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  • When's the Right Time to Sell Apple? [View article]
    The right time to buy AAPL is a few weeks before earnings announcements, preferably on a down day for the market, and the right time to sell is just before earnings, preferably on an up day for the market.

    Best results are obtained when you sell higher than you bought.
    Aug 19, 2011. 02:41 PM | 2 Likes Like |Link to Comment
  • Don't Let the Market Correction Scare You: Trade These Stocks [View article]
    I just sold my AAPL LEAPS a couple of days ago and already saved myself a fair bit of change today.

    The reason for doing that was to take profits off the table to use elsewhere in the portfolio. Actually in a 5:1 SPY put backspread.

    I imagine many others would be doing the same thing. When you have a candidate for president of the USA effectively threatening to lynch the Chairman of the Federal Reserve if he attempts any kind of stimulus spending or QE3, then this does not provide a very encouraging atmosphere for the stock market.

    Many investors will be thinking of pulling out funds converting to the Haitian gourde in search of a jurisdiction with more political stability.

    I will probably get back into AAPL calls or sell some put spreads a few weeks before the next earnings announcement as the stock tends to accelerate into earnings. I agree that AMZN and AAPL will probably do well in the Christmas season unless the overall economy really hits the skids.
    Aug 18, 2011. 10:31 PM | 1 Like Like |Link to Comment
  • The claim that conservative policies of new presidential candidate Gov. Rick Perry caused an economic miracle in Texas is a myth based on a fallacy, Paul Krugman writes. "A state offering cheap labor and... weak regulation can attract jobs from other states," but any logic applying those policies to the entire U.S. is impossible since "every state can’t lure jobs away from every other state."  [View news story]
    One can use a bit of hyperbole, but I do suspect that when people say they want less government, they really mean that they could live without dog leash laws, and other trivia rather than seeking the reintroduction of child slavery.

    I am here in the Dominican Republic and most of the dogs just live and sleep on the sidewalk outside their homes, and take an occasional stroll down the road to visit other dogs, but don´t bother anyone as long as you step over them, which makes you think the US is a bit hysterical about the matter.

    I am a great fan of Swift, but it is Book 3 of Gulliver´s Travels, A Voyage to Laputa that is most relevant to current US politics. In the land of Laputa (check your Spanish dictionary for the derivation!) the land is governed by mad scientists who are completely out of touch with the real world.

    Since the Mad Hatter´s Tea Party´s objective is not just to abolish overly fussy regulations, but also to turn the US into Haiti, we might as well know what we are getting into so we can be prepared.
    Aug 18, 2011. 07:14 PM | 1 Like Like |Link to Comment
  • The claim that conservative policies of new presidential candidate Gov. Rick Perry caused an economic miracle in Texas is a myth based on a fallacy, Paul Krugman writes. "A state offering cheap labor and... weak regulation can attract jobs from other states," but any logic applying those policies to the entire U.S. is impossible since "every state can’t lure jobs away from every other state."  [View news story]
    ¨¨Who made child labor laws? Why do we need child labor laws? Why not just have parents instead?¨¨

    The movement towards child labor laws was inspired by the works of such as Charles Dickens, who was himself sent to work in a factory at the age of 12 while the rest of his family was confined in debtor´s prison.

    While I personally have no objection to children being set to work in factories instead of watching TV or playing video games, Dickens didn´t care for it and made his fortune by inventing the whole child abuse industry and writing about it.

    But you are certainly right that if children could be made economically self sufficient, this would be a great help to families. They could probably even pay for their own schooling, thus relieving the taxpayer.
    Aug 18, 2011. 01:15 PM | Likes Like |Link to Comment
  • 5 Stocks to Buy Regardless of Economic Status: Part 1 [View article]
    Of course, and in fact the Coca Cola company is also responsible for Dasani bottled water, which is an expensive way to obtain tap water in which you are essentially paying only for the bottle. This is really the ultimate achievement in business--to get people to pay for something that used to be free.

    Here in the Dominican Republic I can pay 30 pesos, which is less than a dollar for a 5-gallon refill of purified drinking water, or pay the same price for a glass of Dasani water.

    From an investment point of view, this makes Coca Cola an incredible company, because its products cost almost nothing to make, yet sell at a premium price. Even in the event of a severe recession, tap water will always be available virtually free, so the profit margins will remain close to infinity.
    Aug 17, 2011. 09:13 PM | Likes Like |Link to Comment
  • Swensen Too Broad in His Condemnation of 'All' Mutual Funds [View article]
    If you buy DIA or SPY or EWA you can be sure not to be outperformed by the market. If you choose an actively managed mutual fund, you MIGHT beat the market, but if you do it is purely a matter of luck.

    Another problem is that if a market tanks, then you tank with it, because mutual funds, unlike hedge funds, cannot go to cash or buy puts to insure their positions, protect profits etc.

    It makes no sense to buy mutual funds, but often if you are in a 401(k) or government pension plan you may not have a choice.

    This article is WRONG, WRONG, WRONG. One SHOULD completely dismiss a portion of the market that is nothing but a ripoff.
    Aug 17, 2011. 08:27 PM | Likes Like |Link to Comment
  • Most Mutual Funds May Be for Fish: DFA's Funds Aren't [View article]
    Mutual funds are just a ripoff. You might just as well buy DIA or SPY, because that way you will never be beaten by the market like half the mutual funds.

