User 305589

Fuel Your Portfolio with These Option Strategies

I suspect that seasonality may not be as reliable this year. A lot of money has already piled into oil and metals in anticipation of an economic recovery AND of the usual seasonal trend in oil. So, oil may still peak in July, but may have little upside left from here. And, since oil stocks usually lead the price of oil, your play could turn pretty bad with a vengeance. Oil stocks are very overbought and could easily correct by 20-30% short term. Imho, it is not worth the risk to play that kind of strategy right here right now. the lower vix (and lower call premiums) don't help, either.
There are much better ways to make 6-10% over the coming 6-7 weeks than your covered call plays. their risk-reward is simply not worth it imho.

Dow 10,000 and More Irrational Exuberance

9000, 10000 Dow - well possible. Hold on to positions, but with ever tighter stops. It makes zero sense to jump into new positions after this bull-run, yet this is what a lot of people are contemplating here (fear of missing the next bull) and ultimately will really do. Dow 9000-10000 would be great - to cut positions big time and build cash. 3 months ago nobody could have enough cash and opportunities were everywhere. most people were either too scared or didn't have the cash to take advantage of them. Over the next 18 months we will have a similar situation again - with lots of opportunities while cash to buy them will be king again.This rally is a golden opportunity to rebuild and´rebalance the portfolio and to prepare for the real bottom - which may be years away.

On May 02 01:10 PM Freya wrote:

> The Nays have it by a vast majority, I excluded Marc's responses.
>
>
> Just based on your comments and the Fact that Indicators like "Sell
> in May" and go away prove to be wrong when everyone knows and quotes
> it, I have no choice but to continue to be fully invested on the
> Long side.
>
> Dow 9,000 before another steep drop.
>
> The results of the stress tests were leaked, Chrysler was telegraphed
> long before it happened. The Public is not participating, big deal.
> This is normal, they do not get in until near the top anyway.
>
> The US this and the US that, This "Bear Rally/Bull Trap" is Global.
> I can understand the normal corrupt, manipulation expected here.
>
>
> The up move started in Asia and Russia. Not here.

Why Is Oil Trading at $53 When Supply and Demand Is So Bearish?

rig count for nat gas has fallen more than 40%. you just can't shut down a well overnight. a 45% cut is a hefty one, no? CHK estimates it may get down to a 60% cut in rigs by q3/q4 this year.
I am bullish for selected nat gas companies but unfortunately, a glut of Nat gas is inevitable for the next 9-18 months given the huge supply of LNGs hitting the market. CHK has hedged very prudently (I think the company is heavily underrated by the market) while many others have not. MCF is a low-cost producer that will survive and then thrive as well. But i expect no short-term catalyst for nat gas stocks.


On Mar 24 09:14 AM long_on_oil wrote:

> When the price of oil was high the oil companies tried to maximize
> profits by drilling new wells and increasing supply. Now that the
> price is low the opposite will be the rule. The stockholders must
> demand profit maximization irregardless of the price of oil. This
> is just business 101.
> Why the natural gas companies aren't cutting production is beyond
> me. We stockholders should be writing our management to insist they
> cut production to protect our investment. We are tired of giving
> our product away. No responsible management of any successful company
> operates like these natural gas companies.

Your Oil Stocks Aren't Coming Back

hm, I have no idea, whether the integrated oil companies already saw their "peak earnings". Available evidence for the longer term trends in oil and gas suggest, however, that we will see very hefty spikes in oil and gas prices down the road. Whether the companies can make money from those or get killed by them, is an open question though and depends to a great extent on the mgmt of the various companies. let's be clear about it: When Matt Simmons, who undoubtedly is a very profound industry insider, sees the real danger of oil and gas price volatility destroying the entire industry, then you ought to listen!
That being said, I look at the valuations of a company like CHK or MCF (which are very different companies in the same industry (nat gas)) and I say, boy, this market IS crazy! These copmanies do not need $12/mcf in gas prices to generate huge profits. they could live with $6-$7 just very very fine - when most other companies in that business will struggle and cut production left and right.
CHK at $15 and MCF at $36 are so screaming bargains, that I could not care less whether or not their earnings or stock prices or both will ever surpass their historical peaks. Just a return to a normalized economic and commodity environment would make their stock prices double or triple from here - and still be very very reasonably valued.

Dennis Gartman on Gold, Oil, Government and the Economy

The guy is way overrated. His remarks regarding oil are hillarious. on the one hand, he -correctly - figures out that you cannot trust OPEC's pumping statistics and their cut-announcements. But this doesn't stop him from believing their absolutely unproven resource claims! Even though they form the basis for the individual countries' quotas - which means they have every incentive to report their resource base as high as possible. Go figure. Yes, we have a lot of crude next to Brazil or in the tar sands. right. it just costs awesome amounts to drill and proceed those supplies.
others have commented on his silly debt comparisons so no need for me to dwelve on those again.

Four Oil Giants to Keep an Eye on - Barron's

why the outlook for cop is said to be 'not so good' while on the other hand recommending a high-cost, state-owned company like petrobras really beats me.
how many billions pbr will sink into the newfound big but highly difficult to extraxt oilfields is anybody#s guess. In any case, hey won't make money on those as long as crude stays below 70. PBR a buy?? Please!