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  • Your Biggest Risk In The Market May Not Be What You Think [View article]
    The people that can least afford to lose money in the market are the ones that know absolutely nothing about insurance and dynamic hedging.
    Ignorance is bliss?
    Feb 27, 2015. 10:25 AM | 2 Likes Like |Link to Comment
  • Oilfield services gains won't hold up as U.S. storage fills, Credit Suisse says [View news story]
    There is a time to gather stones, and a time to cast away stones.
    Short interest quite high-historically. Yet, we seem to be in the midst of a historical recalibration.
    I published a stocktalk last summer to short oil. I got out early, but re-entered. Subsequently, I suggested long oil via UCO and short via selling call spreads on USO.
    This balances the risk, and allows one to collect premium on USO (which has a contango issue), while adding to long positions.
    I keep adding to the long positions, and keep collecting coupons on USO. In a sense, the long structure is a 'foundation' which is paid for by the rent collected on USO.
    I suppose one could pick SLB as a proxy for the long position (or OIH, XLE, etc,). But, the levered UCO enhances the returns. And, I suppose you could sell puts on SLB (a bullish play), and maintain a few shares of SCO (3x short oil).
    My point is that you don't have to swear eternal allegiance to either the bull or bear side-be a shark and take a bite out of both the snorting bull and growling bear.
    And take some of the gains and adopt a pet!
    Feb 26, 2015. 10:33 PM | 2 Likes Like |Link to Comment
  • U.S. Economy: This Was Not Supposed To Happen [View article]
    Yes-The Illusions of Pundits subsection under a chapter entitled "The Illusion of Validity."
    Feb 26, 2015. 05:52 PM | 1 Like Like |Link to Comment
  • Topgolf Is A Diamond In The Rough For Callaway [View article]
    I'm amazed at the number of people that visit. It's definitely off to a good start. I also find it a bit strange, though. But, maybe the decrease in 'real' golf is being offset by these types of related diversions.
    And, I'd rather go to one of these places than sit in a boring bar.
    Feb 26, 2015. 04:27 PM | Likes Like |Link to Comment
  • Fortune's Formula: The Untold Story Of The Scientific Betting System That Beat The Casinos And Wall Street [View article]
    At the moment, I have an iron condor spread on BIDU. Earlier today, both sides were 'winning.' BIDU slipped a bit, which put the short put spread in the 'red', but enlarging the 'green' short call spread.
    I made an assumption that I would win (collect full bet by Fri) on the short call spread. What about the short put spread? Well, I mentally changed the way I thought about the initial strategy. That is, I no longer thought about a simple iron condor. I viewed the short put spread as a stand alone short put spread headed in the wrong direction. I adjusted the odds by selling a new call spread, with more time premium. If that call spread goes in the wrong direction, then the initial short put spread would have to turn around and become profitable.
    The point is that cell automata, tit for tat and thinking about evolutionary biology can create a new way of playing this game. In some sense, there is a continuous game-the buzzer never sounds-there is always a move/counter-move, a counter to the counter-move and so forth.
    Feb 23, 2015. 10:44 PM | Likes Like |Link to Comment
  • Big Short II: Can Canada's Largest Banks Absorb Increasing Defaults From A Real Estate Crash? [View article]
    Interesting perspectives on Canada. Will take a further look at real estate issues.
    In the US, state laws are more nuanced than recourse vs non- recourse. Some states are judicial foreclosure and a few non- judicial. Some states require a confirmation hearing within a short time after foreclosure, otherwise there can be no deficiency judgment.
    And, practically speaking, the vast majority of lenders realize that it's a waste of time and money to pursue a debtor anyway. And, I haven't even mentioned the various rules relating to chapter 7 and/ or chapter 13 of the bankruptcy code. In essence, the lender generally gets the foreclosed house back, and that's it.
    Feb 23, 2015. 09:27 PM | Likes Like |Link to Comment
  • Homebuilders lower after soft sales report, downgrades [View news story]
    I know it's hard to fathom, but some people have to sell an existing home in order to buy a new home. In an ideal world, the government would provide a FMV resale purchase guaranty, and the entire issue of 'existing home sales' would drop in significance. New home sales would rise, and actually allow folks to make an even larger home purchase. And, as we know, immediately after closing on a new home, the structure transforms into an 'existing' home, and, of course, the Federal Resale Purchase Guaranty attaches once again. This would eliminate fraudulent appraisals, construction loan carrying costs, allow more real estate agents to drive Mercedes, and increase home builder profits.
