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George Acs  

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  • When Good News Goes Good [View article]
    Whether straight forward interpretation of events continues is anyone's guess. I think that once Yellen takes her place as Fed Chair the speculation will really heat up as the first FOMC minutes release is about to occur.

    I have a rule that I don't maintain more than 3 lots of a single stock at a time. If I were to break that rule I would add Mosaic, as I think it and POT are going to continue in their recoveries, as common sense helps to re-strengthen the fractured cartel.
    Dec 7, 2013. 02:57 PM | 1 Like Like |Link to Comment
  • Eve Of Inflection [View article]
    Based on today's Icahn related news I would think that Apple would out-perform the S&P 500 between now and gift unwrapping time,

    To really answer your question you have to accept the fact that the answers may not need to be mutually exclusive.
    Dec 4, 2013. 07:26 PM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    Thanks.

    So you mean my recurring dreams of being able to see into the future are destined to be unrequited?

    Lots of philosophical treatises have been written on the curse and blessing of being able to see into the future, but I think I'd have to agree with you. Not only would investing be easier, but I think the certainty of success would more than offset the inability to be surprised by the outcome.

    I think I would still celebrate and just make believe everything was a surprise.
    Dec 4, 2013. 02:03 PM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    Apple is specifically the stock that I first had a bad experience when buying back a call in order to attempt to participate in continued share appreciation.

    I think that individuals should develop their own rules for trading and have some structure to follow. I never considered establishing such rules to determine when it may be appropriate to buy back calls in such cases, only because of a preponderance of negative outcomes from taking a loss on the call option trades and then a subsequent decline in share price.

    In those cases where the stock does continue appreciating in a straight line higher, as Apple has recently been doing, there's a bit of serendipity involved. Most stocks simply don't act in that manner and can be expected to retrace a portion, if not all of their price appreciation.
    Dec 4, 2013. 09:47 AM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    No, someone may elect to exercise shares at any point. So it is possible that despite the shares closing below a strike level the shares may have been significantly above that level earlier in the day and the option was exercised.

    After hours is another story. The CBOE cut-off to decide to exercise is at 5:30 PM EST, however, individual brokerages may set an earlier time. That means if shares move up in the after hours, making it advantageous to exercise, the contract holder may do so, while the contract seller has no recourse to close out the position once the closing bell has hit.
    Dec 2, 2013. 09:30 AM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    Language has allowed for either interpretation. Common usage requires only a change to have taken place. The mathematical concept, as is adopted in investment circles is far more demanding and precise.

    The scenarios that you use to illustrate what are differences need not be mutually exclusive. Even during a critical point there may be opportunities to move forward, a is the point suggested in this article.
    Dec 2, 2013. 09:27 AM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    All of those issues may be true and they may be unjust, but investors don't particularly care about what goes into making the sausage.

    There are probably very few publicly traded companies that have not trod down hard on some population in order to derive benefit for themselves. Again, by and large, investors don't make their decisions based upon issues of right and wrong.

    What is wrong is anything that impacts profits today. What is right is anything that enhances profits today. The issues that you cite may be unfortunate but they are not likely to make it onto the radar screen of very many people and they're not likely to change many minds.
    Dec 1, 2013. 06:52 PM | 3 Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    Thanks.

    You're far more analytical than I am. I still use the "if it feels good it must be good" approach, since I assume that everyone else has already analyzed every position to death and as a result there will be little advantage to be gained from doing it myself.
    Dec 1, 2013. 04:45 PM | 2 Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    Thanks.

    What you describe is basically a calendar spread, a strategy usually used when trying to take advantage of differences in volatility, essentially creating volatility arbitrage.

    If you believe that we're at the end stages of a mature bull market the idea of buying the deep ITM options and selling near term options is an appealing one for some investors and requires less cash outlay for each position.

    No, I don't use that strategy, but not in any way as a reflection of the potential value of the strategy.

    I tend to be very simple in my approach to the use of options. I recognize that there are lots of ways in which options and various combinations of options can be utilized to take advantage of specific markets. It's just that my brain has gotten to the point that most of its creativity generating portions are now in deep storage. I prefer no longer thinking very much and like the auto-pilot mode.

    As another perspective, the playing of one asset against another in the spread is also more complex than I like and requires a longer term period than which I like to commit.

    In the case to which you refer the volatility required to really make the combination create advantage may be influenced by both stock specific and market factors. That adds an additional complication for me, as I like to narrow my focus to the stock itself over that short term that I want to be thinking about its fortunes.

