Both A & B go down 5, you lose 10 The put seller loses 8
On Jul 20 07:34 PM mtd wrote:
> How this can go wrong: > > Stock A and B are trading at $10. You buy both at market. Stock A > loses $5 and Stock B gains $10. > > Your portfolio gains/losses > Stock A ($5) > Stock B $10 > P&L $5 > > If you had done this with selling puts @ $9 (say for a $1). Since > Stock B took off, you would have never purchased it. Stock B on the > other had has dropped and you have been forced to pay $9 for it. > > > Your portfolio: > Stock A ($4) > Put premium $1 > P&L ($3)
>>>Well I’m growing tired of it, and if it were up to me, I’d prohibit anyone else from making this point for the rest of 2009.
You would probably also abolish free speech and the rest of the Constitution. Oh well... If you are tired, take a nap!
If the market tanks by 50% then 50% of your stock market wealth has disappeared down a rat hole. It might or might not come back. If you had GBLX you faced bankruptcy. GBLX never bounced back. If you had Bear Stearns you got a $10 pittance from the US taxpayer courtesy of the NY Fed. What is so wrong about protecting yourself from these misadventures?
Just because you and Buffett like LTBH does not mean that this is the obligatory way to put your money in the market. Some people (not me) make money by doing the opposite, shorting!
What Apple Is Doing Wrong and Why It Means Trouble [View article]
>>>6. The Mac, MacBook and iPod Nano are getting stale. <<<
I can assure you my Mac is not stale and I've been a Mac user for 24 years.
But I do worry that Apple is "The Steve Jobs Show." Apple under Amelio and Scully was a disaster. If they hire some by-the-numbers CEO to replace Jobs, Apple will become a mee-too kind of company in short order. Creativity is not something you can easily buy in the market.
BTW, let me assure you I'm no Jobs groupie, I don't even like the guy, but Jobs is Apple and Apple is Jobs.
The reason Gates could retire from Microsoft is that just about anyone can create the crap they sell. They just make expensive imitations of things others design. That is not Apple's story.
Hedge Fund Tracking: Lee Ainslie's Maverick Capital, Q3 2008
[View article]
Reading these stock sheets is like reading a tip sheet and about as useful. Maverick will not call you up to tell you they changed their minds about a stock so you buy after Maverick has already pushed the price up and you sell after Maverick has already pushed the price down. Somehow that does not sound like the best way to invest, picking at hedge fund droppings.
Alternative Energy Storage: Cheap Will Beat Cool [View article]
Great article!
I have been an Apple fan since 1979 having been an Apple reseller and a Macintosh developer. I wouldn't touch a Windoze machine. But when it comes to buying Mac, I tend to buy the low end products. I'm writing this on an iBook G4 with the now obsolete PPC chip.
An OS is not quite a commodity. There is a lot of personal investment in learning the use of an interface. This is why a technology to be disruptive must be ten times cheaper than the technology being disrupted according to Clayton Christensen. But energy is essentially fungible so expensive makes no sense except for very special uses like maybe a Mars orbiter.
End of the Line for Apple's FireWire [View article]
On my current iBook you can only do a startup from an external disk if it is FireWire. I wonder if you can do startup from USB disks with the new 13 inch MacBooks. If not, that would screw up my backup setup.
Browser Wars: What Are They Good For? [View article]
Chrome is not about browser wars but about OS wars.
There is high level of incompatibility between browsers and designers waste incredible amounts of time to get their pages working on all the major browsers. That's why you don't see this issue.
How do companies make money on browsers? Beats me! But that is like asking how MacDonald's makes money on the rest rooms... You gotta have 'em...
Online Sales: Poking Holes in the Long Tail Theory [View article]
I don't sell books. I collect eyeballs for my web customers. By having 2,500 pages instead of 250 I collect a lot more eyeballs. These additional eyeballs are not as focused as the ones I collected with the original 250 pages but the cost of the extra pages is vanishingly small. This is very much like the transistor count on chips. The original ICs had a few transistors and each transistor had a sizable cost. Now, with millions of transistors on a chip, the cost per transistor is vanishingly small. The effect is similar, with chips you have vastly more processing power and with websites you have vastly more eyeball collecting capacity.
