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convoluted

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  • Dog-Day Summer: Scratch The VIX Fleas [View article]
    Great article Peter. Look forward to your thoughts on SVXY.
    Aug 9, 2015. 10:12 PM | Likes Like |Link to Comment
  • When Even The Est. Survey Slows... [View article]
    Corporate "reorganizations" began years before the financial crisis back in 2008. The crisis may have exacerbated the pre-existing trend. And certainly the mere quantity of jobs isn't nearly as important as the quality of jobs.
    Recessions in the past were typically characterized by plant layoffs, BUT the big differential between now and then is that most of the laid-off workers went back to their relatively high paying manufacturing jobs, and business continued as usual.
    Unfortunately, most of the previous high paying jobs with benefits don't exist now. Is this temporary or permanent?
    It seems that the best observation is that the trend remains rather persistent.
    Aug 9, 2015. 09:54 PM | 1 Like Like |Link to Comment
  • The Stock Market's Small Cap Problem [View article]
    Numerous pundits opined that 2015 would be the year of small cap outperformance. And, that seemed to be true- until it wasn't.
    I am on record, going back several weeks now, to sell TZA puts. I even indicated the number I sold- 500. At that time TNA had recovered back to 96 or so.
    So my TZA position is glowing a neon green color. Of course, at this point, you might consider nibbling on some TNA or IWM short puts. Remember, you don't care if you eat bear meat or bull meat. And, you just want the options to expire worthless. Leave the cheerleading to the bull or bear team.
    Aug 9, 2015. 09:35 PM | 1 Like Like |Link to Comment
  • The Seventh-Largest Economy In The World Spirals Down [View article]
    Remember the euphoria over the election months ago? Go back and check my comments- I said short EWZ.
    But "Blame it on Rio" remains one of my fav movies. And, it remains one of the most extraordinary places on Earth.
    Aug 7, 2015. 10:06 AM | 1 Like Like |Link to Comment
  • The Great Tragedy? [View article]
    Well, it is August and the nights are hot. So 'pack up the babies and grab the old ladies and everyone goes to...watch the Fed-heads? If the masses had any sense they would throw garbage- as they did in Elmer Gantry.

    Thanks.
    Aug 6, 2015. 04:59 PM | 2 Likes Like |Link to Comment
  • The Great Tragedy? [View article]
    The central planners have tried to 'breed lilacs out of the dead ground, mixing memory and desire, stirring dull roots with spring rain.'
    But sterility is not alleviated by even a massive dosage of Viagra. Dr. Love's traveling salvation show ignited a revivalist fervor, but failed to offer redemption.
    Well, hope springs eternal, at least for the beneficiaries of this arbitrage charade. Does history not teach?
    Perhaps these intellectuals could have read "Depression and Reconstruction" (1936) by E.L. Dulles. The author noted that big business was responsible for missal location of investment funds, causing the income flow in the economy to become restricted. And, John K. Galbraith, who noted in "The Great Crash" that maldistribution of income was an underlying cause of the market collapse. If they didn't have time to read a book, there were a number of scholarly articles on the subject: "Let's Face Reality" in the Journal of Business and Economics (1932); "Distribution of Wealth" Nation's Business (October 1935); "Spiraling Reaction" Fortune (April 1934).
    Aug 6, 2015. 01:41 PM | 2 Likes Like |Link to Comment
  • Tesla: Things Are Turning Ugly Very Quickly [View article]
    Collecting on my usual put spreads. Will now reverse course to the extent of 50% of the short gains.
    Also collecting on GMCR- but reluctant to play the bull side.
    I am gradually layering in put spreads on NFLX- again.
    Can a TSLA pull anything- like a boat or dirt bike? Never tried one. I do have a couple of golf carts, though.
    Aug 6, 2015. 12:48 PM | Likes Like |Link to Comment
  • U.S. Economic Data In Decline; Rate Hike, Strong Dollar Results Of Outdated Expectations [View article]
    Most modern economic theories tend to either " hold constant" or implicitly assume away cultural changes. Humanity will play the cards dealt- hence an enormous increase in entitlements, welfare, disability, Medicaid, student loans, violent crime, etc.
    If you tell the guy that lost his job and benefits in the textile industry to flip burgers, you've just created a 'unit of sweltering resentment." He might flip burgers until he can replace what he lost- legally or otherwise.
    The small town businessman, once a pillar of his little world, fails to comprehend why he is no longer served by his local bank. He, and his many brethren, realize that they are not too big to fail. Borrowing money at virtually no cost to buy back stock is, to him, a mockery of his hard work over the years.
    The total number of people that even know what the Fed does is about equal to the number of people that can define "Manifest Destiny".
    So, the predictable destiny of the economy, and capitalism, rests not with 25bps, but rather with an ethically enriched spirit. Within that spirit is a proud- but justified- confidence. The carry-trade and stock buy backs created in the laboratory of financial alchemy ravage the soul and destroy the trust.
    Aug 5, 2015. 03:14 PM | 1 Like Like |Link to Comment
  • Technically Troubling Tuesday - Collapsing Commodities Cause Concern [View article]
    With "in" or "cool" stocks like NFLX, you can't play CPA and establish trades based on obvious financial conclusions. Remember all the clowns that stood in line for the latest gadget or gizmo?
    Personally, my automatic tendency is to short anything with a 'net' in the name. But, I have learned- the hard way- that fools and idiots will rush in with the raging madness of a scorned lover- and they will not be denied. Until, of course, the alarm bell rings loud and true.
    Initial short positions should be hedged. So, if you short 100 shares of NFLX, go ahead and buy the OTM call. It's all relative to account size, of course. If you're trading with less than 100k, you might just short 25 shares, and be prepared to double down. As your bet size increases, you might want to sell a put ( or put spread) and/ or buy a bull call spread. This only scratches the surface, but avoid swinging for the fences. And avoid analysts like the plague. It wasn't so long ago that they had Arch Coal a 'steal' at 90- something!
    Aug 5, 2015. 02:26 PM | 2 Likes Like |Link to Comment
  • Chart Of The Day: U.S. Housing's Stealth Price Boom [View article]
    Well, if you average in a few $100Million pads, along with a few decrepit neighborhoods, the numbers are bound to look a bit rosy.
    GIGO.
    Aug 4, 2015. 04:49 PM | 1 Like Like |Link to Comment
  • Why The Fed Is Screwed [View article]
    Imagine there's no Fed
    It's easy if you try...

