Hello my friends, I'm starting to get over the disappointment and sheer distate for the election results. Over the last little while I've continued to read and mark down thoughts. Here are a few:
Rich Karlgaard said this about the future: " . . . if the economy is thwarted by high taxes and complex regulation--- then welcome to the new normal of 2% annual growth."
Earlier this year there was an editorial in the WSJ about the Dodd-Frank monstrosity. Said they: "taxpayers must be thrilled to know that 2,300 pages of Dodd-Frank have succeeded in codifying and enhancing the ability of regulators to exercise their own own discretion based on gut instinct."
My thoughts are that Dodd-Frank is far more dangerous to our society, our economy and our freedoms than ObamaCare. And that's saying a lot.
"Economic liberty is tied to political liberty." ~~Mark Levin
More later.
I'd love to hear from you.
Wade
Saturday, November 10, 2012
Wednesday, November 7, 2012
Election Night 2012
Hello my friends,
I'm sitting here on election night. I sure do love this country. It is so disappointing to see what is happening.
Here's a quote from long ago. "The punishment which the wise suffer who refuse to take part in the government, is to live under the government of worse men." ~~Plato
I'm sitting here on election night. I sure do love this country. It is so disappointing to see what is happening.
Here's a quote from long ago. "The punishment which the wise suffer who refuse to take part in the government, is to live under the government of worse men." ~~Plato
Sunday, October 21, 2012
Abundance, Scarcity and Fairness
I was listening to the results of a poll/survey the other day. The question was asked:
"If an employee works harder and longer than others should he be paid more money?"
A good question.
88% of Republicans said yes.
32% of Democrats said yes.
I don't know if there was another part to this. This is telling. So, I thought I'd ask Ds & Rs here. I got about the same results.
Then m'thoughts, what if the query was slightly different? I changed it to this: "If you work longer and harder than others, should you be paid more?
The overwhelming response was yes. In fact, not one person answered no.
I also want to add that it amazes me that Liberals will curtail or destroy the chances of millions so long as a few don't make it bigtime. So many people live a life of scarcity, which is a failed policy. There is no credible evidence of a law of scarcity. We can and should live a life of abundance.
Do you know the word "multiply" is used more times in the Bible than the word "add?" God's love is a love of abundance, even when we don't deserve it.
I wrote extensively on this topic in: BUSINESS BUY THE BIBLE. I hope you have a chance of readng it.
Intellectual food for thought.
You Friendly Enigmatist,
Wade
"If an employee works harder and longer than others should he be paid more money?"
A good question.
88% of Republicans said yes.
32% of Democrats said yes.
I don't know if there was another part to this. This is telling. So, I thought I'd ask Ds & Rs here. I got about the same results.
Then m'thoughts, what if the query was slightly different? I changed it to this: "If you work longer and harder than others, should you be paid more?
The overwhelming response was yes. In fact, not one person answered no.
I also want to add that it amazes me that Liberals will curtail or destroy the chances of millions so long as a few don't make it bigtime. So many people live a life of scarcity, which is a failed policy. There is no credible evidence of a law of scarcity. We can and should live a life of abundance.
Do you know the word "multiply" is used more times in the Bible than the word "add?" God's love is a love of abundance, even when we don't deserve it.
I wrote extensively on this topic in: BUSINESS BUY THE BIBLE. I hope you have a chance of readng it.
Intellectual food for thought.
You Friendly Enigmatist,
Wade
Monday, September 10, 2012
Family
I read a great quotation earlier today, and it caused me to feel a great love for my family and friends.
I mostly made me feel love for my wife.
To me, Laura is the essense of God's love. I see in her beauty and love and all that is praiseworthy, and she has a good report card. Heh, heh, a little schoolyard humor there.
Anyway here's the quote by Donna Leon, in one of her whodunnit books:
"How beautiful, the grace of women; how soft their charity."
Love to you all.
Wade
I mostly made me feel love for my wife.
To me, Laura is the essense of God's love. I see in her beauty and love and all that is praiseworthy, and she has a good report card. Heh, heh, a little schoolyard humor there.
Anyway here's the quote by Donna Leon, in one of her whodunnit books:
"How beautiful, the grace of women; how soft their charity."
Love to you all.