How to convert those extra eyeballs into additional sales is a different issue and that is what professor Anita Elberse is addressing.
Not Everyone Likes Windows 7 [View article]
Just say No! Switch to Mac! LOL
Why I Sell Put Options (Part I) [View article]
The put seller loses 8
On Jul 20 07:34 PM mtd wrote:
> How this can go wrong:
>
> Stock A and B are trading at $10. You buy both at market. Stock A
> loses $5 and Stock B gains $10.
>
> Your portfolio gains/losses
> Stock A ($5)
> Stock B $10
> P&L $5
>
> If you had done this with selling puts @ $9 (say for a $1). Since
> Stock B took off, you would have never purchased it. Stock B on the
> other had has dropped and you have been forced to pay $9 for it.
>
>
> Your portfolio:
> Stock A ($4)
> Put premium $1
> P&L ($3)
Buy and Hold Is Alive and Well [View article]
You would probably also abolish free speech and the rest of the Constitution. Oh well... If you are tired, take a nap!
If the market tanks by 50% then 50% of your stock market wealth has disappeared down a rat hole. It might or might not come back. If you had GBLX you faced bankruptcy. GBLX never bounced back. If you had Bear Stearns you got a $10 pittance from the US taxpayer courtesy of the NY Fed. What is so wrong about protecting yourself from these misadventures?
Just because you and Buffett like LTBH does not mean that this is the obligatory way to put your money in the market. Some people (not me) make money by doing the opposite, shorting!
40 Stocks That Have Defied the Downturn [View article]
New Microsoft Ad Targets High Cost of Macs [View article]
What Apple Is Doing Wrong and Why It Means Trouble [View article]
I can assure you my Mac is not stale and I've been a Mac user for 24 years.
But I do worry that Apple is "The Steve Jobs Show." Apple under Amelio and Scully was a disaster. If they hire some by-the-numbers CEO to replace Jobs, Apple will become a mee-too kind of company in short order. Creativity is not something you can easily buy in the market.
BTW, let me assure you I'm no Jobs groupie, I don't even like the guy, but Jobs is Apple and Apple is Jobs.
The reason Gates could retire from Microsoft is that just about anyone can create the crap they sell. They just make expensive imitations of things others design. That is not Apple's story.
Time to Sell Apple [View article]
Steve Jobs' Shrinking Billions [View article]
Get a life!
Mobile Reading: Next Big Area of Innovation [View article]
But I do admit that being able to take a laptop into the john has made books less of a necessity when performing that necessity.
Hedge Fund Tracking: Lee Ainslie's Maverick Capital, Q3 2008 [View article]
Alternative Energy Storage: Cheap Will Beat Cool [View article]
I have been an Apple fan since 1979 having been an Apple reseller and a Macintosh developer. I wouldn't touch a Windoze machine. But when it comes to buying Mac, I tend to buy the low end products. I'm writing this on an iBook G4 with the now obsolete PPC chip.
An OS is not quite a commodity. There is a lot of personal investment in learning the use of an interface. This is why a technology to be disruptive must be ten times cheaper than the technology being disrupted according to Clayton Christensen. But energy is essentially fungible so expensive makes no sense except for very special uses like maybe a Mars orbiter.
End of the Line for Apple's FireWire [View article]
Not having FireWire is bothersome.
Browser Wars: What Are They Good For? [View article]
There is high level of incompatibility between browsers and designers waste incredible amounts of time to get their pages working on all the major browsers. That's why you don't see this issue.
How do companies make money on browsers? Beats me! But that is like asking how MacDonald's makes money on the rest rooms... You gotta have 'em...
False Data Clobbers the Markets [View article]
Getting no data is the simplest thing in the world: Sell your TV set and DON'T watch CNBC. Problem solved!
But false data is a big help for smart people, it drives stock prices down to bargain-basement red-tag sale levels, the best time to buy. :)
Online Sales: Poking Holes in the Long Tail Theory [View article]
How to convert those extra eyeballs into additional sales is a different issue and that is what professor Anita Elberse is addressing.