Apple's Big Mystery Buyer In Q1 2012 [View article]
I will admit that I am not very sure to what extent those dividend Funds will effect the demand for Apple's stock.
Dividends are mostly replaced by stock buybacks in the modern companies, and I am not sure if the Funds still restricted to dividend stocks still constitute a large and active part of the investment firms.
I suggest you research this on SA's Apple articles in the last year. You might find something with actual data on the extent of those Funds, which I admit I don't have.
Buy Cheniere Energy: Natural Gas Exports Present A Huge Opportunity [View article]
All it takes is natural gas at $6 for this company to completely get wiped out as far as I know.
They are basically making a huge one way trade on natural gas staying at near $3 which won't happen because it is an anomaly. Their investment theory is if natural gas stays low they make lots of money and if it doesn't they will just declare bankruptcy.
The only one with something to lose will be the ones who buy the LNG shares from the open market. They don't have the option of declaring bankruptcy to limit their losses so I don't understand why would an investor buy shares in a company with so much uncertainty and risk. This is a lose-lose trade for the investors since the upside is already in the price.
Short Yen: Great Strategy, Excellent Diversifier [View article]
Great article. And definitely a correct concept.
I should mention though the Yen's latest weakness is almost completely a result of the latest and most open announcement from the BOJ that they are determined to end deflation.
They tried to do the same before, but this IS DIFFERENT in my opinion. Because the announcement was more along "we'll ease until we solve this problem, even if we have to increase the money supply tenfold". It was very blunt.
I should note that in the case that their public finances might start to strain them, that would actually strengthen the Yen because it would limit their money printing.
One more note. The yen is much more closely related to their equity market over there. There have been many instances the hedge stated in the article did not work with the US market because yen continued to strengthen while US markets were rallying. The hedge between US markets and yen worked recently because the BOJ announcement overlapped with rallying US equity markets. Australian Dollar is a much better way to hedge against US markets.
Should You Trade, Or Hold Your mREIT? [View article]
I would agree with IncomeYield. Plus you have to take into account the loss to bid/ask spread. Also 20% a year return is it worth the risk for an options trade. One big jump in the stock and you will lose all your capital.
Liquidity Risks In High-Yield Stocks [View article]
I don't understand your argument.
If the stock price drops a few dollars (more than 10% on AGNC) that indeed is an example that the stock could not handle the sell orders.
Of course there is no such thing as being stuck with shares on a publicly traded security. What matters is how much the stock can absorb without crashing if sell orders pile up.
Can you clarify your argument?
Also small investors won't have a problem with selling. The argument in the article is for larger sell orders.
Oil: The Best Way To Play The 'Bernanke Boost' Until May 2012 [View article]
I would agree with TheBaronInvesting almost completely. Many European heavyweights are way undervalued compared to US but that has been the case for a while and it did not correct itself. I would also caution that oil is leveraged to the market sentiment but from only one side. Oil stocks get hit by even more when the market mood turns negative because they take the hit from the market loss AND the loss in oil price that usually happens when the market tanks.
Apple's Big Mystery Buyer In Q1 2012 [View article]
The move actually happened before the dividend announcement. And the Funds who can't buy without a dividend couldn't have bought it before the dividend actually starts to get paid which is still far off. You might assume the expectations of demand from those Funds might have pushed up the price, that is still demand by speculators not demand from the actual Funds in question.
Apple's Big Mystery Buyer In Q1 2012 [View article]
The article was just a theoretical exercise in who might be the powerful buyers behind Apple's exponential move. Of course 170,000,000 shares is probably off the mark a little. However, the conclusion still stands that option underwriters do have a say in Apple's rise.
As for delta hedging: The delta sensitivities of the options changes as the underlying price changes (hence there is additional risk) so delta hedging is only relevant to investors. For option underwriters, they have to hedge the entire underlying amount to completely eliminate risk until expiration as far as I know.
Trades For The Approaching Euro Strength [View article]
GMCR is based on it being oversold and a turn in market sentiment will probably initiate a short squeeze. The Euro stabilization will turn the market sentiment positive and oversold stock will rally aggressively.
Capitulation Of LDK Solar Will Mark The Bottom In The Sector [View article]
The balance sheets of many solar stocks are in very bad shape. None of these companies are in a shape to assume more risks than they already have, in my opinion.
How To Profit From The Last Stage Of The Cloud Bubble [View article]
Most of that 1,7 billion is Noncurrent marketable securities. Those cannot be considered liquid because they are under the non-current category. Their cash is only $440 million. If you consider that the company needs to set aside most of it for working capital not much can be spent on an acquisition without financing. CRM is all about trickery like these.
Natural Gas: How I Got The Pullback Exactly Right With A Simple Analysis [View article]
Upside potential is much more limited if you own the pipeline MLPs. Also check this out: http://bit.ly/KvyfuI "Why The Bond Bubble Is Very Dangerous To mREITs And MLPs" Wouldn't you agree? Commodity investing and yield investing are very different styles and risk profiles.
