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  • Freeport McMoRan Copper & Gold: New Lows Set As Dollar Rises [View article]
    Good article actually. But don't forget that all that glisters is not copper, and FCX also produces gold.

    There is a strike going on at one of their Indonesian mines and the company says 3M-5M pounds of copper and 5K ounces of gold production per day will be lost.

    So that is about $10 million dollars worth of gold per day from that mine. Nice work if you can get it, but I guess the Indonesian workers feel that they are not getting it, or not getting enough out of it.

    Also, I would have thought that since the primary use of copper is for electrical cable (though I have a copper pan for making jam) that copper is really a proxy for construction and economic activity in general, just like wood, rebar, electricity meters, etc. whereas gold seems to be mostly for filling teeth and the famed vaults of GLD, now that love and marriage no longer go together like a horse and carriage and gold on the ring finger is no longer de rigeur.

    A good stock for the long run and looks like it will be on sale before Christmas.
    Sep 21, 2011. 11:05 PM | Likes Like |Link to Comment
  • Is The Chinese Yuan 300% Undervalued Against The Dollar? [View article]
    I don't know, but the internal economy of Spain become impoverished because plundering gold from South America was so profitable that nothing else counted. The gold caused inflation in Europe and destroyed the economy of Spain. It is still recovering.
    Sep 21, 2011. 08:31 PM | 1 Like Like |Link to Comment
  • Generating Income: 2 Put Selling Opportunities [View article]
    Yes, Convoluted does make an interesting point, as I understand it.

    If you buy a stock as a buy write with the call slightly in the money, and the stock immediately tanks , then your best bet may be to cash in the short call and sell more calls at the money or indeed in the money, especially if the VIX is high. If the stock continues to tank, just do it again. That is where the time factor comes in.

    As it happens I have an example from my portfolio using the very stock you mention above, which is ANR (a coal miner.)

    Since it merged with MEE in May the stock has fallen from $54 to $22 today. I am long 700 shares with an average basis of $31 per share. However the stock has tanked badly in the short time I have had it. However by selling LEAPS against the stock, and then redeeming them, I have collected $1000 profit, $2000 profit, and then $5460 on the current sale for a total of $8460 or about $12 per share, so my actual basis at this point is $19 per share.

    If it continues to tank, I may readjust again.

    If it goes above $20 by January 2013 then it will be called away for a profit of a meager 5% over 16 months, which is obviously not very much, but considering that the stock has been cut in half and then some, it is better than a kick in the teeth, and there is still a potential to sell puts to get more stock in January 2013 if the old is called away, or if it is not called away, then to have possession of some rather cheap stock considering the book value of the company is listed on Finviz as $37 per share.

    Selling puts to buy stock is also a useful technique, but it can be harder to adjust if the trade runs against you.

    My preference is to sell a put spread by selling a put and then buying a lower put. The advantage of this is that if the stock gains in value, you just keep the premium, but if the stock falls to where you want it, you have the choice of selling your long put so that the stock will be put to you, or if the stock absolutely tanks and falls below the value of the long put, then the long put itself becomes profitable and further reduces your basis in the stock.

    As an example I sold a put spread on FCX with the lower puts costing $0.67 each. I didn't like the way the trade was going so I pullled the plug on the short puts and redeemed them for a loss, but I held on to the long puts as a disaster hedge, and now they are worth $5.30 each, and the trade has broken even again. I then sold another put spread at a lower price range and so far it looks promising even though FCX continues to tank, partially due to a strike in Indonesia and partly due to a worldwide construction slowdown--though it looks like good value now.
    Sep 21, 2011. 08:18 PM | Likes Like |Link to Comment
  • John Paulson And Insiders Love These Stocks [View article]
    "We believe that by imitating the stock picks of the smartest investors, such as Paulson as well as other insiders, investors are more likely to beat the market."

    Well, you are suckers, because without knowing exactly when a hedge fund purchased stock, at exactly what price and with what option positions and hedges in place, and with what time frame in mind, then you don't know anything. When hedge fund managers do succeed in beating the market, it is often because of inside information and whatever advantage existed for them will not exist by the time you get to hear about it. In at least one of Paulsons bets against sub prime mortgages, the game was substantially rigged and he was lucky not to face criminal charges. He still may.

    Now if we knew what hedge fund managers were PLANNING to buy, that would be a different matter, or if we knew what they were NOT buying, and why.
    Sep 21, 2011. 09:26 AM | 1 Like Like |Link to Comment
  • 5 Dividend Stocks To Buy And Hold Forever [View article]
    "The margin of safety comes from the fact that consumer will not stop consuming its products even in times of a recession."

    Mission statement:

    Most companies seek repeat customers, but we are married to ours. They stay loyal "until death do us part".
    Sep 21, 2011. 08:30 AM | 1 Like Like |Link to Comment
  • The GOP leadership has delivered a letter to Ben Bernanke in advance of the FOMC policy statement tomorrow, urging him to back off any more easing moves. "We have serious concerns that further intervention by the Fed could exacerbate current problems or further harm the U.S. economy," the letter states. "The American economy should be driven by consumer confidence and worker innovation... not central-bank policy."  [View news story]
    They should be arrested under the terrorism laws for threatening a federal official. Washington may be a circus, but it is time to get tough with these clowns.
    Sep 20, 2011. 07:25 PM | 7 Likes Like |Link to Comment
  • 5 Reasons I'm Short Chipotle Mexican Grill At Over $340/Share [View article]
    No, but really, the key to running a successful mass-market restaurant is to make the customers feel like they are getting something special because they ARE special, while at the same time serving up the utmost crap as cheaply as possible. The interests of the customer and the proprietor cannot be more divergent. (The sale of alcohol may be useful, because it dulls the senses, though many fast food restaurants don't have it, the most expensive restaurants always do, for good reason.)

