MILESCFA

John Hussman's Peak PE Ratio as a Long Term Market Indicator

Hussman probably got the idea from CrestmontResearch.com (Shiller may have too). My only instablog covers this topic in greater detail. Looking at my/Crestmont info. buy the heck out of it below a PE of 10x and be very, very careful above 20x... LIKE NOW.

Franco-Nevada: Building Up a Royalty War Chest

RGLD is creeping up; however, the great thing for me is it does so slowly. You can sell 2+ mn straddles on it and collect a LOT in time premium! (Sh Don't tell anybody though)

Today in Commodities: Potential Reversal Looming

On Nov 11 06:25 PM rrdaniel wrote:
> Anybody knows what Goldman roll is ?

Goldman Sachs is a big player (in all markets). Nearing expiration of the active contract, GOLDMAN (and others) have to ROLL THE EXPIRING CONTRACTS INTO THE NEXT ACTIVE FUTURES CONTRACT. It can cause short-term pricing volatilities.

WealthTrack: Why Jim Grant Is Bullish on the Recovery

Grant is brilliant, but also typically a bear. Thus I think people are confused by his "bullishness" on the economy. They think a good economy means a good stock market. This is not necessarily true.

Nominal GDP actually grows FASTER during secular Bear markets than it does during secular Bull markets. The reason is that often the secular Bear market experiences inflation, which artificially boosts NOMINAL GDP, but the inflation cause the market (PE) multiple to compress.

I have an instablog (my only one, in fact) that goes into greater detail on this issue, but if Grant is buying gold, it's fairly obvious he's NOT bullish on the stock market.

Opportunity Knocking in the Form of a VIX Spike

Fascinating concept, which makes me wonder... The shape of the yield curve can tell a lot, like the warning given by an inverted yield curve. Have you looked at what insight the term structure ("yield curve") of VIX tells you?

www.cboe.com/micro/vix...

FYI: I could only find VIX futures info on the CBOE website above. I have a hard time finding VIX futures quotes, being neither on my ThinkorSwim nor TradeStation platforms (futures "turned on" on both). Also, ThinkorSwim shows VXX as "hard-to-borrow", so while your concept is fascinating, where do you find it "not difficult to short anymore"?

Mitigating Gamma Losses

Gamma is easily ignored until it bites you on the ass. Once bitten, you begin to take notice. I try to take profits when they've "been made" but all too often I'm greedy for the last "nickle or dime". Gamma is what has finally taught me to "stop picking up the pennies" because too often those "not-so-elusive" black swans bites my gamma on it's ass!

5 Things to Consider Before Buying and Holding

Excellent article.... my one instablog makes the same point using charts and important referance material (CrestmontResearch.com). This is NOT a buy and hold market... but sometimes it is...

seekingalpha.com/user/...
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Readers Pick the Top 20 5-Year Horizon Stocks

That was an interesting popularity contest. However, we're in a secular bear market that is undergoing a strong (counter-trend) cyclical bull. I would not want to be initiating a 5 yr "buy and hold" here and my one instablog shows why :

seekingalpha.com/user/...

I urge you to at least view the first chart in my instablog, which is a 90 yr Dow chart showing percentage ups and downs. Volatility rules in a secular bear
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Think Twice: How People Are Fooled by Irrelevant Data

We've lost our math skills. I've read where 9 out of every 7 people can't do fractions!

:-)

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The Liquid Upside for Energy Recovery's Desalination Technology

I thought ERII sounded like a company with a great tehnology and presumably it is. The only thing is, I've lost a lot of money playing "great ideas". Great ideas don't necessarily make great investments. The reason is they don't occur in isolation. ERII "might be the one" but it might also be "one of many". (How many of you picked "the right" solar stock years ago, AND ONLY the "right stock"?)

The US Navy seemingly is a leader in desalination. Anyone know if ERII sells to them?...

www.chemistrytimes.com...

I also recently read of a new advancement in desalination but since I have already exited ERII I didn't bother to keep the article. Anyone know what's the leading edge?
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Option Players Aren't Buying the Rally

On Oct 02 03:56 PM Surly Trader wrote:
... Check out information about Max Ansbacher....
> ttp://ansbacherusa.com/files...
======================...
Thanks Surly. His strategy sounds a lot like what I do; however, whereas I use to sell naked straddles and strangles, as the market volatility went up dramatically, I began to "insure myself" by moving to iron condors and butterflies AND by pushing out (down) the put strikes I sell. The "cost of insurance" has been noticeable! Any thoughts?
BTW: As for the "excess put premium" research, I wouldn't mind a study to two, or a clue as to a "good google search term" to find these studies.

I don't suppose the Ansbacher index is available on the web anywhere, is it?

Lastly, on an options related message board, a (supposed) hedge-fund programmer hinted at a similar index he used. The index was based on the ratios of OTM strikes and brought to mind "a spider chart" (or like a coiled piece of metal used in a wind-up toy). He measured the "compression" as an indicator whether the market was headed up or down (I think as it "coiled" tighter and tighter, he expected a move, but I'm not sure it was also directional). Interestingly, he said the "ratios" between strikes exhibited Fibonacci ratios. Do you know this indicator (any references?)?

ISM Numbers Point to a V-Shaped Recovery

Steve Hansen disagrees... (see point#4)

seekingalpha.com/artic...

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Option Players Aren't Buying the Rally

Surly, There seem to be a lot of buy-write funds these days, although I'm not sure when they "surged in presence". I've seen studies that say put buying is mostly a professional hedging strategy and that index options have thus had a historical "put skew". Thoughts or references to the impact of proefessionals?

Similarly, the put/call ratio use to be a good contrarian indicator, which might seem to imply that the skew indicator would ALSO be a contrarian indicator. Any thoughts?... or any recent "academic" studies that you can point me to for more info (a net search proved ineffective).

Collapsing Volatility: ETF Opportunity

ChrisMck - if volatility been 25% back on 3/9 then the call would have sold for $45 rather than $75 (an approx. 36% drop in value due to the change in volatility)...

but the caveat is that you typically don't want to be buying options when volatility is really high (unless you expect higher volatility).

I went long out-the-money vertical call spreads using LEAPS around the March low and discovered one thing missing in MOST option articles - liquidity. My LEAP trades were fairly illiquid and I have to "give in" when trying to close them. Several of the ETFs in the list above have options that "trade by appointment", so ALWAYS be aware of option liquidity.

Invest in Lowe's with LEAP Options

Paul, I'm not disputing your calculation, I'm just trying to "put" the comparison on an apples-to-apples basis and this is the calculation all my option books show.

BTW: On my NOV buy-write, in my acct with portfolio marginning, the return is 828% annl.... :-)

and oh! You can buy the convertible funds using margin too!