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George Acs

 
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  • How Low Can You Go? [View article]
    It's not to help the domestic producers that I suggest government consider playing a role, just as they do with crop supports.

    Keeping oil prices low can be very useful as a tool when dealing with the rest of the world, as we are now seeing quite clearly. For example, sanctions against Russia are one thing, but creating or prolonging an environment in which they see much lower oil revenues gets us to a desired endpoint much more readily and without the political baggage.

    Beyond that lower energy prices have many trickle down benefits. For those who believed that lower tax rates for the wealthy offered trickle down benefits there should be no difficulty believing the same to be the case when extended to almost every American in the form of lower costs of heating, driving, etc...
    Dec 13, 2014. 12:31 PM | 2 Likes Like |Link to Comment
  • How Low Can You Go? [View article]
    I definitely agree that this may be a great opportunity for Blackstone (mentioned in weekly article 2 weeks ago).

    Seeing them position themselves with cash at a time when prices are dropping is a formula for them to secure their good fortunes for years to come. Following Friday's drop, if there is some more erosion in shares, I would consider adding more, particularly in advance of its dividend, which is both generous and appears to be safe.
    Dec 13, 2014. 10:17 AM | 1 Like Like |Link to Comment
  • How Low Can You Go? [View article]
    Unfortunately, some of the people using the "drill baby drill" mantra were also "shrill baby shrill" and didn't necessarily have concerns that many others have. The same shrillness could easily be found on the other side that also took the issue of drilling to its other extreme.

    As with most things in life there is room for compromise and balancing the risks with the rewards.

    As far as that particular politician goes, I probably wouldn't want to use her as a source to demonstrate soundness of very many ideas. Even the insane occasionally have some insights and sound ideas, but it's really hard to overlook the preponderance of evidence that points to their insanity.

    Even if you are vehemently opposed to oil exploration and drilling, it's hard not to notice that there seems to be an association between the ability to be energy independent and national security. In a zero sum environment, when we thrive some of those who would wish us misfortune don't thrive. They are less able to fund their own activities, many of which may be good, but some of which may not be so, such as exporting terror, etc..
    Dec 13, 2014. 10:08 AM | 11 Likes Like |Link to Comment
  • How Low Can You Go? [View article]
    Ah, then the mistake you have made is reading anything on Seeking Alpha.

    (Wait, that may have come out wrong.)

    You're right, though. Dividend cuts leave scars and scares.

    I think that one has to distinguish between a company that is forced to cut its dividend because its businesses are failing due to competition as opposed to one that is suffering through a business cycle.

    I don't think that there is inherently wrong or amiss with SDRL's ability to compete in the marketplace. Rather they had to be the first to let go of their dividend as it was so outrageously high and for so long. Right now, retaining that cash is a good idea and at some point the dividend, much reduced, will be back and shares will prosper as the supply - demand cycle shifts.
    Dec 13, 2014. 09:59 AM | 3 Likes Like |Link to Comment
  • How Low Can You Go? [View article]
    I like the imagery.

    I agree that the process that is part of the cycle of boom and bust isn't going to be a pretty one. The real question is what will the time frame be?
    Dec 13, 2014. 09:54 AM | 1 Like Like |Link to Comment
  • How Low Can You Go? [View article]
    I agree that it won't happen, but I also believe that Chen will not give up on the possibility.

    If you re-read my comment about BBRY, you'll see that I referred to such a sale as a "last resort" and also referred to the dual issues that would be difficult to surmount if such a sale is proposed.

    Am I concerned that the CEO is bluffing?

    I really don't care. The earnings related trade is meant to be a 1 week position, or otherwise with an exit as soon as possible, so the long term prospects don't particularly concern me as an investor, other than being an interesting story.
    Dec 13, 2014. 09:53 AM | 2 Likes Like |Link to Comment
  • How Low Can You Go? [View article]
    Good tip. I may try it the next time I go cruising or even to a crime scene.