    Feb 23, 2015. 12:00 PM | Likes Like |Link to Comment
  • Existing home sales down more than forecast in January [View news story]
    NO problem-once we determine where appropriate blame should be allocated:
    (a) polar vortex
    (b)global warming
    (c) increase in use of medical weed, or
    (d) alignment of Jupiter and Mars-
    our highly trained politicians can fashion a new centralized program, designed to alleviate this horrible tragedy and continuing nightmare.
    Feb 23, 2015. 11:40 AM | 5 Likes Like |Link to Comment
  • Ripping The Shorts' Faces Off! [View article]
    How to short a stock with .oooo1% risk?
    PUT RATIO BACKSPREADS- but don't tell anyone
    Feb 21, 2015. 09:41 PM | Likes Like |Link to Comment
  • Tesla: Bonfire Of The Money Printers' Vanities [View article]
    A lot of communities are becoming 'golf cart friendly'-But this discussion is igniting a creative urge in my brain:
    "Oh Lord, won't you buy me a brand new tes-la,
    My friends all drive E-Z Go carts, and live in shan-gri-la...
    Feb 20, 2015. 04:35 PM | 2 Likes Like |Link to Comment
  • Betting On Oil [View article]
    The price of the underlying (USO) affects the options delta. So, there is an impact. But, all sorts of things impact any given stock. I mean we already know that a cat will chase its tail. Theta tells us that each cat will become exhausted- as a function of its own unique, but limited, stamina. So, a keen eye for historical volatility via a vis implied volatility is what really matters.
    I'm short USO via call spreads, and long via UCO shares, as well as short puts.
    Feb 19, 2015. 09:01 PM | Likes Like |Link to Comment
  • The U.S. Stock Market Is At Its Most Overvalued Level In History [View article]
    Even the World Series can be rigged.
    Which begs the question:How 'honest' do you want the game to be?
    Feb 19, 2015. 04:44 PM | Likes Like |Link to Comment
  • Crude drops on inventory build [View news story]
    This is a classical situation in economics. To some extent, the sheer number of players would suggest a model of perfect competition. Logic might suggest that everyone would cut back. But, the appearance of perfect competition is deceptive.
    Game theory would indicate that the best strategy for larger players would be to produce at a maximum level. All players similarly situated would find that to be the optimal move. Players that are compelled to cover variable costs and meet loan covenants, are forced to generate some level of cash. If these players stop producing, there are insufficient reserves to stay in the game. Yet, as the price drops, all they really do is postpone the inevitable-much like rearranging the deck chairs on the Titanic.
    The bigger players should produce as much as possible, and as quickly as possible. The short-term price is incidental to them.
    After the smaller players have lost the prisoner's dilemma game that they are forced to play, a new set of strategies will emerge. Most of you can figure that one out.
    Feb 19, 2015. 10:36 AM | 2 Likes Like |Link to Comment
  • A Big Financial Sector Hurts Economic Growth [View article]
    "An idle mind is the devil's workshop."
    Only the financial alchemists possessed the knowledge and wherewithal to leverage plain vanilla to multi- flavored, derivative concoctions. They found the new taste quite intoxicating. They are applauded and encouraged by the unlimited enthusiasm of central planners.
    Feb 18, 2015. 09:24 PM | 1 Like Like |Link to Comment
  • Warren Buffett Increases His Stake In Deere, Is It Time To Buy? [View article]
    Sometimes there are reasons to buy a stock, other than conventional metrics. Suppose XYZ is the dominant player in its arena- and has been for decades. It may face a stagnant period for quite some time, but can quite readily ride out the limbo time frame.
    So, if I buy 50,000 shares, I can sell 500 covered calls- and I can blend ITM, ATM and OTM, and use different expiration periods. I can roll out, double down, and do a lot of different things, realizing that the stock price has a low probability of any sustained uptick. I can lower my basis on the shares significantly, while generating substantial returns.
    Feb 18, 2015. 08:57 PM | Likes Like |Link to Comment