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  • Exit Equities As VIX Hits A 5-Year Low And S&P 500 Index A 4-Year High  [View article]
    No. It is the other way round. As long as stocks keep going up, investors will not feel the need to insure their stocks against a downtrend by buying puts. As soon as the fear of a downtend comes, they will start buying puts. When that happens, the VIX starts going up. Right now the low level of the VIX indicates a sense of complacency, a sense that when things start to go wrong, the cavalry (in the form of Ben Bernanke and the Fed) will show up to save the day.

    Too high of a VIX indicates a heighten sense of fear.
    Too low of a VIX indicates a sense of complacency.
    Aug 19, 2012. 10:04 PM | 3 Likes Like |Link to Comment
  • Why low volume actually is bullish, according to Ryan Detrick: Total-dollar volume is higher now than in the 2003-07 bull market, so how can bears say lower share volume is bearish? "As long as volume stays low and bears use it as ammunition for lower prices, just smile and nod your head, knowing this isn't true."  [View news story]
    Less volume does not mean bearish.
    Less volume means the recent price action is unconfirmed, regardless of whether the recent price action is bullish or bearish.

    More volume means that the recent price action is confirmed.
    Aug 19, 2012. 11:53 AM | Likes Like |Link to Comment
  • Will Bernanke Save The Equity Markets?  [View article]
    Yes, I made a mistake. The market is close to the April high but has not gone past it yet.
    Aug 19, 2012. 11:45 AM | Likes Like |Link to Comment
  • Facebook Is A Fad  [View article]
    Yes, you are right. I don't invest in start-ups.
    Yes, it is hard to find a 20-bagger among companies.

    It all depends on your investment philosophy. I wait for pullbacks in companies that I like then I buy in. Then I hedge my position. So I don't get home runs but I get a lot of singles and a few doubles or triples. On the other hand, I don't give away home runs either. My no. 1 rule is Capital Preservation.

    Aug 19, 2012. 11:34 AM | Likes Like |Link to Comment
  • Buy Delta Air Lines: Debt And Cost Reductions Are Setting The Stage For A Rally  [View article]
    True. Hedging is not a zero cost strategy but it gives you less dependence on the price of oil. This removes one of the items that are outside your control. You now have a better idea of YOUR cost of fuel as opposed to the INDUSTRY cost of fuel. By not hedging, you are also gambling.

    As to whether running a refinery will be a distraction to management, I would assume that management would have the foresight to delegate the part of running the refinery to a competent third party contractor.

    As to your comments on the debt position, I agree with you which is why I do not intend to initiate any positions in Delta for the time being.

    I do however commend the Delta management for their out-of-the-box thinking.
    Aug 19, 2012. 11:20 AM | Likes Like |Link to Comment
  • Why Royal Dutch Shell Is Likely To Bid For InterOil Imminently  [View article]
    I have read the previous article on IOC which was very bearish on IOC and the bullish comments posted therein and also your bullish article above.

    It seems to me that owning IOC is a binary choice. Either the stock will shoot up when Shell acquires it or it will plunge when nothing comes out of their PNG leases.

    My conclusion: Good for a gamble but I would be cautious about entering it at this stage until either the stock has dropped some more or I see a decent pullback.

    It is not helped by the large bid-ask spread of the near term options. (I use options to hedge my positions and the large bid-ask spread is putting me off from investing in this company at present.)

    Note: I am neither bullish nor bearish at this moment. Just cautious.
    Aug 19, 2012. 10:14 AM | 4 Likes Like |Link to Comment
  • Buy Delta Air Lines: Debt And Cost Reductions Are Setting The Stage For A Rally  [View article]
    In general, I do not invest in airline companies because of:
    1. High operation costs caused by rising fuel costs causing a dent in their profits
    2. High operating costs caused by buying new planes, as one of the previous commentators talked about

    Having said that, Delta is the only airline company that I know about that bought a refinery so as to hedge on their fuel costs. In direct contrast to that is US Airways (LCC) which does not hedge on its fuel costs.

    If I do decide to invest in an airline company, it will be Delta while if I do decide to short one, it will be LCC.

