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In Case We're Wrong About The New York Times

Feb. 10, 2019 6:15 PM ETThe New York Times Company (NYT)5 Comments
David Pinsen profile picture
David Pinsen


  • President Trump has long appended the adjective "failing" to the New York Times, but the company is far from failing after its Q4 earnings beat.
  • The New York Times is now trading near 13-year highs, and was a Portfolio Armor top ten name on Thursday.
  • In the event my site ends up being wrong about it, I present two ways of hedging the stock. I also discuss how my site decides which hedge to use.
  • Looking for more? I update all of my investing ideas and strategies to members of Bulletproof Investing. Get started today »

The New York Times building in New York City (Photo by Scott Eells/Bloomberg via Getty Images).

The New York Times: Far From Failing

Starting during his campaign, as exemplified by the tweet below, President Trump frequently derided The New York Times (NYSE:NYT) as "failing."

After NYT shares hit a 13-year high following the company's Q4 beat, critics on Twitter such as Eric Wishart, below, were quick to contrast its results with the President's characterization of the paper.

The New York Times was one of the top ten Portfolio Armor names I shared with subscribers on Thursday, but it's possible my site will end up being wrong about NYT. In the event it is, below are two ways shareholders can limit their risk. As a reminder: these hedges are for NYT bulls. If you're bearish on the stock, you shouldn't own it.

Downside Protection For The New York Times

For these two examples, I'm going to assume that you have 1,000 shares of NYT and can tolerate a 20% decline over the next several months, but not one larger than that. The screen captures below are via the Portfolio Armor iPhone app.

Uncapped Upside, Positive Cost

These were the optimal, or least expensive, put options to hedge 1,000 shares of NYT against a greater-than-20% decline by late July, as of Friday's close.

Optimal Put Option for NYT via Portfolio Armor.The cost of this protection was $750, or 2.39% of position value, calculated conservatively, using the ask price of the puts (in practice, you can often buy and sell options at some price between the bid and ask.

Capped Upside, Negative Cost

If you were willing to cap your possible upside at 17% over the same time frame, this was the optimal collar to give you the same level of downside protection.

Optimal Collar for NYT via Portfolio Armor.

One difference with this hedge is that, after

To be transparent and accountable, I post a performance update for my Bulletproof Investing service every week. Here's the latest one: Performance Update - Week 62.

This article was written by

David Pinsen profile picture
I developed the hedged portfolio method of investing at Portfolio Armor, and I run a Marketplace service at Seeking Alpha based on it called Bulletproof Investing.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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