    Where LEAPS do find favor with me is in their use in high dividend paying equities. I like to sell LEAPS in DJIA stocks, usually choosing a strike price that is two or more levels above the purchase price. Doing so usually will add a couple of percent to the return from the premiums and allows for share appreciation, as well as a good likelihood of capturing most, if not all of the dividends. Best f all, for me, it requires no real alteration of strategy nor the need to think outside of the box I've created for myself.
    Dec 1, 2013. 03:04 PM | 2 Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    No, not annoying at all. Pedantic? Maybe.

    The mathematical usage of "inflection" is very different from its non-mathematical use, certainly in its precision. The predominant use of or reference to "inflection" is to represent a concept of change or as Gladwell popularized, "tipping points." Relatively few people think in terms of first, much less second derivatives, but they do think in terms of qualitative differences and often attempt to create order or personal meaning through the use of a semi-quantitative process that may be proprietary.
    Dec 1, 2013. 01:36 PM | Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    The overall market is not as susceptible to sustained or dramatic reversals as ordinary stocks if you look at their frequency, but they can exhibit the same kind of pricing dynamics. In addition to being focused on data driven movements as might be seen in a single stock, the market also is susceptible to contagion.

    I think that the final month of the year will be challenging, particularly if many managers do seek to significantly catch up with the indices. I think that straying from a core strategy in a reactive manner is fraught with individual risk and could create systemic risk if sufficient in size over a short period of time.

    An interest rate of note that has demonstrated some association with the market's reluctance to continue its expansion has been the 10 year Treasury. While inflation may not be nearing the 2.5% metric that the FOMC is focusing upon, the market has been focused on 2.75%. I think that bears watching
    Dec 1, 2013. 01:25 PM | 2 Likes Like |Link to Comment
  • Eve Of Inflection [View article]
    In an annual Forbes article by Eric Jackson, I gave FCX as my stock of the year for 2013. I will fall far short of whoever turns out to have made the best predictions for this year.

    While I do agree with you regarding FCX management, Goldman may finally be on the right side of its commodity outlooks, as they had a fairly poor record over the past 5 years, until their most recent metals calls. I hope that they revert to true form and that there is at least some stability, if not recovery in metals.

    Unfortunately, I don't know if insider buying is always a metric to follow. While insiders may have only one reason to buy their own stock the reason may not always be borne out by forward events.
    Dec 1, 2013. 01:12 PM | 1 Like Like |Link to Comment
  • Eve Of Inflection [View article]
    I will likely submit an article similar to the one that I did that recapped 2012, which had a difficult start to it, at least in terms of presenting a greater challenge to covered call traders, as the market went straight higher and then ended with the first two months of the current 12 month long up market.

    The problem with reporting the data is that for my subscribers the assumption is that each position is held in equal number of shares. In personal accounts that is very unlikely to be the case and so individual performance will not only vary based upon that factor, but also upon the specific Trading Alerts that they followed.

    There's no doubt that a straight line and sustained increase is the covered option writer's nightmare, but there are variations of the theme that are appropriate when one feels bullish, just as there are variations when one feels more bearish.

    Additionally, the use of shorter term expirations is far better able to level the playing field when markets are moving higher and higher, as opposed to the monthly contracts that compound the influence of low volatility. Where possible, I've been accentuating weekly contracts when bullish and monthly when bearish or more defensive.
    Dec 1, 2013. 01:07 PM | 1 Like Like |Link to Comment
  • Eve Of Inflection [View article]
    What kind of information could you get from a visit to a single store that would serve to inform you and steer a decision? How does single store offering a snapshot become representative of something beyond that store and that local community, at that moment in time?

    Even when analysts methodically perform "channel checks" all over the country and analyze their metrics, they are routinely surprised when same store sales figures are released.

    Years ago I had a relationship with a publicly traded company that would hire people to sit in their waiting rooms. The appearances weren't very substantive and were intended to deceive, yet potential investors and analysts drew conclusions that, at least in that case, were far from reality, despite their ability to ask questions of the CEO, CFO etc.

    I think that even the "professionals" are handcuffed when seeking to interpret "on the ground" data and they typically will use their observations only to help fill in gaps (pardon the pun) in their existing thesis, in order to give an appearance of validity to their pre-existing opinions.
    Dec 1, 2013. 12:19 PM | 1 Like Like |Link to Comment
  • Eve Of Inflection [View article]
    Thank you. Hopefully, it will at least out-perform the market in the event of a little respite, or at least keep up if we just keep going higher. The combination of option premium, dividend and perhaps more upside room on shares is enticing, although I would have preferred if a weekly option was available.
    Dec 1, 2013. 10:13 AM | Likes Like |Link to Comment
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