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Robert Zingale

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  • Debunking The '100 Minus Your Age' Rule Of Thumb [View article]
    Hey thanks for your feedback. There are so many factors to consider when deciding between stocks and bonds, but my article was meant to show what could happen when rearranging historical outcomes and disregarding things like taxes, risk tolerance, etc.

    I still don't think 60% equity / 40% bonds is best for everyone, but based on the simulation outcomes, it is better than the others for maximizing your minimum and still outperforming the "100 minus your age" rule. I realize that the rule has been increased to as high as 120 minus your age recently but actually that would decrease the minimum further.
    Jan 26 07:38 PM | Likes Like |Link to Comment
  • Debunking The '100 Minus Your Age' Rule Of Thumb [View article]
    How is this relevant to my article?
    Jan 26 05:02 PM | Likes Like |Link to Comment
  • 5 Stocks With Attractive Calendar Option Spreads [View article]
    That depends on the probability of hitting the Feb strike price at January expiration. If the stock is still very far away from the strike, then I would let it ride. If it is close to the strike price, then I would close out the position.

    If you decide to close the position in Jan, the profitability depends on the stock's price relative to the strike and the implied volatility.
    Dec 16 06:38 PM | Likes Like |Link to Comment
  • 3 Stocks Insiders Are Buying Up [View article]
    My apologies for the misinformation. NASDAQ's website classifies these as purchased shares vs. acquired shares in the summary of transactions. I realize there is a difference when considering the meaningfulness of the transaction. Being awarded a share vs. buying a share with one's own money are two different events.

    I would like to keep providing you all with this information in the future. I've found a more reliable source of data that I will use going forward.

    Thanks,
    Rob
    Nov 10 11:56 PM | Likes Like |Link to Comment
  • J.C. Penney $900M Stock Buyback: Driven by Management's Personal Interests? [View article]
    Mutual funds would still be cognizant of after-tax returns for their clients during a traditional progressive tax regime. Additionally, the tax-free entities which you mentioned would not influence stock prices as much as hedge funds, investment banks, etc. because by their investment policy statements must maintain certain asset allocation strategies and have limits to what they can invest in. Therefore, entities like hedge funds, which control vast amounts of high-net-worth individual wealth (approximately $2 trillion), drive much volume in the market as they can pick and choose what to buy / sell more freely. Since these entities can choose to be 100% cash and then jump back into equity, then it really matters who their clientele are when they are choosing which equities to buy. Although endowments and pensions have been investing more into hedge funds, the amount is a smaller portion of their total portfolio due to their investment policy constraints.
    Oct 28 11:40 PM | Likes Like |Link to Comment
  • J.C. Penney $900M Stock Buyback: Driven by Management's Personal Interests? [View article]
    Crunching Numbers - You are correct that until 2012, dividends receive favorable tax treatments and can actually be lower than capital gains depending on your tax bracket. However, I am operating under the assumption that management is basing decisions on the dividend tax relief reforms to only be temporary and is looking at their capital structure on a long-term horizon.

    Therefore, after the dividend relief era, lower income bracket individuals would continue to be indifferent between dividends and capital gains, however, High-Net-Worth individuals, who are largely responsible for driving stock prices, would no longer find a high dividend payer attractive.

    Thanks for your feedback!
    Oct 27 03:28 PM | Likes Like |Link to Comment
  • Vectren Corp Options: An Attractive Income Play [View article]
    Good feedback. I completely agree with you on your commentary about the lack of liquidity and low premium issues. You would need to have an attractive commission structure (like interactive brokers) to make this trade work. Additionally, you are correct that you would not be able to execute a market order to get the $0.20 premium. However, due to the amount of open interest at the $30 strike (highest out of any of the strikes for December) and the last trade was at $0.25, I thought there would a decent chance of getting a premium at the mid-quote.

