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Richard Glenn

 
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  • Apple: The Law Of Large Numbers And Declining Margins Point Towards Average Stock Returns [View article]
    Nice article - my thoughts exactly. I'm long apple and a long time apple user, but there is a very good reason that the stock always has a low p/e.
    And all of you folks complaining about the misuse of the "law of large numbers" take a deep breath. Used in this context, it means exactly as the Author used it - As a company gets bigger, % growth gets harder and harder to come by.
    Nov 13 09:44 AM | 1 Like Like |Link to Comment
  • Intel, Google, And Amazon Win All The Mobile Marbles [View article]
    Good food for thought. I think the most important idea from an investment standpoint is the comment above. In a commodity business, you can only be as smart as your dumbest competitor. Will smartphones become a commodity? The more the gap between an iphone and everything else shrinks, the closer to a commodity it becomes. And when you have players in the game who don't even care about turning a profit on hardware (Amazon, Google, Microsoft) that is not a good business to be in. I am long Apple and own several of their products but if their margins start to contract, it's a sign that the game could be up.
    Nov 3 03:59 PM | 3 Likes Like |Link to Comment
  • High Beta Value Isn't Working Right Now  [View instapost]
    Tom,
    Backtesting through the 07'/08' crisis is a good way to look at a worst case in action, but I wonder how useful it will be looking forward. Insurance stocks and banks traded like biotechs, but I would bet that we will see a huge mean reversion in beta for them over the next decade as the "lessons" of the crash are slowly forgotten. It seems to me that a lot of risk has been taken out of these sectors, and now they are a lot cheaper as well (vis a vis normalized earning power).
    Oct 30 03:26 PM | Likes Like |Link to Comment
  • High Beta Value Isn't Working Right Now  [View instapost]
    I really appreciate your willingness to share things that are not working. Can you really stomach a 69% drawdown? That would feel awfully close to a total wipe out to me. I think limiting max drawdown is one key to a system that you can stick with over time. The longer I invest, the more conservative I get, I guess. Thanks again.
    Oct 29 03:12 PM | Likes Like |Link to Comment
  • Backtesting A Portfolio Of Low Beta, High Quality Dividend Payers [View article]
    Great article Tom. You mention in the comments testing a buy write strategy. I was wondering where you get historical option prices to back test that with. I have been looking for a source of historical pricing data on options without much luck. Any help would be appreciated. Thanks.
    Oct 21 12:12 AM | 1 Like Like |Link to Comment
  • Are We Diving Into A World Slump? [View article]
    What the central banks are aiming for is inflation, not liquidity. And inflation is a great balm when the problem is too much debt. And for all the carping about QE (to infinity and beyond!), what would you have the central bank do? Follow Mellon's advice to "Liquidate, liquidate!" regardless of the social and political costs? Ben is doing the only thing he can, and if inflation doesn't get too out of control (a big if, I know) he will come out of this looking like a hero. Risk inflation in the future or accept a depression right now -- I'll roll the dice on inflation, thanks.
    Sep 25 12:40 PM | 1 Like Like |Link to Comment
  • How We Made 613% With Apple Options In 7 Weeks And Expect To Do It Again In 4 Months [View article]
    Just wanted to point out that if fully invested this is a VERY risky strategy. Take a very hard look at the P/L graph above. A substantial move up or down (which apple makes a couple times a year, on average) exposes this strategy to an almost complete wipe out. Any strategy that suffers regular 80%+ losses is going end in tears, even if it has great returns the other nine times out of ten.
    Options are an amazing tool for investors, but they are much more complex than plain vanilla stocks, and anyone promising huge, low risk returns trading them is just plain dangerous to your wealth. Like Klobbasa, I would also like to hear the outcome of the SEC fraud complaint against the author.
    Sep 16 11:20 PM | 1 Like Like |Link to Comment
  • Why Google Is About To Break Out To All Time Highs And A Modified Butterfly To Play It [View article]
    Thanks for the comments. re_train: I don't sell any puts here, but if I did then I would calculate my return based on the total amount of the strike (cash secured). As for my return estimates on this position, there are several online option calculators that will give you an option price if you put in strike, time to expiration etc. My estimate of a double was a rule of thumb from trading options daily for almost 10 years. Depending on how much time decay has helped you out it could be more or less, but it will almost always be a very nice (50%+) return if the stock moves through your strike zone.
    Sep 16 10:54 PM | Likes Like |Link to Comment
  • S&P 500 Earnings Poised To Plummet [View article]
    Nice article, r squared of .91 is impressive. Do you make any allowances for write offs in the "E" when you are calculating? For example, in 2009 I think the plunge in E was largely due to several huge asset write offs, rather than a deterioration of cash coming through the door at the average company (although there was a slowdown there as well).
    Sep 12 12:06 AM | 1 Like Like |Link to Comment
  • The Burning Village: A Fable [View instapost]
    Fantastic. You have to laugh so you don't cry, I suppose.
    Sep 5 10:57 PM | 1 Like Like |Link to Comment
  • Give In To Peer Pressure, Buy American International Group [View article]
    Tom I really value your opinion. Are there any specific issues at AIG that you think are not reflected in the numbers? (other than Timmy's involvement, of course). By the numbers there seems to be a compelling long case. The Gov'ment ownership seems like a net plus to me, as they are "dumb" money desperate to sell shares and get out -- shares the company can buy back on the cheap. Your thoughts would be appreciated. Thanks.
    Aug 27 10:22 AM | Likes Like |Link to Comment
  • Calling Nokia: A Case For Using Options [View article]
    Indeed. The 14' 2$ calls are now trading at $1.23 ish with the stock at $2.64. That's an almost 100% gain on the options Vs. an almost 50% gain if you bought the shares. Gotta love cheap leverage. And on a side note, if you are holding these calls you might want to lock in some profits. NOK is far from out of the woods, and this recent pop is just the sort of selling opportunity you have to grab with a position as speculative as this one, imho. Good luck.
    Aug 8 02:34 PM | Likes Like |Link to Comment
  • Winning In A World Without Yield: A Portfolio Level Solution [View article]
    Great food for thought. How do you get comfortable with the reporting in emerging markets? (in order to buy the equities) The chances for fraud seem so much greater. Thanks.
    Jul 31 01:27 PM | Likes Like |Link to Comment
  • Almost-Free Leverage On Intel [View article]
    Slim Shady is absolutely right. You can't ignore the dividends -- that's why the ITM calls are so cheap compared to the same strike puts. The real cost of this leverage is more like 9% as Slim points out. And 9% in this rate environment is far from "free".
    Also Skyler, I have to correct you on "you give up the dividend in any options trading situation except covered call writing" That's just not accurate, as the put prices have future dividends baked in so that if you sell them you get compensated for the dividends that occur before expiration. There is no free lunch.
    Jul 18 12:23 PM | 2 Likes Like |Link to Comment
  • How Penn State Could Put Jamie Dimon In Jail [View instapost]
    Amen to that. No more fines. Those just become a cost of doing (dirty) business.
    Jul 13 04:04 PM | Likes Like |Link to Comment
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