Paul Price

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129 Comments

    • Fri Jun 6th 14:06 PM | Rating: 0 0
      Commented on:
      Nokia Without the Hang-Ups
      There is a margin requirement on the naked puts but that can be satisfied by having paid-up stock, t-bills ot bonds in your account.

      No cash is needed [other than what is described] unless you are actually 'put' the shares.
      View article »
    • Fri Jun 6th 07:15 AM | Rating: 0 0
      Commented on:
      'Take Off' with Boeing Option Combination Plays
      If you sell a put that goes on to expire worthless:

      You will have collected the full premium [less commission], earned interest on the cash for the full time period until expiration and never have had to lay out any cash [if you wrote the puts against marginable securities that were already in your account].
      View article »
    • Fri Jun 6th 07:12 AM | Rating: 0 0
      Commented on:
      'Take Off' with Boeing Option Combination Plays
      Margin requirments ARE NOT cash outlays. I write all positions against paid-up marginable securities so all cash-on-cash returns are 100% accurate.

      Option sellers actually earn money on premiums received. There is no 'cost of capital' on option sales. There is an 'opportunity cost' in terms of tying up buying power.
      View article »
    • Thu Jun 5th 13:29 PM | Rating: 0 0
      Commented on:
      'Take Off' with Boeing Option Combination Plays
      The cash outlay is exactly as indicated.

      I fully disclosed you may end up with a double position but if the stock does as is indicated [stays above the put's strike price] in the examples you will not ever lay out any additional cash.
      View article »
    • Wed Jun 4th 17:22 PM | Rating: 0 0
      Commented on:
      Trusting the WSJ
      An excellent analysis of this situation.
      View article »
    • Wed Jun 4th 00:18 AM | Rating: 0 0
      Commented on:
      USG Corp: Another Buffett 'Failure to Sell' Mistake
      What would it take for you to say he made a mistake? The shares were at a cyclical peak in earnings and a higher than normal valuation.

      USG shares declined over 70% from there in a two year period. The company is now losing big money wiht no turnaround in sight.

      If that is not a clear cut 'failure to sell' error what woould one of those look like?
      View article »
    • Mon Jun 2nd 08:59 AM | Rating: 0 0
      Commented on:
      Sears: The End is Near
      Sears and K-Mart are two of the worst operators in retailing today.
      They can't compete on price, ambiance, style or selection with WalMart or Target.

      SHLD is in a slow-motion death spiral. Remember Caldor, Rose Stores, Montgomery Ward etc. SHLD is heading for the retailers' graveyard also.
      View article »
    • Sat May 31st 08:36 AM | Rating: 0 0
      Commented on:
      Will GE Drop Below $30?
      The author made no case for any correct valuation.

      Nothing he wrote gave any indication of what GE is truly worth or what their shares should be selling for.

      View article »
    • Sat May 31st 08:32 AM | Rating: 0 0
      Commented on:
      Costco: The Enigma
      The story is good but you failed to mention anyting about valuation.

      At today's price of $71.32 it trades at 24x FY 2008 EPS estimates of $2.99 [FY ends August] and 20.8x FY 2009 estimates of $3.40.

      In the past 5 years COST's annual average P/E has ranged from 21x - 24x meaning the shares are now fairly priced for both this year and well into 2009.

      Great company at a non-discounted share price. For cap gains I'd wait to buy much cheaper. This stock sells off periodically and it should only be bought after a significant dip.
      View article »
    • Fri May 30th 16:20 PM | Rating: 0 0
      Commented on:
      USG Corp: Another Buffett 'Failure to Sell' Mistake
      Every option at every strike has a bid price all the time. In-the-money options show bids at intrinsic value plus any time premium.

      You would need to do this over a period of time but it can surely be done using multiple strike prices and multiple expiration months from near term to LEAPS.

      If owning a major position was really a "roach motel" then neither Buffett nor anyone else would ever take that big a stake in anything.
      View article »
    • Fri May 30th 14:32 PM | Rating: 0 0
      Commented on:
      USG Corp: Another Buffett 'Failure to Sell' Mistake
      I fine way to sell large positions without disturbing the price is to write [sell] in-the-money calls for various strike prices and varied expiriation dates.

      You can do this over a period of time and end up unloading huge quantities of stock at higher than market prices from the day you're writing them.

      You just sell them and let the shares get called away. No muss, no fuss and no need to telegraph what you're doing.
      View article »
    • Thu May 29th 07:54 AM | Rating: 0 0
      Commented on:
      Are US Equities a Buy?
      Now, eighteen months ago, Macro Man took a look at US stocks and liked what he saw. And so he remained constructive on equities through the end of last year. Early in 2008, however, he changed his mind on the fate of the US consumer, and thus his opinion on equities. Ever since, he's been biased towards neutral to short positioning in indices.

      What you said above is that when the market was high you liked stocks. As they weakened from July - December 2007 you liked stocks.

      After getting stomped in January and shares got really cheap...
      you no longer liked stocks. You have stayed out since then missing a big broad-based recovery.

      Now you say you'll stay neutral to short until stocks get high enough to give you confidence to get in at higher prices.

      That is as bad a strategy as anyone could have had. Stay in when its high. Exit at the lows. Only get back in again when things look rosy [and prices are much higher].

      Brilliant!
      View article »
    • Thu May 29th 00:22 AM | Rating: 0 0
      Commented on:
      USG Corp: Another Buffett 'Failure to Sell' Mistake
      Cyclical shares need to be sold if their P/Es get to be well above normal on PEAK earnings as occurred in 2006.

      What is this company worth?

      No earnings, the only book value came from the rights offering, no yield. It's not an easy one to judge.

      I see much better and more predictable stocks out there than USG.

      How do YOU come to a 'fair value' for this stock? What is it and how would you justify it?
      View article »
    • Thu May 29th 00:15 AM | Rating: 0 0
      Commented on:
      USG Corp: Another Buffett 'Failure to Sell' Mistake
      Long term capitals gains are now taxed at 15% so a $70 /share gain incurs only $10.50 in federal taxes - not 42%.

      View article »
    • Wed May 28th 17:20 PM | Rating: 0 0
      Commented on:
      Is Something Brewing at Archer Daniels Midland?
      Under current law it is illegal for ADM to invest directly in CUBA.
      View article »
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