Wade
Saturday, September 1, 2012
Protecting the Constitution
Thomas Sowell said: "The Constitution of the United States cannot protect us unless we protect the Constitution." And it is under attack. I just read a Wall Street Journal Op/Ed that the Federal Governments Justice has just lost their 15th lawsuit against States, private citizens. Whatever they can't get through Congress they implement by fiat or by ignoring the current law and court edicts, like the moratorium on drilling in the gulf. It is a sad day, actually many days to see these thugs destroy our country.
That's it for now.
Wade
That's it for now.
Wade
Tuesday, August 21, 2012
The ups and down of Life
Here are a few thoughts on the ups and downs of life
_____________________________________________________________
HEAVEN KNOWS
May the clouds part before you on your way.
May the sun brighten your path everyday.
And when you're alone and face the night,
May the weight on your mind be light.
We have had pleasures . . . and treasures,
There were so many and many were ours.
The sun rises, the sun sets,
And life is as complex as it gets.
Anxiously running to a place we'd rather not go,
Wondering and worrying because we do not know.
Our strength does wax and wane,
And we feel out of control again.
We must bow our heads again,
So we can lift our chins, and begin.
Our connection to Diety, sometimes strong,
Is the one connection that is never wrong.
Heaven knows where to find us,
And Heaven's cause is always just.
While we are in the heat of life's blows,
May we learn what an angel knows.
May the angels lift the ones who fall behind,
And help in the rescue of all mankind.
At all times, Heaven wants to be known,
And is always waiting for our return home.
__________________________________________________
Wade B. Cook
Friday, May 4, 2012
CORPORATE TAXATION
When we think about corporate taxes the field of inquiry becomes muddled with . . . well, mud slung from different political positions. Any discussion has to include a reference to "static" or "dynamic" considerations. Liberals (including myopic bureaucrats in government) primarily use a static model. Conservatives, and other right thinking people, know this presents one falsehood after another. And the problem with these falsehoods is that "computer models" then dictate present and future policies.
Here's a quick example. If taxes are at 20% on $100,000 and the government raises the rate to 30%, they will not take in an extra $10,000. That's static. Life is dynamic. We all make decisions based on our interests. We cut back, we buy tax shelters. We don't expand our businesses. We prolong selling assets. As a result, we contract, the economy contracts. It's not good. And one ugly side-effect is that the government takes in less revenue. Then, the disease of stupidity catches on, and spreads among the Liberal intelligentsia like a contagion and they ask for higher rates--adding more insult.
Real world experiences teach the opposite. I'll tell a personal story. I was taking my 15 year old daughter Carrie to a class. I asked her what she thought of this same scenario. I used the same 20% and 30%. Without being prompted she said, "No, they [the government] won't take in more. People will make less. Businesses won't grow and everything goes down." Oh, the pride of Papa Wade!
Kevin A. Hassett in NATIONAL REVIEW magazine put it this way: ". . . the counter intuitive economics of corporate tax reform." It was not counter intuitive to my daughter! It's natural to think in dynamic ways. The problem we face is so many government politicians. But people adapt and adjust. In short, they make better choices for themselves.
Mr. Hassett goes on: "How did we get here? The lion's share of the blame can be pinned on Democrats. They are in such denial on this issue that President Obama's proposed corporate tax 'reform' actually would increase the taxes paid by U.S. corporations."
True, and reality must check itself at the door of reason. Lower tax rates mean an expansion of the economy. This expansion is growth. Growth is profits, jobs, a better standard of living, and all things good. Growth seems anathema to liberals.
We now have the highest corporate tax rate in the world (of all economically developed countries). The world generally gets smart. They too adjust and adapt. "The change came after an explosion of academic literature that identified clear links between lower corporate rates and economic growth." (Ibid., Hassett)
And here's the rub: Studies conclude that labor - the working people - get much if not all of the corporate tax. And the counter intuitive and comical (if the results were not so pathetic) aspect to all of this is that lower rates (broad-based and permanent) would benefit workers more than corporations. The President's economic illiterate policies are destructive and recessionary.
Here's a quick example. If taxes are at 20% on $100,000 and the government raises the rate to 30%, they will not take in an extra $10,000. That's static. Life is dynamic. We all make decisions based on our interests. We cut back, we buy tax shelters. We don't expand our businesses. We prolong selling assets. As a result, we contract, the economy contracts. It's not good. And one ugly side-effect is that the government takes in less revenue. Then, the disease of stupidity catches on, and spreads among the Liberal intelligentsia like a contagion and they ask for higher rates--adding more insult.
