G23ROCKS

How Long Will This Bull Run Last?

You're right - the market could continue its run, or it could fall.

The Worst Isn't Over Yet

I hate it when people talk in third person. It really detracts from an otherwise good article.

Risk Management in Trending Markets

Terrific article. The best I've read in a long while. Thanks for putting it together.

Options Trader: Wednesday Outlook

Philip,

On May 28, you recommended buying BAC leaps at $4.70.

"This is good timing for Bank of America (BAC) [another one of our LTP holdings], who are exercising $1.9Bn worth of calls to up their stake in China Construction Bank (CICHF.PK) to 10.75% from 8.2% in China’s second largest bank. BAC’s original $3Bn investment in June 2005 is now worth about $30Bn. The 2010 $35 calls are just $4.70 and make a fantastic long-term investment."

Those same leaps are selling for $1.34 today. That's a 75% loss in 1 month. I don't think anyone could have predicted how bad June was going to be, but I'm curious how you would handle such value erosion in long term calls that you've bought, e.g. sell, hold, average down, if your reason for buying has not changed. Thanks. I enjoy reading your posts.

BD

Time To Start Buying Some Dogs?

BAC is the best pick of the group. I'm buying in scales over time. The CEO recently reassured Wall St. that the dividend will remain intact. But even if that is not the case for the short term, you're picking up a solid bank at a 50% discount. Writedowns from CFC are the big question mark, but this can be used as a tax write off for years to come. And if the Dodd-Shelby act passes, BAC stands to benefit greatly. There is risk, but I'm a buyer at this level. Remember, trying to pick bottom is a fool's game. It's best to buy in increments over time.