    John Lennon
    Aug 4, 2015. 08:41 AM | 1 Like Like |Link to Comment
  • Baby Boomers: LEAP Into Action [View article]
    I have various 'embedded' strategies in place, as I've indicated numerous times. If
    You have time, research put ratio backspreads. Simply stated one sells one or more deep ITM puts, and uses the premium to buy two or more long OTM put options. A serious reversal will cause the extra long puts to (a) quickly hit a total break- even position, and (b) create profit as there are more long puts than short puts.
    If nothing happens, or the market goes higher, it's possible to actually net a small amount.
    Aug 3, 2015. 07:10 PM | Likes Like |Link to Comment
  • Demographics Weigh On The U.S. Homeownership Rate [View article]
    Excellent article. Why?
    A reasoned attempt to offer thoughtful insight on nuanced changes over extended time frames.
    Housing is actually a complex social and cultural phenomenon that tends to elude rigid categories. Education, divorce rates, changes in technology, interest rates, government programs, conspicuous consumption- and more- impact housing decisions. And, of course, changes in median income and employment opportunities permeate all of the above.
    The "future" of housing will be a reflection of these dynamics, and predictions will only be as good as understanding the confluence thereof.
    Aug 3, 2015. 09:30 AM | Likes Like |Link to Comment
  • Baby Boomers: LEAP Into Action [View article]
    Historically, most options have expired worthless. But a more refined question relates to whether an option is ITM, ATM or OTM. And, the distribution of options, and their allocation is relevant. How many index options are traded vs stock?
    No question that selling options- especially OTM options-seems like free money. Well, not free, but similar to the odds related to insurance products.
    Another subtle issue is that thousands of far OTM options are a virtual certainty to expire worthless, but are bought to hedge a short option that is closer to the money. An ATM option has a 50/50 factor to play out, and often requires patience for decay to slowly do its damage. In the meantime, that already highly decayed OTM option is held to protect leverage and risk- so when eventually closed, it is worth zilch. Yet the meat of the profit may be garnered by accepting a 70% gain on the short ATM a few days short of expiration.
    But as to the question of whether to buy LEAP puts, I would say that the odds of a market correction within the next 2 years exceeds the odds of your million dollar house burning to the ground.
    Aug 3, 2015. 08:59 AM | 3 Likes Like |Link to Comment
  • Making Sense Of The China Stock Roller Coaster [View article]
    To understand the market in China you have to understand the people. And to understand the people you have to understand the cultural history. Now you may advance to the first grade.
    Or you might spend an evening with Jesse Livermore.
    Jul 30, 2015. 10:21 AM | Likes Like |Link to Comment
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