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George Acs  

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  • 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
  • I Love Caterpillar [View article]
    Poor acquisitions affecting the bottom line shouldn't come as a recurring surprise, although I did like the pun.

    I think that you're absolutely right in that there seems to be an inability to perform basic financial forecasting and as a result they are perennial disappointers.

    While I don't necessarily believe that the Secretary of Health and Human Services is responsible for the ACA related web site and software not functioning up to expectations, I do expect the CEO of a publicly traded company to be responsible for forecasting and delivering without surprises.
    Oct 24, 2013. 03:20 PM | Likes Like |Link to Comment
  • NQ Mobile crashes as Muddy Waters calls company a "massive fraud' [View news story]
    Four words:

    Focus Media
    Spreadtrum Electronics

    Previous Muddy Waters calls, alleging widespread accounting fraud. Panic selling in each for two days and multiple trading halts. Both went on to quickly recover and prosper, with Muddy Water allegations having no credence.

    The current report is damning, but they have traveled this path before. Remember, they are a short selling house.

    I did precisely as with the above two and Harbin (also a Chinese company accused of accounting fraud, but not by Muddy Water) and sold put options this afternoon
    Oct 24, 2013. 02:48 PM | 3 Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    You're welcome. Ultimately, I think a combination of varying expiration dates ends up being another hedge for a portfolio and may be an important protection against less than serendipitous timing, such as a Federal Reserve Chairman press conference two days before monthly expiration that sends the market tumbling.

    It happens.
    Oct 24, 2013. 02:27 PM | Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    Time is definitely a factor.

    Like everything, there are up and down sides.

    In a period of low volatility the weekly option generally gives you a better premium per unit of time.

    That's a nice upside, but the downside is that if your shares aren't assigned or if you're unable to rollover shares to a new contract due to a precipitous price drop, the shares aren't generating any further income.

    By contrast, the monthly option gives you a guarantee of income for the longer time span, but at a cost of a lower time adjusted ROI , in general.

    In addition, the extended time contract may make it more likely that you will collect a dividend if shares are in the money and sufficient time remains on the contract.

    Increasingly, with the expansion of the extended weekly options I am trying to stagger the expiration dates of my holdings so that a quick and sudden cold blast doesn't adversely impact them all in advance of expiration dates.
    Oct 24, 2013. 12:33 PM | 2 Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    Thanks, but too many subscribers keeps me from my real passion, which is doing nothing.

    It's sometimes pretty maddening when you see the upgrades and downgrades that are way too late. I guess they'd be more maddening if you were an investment client. I especially like when an upgrade comes and assigns a new price that's below the current price. I sometimes wonder how they can keep a straight face when reporting that kind of news.
    Oct 24, 2013. 09:50 AM | 2 Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    You can love all of your children equally. Without making a comparative case, I think INTC is good, as well and have 2 lots of covered shares. WIth its dividend coming up early November and earnings out of the way, I may look to add even more shares.
    Oct 24, 2013. 08:55 AM | 1 Like Like |Link to Comment
  • I Love Caterpillar [View article]
    Sorry, but that was an article written behind a pay wall and not on Seeking Alpha
    Oct 24, 2013. 08:53 AM | Likes Like |Link to Comment
  • I Love Caterpillar [View article]
    Sorry, all of the above dates should be 2012, not 2013
    Oct 23, 2013. 08:18 PM | Likes Like |Link to Comment