Real world experiences teach the opposite. I'll tell a personal story. I was taking my 15 year old daughter Carrie to a class. I asked her what she thought of this same scenario. I used the same 20% and 30%. Without being prompted she said, "No, they [the government] won't take in more. People will make less. Businesses won't grow and everything goes down." Oh, the pride of Papa Wade!
Kevin A. Hassett in NATIONAL REVIEW magazine put it this way: ". . . the counter intuitive economics of corporate tax reform." It was not counter intuitive to my daughter! It's natural to think in dynamic ways. The problem we face is so many government politicians. But people adapt and adjust. In short, they make better choices for themselves.
Mr. Hassett goes on: "How did we get here? The lion's share of the blame can be pinned on Democrats. They are in such denial on this issue that President Obama's proposed corporate tax 'reform' actually would increase the taxes paid by U.S. corporations."
True, and reality must check itself at the door of reason. Lower tax rates mean an expansion of the economy. This expansion is growth. Growth is profits, jobs, a better standard of living, and all things good. Growth seems anathema to liberals.
We now have the highest corporate tax rate in the world (of all economically developed countries). The world generally gets smart. They too adjust and adapt. "The change came after an explosion of academic literature that identified clear links between lower corporate rates and economic growth." (Ibid., Hassett)
And here's the rub: Studies conclude that labor - the working people - get much if not all of the corporate tax. And the counter intuitive and comical (if the results were not so pathetic) aspect to all of this is that lower rates (broad-based and permanent) would benefit workers more than corporations. The President's economic illiterate policies are destructive and recessionary.
Monday, April 9, 2012
EASTER
April 8, 2012
I love the Easter season. I love everything about it. Today, Sunday is just beautiful out. The sky is a deep blue and the wind is only blowing slightly. When it picks up a bit it brings a cold chill.
I wonder if the weather was such in the Judean desert so long ago. I can't but imagine that the desert flowers were in bloom in all their simple, yet regal majesty. Spring, Easter, a new hope, a renewing and a refreshing.
In church today the scriptures once again exploded in meaning. Again my heart was touched. I know that my Redeemer lives. I know that his death and resurrection brought about because of His great and gracious love for us is unfathomable. Yet, I marvel and know because of our Messiah that we will be reconciled to God, the Father.
He came to bring us home.
Sincerely, Wade
I love the Easter season. I love everything about it. Today, Sunday is just beautiful out. The sky is a deep blue and the wind is only blowing slightly. When it picks up a bit it brings a cold chill.
I wonder if the weather was such in the Judean desert so long ago. I can't but imagine that the desert flowers were in bloom in all their simple, yet regal majesty. Spring, Easter, a new hope, a renewing and a refreshing.
In church today the scriptures once again exploded in meaning. Again my heart was touched. I know that my Redeemer lives. I know that his death and resurrection brought about because of His great and gracious love for us is unfathomable. Yet, I marvel and know because of our Messiah that we will be reconciled to God, the Father.
He came to bring us home.
Sincerely, Wade
Wednesday, February 29, 2012
BOOK REVIEW - "SHOOTING STARS"
SHOOTING STARS BOOK---SET TO BLAST OFF.
Evil has a new name. It's Gershon. Far, Far Away in the Zodiacs, a political and economic common weal of twelve independent constellations, this evil and treacherous maniac is accumulating power. He does so by robbing people of their freedom with lies and sophistry. Then when people and other sentient beings realize they've been duped and turn back to freedom, he, along with his evil minion squash them---destroying, killing, enslaving them in horrible ways.Upon his rise to power, the last of the Royal Zodian line went into hiding, even sending off for safety their Prince and his Princess from Vega, and their baby daughter, Stella. Together this marriage formed an alliance of the Summer Triangle, but before this freedom-friendly and powerful alliance could take effect, Gershon had already subverted the twelve stewards. The war raged on and Gershon would not give up his devious and insidious plans to destroy the last vestiges of the Royal Family.
Stella is now a young woman, a teenager exactly, who was hidden away and protected from all of this. And, she had a brother, the new Prince, who Gershon knew nothing of. Now alone, without the guidance of their parents, they learn from Maximus, their protector, of their heritage, royal gifts and destiny---if they choose to accept it. One such gift is to travel as SHOOTING STARS. This transport is faster than the speed of light---it is travel at the speed of thought.Leslie Hodgson, the author of this compelling book, builds on this and winds these two teenagers through their learning trials, has them meet and befriend a stately Winged Horse named Arrow from Pegasus, and Helios, a Dragon from the constellation Draco.
