I'm not suggesting that the company has no chance, just that a few more quarters of losses and negative cash flows are imminent. Also, keep in mind that the best-in-class production costs are predicated on a certain level of volume (about 20k mt). If demand doesn't warrant, the company won't produce 20k mt, and it won't achieve optimal production costs.
You are very good at tracking the articles. I beg to differ that my successes are in secret. I bought calls as cheap insurance against my puts. I had no idea I would make 8x my money on them. The last value of $2.21 per share was driven by (i) assumptions on write-offs of inventory and goodwill and (ii) lower revenue and cash flow for 1Q 2013 than actually occurred. If you want to make money on this stock your investment thesis has to be ahead of what actually occurs.
If you wait, then you end of chasing an up trend or a downtrend. In the M&A world we call that "mullet money" or "dumb money." The flip side is that your thesis could be wrong and you may have to make adjustments. I will update my price target - or what I would be willing to buy in at - over the next few weeks. As a hint, it will be higher than $2.21 per share but lower than $7 per share.
I am not at liberty to divulge the strike price of my puts. I don't want you to replicate my trading strategy for free. Ultimately, do you think shorts are going to make money at these levels given (i) the exuberance from longs and (ii) a bankruptcy scenario is far from imminent?
What I was implying is that shareholders representing millions of shares are fans of the stock. That may have been a better way of saying it. Secondly, I made enough money on my May call options to more than cover losses on my June puts. In effect, I now own the Junes puts "for free" > ( http://seekingalpha.co... ).
I think the scenario that shorts have priced in - bankruptcy - won't occur until a few quarters from not, if at all. I understand you have an issue with the analysis. Ultimately, what is your position? Is MCP a bear trap or not?
Thank-you for the kind words. I think we are headed for a double-dip as well. I wrote about it in "Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead" > ( http://clicky.me/7VvE ).
The housing market and housing stocks are as interesting as the overall market. Whoever bets correctly will make a lot of money. I think we are at an inflection point; they will write a lot of business school case studies about this investment cycle.
How I Profited From Molycorp's Wild Trading Day [View article]
WBSR,
If you read the article carefully, I never said I bought calls after hours. I said (i) "After the markets closed on Thursday May 9, I tried to get a copy of Molycorp's (MCP) earnings release" and (ii) "At the end of the trading day on Thursday, I purchased May calls in order to protect my downside ..."
Inflation is the most obvious reason to exit bonds. The next rotation out of bonds may be due to simply a change in "supply and demand." The fed has been buying bonds through its Quantitative Easing program. Once that stops, then what happens to the price and ultimately, yields. We won't know until QE ends. Secondly, China owns trillions of U.S. treasuries and with Europe in the tank, it has no other safe investment choices. If its own economy declines, it may have to repatriate those investment to shore up its crumbling finances - high unemployment, shadow loan crisis, non-existent infrastructure to support its rising senior population.
How I Profited From Molycorp's Wild Trading Day [View article]
Flann,
From my notes: "Interim CEO is focused on executing Mountain Pass but wants to ensure the company does not burn through too much cash. When they are capable of running at 20K mt in the second half of the year, they will if they can do it profitably. If not, they will not run at capacity and their production costs/unit will be higher than optimal."
It seems like we are splitting hairs here. By the 3rd / 4th quarter, we will know about the completion of Chlor-Akali, Mountain Pass and costs/kg. There is no need to speculate here.
Molycorp Is A Bear Trap [View article]
I'm not suggesting that the company has no chance, just that a few more quarters of losses and negative cash flows are imminent. Also, keep in mind that the best-in-class production costs are predicated on a certain level of volume (about 20k mt). If demand doesn't warrant, the company won't produce 20k mt, and it won't achieve optimal production costs.
Molycorp Is A Bear Trap [View article]
Enjoy the ride.