    Disclosure: At the moment, I hold no positions in any airlines and I do not intend to initiate any new positions in any airlines in the next 72 hours.
    Aug 19, 2012. 09:39 AM | Likes Like |Link to Comment
  • With the causes of last summer's market volatility still relevant, the low level of the VIX, which closed at 13.45 on Friday, is prompting puzzlement. One reason could be that investors want longer-term hedges than the 30 days the VIX gives, while another is that they're sitting on the sidelines and so don't need protection. Others see danger - anything under 15 "is flashing red for us," says Schroders' Robert Farago.  [View news story]
    I'd agree with the second viewpoint i.e. "another is that they're sitting on the sidelines and so don't need protection". Volumes in the stock market this August have been very low, much lower than previous Augusts.
    Aug 19, 2012. 09:21 AM | Likes Like |Link to Comment
  • A San Francisco judge rejected on Friday a $20M deal to settle a lawsuit from five Facebook (FB) users that the social network violated users' rights through its "Sponsored Stories" advertising feature. Judge Richard Seeborg is concerned as to why $10M is going to lawyers, why the rest is going to advocacy groups, and why none is going to Facebook members.  [View news story]
    Sounds like a judge with some common sense.
    Aug 19, 2012. 09:14 AM | 3 Likes Like |Link to Comment
  • Exit Equities As VIX Hits A 5-Year Low And S&P 500 Index A 4-Year High  [View article]
    Very well written article.

    I am currently long some quality stocks. Rather than closing out my positions, I have hedged myself by buying puts to protect my positions.
    Aug 18, 2012. 10:53 AM | 1 Like Like |Link to Comment
  • Facebook Is A Fad  [View article]
    Wow! A lot of emotional comments.

    As a trader and an investor, I do not trade or invest in anything until I understand the business model and look at a few years financial data to understand the profitability of the business. Then and only then do I take a position (whether long or short) and even then I hedge my position.

    Thank you very much.
    Aug 18, 2012. 10:40 AM | Likes Like |Link to Comment
  • YouTube's (GOOG) U.S. video views reached 19.6B in July, estimates comScore - that's up 7% M/M (aided by an extra day) and represents over half of all views measured by the research firm. Just as importantly, minutes/viewer rose 48% Y/Y to 525, as users continue to embrace long-form professional content. By comparison, Facebook only had 328M views, and Yahoo 625M. Earlier today, YouTube boasted it served 159M Olympics streams for NBC, with 37% involving mobile devices.  [View news story]
    I don't believe that you actually have to click the link for Google to collect the money from the advertiser. Once the advertisement video starts playing, Google collects the revenue from the advertiser.
    Aug 18, 2012. 10:30 AM | Likes Like |Link to Comment
  • Interactive Brokers Group (IBKR) receives a letter of noncompliance from Nasdaq, saying it's non-compliant with Nasdaq Listing Rule 5250(c)(1) because its quarterly 10-Q has not yet been filed.  [View news story]
    I quote from ( )

    (capital letters are mine, not from the source)

    Interactive Brokers comes with a $10,000 minimum funding and is NOT SUITED FOR CASUAL INVESTORS but provides fantastic support for international trading and OFFERS ACTIVE TRADERS a very competitive commissions schedule for LOW COST TRADING.

    To open an account with Interactive Brokers there is a $10,000 minimum. If client does not spend at least $10 in commissions per month they will be charged the difference. Additionally, there is a fee of $10 charged for real-time quotes each month which is waived if at least $30 in commissions is spent. Lastly, Interactive Brokers currently does not pay interest on any positive (free) cash balances for US ($) clients.

    Hope this helps.
    Aug 18, 2012. 10:18 AM | 1 Like Like |Link to Comment
  • Facebook's (FB) brutalizing after going public may be the best thing that could've happened to the company, says Pimco's Mohamed El-Erian. Prior to its IPO, the company could do no wrong, but suddenly that's all changed. It's mystique has been replaced by the harsh reality of analyst's calls and downgrades. Hopefully, if FB's reality check is successfully internalized by management and staff, the company may well avoid what could have been an even bigger shock down the road.  [View news story]
    If you buy, be sure to hedge your position.
    Aug 18, 2012. 05:30 AM | Likes Like |Link to Comment
  • The Vixen VIX  [View article]
    That depends. I myself am expecting a market correction before the bull run continues. Have currently hedged all my positions.
    Aug 18, 2012. 05:28 AM | Likes Like |Link to Comment