Gershon is not just waiting for them, but is luring them into a trap---to use them for his evil designs or to kill them. Millions will die, and these young people have to grow up fast. As in all ages and in all places the war between tyranny and liberty rages on. The costs are dear. SHOOTING STARS is a page-turning, riveting novel of loss and triumph. You'll feel like you're soaring though the galaxies with Isaac and Stella.Now available at Amazon.com. Shooting Stars, by Leslie Hodgson
Option Pricing and Covered Calls
I want to write in response to one of the blog-site followers, Erin Shabowitsky. She was concerned that there are not too many good covered calls right now. I say yes, especially if you want more than 2% a month cash returns.
Why? The reasons are varied, so let me try to put some perspective. Stocks climb a wall of worry. As the market has moved higher and higher, the premiums are depressed. The fluff is sucked out of the option price. Remember, "when a stock goes up implied volatility goes down (with call options).
Normally we would see an option on BAC at $8 in the .50 cents to .80 cents range. Not now. The $8 calls are about .15 cents and the April options are not much more, say .30 cents. Virtually all the stocks I check are this way.
"FEAR IS PURE AND POTENT, GREED IS ALWAYS TEMPERED WITH REALITY."
There is too much reality out there. It looks like the market wants to move higher, and in many ways (P/E ratios, EPS, even book value) that would be justified, but it also looks like it needs a short to mid-level correction. I bet on that. Reality will set in and it will back off some. At that time option prices will increase. Will they soar? I don't know, that depends on the amount of the downturn or correction.
Just keep your powder dry. Don't spend your capital, be patient.
Why? The reasons are varied, so let me try to put some perspective. Stocks climb a wall of worry. As the market has moved higher and higher, the premiums are depressed. The fluff is sucked out of the option price. Remember, "when a stock goes up implied volatility goes down (with call options).
Normally we would see an option on BAC at $8 in the .50 cents to .80 cents range. Not now. The $8 calls are about .15 cents and the April options are not much more, say .30 cents. Virtually all the stocks I check are this way.
"FEAR IS PURE AND POTENT, GREED IS ALWAYS TEMPERED WITH REALITY."
There is too much reality out there. It looks like the market wants to move higher, and in many ways (P/E ratios, EPS, even book value) that would be justified, but it also looks like it needs a short to mid-level correction. I bet on that. Reality will set in and it will back off some. At that time option prices will increase. Will they soar? I don't know, that depends on the amount of the downturn or correction.
Just keep your powder dry. Don't spend your capital, be patient.
Sunday, February 26, 2012
The Business of America
Hello my friends. I've been very blessed lately. I've had an opportunity to study the Federalists Papers. In the editors preface, he comments on parts of the papers that deal with commerce, wealth and the like. A most profound statement.
His name is Isaac Kramnick, the editor of the 1987 edition of THE FEDERALISTS PAPERS (In their original content and format), said of Alexander Hamilton's quote in #12: "The prosperity of commerce is now perceived and acknowledged by all enlightened statement to be the most useful as well as the most productive source of national wealth . . . By multiplying the means of gratification . . . it seems to vivify and invigorate all the channels of industry and to make them flow with greater activity and copiousness."
The Business of America is Business. When will liberals learn this? And success at this endeavor and all others is freedom. The battle between Tyranny and Freedom is raging on.
His name is Isaac Kramnick, the editor of the 1987 edition of THE FEDERALISTS PAPERS (In their original content and format), said of Alexander Hamilton's quote in #12: "The prosperity of commerce is now perceived and acknowledged by all enlightened statement to be the most useful as well as the most productive source of national wealth . . . By multiplying the means of gratification . . . it seems to vivify and invigorate all the channels of industry and to make them flow with greater activity and copiousness."
The Business of America is Business. When will liberals learn this? And success at this endeavor and all others is freedom. The battle between Tyranny and Freedom is raging on.
Monday, January 30, 2012
Observations on the DOW
I just wanted to make a quick observation. I read recently that the Dow (DJIA, hence the ETF DIA) has not moved up or down more than 100 points a day in about three weeks. I think it's continuing. Look at today. The Dow started down almost 100 points, dropped slightly below that for seconds, and then struggled back all day, closing down 6 points.
If this is the "market at hand," then you can make money. Here's the point. If the DJ futures show down 100 points, and you grab the puts, say the $125s (On the DIA) or the $125 calls if it's showing up that much, then it might be good for a .50 cent profit, or $500.