    COP isn't bad but I don't know if the risk-reward trade off is as attractive vs. VVC given the amount of volatility in oil prices and COP sensitivity to those movements. However, given the constraints on the VVC trade it would be a good alternative for sure.
    Oct 27 12:38 PM | Likes Like |Link to Comment
  • Why You Need TIPS in Your Retirement Account [View article]
    That is what everyone thought Greenspan would do when he sent the Fed Funds rate to 1%, but in hindsight, it seems that he left rates too low for too long. I lean toward a monetarist view of the economic cycle. I do not believe that the Federal Reserve has perfect foresight into how to set interest rates and the monetary base. Your idea that it is that easy to unwind that much money is too simplistic. If unemployment and the general economy remain sluggish, they will not have an incentive to sell back the Treasuries that they previously bought. Maybe they will time it exactly right, and inflation will not be that bad. However, if you are wrong about your beliefs about the abilities of the Federal Reserve, then you stand the possibility of losing much more than I do if I am wrong.


    On Sep 21 07:20 AM VennData wrote:

    > You claim that you do not believe the Fed can buy in a bunch of cash
    > with all the bonds they have? Why not?
    >
    > They just go and buy the bonds. It's simple, really. They sold
    > all the cash into the market. They are independent, why not buy
    > it all back in?
    >
    > The fact there there's more money is a simple problem of scale.
    > But they have the bonds and the banks have most of this cash in reserves
    > AT THE FED.
    >
    > TIPs are an excellent counter weight to equities in your asset allocation,
    > but the Fed can adjust the monetary base at will.
    Sep 21 10:37 PM | Likes Like |Link to Comment
  • DJP: An Alternative Investment in Commodities [View article]
    Some of the images seemed to have gotten messed up. Here is a link that can take you to the fund's prospectus and info sheet. www.ipathetn.com/DJP-o... There you can look at the historical returns of DJAIGTR and the composition of the index.


    Apr 13 12:11 PM | Likes Like |Link to Comment
  • Oil/Gold Arbitrage Opportunity [View article]
    Yea I am not seeing that either. When I refer to demand and supply this can mean futures contracts as well. This can also incorporate speculation and whatever else you would like to call it. All this means is that it is not entirely monetary influenced.

    As for my strategy it has worked out extremely well since I've enacted it at the start of trading of Monday. I am up 6.64% in about two days. The relationship between gold and oil has closed down to (138.75/978.700) or .141770.

    What has happened is that the demand and supply portion of oil's price has fallen simultaneously with a further future dilution of the dollar created by the moral hazard of the government willingness to bail out failing companies. Their role is going to be to loan large amounts of capital to failing companies at artificially low interest rates. This further fear has supported gold's price. This is exactly what I expected to happen in my ideal situation.

    The other situation that I thought would cause this ratio to come further together would be a price spiral in oil which would cause such a sudden economic downturn and further financial instability that it would continue to dilute the dollar as a result of the Fed continuing to print money in order to combat these issues. This would likely cause gold to be revalued to historical levels to oil as the dollar would weaken and demand and supply of oil would be severely comprised.

    I hope someone took this position and thought my reasoning presented them with a healthy risk adjusted return during a market where that is scarce.
    Jul 15 07:26 PM | Likes Like |Link to Comment
  • Oil/Gold Arbitrage Opportunity [View article]
    I understand the problem with using a long time series like I did to show correlation. However, I originally used percentages like you advised. These did not yield desirables results either. It actually did not prove an inverse relationship between CPI and Unemployment. I downloaded all of these time series from the Fed as well so I know that they are sound. What other suggestions might you have to get a more accurate reading? I am eager to learn.

    However, the main assumption drawn between the Gold and Oil parity was from comparing their prices. If loose monetary influence is the only influence in driving these commodities, then this ratio would not be up to .15.

    Also, to be financially correct this is probably more close to a cross hedge on the U.S. dollar. True arbitrage opportunities only exist for a short while until it is traded away. This is not an arbitrage opportunity. You are correct.

    Jul 14 08:15 PM | Likes Like |Link to Comment
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