    See George Orwell's devastating account of life as a dishwasher in a smart Paris restaurant in Down and Out in London and Paris for more information.

    "Some restaurants are better than others, but it is impossible to get as good a meal in a restaurant as one can get, for the same expense, in a private house."
    Sep 20, 2011. 07:14 PM | 1 Like Like |Link to Comment
  • InterOil: Has The Stock Run Out Of Gas? [View article]
    I would never have heard of this company but for reading about it in an article about Tilson.

    Basically you are right, but you would kind of think that Mr. Soros probably has teams of professional researchers on his payroll who have access to far more information and contacts than I. I suspect that if I picked up the phone, I would not find it easy to speak to the CEO of IOC, but I most likely he would spare a few minutes for Mr. Soros.

    Once of the companies (EWC) that is supposedly contracting with IOC has a very strange stock chart and its HQ looks like a residential address on the waterfront in Sydney.

    I read a number of their annual reports and noticed the the auditor (same guy for several years) had the same last name as the CEO of the company. I e-mailed him and he denied any family connection, but you never really know. I guess the company really exists, however for a retail investor there is a limit to what due diligence you can really do.

    A friend of mine lost a decent sum in one day on a Russian goldmine that probably never existed, so these things can happen, and what better place than Papua New Guinea to use to list a company on US exchanges, where it is unlikely that too many diligent investors will coming poking around asking questions.
    Sep 20, 2011. 06:02 PM | Likes Like |Link to Comment
  • Buy Apple Before iPhone 5 Launch [View article]
    Mr. Buffett. We are honored by your presence. Do you recommend buying the whole company, or just a slice?
    Sep 20, 2011. 05:49 PM | Likes Like |Link to Comment
  • Blow The LID Off Your Retirement Portfolio [View article]
    Yes, but as I have said elsewhere it seems to me that companies that never cut their dividends may be holding something back. BP could have continued to pay its dividend, but was forced to stop it for political reasons.

    If CVX was forced to stop paying its dividend because of this court case over the Ecuador pollution, which was actually caused by Texaco before it was taken over by Chevron, I don't think it would make Chevron any less of a company going forward.

    If it dropped its dividend in such circumstances, would you immediately feel the need to dump the stock?
    Sep 20, 2011. 05:30 PM | 1 Like Like |Link to Comment
  • Blow The LID Off Your Retirement Portfolio [View article]
    "You could have bought BP for $29 in 2010 and it is now almost $40."

    I did. But I sold it a few weeks later for $36. I am buying again now.
    Sep 20, 2011. 05:23 PM | Likes Like |Link to Comment
  • 5 Reasons I'm Short Chipotle Mexican Grill At Over $340/Share [View article]
    Their definition of "naturally raised" is amusingly ambiguous. Now they are having to switch to naturally born and raised employees too, that is bound to be more expensive than having illegals killing chickens out back of the kitchen and growing cilantro in pots in their back yards.

    I used to like the absolutely authentic illegal-cooked tacos available at the Mexican supermercado back of my house, until I noticed that the meat part was made from beef hearts. One should not be snobbish, and actually I do like both liver and kidneys, and no doubt the hearts had not been fed beta-blockers, but I found it harder to savor the flavor after that.

    Two thumbs down for "food with integrity".
    Sep 20, 2011. 05:19 PM | 2 Likes Like |Link to Comment
  • Freeport McMoRan Copper & Gold: New Lows Set As Dollar Rises [View article]
    Oh life {is so peculiar}, (you get so wet in the rain), You know it too? (mm-hmm).
    You get so warm in the sunshine, (Get my sun tan) (It doesn't pay to complain), I never compain.
    When I get up each morning, there's nothing to breathe but air, (Yeah)
    (And when I look in the mirror, there's nothing to comb but hair),
    And when I sit down to breakfast, there’s nothing to eat but food,
    {Life is so peculiar but you can't stay home and brood}.

    Louis Armstrong and Louis Jordan scat duet.
    Sep 20, 2011. 04:37 PM | 1 Like Like |Link to Comment
  • Revisiting A Humbling Investing Experience: Why I'm Selling Apple [View article]
    You are possibly not a lifelong collector of music.

    The fact that AAPL sells music in a proprietary format makes me LESS likely to buy their hardware. I do actually have software that would enable me to convert music from AAPL to mp3, flac, or another format, but it is too much work to bother with.
    Sep 20, 2011. 08:42 AM | Likes Like |Link to Comment
  • Is The Chinese Yuan 300% Undervalued Against The Dollar? [View article]
    This is exactly it. Compare the salary of an airline pilot or nurse in China with their counterparts doing exactly the same work in the US!

    Clearly the Yuan is powerful in its purchasing power of labor, but weak in its purchasing power of manufactured goods, oil etc. The dollar, on the other hand, buys a lot of stuff, but not much labor.

    The two currencies, therefore, are clearly misaligned and ultimately, in a free market, would meet somewhere in the middle.

    This is not a silly article. It is actually very profound.
    Sep 20, 2011. 07:23 AM | 1 Like Like |Link to Comment