is worth looking over, what kind of an investor do you believe it can serve as a model for in terms of risk temperament?

    Finally, with a portfolio gain of 4% for 2014 YTD and now with 6 months remaining, what do you believe will be the catalysts to help you achieve the additional 50% that you refer to as "Future Portfolio Return"?
    Jun 28, 2014. 11:08 AM | 3 Likes Like |Link to Comment
  • Beware The Hand Of Government [View article]
    I've been on the wrong side of cash accumulation for more than a year, although I keep plowing some back in each week and usually hope to get back to my starting cash level for that week.

    I'm currently at about 30% but am willing to get down to about 20% for the week. Without considering new cash inflows from the sale of options, that would mean about 5 new positions being opened up, as I usually have each lot represent about 2%.

    Not being fully invested has a downside if you don't have your existing positions in a state of overdrive generating revenue, but I always think in defensive terms. Like a lot of things you don't appreciate it until it's really needed.

    I wouldn't mind facing any correction with that 20% in reserve. Then the hard part becomes when to believe that the correction is done. Whether it's a market correction or an individual stock I'm usually on the early side, but I don't get bent out of shape if seeing more declines. If the declines steepen you simply adjust your covered call strategy taking advantage of the accompanying increase in volatility and the increased premiums that will make out of the money strikes as attractive as in the money strike are currently.
    Jun 28, 2014. 10:41 AM | 1 Like Like |Link to Comment
  • Minsky Moment: The Roles Of Complacency And Volatility [View article]
    I do agree about the typical nature of "knee jerk" reactions, but this one has some logic to it, but is just like most knee-jerk reactions, was well over-done.

    Ultimately, I think the basic theory upon which the sell off was predicated will prove to be less true than in theory, as the margin compression should be offset by price increases throughout the pipeline.

    Personally, I look at it, at least in the case of Holly Frontier, as a buying opportunity and it is on my list for this coming week, but only if it shows some price stability to start the week.
    Jun 28, 2014. 09:10 AM | Likes Like |Link to Comment
  • Minsky Moment: The Roles Of Complacency And Volatility [View article]
    I look at the Law of Unintended Consequences and see the ruling by the Department of Commerce as potentially driving up the price of crude, as now everyone will be bidding to get their share, whether for exporting as unrefined or condensate or as refined. I think that the refiners will be able to deal with potential margin pressure as prices will also rise throughout the pipeline as it gets to the end users, you and I.
    Jun 28, 2014. 09:06 AM | Likes Like |Link to Comment
  • Minsky Moment: The Roles Of Complacency And Volatility [View article]
    Actually, I don't think HFC got hit too badly as it seems to have found some comfort at its resistance point at about $44.50. It has traded nicely and consistently for those with some patience, in that $44 - $50 range, with $48 having been a very safe entry level the past few months. I've owned shares on 7 occasions since December 2013 and may make it 8 this coming week on any evidence of a decrease in selling pressure.

    As far as there being "no good reason" that's hard to substantiate, as the entire sector made it clear that there were winners and losers in response to the government decision regarding unrefined oil exports. HFC was among the losers. The swiftness and intensity should point to an identifiable cause.
    Jun 27, 2014. 08:26 PM | Likes Like |Link to Comment
  • This Roller Coaster Only Goes Higher - Don't Fight It [View article]
    BBBY seemed like it was really overdone on the selling, but these days that's more normal than a measured response to bad news.

    We'll see how it fares, but since this one was one that I wouldn't have minded owning it was a little easier to watch the over-reaction and subsequently rollover the puts, although had I been patient the position could have been closed in the mid-afternoon at shares traded nicely above $57.50 for a short while.
    Jun 27, 2014. 08:17 PM | Likes Like |Link to Comment
  • This Roller Coaster Only Goes Higher - Don't Fight It [View article]
    I always like EBAY, especially at this level, but it returns me to the discussion of rules and diversification that dominated last week's or perhaps the prior week's article.

    I have 3 lots of EBAY open at the moment and that's my personal maximum. At this point I'm content to try to have them continue to generate some premium revenue as we head into earnings on 7/16. I would actually like to have at least one of those lots assigned by 7/11, because I do have some concerns about earnings, especially some pressure at the PayPal unit. I'm concerned that their guidance for PayPal maybe cautious and that would probably generate selling pressure.
    Jun 27, 2014. 08:14 PM | Likes Like |Link to Comment