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Michael Thomas  

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  • Dividend Champion Altria: Attractive Buy With Limited Downside [View article]
    @Mike Nadel - "You can't get a moat any deeper than MO's: Its product is so addictive, that even those who don't want to use it HAVE to use it."

    So true. Tobacco companies benefit from having a very inelastic product. I'm not even sure you can cite the big increases in cigarette prices over the years as the cause of decreased consumption. I think it's more to do with the strong media campaign against smoking and the fact that you can no longer smoke in many places. Seems even with all of the excise taxes, tobacco companies can just pass the cost along to consumers with minimal impact.
    Jun 25, 2015. 07:34 AM | Likes Like |Link to Comment
  • Michael Kors: An Unfashionable Portfolio Accessory [View article]
    @ICARUS A M - I took that number from Nasdaq.com. They may have it wrong. Thanks.
    Jun 22, 2015. 08:52 AM | 1 Like Like |Link to Comment
  • Michael Kors: An Unfashionable Portfolio Accessory [View article]
    @MJ Pragmatist - You are absolutely right. Naked puts would definitely act to increase the yield from option premium. Unfortunately I do not have that option in my IRA. I have looked in the past and couldn't find any brokers that would allowed naked option writing in a retirement account. If you know of one, please let me know. Thanks.
    Jun 22, 2015. 08:52 AM | Likes Like |Link to Comment
  • Michael Kors: An Unfashionable Portfolio Accessory [View article]
    @user158 - Put spreads work by buying a number of put options and selling an equal number of put options at the same expiration. They can either be debit or credit spreads.

    A debit spread is where you buy a put and then sell a put at a lower strike price. For this spread you want the stock price to go down. The risk/reward varies depending on the strike prices chosen.

    A credit spread is where you sell a put and then buy a put at a lower strike price. For this spread you want the stock price to increase or stay flat. Risk/reward also varies.

    The credit spreads I show were not originally spreads. They started out as cash secured puts. After the underlying stocks increased in price by a good amount were they converted to a put spread buy buying a put option at a lower strike.

    For the GILD example, the original position was a cash secured put sold at the August 21 expiration $105 strike price. I received $979.34 in premium from selling the put and required $10,500 to cover the put. I didn't choose to buy a lower strike put until 6/10, where I bought a $95 strike put for $46.64. The rise in GILD shares along with time decay on the August options allowed me to create a put spread at minimal cost. This allowed me to reduce the required capital from $10,500 to $1,000.

    So essentially, I now stand to make the difference between the short and long put, $932.70, on the $1,000 capital requirement for the position. This is why the return rate is so high. This also acted to free up $9,500 that can be used to fund more positions.
    Jun 22, 2015. 08:49 AM | 3 Likes Like |Link to Comment
  • Seeking Alpha On Day 2 [View article]
    No, you used to be able to buy treasuries with a credit card. That is no longer an option.
    Jun 17, 2015. 07:08 PM | Likes Like |Link to Comment
  • Seeking Alpha On Day 2 [View article]
    Log charts still show true price action. Every closing price will be the same on the log chart compared to the linear chart. Log charts just adjust the Y scaling so equal percent changes take up equal vertical distance on the chart. A change in market value from 100 to 200 shouldn't be viewed any differently than a change from 1000 to 2000. On a linear scale, the 1000 to 2000 appears as a much larger increase even though it's the same percentage increase as the 100 to 200 move.
    Jun 16, 2015. 08:34 PM | 5 Likes Like |Link to Comment
  • The Great Beta Hoax: Not An Accurate Measure Of Risk, After All [View article]
    "Name one risk measure that isn't?"

    Implied volatility. That was mentioned in my comment...
    Jun 14, 2015. 06:37 PM | 1 Like Like |Link to Comment
  • Target, Time To Buy For A Dividend Growth Investor [View article]
    "Better take another shot at your "recommendation" - rear view mirror thinking."

    Looks like my recommendation would have netted a 42% gain in roughly a year.
    Jun 12, 2015. 08:51 PM | Likes Like |Link to Comment
  • Is Michael Kors Stock A Value Trap Or An Investment Opportunity? [View article]
    You're right, I think it comes to about 4.5%. MKFEH generated $103.7M is sales fiscal 2015 and KORS received $4.7M in royalties.

    Even though KORS is also generated revenue from selling product to MKFEH, it at wholesale prices. Retail is where the money is for luxury brands.

    Given that the current licensing agreement between KORS and MKFEH prevents KORS from selling retail in China until 2041, KORS will either need to buy back the licenses or terminate the agreement if MKFEH fails to meet sales benchmarks.

    I am long KORS, even more so now that my short $72.50 August put is deep in the money, but I feel that management is now in a position where they have to do something significant to right the ship for the stock. There is too large a disconnect between the company's performance and that of it's stock.
    Jun 10, 2015. 07:06 PM | 2 Likes Like |Link to Comment
  • Netflix: No Thanks - We'll Have Level 3 Instead [View article]
    Level 3 focuses on enterprise customers. How many enterprise customers are using their data services to stream Netflix?

    Netflix is a residential customer service and it would have been more applicable to relate it to a company that actually provides broadband access to residential customers, something Level 3 doesn't really do.
    Jun 10, 2015. 06:13 PM | 2 Likes Like |Link to Comment
  • The Power Of Dividends: Constructing Your Perfect Dividend Growth Portfolio [View article]
    "Michael, I completely and absolutely disagree with everything you said, but it does not appear that we will reach agreement, so there's no sense continuing the discussion."

    What a cop out...
    Jun 8, 2015. 08:41 PM | Likes Like |Link to Comment
  • The Power Of Dividends: Constructing Your Perfect Dividend Growth Portfolio [View article]
    @Robert - What's the point of your comment? Was it intended as a rebuttal? Nothing you stated discredits the excerpt you chose from my original comment. When a company pays a dividend, the stockholder receives cash and the stockholder's equity is reduced by the same amount. Whether it's temporary or not, that's how it works. No wealth has been created. Now, if the share price subsequently increases after the dividend event has taken place, then wealth is created. That's called capital appreciation.
    Jun 8, 2015. 06:17 PM | Likes Like |Link to Comment
  • The Death Of This Bull Market Will Bring Higher Income To Retired Dividend Growth Investors [View article]
    @MAYHAWK - Sell put options. That'll put your cash to work.
    Jun 4, 2015. 06:22 PM | Likes Like |Link to Comment
  • The $50 Case For Coke [View article]
    Good job. You're more bullish on KO's upside than the analysts covering the stock. The highest price target is $48. The options market shows implied volatility for KO at 12.05%, which indicates an expected 12 month move of almost 5 points, which would place the high end at roughly $46. This also happens to be about the same as the analyst consensus price target of $45.50.

    You mentioned gross margins in the article, but EBITDA margins are going to be the more important number to track given much of KO's growth is in emerging markets where margins are lower. Also, currency exchange is going to continue to be a headwind as long as the dollar remains strong.

    Another commenter mentioned Pepsi as being a better choice. There may be some merit in that based solely on the fact that PEP is more diversified than KO. Pepsi has a strong presence in the snack business, whereas KO is well...pretty much just beverages.
    Jun 3, 2015. 06:42 PM | 2 Likes Like |Link to Comment
  • The Death Of This Bull Market Will Bring Higher Income To Retired Dividend Growth Investors [View article]
    I would buy a 100k car when that CD matures. Best investment ever.
    Jun 2, 2015. 06:16 PM | 1 Like Like |Link to Comment
COMMENTS STATS
296 Comments
375 Likes