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Oak Grove

Oak Grove
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  • 10 Reasons Apple Investors Should Be Nervous [View article]
    " .... it is becoming apparent that Apple is trading at a lower multiple in part because of its tremendous cash stockpile."

    If there are reasons why AAPL is trading at a lower multiple, an increase in cash/marketable securities on the balance sheet is not one of them. To have an increase in cash/marketable securities, a business has to generate more cash flow. That is a good thing. If you are trying to suggest AAPL would trade at a higher multiple if it "held" less cash, that is a very different point and is debatable, at best.
    May 26, 2011. 11:55 AM | Likes Like |Link to Comment
  • Thursday Options Brief: VALE, BID, EBAY & YGE [View article]
    Correction - The break-even is a bit less at around $36.63 share price but, who's counting?
    Feb 18, 2011. 05:00 PM | Likes Like |Link to Comment
  • Thursday Options Brief: VALE, BID, EBAY & YGE [View article]
    The analysis on the net credit for the Vale spread, as described, is incorrect. It isn't a net credit of $2.24 per contract. It's a net credit of about $0.815 per contract on 23,000 contracts. The trader is net negative $0.05 on 11,500 contracts and net positive $1.68 on 11,500. He goes into it with a credit of $1.875 million and at $36.875/share he is at breakeven. At $40, he is down just under $3.9 million and at $45, the position is red by $15.376 million. He must be long around 2.3 million shares and using the option strategy to hedge. The risk/reward is poor as a positional strategy.
    Feb 18, 2011. 10:26 AM | Likes Like |Link to Comment
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