Teva: A 'Show Me' Stock That May Show Patient Investors Profits [View article]
Copaxone is branded by Teva, so its going generic will impact margins. Competitive products from other firms are also expected to dent the top line. Copaxone is currently a very high-margin product, and thus accounts for a disproportionate percentage of the bottom line--near half of Teva's EPS.
Cisco Bulls: 4-1 Leverage For Almost Free [View article]
Sol, thanks for the idea...I didn't hang on for the calls to quite double...but it worked nicely and I would have been happy to add a few hundred shares to my CSCO holdings, anyway.
Cisco Bulls: 4-1 Leverage For Almost Free [View article]
Slim, the strategy described here only has opportunity cost of giving up the first couple of points of upside if you hold to expiry (which the author isn't suggesting).
Right now, the delta of the put and call strikes referenced above is .40 and .16, respectively. So a 1 point gain in the stock would give you about a 40 cent improvement in your (short) put option and a 16 cent improvement in each of your 4 (long) call options, for a total gain of $1.04, which is actually slightly better than owning the stock (might be only breakeven against stock only after commissions, depending on commissions).
The advantage (of owning the options instead of the stock) accelerates quickly if the stock continues to rise; however, time decay works against you and the gains can dissipate quickly if the stock price falls. That's why the author suggests unwinding the position to lock in your gain, when possible.
Hope that helps you understand the strategy. You're correct, it's not "free" (i.e., without risk)...but the stock doesn't have to gain 23%+ before your option positions start to profit.
Google Is Worth At Least $800 Per Share [View article]
You are correct...shares out is 325...not 258 (which is float)...my bad. I did not make any adjustments for the MMI purchase because I think that the addition to cash flow would offset the decrease in cash.
Google Is Worth At Least $800 Per Share [View article]
If the overall pie grows at a relatively constant rate, then the larger one of the pieces of the pie becomes the more likely its growth rate will revert to the mean growth rate of the pie...it's not all that dissimilar a concept to the mean reversion described by the Law of Large Numbers.
Google Is Worth At Least $800 Per Share [View article]
Thank you. If you use trailing 12 months earnings for the S&P 500, this type of framework would suggest the S&P is significantly undervalued. However, I agree with those who believe that the S&P's currently above-average margins will revert toward the mean, so I would concur with the analyses I have seen using trendline S&P earnings that suggest equities are at best fairly valued and possibly slightly overvalued. That doesn't mean that momentum can't propel prices even higher from here, but I don't think the market is broadly undervalued.
New York Community Bancorp Worth Another Look [View article]
For what it's worth, yesterday's price action is consistent with NYB's price action the day after its ex-dividend date for the last seven of eight quarters...even when the stock was rising throughout most of 2010, it usually traded down on its ex-dividend date as well as the following day.
New York Community Bancorp Worth Another Look [View article]
In rent-controlled NY, you can't raise rents unless you justify the increase by fixing up old (sometimes that means run-down) buildings, and one of NYB's long-term niches has been providing loans to do just that. This fact inherently causes lenders to be involved with some bad properties.
There ARE accusations by some of the citizens groups (http://bit.ly/Ag7Yr3) who suggest NYB should be punished by new regulations passed by last year's Wall Street reforms. But worst-case-scenario fears are probably worse than reality (although the potential for wacky government sanctions is certainly plausible).
NYB is aware of these issues and is taking actions to clean up its portfolio. And while their actions are not necessarily placating the citizens groups (http://bit.ly/AnVKdL), NYB is clearly aware of and addressing the issues.
Unfortunately for the tenants, the most likely result of the pressure being put on banks over building maintenance is less money being made available to fix the problems--i.e., a worsening of living conditions.
Teva: A 'Show Me' Stock That May Show Patient Investors Profits [View article]
An Apple Play For The iPhone 5 [View article]
Cisco Bulls: 4-1 Leverage For Almost Free [View article]
Cisco Bulls: 4-1 Leverage For Almost Free [View article]
Right now, the delta of the put and call strikes referenced above is .40 and .16, respectively. So a 1 point gain in the stock would give you about a 40 cent improvement in your (short) put option and a 16 cent improvement in each of your 4 (long) call options, for a total gain of $1.04, which is actually slightly better than owning the stock (might be only breakeven against stock only after commissions, depending on commissions).
The advantage (of owning the options instead of the stock) accelerates quickly if the stock continues to rise; however, time decay works against you and the gains can dissipate quickly if the stock price falls. That's why the author suggests unwinding the position to lock in your gain, when possible.
Hope that helps you understand the strategy. You're correct, it's not "free" (i.e., without risk)...but the stock doesn't have to gain 23%+ before your option positions start to profit.
New York Community Bancorp Worth Another Look [View article]
New York Community Bancorp Worth Another Look [View article]
Google Is Worth At Least $800 Per Share [View article]
8.2% 9.2% 10.2% 11.2% 12.2% 13.2% 14.2%
5.0% $1,026 $813 $681 $592 $527 $479 $441
5.5% $1,198 $909 $743 $635 $559 $503 $460
6.0% $1,447 $1,035 $819 $686 $596 $531 $482
8.2% 9.2% 10.2% 11.2% 12.2% 13.2% 14.2%
5.0% $1,252 $984 $819 $708 $627 $567 $519
5.5% $1,466 $1,104 $897 $762 $667 $597 $543
6.0% $1,778 $1,262 $992 $826 $713 $632 $571
Google Is Worth At Least $800 Per Share [View article]
Google Is Worth At Least $800 Per Share [View article]
Google Is Worth At Least $800 Per Share [View article]
Google Is Worth At Least $800 Per Share [View article]
Google Is Worth At Least $800 Per Share [View article]
New York Community Bancorp Worth Another Look [View article]
New York Community Bancorp Worth Another Look [View article]
There ARE accusations by some of the citizens groups (http://bit.ly/Ag7Yr3) who suggest NYB should be punished by new regulations passed by last year's Wall Street reforms. But worst-case-scenario fears are probably worse than reality (although the potential for wacky government sanctions is certainly plausible).
NYB is aware of these issues and is taking actions to clean up its portfolio. And while their actions are not necessarily placating the citizens groups (http://bit.ly/AnVKdL), NYB is clearly aware of and addressing the issues.
Unfortunately for the tenants, the most likely result of the pressure being put on banks over building maintenance is less money being made available to fix the problems--i.e., a worsening of living conditions.