Molycorp Is A Bear Trap [View article]
You are very good at tracking the articles. I beg to differ that my successes are in secret. I bought calls as cheap insurance against my puts. I had no idea I would make 8x my money on them. The last value of $2.21 per share was driven by (i) assumptions on write-offs of inventory and goodwill and (ii) lower revenue and cash flow for 1Q 2013 than actually occurred. If you want to make money on this stock your investment thesis has to be ahead of what actually occurs.
If you wait, then you end of chasing an up trend or a downtrend. In the M&A world we call that "mullet money" or "dumb money." The flip side is that your thesis could be wrong and you may have to make adjustments. I will update my price target - or what I would be willing to buy in at - over the next few weeks. As a hint, it will be higher than $2.21 per share but lower than $7 per share.
Molycorp Is A Bear Trap [View article]
I am not at liberty to divulge the strike price of my puts. I don't want you to replicate my trading strategy for free. Ultimately, do you think shorts are going to make money at these levels given (i) the exuberance from longs and (ii) a bankruptcy scenario is far from imminent?
Molycorp Is A Bear Trap [View article]
What I was implying is that shareholders representing millions of shares are fans of the stock. That may have been a better way of saying it. Secondly, I made enough money on my May call options to more than cover losses on my June puts. In effect, I now own the Junes puts "for free" > ( http://seekingalpha.co... ).
Molycorp Is A Bear Trap [View article]
I think the scenario that shorts have priced in - bankruptcy - won't occur until a few quarters from not, if at all. I understand you have an issue with the analysis. Ultimately, what is your position? Is MCP a bear trap or not?
Molycorp Is A Bear Trap [View article]
There is feverish demand on both sides for MCP - long and short. But that's what makes a market. Good luck to you.
Housing Weekly - Time To Sell? [View article]
Thank-you for the kind words. I think we are headed for a double-dip as well. I wrote about it in "Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead" > ( http://clicky.me/7VvE ).
Housing Weekly - Time To Sell? [View article]
The housing market and housing stocks are as interesting as the overall market. Whoever bets correctly will make a lot of money. I think we are at an inflection point; they will write a lot of business school case studies about this investment cycle.
How I Profited From Molycorp's Wild Trading Day [View article]
I don't agree, but then again, that's what makes a market.
How I Profited From Molycorp's Wild Trading Day [View article]
If you read the article carefully, I never said I bought calls after hours. I said (i) "After the markets closed on Thursday May 9, I tried to get a copy of Molycorp's (MCP) earnings release" and (ii) "At the end of the trading day on Thursday, I purchased May calls in order to protect my downside ..."
How I Profited From Molycorp's Wild Trading Day [View article]
Why speculate. We will find out in a few quarters what Chlor-Alkali's impact is. Either way, MCP will lose money again.
Housing Weekly - Time To Sell? [View article]
Well said. Waiting for Godot and/or "losing your shirt while waiting for Godot" is what makes a market.
Housing Weekly - Time To Sell? [View article]
Inflation is the most obvious reason to exit bonds. The next rotation out of bonds may be due to simply a change in "supply and demand." The fed has been buying bonds through its Quantitative Easing program. Once that stops, then what happens to the price and ultimately, yields. We won't know until QE ends. Secondly, China owns trillions of U.S. treasuries and with Europe in the tank, it has no other safe investment choices. If its own economy declines, it may have to repatriate those investment to shore up its crumbling finances - high unemployment, shadow loan crisis, non-existent infrastructure to support its rising senior population.
How I Profited From Molycorp's Wild Trading Day [View article]
From my notes: "Interim CEO is focused on executing Mountain Pass but wants to ensure the company does not burn through too much cash. When they are capable of running at 20K mt in the second half of the year, they will if they can do it profitably. If not, they will not run at capacity and their production costs/unit will be higher than optimal."
It seems like we are splitting hairs here. By the 3rd / 4th quarter, we will know about the completion of Chlor-Akali, Mountain Pass and costs/kg. There is no need to speculate here.