Seeking Alpha
View as an RSS Feed

Reel Ken  

View Reel Ken's Comments BY TICKER:
Latest  |  Highest rated
  • Lumber Liquidators: Fear Abounds, But CEO Resignation Was Probably Due To Strategic Disagreements [View article]
    Hi Zorrow,

    Put enough "ifs" into any recipe and anything can emerge. But when you take it out of the oven, sorry, I'll take my wife's cooking. I know what's in it and how it tastes.
    May 25, 2015. 03:54 PM | 1 Like Like |Link to Comment
  • Lumber Liquidators: Fear Abounds, But CEO Resignation Was Probably Due To Strategic Disagreements [View article]
    Hi zorrow,

    An old saying ...".... A leopard can't change its spots ....."
    May 25, 2015. 02:59 PM | Likes Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    Hi YCL,

    I gave you the "quick and easy" explanation. You deserve more, so here's the "down and dirty".

    If you look at SPY the price swells as it gets near the ex-div date. This inflation represents the dividends that will be paid. Then, on the ex date, the dividend is paid and SPY drops to make up for this.

    So, SPY is in a constant situation where it is lower than SPX immediately after the ex-date, slowly climbs, exceeding SPX as the next ex-date approaches, then drops, again ... rinse and repeat.

    hope it's clearer.
    May 25, 2015. 08:49 AM | Likes Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    Hi YCL,

    Sure,

    SPY actually owns the underlying stocks and collects and distributes the dividends.

    SPX is a concoction, it owns nothing , and is just a reflection of price, without the dividends.

    In theory, the differential should be the yield.
    May 25, 2015. 08:42 AM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Giorgio,

    '"whenever I say "probabilities", you come back with "predictions". ....There is a rather distinct difference in meaning between those two words. I can see now why you're so confused...."

    If you check my profile, my training is in actuarial science and statistics (as well as financial products). Of course this training and experience goes back over 40 years, so it's possible, like you say, that I get confused.It's also possible, that I'm not confused.

    So, help me out ... exactly what is the probability of a stock movement in either direction when it breaks the 200 DMA? What is the margin of error?What methodology did you use to determine the probability?

    In my "confused state" I use Weiner process, random walk and stochastic. Tell me where I'm going wrong.

    "..........Traders looking at a chart would see both. I look at a chart and see investor behavior....."

    Thank you. Exactly my point. There is enough variables in every chart that someone can account for any movement, in any direction. The essential ingredient in fortune telling.

    ".....Sure, everyone can see it, but many will still get wet. ...."

    Absolutely, they were caught without an umbrella because they looked at the weather chart in the papers. Forecast was "chance of rain". Sort of like "broke through DMA, if confirmed"
    May 25, 2015. 07:57 AM | 2 Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Giorgio,

    ".......Charts are a representation of past investor behavior. They show areas of support and resistance. While I find that to be of value, fortunately, many do not......."

    Look, if it is of value to you thinking you can predict the future from a DMA chart .... good for you. After all, ignorance is bliss.

    On the other hand, many do not because it has been proven, time and time again to not be predictive. Furthermore, there is no statistical theory that supports such a claim.

    ".........Charts aren't simply a random collection of tea leaves at the bottom of a cup...."

    Actually, past stock prices, represented on a chart, ARE just a collection of random occurrences. So, they are very similar to tea leaves, in that respect.

    However, that's not what I was getting at. Tea leaves and charts are similar in that both require a "reader" to "interpret" what they say. They are not self explanatory. TA groupies are always in disagreement about whether "this-n-that" is showing.

    So, charts, tea leaves, astrology and palm readings, require the interpretation by the "T-analyst" "reader" "medium" or whatever you want to call them. The more of them you ask for interpretation, the more divergent the analysis.

    You look at a chart and see a 200 DMA breakthrough, someone else sees a head-n-shoulder. Happens all the time.

    p.s. Sure you can look out the window and see if it's raining .. so can everyone else. But that wasn't the illustration .. it was can you predict the weather in New York on Christmas Day? Unless you have a window on the future it can't be reliably done. Too many variables. And looking at a chart of the past won't help you. The weather doesn't pay attention to charts and will do what it does without consulting you first.
    May 24, 2015. 09:13 PM | Likes Like |Link to Comment
  • Lumber Liquidators: Fear Abounds, But CEO Resignation Was Probably Due To Strategic Disagreements [View article]
    Hi Wallstreet,

    Maybe if you read SA's policy on abusive posts you'd see what you're doing wrong.

    Blanket statements like "ridiculous claims" are abusive.

    If I may suggest something, instead of attacking EA for your posts being deleted, you could, instead, stop making abusive comments.

    "The fault ... is not in our stars but in ourselves."
    May 24, 2015. 08:57 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Robert,

    The only stock I own, outright is AAPL. I consider that my self-indulgence.

