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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
  • 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
  • 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]
    "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
  • 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
  • InterOil: Has The Stock Run Out Of Gas? [View article];pass=OTk5Zi00ZWFk
    Sep 19, 2011. 11:30 PM | Likes Like |Link to Comment
  • Here's Why The U.S. Needs 16,000,000 Jobs, Yesterday [View article]
    I would not be so sure. I speak fluent Spanish, but the low level of literacy in Spanish is astounding and I often find spelling errors in the names of businesses in Spanish speaking countries.
    Sep 19, 2011. 09:45 PM | Likes Like |Link to Comment
  • InterOil: Has The Stock Run Out Of Gas? [View article]
    335 Km.

    Or maybe these guys can't even get their story right.

    Of course Tilson could be wrong. People are wrong about stocks all the time. Just on Friday an article here on SA said that AAPL was a safe short at $400. On the strength of a contrary view of that article I uncollared the stock I held and today it jumped to $412.

    Tilson was right about Open Table, and I made a lot of money out of that one, and he turned out to be right about Netflix in the long run, which I did not bet on. He thinks Interoil is a total scam, you think it is the best thing since sliced bread. We will see. I have no position in the stock, but would consider it as one of the short side plays that I use to hedge my portfolio. I have no intention of betting the farm on it.
    Sep 19, 2011. 09:42 PM | Likes Like |Link to Comment
  • Here's Why The U.S. Needs 16,000,000 Jobs, Yesterday [View article]
    Good idea, but most people don't know what the trade deficit means. Better to just stick a label saying "picked by foreign heathens" on anything imported.
    Sep 19, 2011. 09:18 PM | Likes Like |Link to Comment
  • Apple Struggling At $400: Great Low-Risk Short [View article]
    He has never let me down before. Probably because I have never followed his tips. I am sure my broker will let me have a mulligan on this one if the double down misses, so why worry?
    Sep 19, 2011. 09:12 PM | Likes Like |Link to Comment
  • InterOil: Has The Stock Run Out Of Gas? [View article]
    Good article, James. Most of these guys posting here seem like paid shills for IOC. What you say makes a lot of sense. I have no position in IOC, but the more I read, the more I think I may open a short position.

    What I would like to know is why anyone thinks that it is economical or profitable to build a 300 kilometer pipeline from PNG to an offshore island terminal to ship LNG.

    Tilson was right about Netflix, but he was too early and gave up too soon. Netflix is now in freefall.
    Sep 19, 2011. 06:59 PM | Likes Like |Link to Comment
  • Here's Why The U.S. Needs 16,000,000 Jobs, Yesterday [View article]
    Yes, you can, though you can't grow apples in Florida or oranges in Washington State.

    Part of the problem is chains of fast food restaurants and supermarkets.

    I remember years ago ordering a glass of OJ for breakfast in a Waffle House located right in the center of the Florida orange growing district (Bradenton), right in orange picking season, and being served nasty tasting processed Minute Maid orange juice from Brazil.

    At the time I was quite newly arrived in the US, but now I am used to that kind of thing, but fundamentally I always prefer locally sourced foods when available, because they are more likely to be fresher and in season.
    Sep 19, 2011. 03:46 PM | Likes Like |Link to Comment
  • Blow The LID Off Your Retirement Portfolio [View article]
    "The idea here is that when someone says that they would rather have a 4% return from BP as opposed to a 3% from CVX, they are not really being intellectually honest."

    Sorry for the intellectual dishonesty, but BP stopped its dividend after the Macondo disaster and now has restored half of the dividend. It is only paying out 13%. If it restores the full dividend so that it is paying out 26% (compare CVX current payout 25.66% per Finviz) within the next year or two, that would be over 8% at the current stock price.

    Most likely the stock price would move up in line with the dividend and it would end up with the dividend around 5% of the higher stock price.
    Sep 17, 2011. 02:29 PM | Likes Like |Link to Comment
  • Why You Should Avoid Apple [View article]
    Headline should be: "Rotten Apple?" by InCider.
    Sep 17, 2011. 01:08 PM | Likes Like |Link to Comment