Even smaller amounts of money will work for a few hundred dollars. I heard Kina got out of her $125 with a $200 profit. Not much, but it's better than a _____________________ (you get creative here).
More Later. Wade
_____________________________________
From the MONEY & POLITICS FILE:
I recently read a great quote from Thomas Jefferson: "I have sworn upon the alter of God, eternal hostility against every form of tyranny over the mind of man."
If this is the "market at hand," then you can make money. Here's the point. If the DJ futures show down 100 points, and you grab the puts, say the $125s (On the DIA) or the $125 calls if it's showing up that much, then it might be good for a .50 cent profit, or $500.
Even smaller amounts of money will work for a few hundred dollars. I heard Kina got out of her $125 with a $200 profit. Not much, but it's better than a _____________________ (you get creative here).
More Later. Wade
_____________________________________
From the MONEY & POLITICS FILE:
I recently read a great quote from Thomas Jefferson: "I have sworn upon the alter of God, eternal hostility against every form of tyranny over the mind of man."
Tuesday, January 24, 2012
2012 Part 2
Hi again. I know you've been anxiously waiting my comments on my prognostication for the rest of the year. So here we go. In short, it's stuck. After I wrote the first blog, saying the same thing and commented on the fact that to an extent the market will be political-news driven, I was reading an article/opinion in Investor's Business Daily. It stated: "Look for ups and downs in the polls to have just as much, if not more, influence on this year's market . . ." I couldn't have said it better. I'll repeat my own take on this. The market wants the current president to go back to Hawaii or Chicago or wherever. He has worn out his welcome.
The year 2011 came and left with a whimper. Our market ended about where it started. However, there were some serious gyrations during the year, especially last August. So we were flat. The rest of the world did not fair so well. Germany and France were down 20%. Brazil was down 26% (even after Miss Hillary said we should be more like Brazil). In Asia, Japan was down 16%, India down 40%, Hong Kong down 18%, Taiwan down 25% and the new gorilla in the China Shoppe was China, with it's small public companies down 36%. I say small because their biggest companies are not up to our standards.
So, even the liberal LA Times said it's been a "pretty good year." Some would say we were in a bear market. If you define a bear market as a reduction in the market of 20% or more, than we were. But hold your horses. Nobody, especially in the Obama-Obsessed-Media will call it that. It all depends when your starting point and ending point is. It depends on your definition of "is." I guess I should join them and blame it on Pres. Bush, but this "recovery" started two full years into this presidency.
Lastly, I'm an eternal optimist. The American economy and Americans in general are too strong and too resilient to even let this Neo-Marxist administration keep us down for long. The IBD said, " . . . the fact that our country is being run by the most anti-business, anti-capitalist, anti-free-market, anti-entreprenuer and anti-Wall Street administration in U.S. history."
This year will plod along. There will be plenty of opportunities to buy good stocks. Plenty of chances to make extra income. And plenty of time to get your own business up and going.
May you prosper well.
Wade
The year 2011 came and left with a whimper. Our market ended about where it started. However, there were some serious gyrations during the year, especially last August. So we were flat. The rest of the world did not fair so well. Germany and France were down 20%. Brazil was down 26% (even after Miss Hillary said we should be more like Brazil). In Asia, Japan was down 16%, India down 40%, Hong Kong down 18%, Taiwan down 25% and the new gorilla in the China Shoppe was China, with it's small public companies down 36%. I say small because their biggest companies are not up to our standards.
So, even the liberal LA Times said it's been a "pretty good year." Some would say we were in a bear market. If you define a bear market as a reduction in the market of 20% or more, than we were. But hold your horses. Nobody, especially in the Obama-Obsessed-Media will call it that. It all depends when your starting point and ending point is. It depends on your definition of "is." I guess I should join them and blame it on Pres. Bush, but this "recovery" started two full years into this presidency.
Lastly, I'm an eternal optimist. The American economy and Americans in general are too strong and too resilient to even let this Neo-Marxist administration keep us down for long. The IBD said, " . . . the fact that our country is being run by the most anti-business, anti-capitalist, anti-free-market, anti-entreprenuer and anti-Wall Street administration in U.S. history."
This year will plod along. There will be plenty of opportunities to buy good stocks. Plenty of chances to make extra income. And plenty of time to get your own business up and going.
May you prosper well.
Wade
Thursday, January 12, 2012
POTENTIAL CASH FLOW DEALS
Hi there my friends.