    Many state pension funds funnel funds into mutual funds provided by companies that have presumably bribed their way into this position of privilege by paying campaign expenses for politicians. It is shameful, but it is the American Way. You get what you pay for!
    Aug 17, 2011. 08:21 PM | Likes Like |Link to Comment
  • 5 Stocks to Buy Regardless of Economic Status: Part 1 [View article]
    Good picks.

    Although I do not drink soda myself, it is my observation that 95% of the US population is addicted to straight Coca Cola, and in many work places dispensing machines are provided so that consumers can get a fix of this expensive designer flavored sugar solution without leaving their desks.

    Here in the Dominican Republic it forms the base for an even more potent form of drink known as Cuba Libre in which it is combined with an ethyl alcohol distillate of sugar cane to provide a fuel that powers a large section of the human population and gives people a sense of optimism.

    Even in the event of human civilization being totally exterminated, it is likely that Coca Cola sales will remain unaffected.

    The stock has also been blessed by the great god Buffett.
    Aug 17, 2011. 08:15 AM | Likes Like |Link to Comment
  • Paulson & Co.'s Major Transactions in the Second Quarter [View article]
    Well, that might explain why ANR has gone down from $54 to $32, but of course he may have bought puts before he began to sell. Who knows what these crooks get up to?
    Aug 17, 2011. 12:17 AM | 1 Like Like |Link to Comment
  • The Case for Best Buy, Part III: The Amazon Threat [View article]
    It does seem cheap. I just entered a put spread to sell 10 January ´12 $22.50 puts and buy 10 January ´12 $17.50 puts to cover for a spread of $5000. This returned $1200 cash to me, making the total cash requirement in an IRA about $3800, offering a yield of about 24% in 5 months if the price stays over $22.50.

    To me this is an acceptable return and an acceptable level of risk. I would not mind buying the stock for less than $22.50 either and will sell the long puts if the price moves below $22.50 so that I will recoup some more outlay and stand to have the stock put to me if it remains below $22.50 in January.

    If the company is bought out, I don´t think I would lose money either. If the stock price moves upwards towards the end of the year, I will take the profits and close the position early.
    Aug 16, 2011. 01:05 PM | 1 Like Like |Link to Comment
  • Corrections Corp. of America (CXW +1.9%) advances after announcing a $150M expansion of its share buyback program, and a newspaper article updates Florida's plans to privatize some of its prisons. The state says it plans to hire only one firm to run the prisons; both CXW and Geo Group GEO already operate prisons in Florida.  [View news story]
    GEO corp is based in Boca Raton Florida and many of its executives are previous employees of the Florida Department of Corrections and Department of Children and Families, and have maintained close contacts with top people in Tallahassee . GEO Corporation donated the maximum $25000 to Governor Rick Scotts inaugural ball which was organized by GEO´s chief lobbyist. GEO Corporation is a major contributor to the Republican Party.

    It would not be a great shock if GEO got the Florida prison contracts.
    Aug 16, 2011. 12:07 PM | Likes Like |Link to Comment
  • Don't Blame Sirius XM's, Netflix's Broken Charts on the Economy [View article]
    Any article on SA that mentions SIRI gets the writer a lot of hits, and the writers are paid by hits. SIRI has millions of retail investors. That is why there is at least one article per day on SIRI whereas many other penny stocks get hardly a mention. SIRI has millions of retail investors, so even though it trades like a small deveopmental biotech, it gets lots of articles on SA.

    If I start writing articles I shall be sure to mention SIRI, AAPL, Netflix, and the Tea Party in all of them.
    Aug 16, 2011. 09:36 AM | 1 Like Like |Link to Comment
  • New Reflections in Understanding Options [View instapost]
    Yes, the interesting thing is that my father regarded his broker as a kind of authority figure because he lived in a big house, drove a Jaguar, and played off a single figure handicap.

    Fortunately my father´s bed and breakfast is now reporting good business due to economic refugees from Ireland arriving late at night on the ferry in search of a bed for the night. Having wisely married a hardworking young woman twenty years his junior, he now operates in more of a consultancy role, though he maintains executive responsibility for omelettes, cash management, and double book keeping.
    Aug 15, 2011. 04:13 PM | Likes Like |Link to Comment
  • New Reflections in Understanding Options [View instapost]
    In real life most people don´t know or understand what the real risks are.

    The prevailing wisdom is that if you stay in the market long enough, you will always come out ahead.

    Of course they used to say that you couldn´t go wrong in real estate either, until it was revealed that it is all the fault of greedy borrowers.

    We all know about Warren Buffett, but where are the great short side investors?

    In 1986 my father had stocks in the UK stock market and that market crashed badly one day. He sought advice from his broker, with whom he sometimes played golf, as to whether the market would go up or down from that point.

    The broker told him they MAY go up, but on the other hand they MIGHT go down more. Being a prudent fellow, and having taken professional advice, my father cashed out all his stocks. Within a few weeks the stock market was right back where it started. The broker retired soon after, my father is still working at 86.

    Moral of the story: Be like a broker. Make money when the market goes up and make even more when it goes down.
    Aug 15, 2011. 02:34 PM | Likes Like |Link to Comment
  • The Case for Best Buy, Part III: The Amazon Threat [View article]
    That´s what I was thinking, or sell BBY puts and sell Radioshack calls for a split-stock iron condor?
    Aug 14, 2011. 10:42 PM | Likes Like |Link to Comment