Norwell's Instablog I am a long term investor, buying stocks as a teen through an account I begged my father to open. I am a software developer by trade. I have an Accounting degree and an MBA along the way, so I do really understand the numbers involved. I tend to like investments that are out of the ordinary and may provide a high rate of return versus a lower than expected risk level. Norwell http://seekingalpha.com Goldman Sachs Released Documented Naked Short Selling http://seekingalpha.com/instablog/269573-norwell/701471-goldman-sachs-released-documented-naked-short-selling?source=feed 701471 Full article here: http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515

Overall GS legal completely messed up by providing documented proof of naked short selling (sell short WITHOUT borrowing stock).

Coincidentally this occurred about the same time period they were begging for billions from the government.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> Tue, 05 Jun 2012 08:39:28 -0400 Full article here: http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515

Overall GS legal completely messed up by providing documented proof of naked short selling (sell short WITHOUT borrowing stock).

Coincidentally this occurred about the same time period they were begging for billions from the government.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> gs Naked Short Selling Illegal Trading Buy Netflix http://seekingalpha.com/instablog/269573-norwell/543611-buy-netflix?source=feed 543611 Netflix (NFLX) announced their earnings last night. While they lost money, they beat expectations on the loss and exceeded expectations for sales. Management effectively met their targets and expect to continue doing so.

The market must be selling on the news. Stock is down about 15% this morning on NO BAD NEWS.

Stock is at $87.80. I expect a nice, slow climb back over $100.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> Tue, 24 Apr 2012 12:45:58 -0400 Netflix (NFLX) announced their earnings last night. While they lost money, they beat expectations on the loss and exceeded expectations for sales. Management effectively met their targets and expect to continue doing so.

The market must be selling on the news. Stock is down about 15% this morning on NO BAD NEWS.

Stock is at $87.80. I expect a nice, slow climb back over $100.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> YPF Volatility Play http://seekingalpha.com/instablog/269573-norwell/524711-ypf-volatility-play?source=feed 524711 Sociedad Annima (YPF) is about to be nationalized by the Argentine government. This has been coming on for some time. Repsol, which owns a large percentage of the company, had been praying for a large payout. The Argentine government has stated the price will not be anything close to what Repsol had been hoping for. As a result the price has dropped dramatically in the last few days.

My guess is that Argentina pays something for YPF. The market is selling the stock with the idea that the price will be lower. I don't imagine this to be resolved quickly. As a result I would think there is an opportunity to work with the stock on the idea that the price will start to settle with the resulting volatility dropping.

I think the best strategy would be some kind of option straddle/collar where you are neutral on the stock direction, just waiting out the volatility to settle down and the option prices to decline. Likely selling calls and puts at the same time gathering current excessive option pricing with the idea of closing out positions in the next month or so.

Current price of YPF is $13.28 on 4/19/2012. Oct 12 25 call is 1.45. Oct 25 put is 12.90. Unfortunately there are no option prices closer to the current market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> Thu, 19 Apr 2012 10:02:02 -0400 Sociedad Annima (YPF) is about to be nationalized by the Argentine government. This has been coming on for some time. Repsol, which owns a large percentage of the company, had been praying for a large payout. The Argentine government has stated the price will not be anything close to what Repsol had been hoping for. As a result the price has dropped dramatically in the last few days.

My guess is that Argentina pays something for YPF. The market is selling the stock with the idea that the price will be lower. I don't imagine this to be resolved quickly. As a result I would think there is an opportunity to work with the stock on the idea that the price will start to settle with the resulting volatility dropping.

I think the best strategy would be some kind of option straddle/collar where you are neutral on the stock direction, just waiting out the volatility to settle down and the option prices to decline. Likely selling calls and puts at the same time gathering current excessive option pricing with the idea of closing out positions in the next month or so.

Current price of YPF is $13.28 on 4/19/2012. Oct 12 25 call is 1.45. Oct 25 put is 12.90. Unfortunately there are no option prices closer to the current market.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> ypf Options Chesepeake Energy Long Term Buy http://seekingalpha.com/instablog/269573-norwell/524651-chesepeake-energy-long-term-buy?source=feed 524651 Chesepeake Energy (CHK) just announced that their CEO has put his interests in CHK's rigs up for collateral for over a billion dollars worth of debt.

On the surface this seems to be a glaring Sell signal - hence the market quickly chopped the price. Given the long death march of the gas developers anyway I would think this would be the last straw for a number of investors.

Reading into it there does not appear to be much risk to CHK here. As part of the CEO's compensation has been a standing agreement where he gets to invest a low, single digit percentage of each rig. I assume there are other investors as well. My impression is that companies developing usually spread the risk out to a number of investors.

Let's assume the worst case - the CEO defaults. The debt holder is a known player in the energy arena. They would 'collect' their ownership of all these small percentages all over the place. I don't think anything changes at CHK. Maybe the CEO goes away, but I would doubt that.

So, if you think natural gas is bottoming anytime soon this might be a longer term play.

Current price is $18.05 on 4/19/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> Thu, 19 Apr 2012 09:47:36 -0400 Chesepeake Energy (CHK) just announced that their CEO has put his interests in CHK's rigs up for collateral for over a billion dollars worth of debt.

On the surface this seems to be a glaring Sell signal - hence the market quickly chopped the price. Given the long death march of the gas developers anyway I would think this would be the last straw for a number of investors.