    I don't know. Tax selling is certainly one of the theories, but people always want answers trying to explain observable phenomenon.

    It has been such a strange year. So many large funds are trailing the market, which has basically been an average year in the S&P 500, that there may be significant tax losses to take, especially for active traders.

    If you believe that to be the case then there would seem to be lots of ammunition to get January started, especially with prices low.
    Dec 13, 2014. 09:48 AM | 2 Likes Like |Link to Comment
  • How Low Can You Go? [View article]
    Thanks, I suppose.

    My weekly articles are a reflection of what potential positions (and sectors) I have room for in my portfolio and am prepared to add in the upcoming week.

    At a moment in time there may not be room in a particular sector. However, I am almost always under-invested in biotechnology. You would have to go back to the weeks ending 11/28 for Gilead and 11/14 for INTC and CY.
    Dec 13, 2014. 09:42 AM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    I really don't know what gave the market the impression that the move would be limited to the 10% side. I was expecting, especially with some activity earlier in the week that it would be another report resulting in upward of 15-20%. Given that tyoe of history and what would appear to have been relatively low premiums to establish a straddle, it did seem as if it would have a reasonable likelihood of producing a nicely profitable leg.

    Still, there's always tomorrow to tack on some more gains, so who knows?
    Dec 11, 2014. 03:14 PM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    Boy, I think you summed it up perfectly. There are so many things that you can do with options, but at some point it really does hurt the brain
    Dec 11, 2014. 02:04 PM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    Theoretically, if you're capable of reacting quickly and the stock moves more than the implied move you can make unlimited money with a straddle. The downside, at its extreme, is that you stand to lose quite a bit if the move is small and you're not very adept at closing your positions or you select the wrong one to close, in an effort to reduce you option losses.

    Still, I'm surprised at the relatively small move implied by the option market on LuLu.

    Someone trading the at the money straddle yesterday would have laid out about $4.50 in premium and unless LuLu adds some more to its now $4 gain, will result in a loss, unless they were able to close their put position while it still had some value and kept the call open. Uncoupling, though, adds risk and really requires a combination of guessing, luck and nerves, especially if shares then reverse course, as they can do as a result of an after opening bell conference call
    Dec 11, 2014. 11:38 AM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    No, it was the option market that looks like they got the size of the move right, despite the past history of much bigger moves, but I'll take credit, anyway.

    Did you do a straddle? I'm on the fence (pun intended) on those. You have to be nimble and attentive. What I don't like is how the trend can change in price if the conference call begins before trading opens. Luckily, for those having done a straddle the trend was from a middling move to one that matched the option market's predicted range

    I am definitely interested in LVS. It goes ex-div next week and is tentaively on next week's list, although I'd like to see it give back a little of this morning's gain
    Dec 11, 2014. 11:10 AM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    Given the upgrade yesterday and earnings tomorrow morning and its past history of easily moving 20% on earnings, it's a little hard to understand why the implied move has been so low. I chose the $56 strike using that 20% level in mind.

    The real mover may be any news on the founder's disposition of his shares. If LuLu looks like it is getting over some of the character driven drop in sales it may start looking appealing to others once Chip Wilson is more definitively out of the picture or can be marginalized
    Dec 10, 2014. 12:42 PM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    Insiders are notorious, though, for poor timing when it comes to their purchases, but they tend to have a longer term outlook, especially if on the board.

    The CHK insider purchase in November by the CEO was at a price $5 higher than today's closing price.

    The purchases at Goodrich Petroleum were at $7.50 and shares are now $4

    At REI, the CEO bought his shares slightly less expensively than its current price, but not so for the directors who bought at $10.50, with shares now at about $9.

    But the truth is that it's really hard to resist at these prices, especially when they're 20% lower than where the insiders may have thought that they were value priced.
    Dec 9, 2014. 05:17 PM | Likes Like |Link to Comment
  • Time To Focus On What's Good [View article]
    Great metaphors
    Dec 9, 2014. 03:07 PM | Likes Like |Link to Comment
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