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| Being President has its perks! |
Wednesday, March 30, 2011
Did Obama cut in line for his iPad 2?
Actually, he got it before the general public! OMG!!!! If the tea partiers were mad before, wait until they hear about this!
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Saturday, March 26, 2011
Pepsi Co. Buy Write
I prefer to drink Coke, but think Pepsi might be a better investment. Everyone knows about Pepsi so I'm not going to say much about it. Here is the buy-write:
Buy 100 PEP @ 63.94: ($6,394)
Sell 1 Jan 13 62.5 call @ 6.54 654
Sell 1 Jan 13 65 put @ 8.00 800
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Total outlay: ($4,944)
Potential return: $1,158 plus any dividends collected over the next 18+months. After dividends, the return is around 30% on a stock that doesn't have to go up at all from todays price.
Break-even on the trade is 57.22 or about 10% below current prices.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Buy 100 PEP @ 63.94: ($6,394)
Sell 1 Jan 13 62.5 call @ 6.54 654
Sell 1 Jan 13 65 put @ 8.00 800
-----------------------------------------------------------
Total outlay: ($4,944)
Potential return: $1,158 plus any dividends collected over the next 18+months. After dividends, the return is around 30% on a stock that doesn't have to go up at all from todays price.
Break-even on the trade is 57.22 or about 10% below current prices.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Free webinar discussing selling options
Dr. Paul Price over at BeatingBuffett.com is offering a free webinar on selling options and how he picks stocks to sell options on. I suggest you listen to it if you want to learn more about the buy-write strategy as he has mastered it and knows what he is talking about. Below is the link.
http://www.beatingbuffett.com/?p=3334
Click the green "CLICK HERE FOR WEBINAR REPLAY" about halfway down the post.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
http://www.beatingbuffett.com/?p=3334
Click the green "CLICK HERE FOR WEBINAR REPLAY" about halfway down the post.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Thursday, March 17, 2011
Manipulation 101
Today an analyst at JMP Securities (interesting how its so similar to JPM.....accidental credibility perhaps) did the unthinkable and downgraded Apple. This sent the stock down nearly 5% on the day and spooked a lot of people. The time during options expiration week is pretty interesting, as well as how he ignored the insatiable demand for the iPad 2. But his reasons for downgrading are also very suspect. Here is a link to the WSJ discussing it.
He cites slowing sales growth at Hon Hai, the owner of the main manufacturer of some of Apple's products, as evidence that Apple is not producing as many products. Correlation does not imply causation. This is just ridiculous. You can look around at all the sold out iPads, the fact that Verizon now has 12% of the iPhone traffic and has only been selling them a month, and see that if anything, Apple is producing more!
His logic goes like this: Hon Hai's sales are decreasing. Hon Hai's makes Apple products. Therefore, Apple must not be producing as many products and sales will fall. How do we know they just aren't producing as many products for other people because people just want iPads and iPhones? Maybe they are just slowing down because of the Chinese New Year? Perhaps they just can't afford to make some products because they operate on razor thin margins and the drubbing of the dollar has made it unprofitable to make them anymore? I would take this report with a grain of salt.
I honestly would not be surprised if this firm has a short position in Apple and is just trying to manipulate the stock for their own gain. But it doesn't matter, because now you can get AAPL even cheaper!
Hopefully this guy will be banned from buying an iPad!
Also, here is why there is a shortage of iPads.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
He cites slowing sales growth at Hon Hai, the owner of the main manufacturer of some of Apple's products, as evidence that Apple is not producing as many products. Correlation does not imply causation. This is just ridiculous. You can look around at all the sold out iPads, the fact that Verizon now has 12% of the iPhone traffic and has only been selling them a month, and see that if anything, Apple is producing more!
His logic goes like this: Hon Hai's sales are decreasing. Hon Hai's makes Apple products. Therefore, Apple must not be producing as many products and sales will fall. How do we know they just aren't producing as many products for other people because people just want iPads and iPhones? Maybe they are just slowing down because of the Chinese New Year? Perhaps they just can't afford to make some products because they operate on razor thin margins and the drubbing of the dollar has made it unprofitable to make them anymore? I would take this report with a grain of salt.
I honestly would not be surprised if this firm has a short position in Apple and is just trying to manipulate the stock for their own gain. But it doesn't matter, because now you can get AAPL even cheaper!
Hopefully this guy will be banned from buying an iPad!
Also, here is why there is a shortage of iPads.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Tuesday, March 15, 2011
The iPad says there's no inflation, so there is no inflation
Almost every commodity, other than natural gas, is up the past 6 months. Oil, corn, copper, iron, wheat, soybeans have all had tremendous increases in price, some of them doubling and tripling in price. But the federal reserve says to ignore all that because this year's iPad model is the same price as last years.
Unfortunately, as one attendee said, " "I can't eat an iPad." I also can't put an iPad in my gas tank. But I can kill the green pigs that ate my eggs, so it's all cool. Perhaps we should give iPads to all the people rioting around the world because they can't afford food. In fact the first generation iPad has actually dropped in price, which is clearly evidence of the dreaded deflation.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
Unfortunately, as one attendee said, " "I can't eat an iPad." I also can't put an iPad in my gas tank. But I can kill the green pigs that ate my eggs, so it's all cool. Perhaps we should give iPads to all the people rioting around the world because they can't afford food. In fact the first generation iPad has actually dropped in price, which is clearly evidence of the dreaded deflation.
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
This Guy (or Gal) is a True Winner
If you haven't heard, Berkshire Hathaway is buying specialty chemical company Lubrizol (LZ) for $135, a 28% premium from its previous close.
But here is an interesting little trade that occurred last Wednesday. I wish I had this kind of luck. Less than a week after buying those options, the company is bought out and the options are sold for a cool $5.71 million dollar gain!
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.
But here is an interesting little trade that occurred last Wednesday. I wish I had this kind of luck. Less than a week after buying those options, the company is bought out and the options are sold for a cool $5.71 million dollar gain!
Disclosure: I may or may not own any of the securities mentioned and am not an investment advisor. Please do your own due diligence before investing in any securities mentioned.