Reading into it there does not appear to be much risk to CHK here. As part of the CEO's compensation has been a standing agreement where he gets to invest a low, single digit percentage of each rig. I assume there are other investors as well. My impression is that companies developing usually spread the risk out to a number of investors.

Let's assume the worst case - the CEO defaults. The debt holder is a known player in the energy arena. They would 'collect' their ownership of all these small percentages all over the place. I don't think anything changes at CHK. Maybe the CEO goes away, but I would doubt that.

So, if you think natural gas is bottoming anytime soon this might be a longer term play.

Current price is $18.05 on 4/19/2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

]]> chk Energy Buy GS http://seekingalpha.com/instablog/269573-norwell/66404-buy-gs?source=feed 66404
The SEC regulation is "know your customer".  This boils down to the amount of risk an investor can make.  So, if you have a lot of cash hanging around, you can afford very high risk.  This doesn't mean you have a clue what you are buying.

The customers complaining had no problem in raking in high profits when the mortgage trades were going their way.  No one was looking into the 'problem' that all these small institutions were investing large amounts into CDO's with no idea of the real risk involved.  They reported great profits on something they had no idea how it worked for years.

Then big, bad, capitalist GS is told "give me more!".  GS knew what they were selling was high risk, bad idea, etc...  But when someone keeps pestering you to sell them something, anything, so they can still have record earnings, they gave in and made up more investments.

The tricky part here is that internal GS leads KNEW they were selling bad investments.  Congress is questioning GS's ethics.  I think ethics is a strange argument to make in a capitalist society.  Capiltalism is based on the idea you sell people what they want to make a profit.  If we were socialist I could understand the argument, you are concerned with everyone coming out positive - not just your company.

I think GS is a solid buy here at close to $150.  Eventually this hogwash, socialist media convention will move on to the next capiltalist and GS will keep making incredible profits.


Disclosure: Long]]> Mon, 03 May 2010 09:38:51 -0400
The SEC regulation is "know your customer".  This boils down to the amount of risk an investor can make.  So, if you have a lot of cash hanging around, you can afford very high risk.  This doesn't mean you have a clue what you are buying.

The customers complaining had no problem in raking in high profits when the mortgage trades were going their way.  No one was looking into the 'problem' that all these small institutions were investing large amounts into CDO's with no idea of the real risk involved.  They reported great profits on something they had no idea how it worked for years.

Then big, bad, capitalist GS is told "give me more!".  GS knew what they were selling was high risk, bad idea, etc...  But when someone keeps pestering you to sell them something, anything, so they can still have record earnings, they gave in and made up more investments.

The tricky part here is that internal GS leads KNEW they were selling bad investments.  Congress is questioning GS's ethics.  I think ethics is a strange argument to make in a capitalist society.  Capiltalism is based on the idea you sell people what they want to make a profit.  If we were socialist I could understand the argument, you are concerned with everyone coming out positive - not just your company.

I think GS is a solid buy here at close to $150.  Eventually this hogwash, socialist media convention will move on to the next capiltalist and GS will keep making incredible profits.


Disclosure: Long]]> gs Long Term Short - Toyota http://seekingalpha.com/instablog/269573-norwell/55237-long-term-short-toyota?source=feed 55237 We are getting daily leaks that Toyota is no longer a quality producer of autos.  This should not be a surprise as Toyota publicly made the strategic decision to be the #1 auto producer in the world a few years ago. 

At the time Toyota was riding high with hybrids and top customer satisfaction.  No one seemed to pay attention to the idea that maybe a worldwide, disributed manufacturing company can not be the #1 producer AND the #1 in quality.  Maybe it's just the Japanese ego that lead them to believe that such a transition in strategy would not come at the cost of quality.

I am assuming that is why Toyota is being very shy about just coming out with facts on a timely basis as to their production quality problems emerge.

In the meantime I think Toyota is a short here.  They are producing at the levels they want, however quality is going away (gone already?) in all models.  This sounds too much like the GM and Ford of 10+ years ago - maintaining market share was predominant - at all costs.

Interesting that you still are getting sound bites of long term Toyota customers who believe that Toyota will fix their problems since historically it has not been a problem.  Blind faith is usually not a good idea.



Disclosure: No positions in Toyota]]> Fri, 19 Feb 2010 10:39:33 -0500 We are getting daily leaks that Toyota is no longer a quality producer of autos.  This should not be a surprise as Toyota publicly made the strategic decision to be the #1 auto producer in the world a few years ago. 

At the time Toyota was riding high with hybrids and top customer satisfaction.  No one seemed to pay attention to the idea that maybe a worldwide, disributed manufacturing company can not be the #1 producer AND the #1 in quality.  Maybe it's just the Japanese ego that lead them to believe that such a transition in strategy would not come at the cost of quality.

I am assuming that is why Toyota is being very shy about just coming out with facts on a timely basis as to their production quality problems emerge.

In the meantime I think Toyota is a short here.  They are producing at the levels they want, however quality is going away (gone already?) in all models.  This sounds too much like the GM and Ford of 10+ years ago - maintaining market share was predominant - at all costs.

Interesting that you still are getting sound bites of long term Toyota customers who believe that Toyota will fix their problems since historically it has not been a problem.  Blind faith is usually not a good idea.



Disclosure: No positions in Toyota]]> tm SHORT