    Besides that, I just trade options on SPX. I use SPX because it is low beta and I use calendar spreads, so I want to limit movement in either direction. Also SPX has a pretty long history and I think I've got a handle on it. It's much easier to just watch one thing continuously than many things a bit at a time.

    I've been doing this for so long I've developed sort of a sixth sense about it. I'm never always right, but often enough to outperform and be hedged.

    So, it's really more about playing options metrics than anything else ... because I can't find any value anywhere. So instead of looking for value, I look for stagnation.

    It's not that value doesn't exist and can't be found. It's just that everything seems to be illusionary. Nothing conforms to any rules. Maybe when the Fed normalizes (if ever) things will behave rationally. For now, I believe everything is just propped up.
    May 24, 2015. 07:37 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Robert,

    I agree. Very few have any new ideas. They are all followers.

    I remember when oil was $110 on its way to $150. Six months later $35.

    Remember when potash was the can't lose commodity and POT the can't lose stock?

    I rode EWZ to 90 and back down to 80 before I bailed.

    I rode LINN to 37 and sold when it was back to $27 (wow, that was a big time call).

    I don't listen to anyone, just go my own way, apply what I know as diligently as I can, take what the market gives me and sleep nights.

    Too many view it as a contest, I view it as a job.
    May 24, 2015. 05:27 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Robert,

    You are definitely right that certain assets classes will outperform others ... but I would refine it by saying ... at certain times and for limited durations.

    I believe that everyone that makes a public statement about the market (or a stock) is making it because they WANT it to go that way, not because they THINK it will go that way.

    If it's a money manager they plan to the opposite of what they tell you to do. If the say bull, they just want higher prices when they sell. If they predict a correction, they wan tin at a lower price.

    Cynic or realist? Not sure there's a difference.

    I'm not quite with you on "...No so easy to indentify the next secular bull".

    To me it's easy ... it is ever-present. Bear markets don't last long enough to be of concern.

    But then again, I stick to the S&P500 and am fully hedged 24/7. Venturing outside that comfort zone and I guess anything goes.

    My philosophy is to give up a little when there's a lot to make and make a lot when there's little to make.
    May 24, 2015. 03:24 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi Robert,

    I apologize for addressing my reply to John, It should have been to you.

    My bad. Sorry.
    May 24, 2015. 02:48 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi John,

    Yes they are ... but not when it comes to deciding whether there is directional bias in the stock market.

    The stock market is supply an demand and the supply is MONEY. As long as world economies generate MONEY, the demand will follow and the market has an upward bias. If anyone doesn't know this, just look at the hysteria over just our Fed tightening.

    What I was referring to was the "fundamentals of world economies" which is the incessant creation of cash. The only way to stop this is do something like reverting to the gold standard, which will limit the cash in circulation.

    So, though the market and the economy are two different things, they are linked in a very real way.

    .
    May 24, 2015. 02:43 PM | Likes Like |Link to Comment
  • Signs Of A Stock Market Correction Developing [View article]
    Hi John,

    The stock market doesn't listen to what people say. It does what it wants to do.

    You cant get "everybody" to agree on what day of the week it is, nevertheless, whether we are going higher.

    It doesn't matter if the average retail investor is ALL IN or not. The cash is always there, it's just who is holding it.

    Unless and until there is a major shift in the fundamentals of world economies the market will march steadily upward. It will get there with ups-n-downs.

    I think the best strategy is to block out what everybody says.

    There's no method that can predict what the market will do. All we can do is make the most rational choice we can and not be influenced by the crowd, one way or the other.
    May 24, 2015. 02:20 PM | 1 Like Like |Link to Comment
  • Selling Puts And Calls: Dessert And Coffee [View article]
    Hi YCL,

    All your assumptions are correct. SPY is the preferred choice, unless taxes are a concern.

    I use SPY in my IRA's and SPX in my taxable account.

    SPX has another advantage in that it is cash settled and can't be assigned. But it is my opinion that it's helpful, on occasion, but not too valuable.

    Now, regarding the $500,00 and number of options.

    Either I didn't make myself clear or you are misinterpreting.

    I'm not saying that, say 25, is the number of options you CAN buy. Just that 25 reflects protection for $500,000 in portfolio value. You can buy much more if you wish.

    The more you buy, the more leverage you get. Actually, since me entire portfolio is calendar spread, I go with 1.5x to 2x my portfolio value. My rationale is that the far-dated cuts downside exposure so why not "lever up".

    Hope that clears it up.
    May 24, 2015. 02:11 PM | Likes Like |Link to Comment
  • Lumber Liquidators: CARB-Compliant Or Not? [View article]
    Hi Sinners,

    Agree, many people play a part in the blame .. no matter what the outcome ... the blame for bad product or the blame for undue harm.

    But, the way things work, there's always just one fall guy. It will be LL or it will be 60 minutes ...that's my guess.
    May 24, 2015. 06:01 AM | Likes Like |Link to Comment
COMMENTS STATS
4,673 Comments
8,110 Likes