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George Acs  

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  • Suffering By Comparison [View article]
    If you're looking for consistency you're looking at the wrong species.
    Lessons learned aren't necessarily learned for very long.

    From my perspective I tend not to focus on longer term issues when it comes to parking money in a stock. In this case, as with most others, my hope and expectation is that I will be out of the position in a week or a month at the most, having met my ROI threshold levels.

    I am usually agnostic to the longer term issues, which in the case of Chesapeake have been significant for years. However, had I used a logical approach to the consideration of those issues I never would have invested anything over the years instead of having used shares on may occasions to reach ROI objectives.

    After the recent price drop I see this as another opportunity to do the same. However, that may not be adequate justification for a buy and hold investor for whom the liability on the horizon may be more significant than the liability around the corner.
    Jan 5, 2014. 02:15 PM | Likes Like |Link to Comment
  • Suffering By Comparison [View article]
    Thank you, Happy New Year to you, as well.

    Some weeks the list of stocks is like a script and I follow it to a tee, other weeks not so much, as the way the stocks open on Monday can very quickly change my mind, especially if shares head higher. In those cases I look to alternatives or wait, hoping that there will be some price weakness.

    Last week, for example, I had already bought BMY on Friday before publication, then during the week did buy EMC, LULU, SBUX and MRO, but substituted HFC for APC, JPM for MS and MSFT for AAPL and threw in VZ as an early start to this week.

    I usually try to stay in the sectors outlined for the week and ideally the stocks initially identified.
    Jan 5, 2014. 08:57 AM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Wow, I guess I shouldn't complain about a little winter snow storm and 14 degrees.
    Jan 3, 2014. 08:01 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Thanks.

    It was pretty good. The key is,as I wrote in today's Week in Review, keeping up when the market hoes higher and staying ahead when it goes down. Best of all are markets that bounce. I'm hoping we have lots of bounce ahead.

    Have a good weekend. No shoveling
    Jan 3, 2014. 05:19 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Thanks for the kind words.

    I wasn't certain how BMY would work out watching yesterday's close. For certain if expiration was on Friday they would have been assigned, but only a few cents in the money and 3 trading days left in the week I wasn't certain of the outcome.

    I bought my shares and sold calls on Friday, which is something I rarely do in advance of an article and mentioned that to be the case in the article. My shares weren't assigned. I also poll subscribers in cases of shares finishing in the money to find out their experience and so far this morning none have been assigned, but it will be another hour or so until I have a more full picture. In general when there is a split in experience regarding early assignment it appears that those having sold fewer than 10 contracts were more likely to have assignments or partial assignments.

    It is possible that because the premium was less (adjusted for it's in the money status) on Monday when you bought shares, there was less possibility of a profitable option trade for the holder and so an exercise and capture of the dividend, while keeping fingers crossed that shares would trade above $53 when taking control and then selling shares would yield a greater ROI. In general, as volatility has continued to drop I am seeing more early assignments to capture dividend because there is less relative premium value when in the money and therefore offers less trading opportunities for the option holders to profit from purely buying and selling their options.
    Dec 31, 2013. 09:29 AM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Thanks.

    Despite your experience with T, very often you can collect both the dividend and the premium. It's related to both how much in the money the shares are and how much time until expiration.

    Some stocks, however, typically higher dividend yield stocks, such as T, VZ, MO and others are often subject to dividend arbitrage strategies and have very little additional premium built into them if in the money and, therefore represent no meaningful alternatives to the contract holder other than to exercise the option early.

    In addition, the holder of the option makes a decision that's also based on which will return greater results for him: exercising the option and collecting the dividend (and being exposed to a dropping share price in addition to much less leverage) or trading his options.

    In general, if you take the price at close on the day before the ex-dividend date and you subtract the dividend, if the result is less than the strike price it is very unlikely that you will be assigned prematurely. The more over the strike price is that result the more likely you will see early assignment, especially as the time remaining on the contract has dwindled.
    Dec 30, 2013. 11:11 PM | 1 Like Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    I have, resulting in a partial assignment of shares.

    The option holder has until as late as 5:30 ET to decide whether to exercise or not. In the event of after hours stock specific moving news you can be in for a surprise.

    More commonly I've had shares assigned when I wasn't expecting that to be the case because of after hours news moving shares higher and beyond the strike.
    Dec 30, 2013. 08:42 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    If you are a buy and hold type of investor, the shares don't move and your cost is below current price, why not consider selling a LEAP, especially with a stock that has a healthy dividend yield? You can set a strike price about 14% above the current price and add about 1.2% to the annual yield.
    Dec 30, 2013. 04:19 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    If you have ever hiccoughed you will have noticed that there are opposite bodily movements contained in the physiologic process.. So too are the hiccoughs in EMC induced by VMW. There are ups and downs. I don't interpret that as a "negative." I interpret that as the reality and for my purposes it is a positive.

    In the context of selling options on EMC, its ownership of VMW is critical in maintaining acceptable premiums. Those "hiccoughs" take EMC shares up and down and create a price volatility that wouldn't exist in the absence of its large position in VMW. I like those hiccoughs because EMC tends to be staid and a reliably profitable covered call play, as a result.
    Dec 30, 2013. 10:57 AM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Remember, I tend to be agnostic with regard to a company's specific fortunes, strategic plan, etc...

    All of those issues are very well analyzed by people whose job it is to do just that and to some degree is already incorporated into its current price.

    All I do is look at near term conditions and historical price movements and try to decide whether the stock can serve as a means to generate some income and perhaps gains from relatively quick trade of shares.

    So far this morning I haven't added share of EMC, as they opened too high. Instead, I added Microsoft, but still may pick up EMC shares. I'm interested in capturing its upcoming dividend and option premium and then exiting the position as quickly as I can have it assigned or rolling over the option contract until assignment.
    Dec 30, 2013. 10:35 AM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    I include insurance, such as AIG and MET in that sector.
    Dec 30, 2013. 08:08 AM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    FCX is still a far, far cry from my prediction that it would be worthy of being a top pick in 2013.

    However, if you also add the regular and special dividends paid in 2013, it has gone 16.1% higher. Better, but not good enough.

    It has great management but lives in a rough neighborhood. I think, given the stresses in the commodities market place and the initial reaction to the Plains purchase, it's done better than you would have expected.
    Dec 29, 2013. 04:15 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Based on how FCX worked out there's not too much value in trying to predict 2014. If not for the dividend it would have done nothing at all, but maybe it's horrible stubbornness, but I really do continue to like FCX. Given the impact of its buyout of the oil exploration unit and the weakness of gold prices, it's done pretty well to stay in place.
    Dec 29, 2013. 03:03 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Like most positions that I initiate I did so accompanied by the sale of a call option. In this case, since it was going ex-dividend early in the week I sold an in the money call, hoping to capture both premium and dividend and further hoping that shares might get assigned at week's end.

    For a longer term position I'd be more comfortable in the $50-51 range.
    Dec 29, 2013. 02:56 PM | Likes Like |Link to Comment
  • Getting The New Year Off To A Bad Start [View article]
    Most are capable of learning after a single article whether there is recurring value for their needs, just as a simple comment can speak volumes.
    Dec 29, 2013. 02:30 PM | Likes Like |Link to Comment
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