Why Oil Has Bottomed And How To Trade It With Less Risk [View article]
Well wouldn't you say the developments are already factored in to the price of oil then. Also I would advise against depending on fundamentals too much in this volatile environment. Oil is very much correlated to the liquidity conditions in the world. Any short-term solution to Eurozone problems would push it higher no matter the fundamentals.
This Solar Stock Didn't 'Miss' Anything [View article]
I would argue that the Green Energy issue in Germany is much bigger than that. It is probably not wise to depend on Germany for demand given the severity of the situation in Europe. The boost to solar panel prices will have to come from supply reductions. The demand will still be there, but it won't be growing enough to raise the prices from the demand side. As stated in the article the Chinese capacity needs to be reduced somewhat.
How I Got It Exactly Right On Green Mountain Coffee Roasters And My Next Trade For It [View article]
Absolutely not, in my opinion. Private Equity is about stable cash flows, not risky but growing cash flows. Plus Private Equity usually does not engage in trying to catch a falling knife. The same goes for other possible acquirers. Trying to buy something that is in a downward trend is very hard to explain if things go bad. So very few people try it.
Apple's Big Mystery Buyer In Q1 2012 [View article]
Dividends are mostly replaced by stock buybacks in the modern companies, and I am not sure if the Funds still restricted to dividend stocks still constitute a large and active part of the investment firms.
I suggest you research this on SA's Apple articles in the last year. You might find something with actual data on the extent of those Funds, which I admit I don't have.
Buy Cheniere Energy: Natural Gas Exports Present A Huge Opportunity [View article]
They are basically making a huge one way trade on natural gas staying at near $3 which won't happen because it is an anomaly. Their investment theory is if natural gas stays low they make lots of money and if it doesn't they will just declare bankruptcy.
The only one with something to lose will be the ones who buy the LNG shares from the open market. They don't have the option of declaring bankruptcy to limit their losses so I don't understand why would an investor buy shares in a company with so much uncertainty and risk. This is a lose-lose trade for the investors since the upside is already in the price.
Short Yen: Great Strategy, Excellent Diversifier [View article]
I should mention though the Yen's latest weakness is almost completely a result of the latest and most open announcement from the BOJ that they are determined to end deflation.
They tried to do the same before, but this IS DIFFERENT in my opinion. Because the announcement was more along "we'll ease until we solve this problem, even if we have to increase the money supply tenfold". It was very blunt.
I should note that in the case that their public finances might start to strain them, that would actually strengthen the Yen because it would limit their money printing.
One more note. The yen is much more closely related to their equity market over there. There have been many instances the hedge stated in the article did not work with the US market because yen continued to strengthen while US markets were rallying. The hedge between US markets and yen worked recently because the BOJ announcement overlapped with rallying US equity markets. Australian Dollar is a much better way to hedge against US markets.
Should You Trade, Or Hold Your mREIT? [View article]
Liquidity Risks In High-Yield Stocks [View article]
If the stock price drops a few dollars (more than 10% on AGNC) that indeed is an example that the stock could not handle the sell orders.
Of course there is no such thing as being stuck with shares on a publicly traded security. What matters is how much the stock can absorb without crashing if sell orders pile up.
Can you clarify your argument?
Also small investors won't have a problem with selling. The argument in the article is for larger sell orders.
Oil: The Best Way To Play The 'Bernanke Boost' Until May 2012 [View article]
I would also caution that oil is leveraged to the market sentiment but from only one side. Oil stocks get hit by even more when the market mood turns negative because they take the hit from the market loss AND the loss in oil price that usually happens when the market tanks.
Apple's Big Mystery Buyer In Q1 2012 [View article]
You might assume the expectations of demand from those Funds might have pushed up the price, that is still demand by speculators not demand from the actual Funds in question.
Apple's Big Mystery Buyer In Q1 2012 [View article]
As for delta hedging: The delta sensitivities of the options changes as the underlying price changes (hence there is additional risk) so delta hedging is only relevant to investors. For option underwriters, they have to hedge the entire underlying amount to completely eliminate risk until expiration as far as I know.
Trades For The Approaching Euro Strength [View article]
Capitulation Of LDK Solar Will Mark The Bottom In The Sector [View article]
How To Profit From The Last Stage Of The Cloud Bubble [View article]
CRM is all about trickery like these.
Natural Gas: How I Got The Pullback Exactly Right With A Simple Analysis [View article]
Also check this out: http://bit.ly/KvyfuI "Why The Bond Bubble Is Very Dangerous To mREITs And MLPs" Wouldn't you agree?
Commodity investing and yield investing are very different styles and risk profiles.
Why Oil Has Bottomed And How To Trade It With Less Risk [View article]
Also I would advise against depending on fundamentals too much in this volatile environment. Oil is very much correlated to the liquidity conditions in the world. Any short-term solution to Eurozone problems would push it higher no matter the fundamentals.
This Solar Stock Didn't 'Miss' Anything [View article]
How I Got It Exactly Right On Green Mountain Coffee Roasters And My Next Trade For It [View article]