I haven't forgotten to write the next piece in the comment category about 2012. I'm working on it right now. Well not right right now, but when I finish this blog I'll wrap it up. In fact, I have more than one blog to write. It's not just about the market or the economy, but about how to use this information to make more money. I'll call it "2012 part 2, and then part 3.
POTENTIAL CASH FLOW DEALS.
The market is not heating up. In fact, it's having a devil of a time with 12,400 (The Dow). But there are always trades to be made and profits to be gathered in. Here are some covered call possibilities for Feb. One has a good Jan. premium, so let's get to it.
ROYL: The stock was at $4.65. the Feb. S45 calls were .35 cents to sell. 1,000 shares would be $4,650, so if you sold the $5 calls and actually got called out, you'd make another $350. But you'd take in $350 now for agreeing to sell the stock at $5. It's not 10% but it's not bad. Look at a chart on this company. It has signed a pretty big deal and it's future looks good at this time, albeit things can change.
ELN: I've traded this one off and on for years. The stock is at $13.65, or $13,650 to buy. If you used margin that would be about $6,825. The $13 calls are going for $1.20 to sell. If you did so and got called out, you would adjust your profits by $650 against your gain. Still, you would take in $1,200 dollars for selling 10 contracts at $1.20 each, or $1,200. That would be a net of $550. But take a look at the $14 calls. They going for l65 cents to sell, or $650 now. You get to keep this no matter what. If the stock goes above $14 and you get called out, you'd make another $350 ( $13,650 up to $14,000 = $350). So, take in $650 and potentially make another $350. Pretty good cash flow now, and good potential for more later.
BAC: Look at Bank of America (BAC). The stock is at $6.50. Look at the Jan $6 calls. Yes, these expire next week, Jan. 21st. They are going for .90 cents to sell. That's $900 for you right now. If you get called out you'd have to give back .50 cents, or $500. That's a cool $400 for a week and a few days.
Now, look at the February $6 calls. They're going for $1.00 to sell. That is $1,000 and the same scenario if you get call out. Here's a good look at a choice and the difference it would make. I say, take the money at hand. Sometimes the near-term option is not going for much, so go on out to the next month. However $900 is $900. If the stock goes down, you can buy-back the option for less, keep the stock and then sell the February's then.
There are similar profits to ELN in JDSU. Also look at MU, RMBS, FRO, and even JBLU.
Happy Investing and Trading. Let me know how it goes or if you have any questions.
Your humble autodidact,
Wade
I haven't forgotten to write the next piece in the comment category about 2012. I'm working on it right now. Well not right right now, but when I finish this blog I'll wrap it up. In fact, I have more than one blog to write. It's not just about the market or the economy, but about how to use this information to make more money. I'll call it "2012 part 2, and then part 3.
POTENTIAL CASH FLOW DEALS.
The market is not heating up. In fact, it's having a devil of a time with 12,400 (The Dow). But there are always trades to be made and profits to be gathered in. Here are some covered call possibilities for Feb. One has a good Jan. premium, so let's get to it.
ROYL: The stock was at $4.65. the Feb. S45 calls were .35 cents to sell. 1,000 shares would be $4,650, so if you sold the $5 calls and actually got called out, you'd make another $350. But you'd take in $350 now for agreeing to sell the stock at $5. It's not 10% but it's not bad. Look at a chart on this company. It has signed a pretty big deal and it's future looks good at this time, albeit things can change.
ELN: I've traded this one off and on for years. The stock is at $13.65, or $13,650 to buy. If you used margin that would be about $6,825. The $13 calls are going for $1.20 to sell. If you did so and got called out, you would adjust your profits by $650 against your gain. Still, you would take in $1,200 dollars for selling 10 contracts at $1.20 each, or $1,200. That would be a net of $550. But take a look at the $14 calls. They going for l65 cents to sell, or $650 now. You get to keep this no matter what. If the stock goes above $14 and you get called out, you'd make another $350 ( $13,650 up to $14,000 = $350). So, take in $650 and potentially make another $350. Pretty good cash flow now, and good potential for more later.
BAC: Look at Bank of America (BAC). The stock is at $6.50. Look at the Jan $6 calls. Yes, these expire next week, Jan. 21st. They are going for .90 cents to sell. That's $900 for you right now. If you get called out you'd have to give back .50 cents, or $500. That's a cool $400 for a week and a few days.
Now, look at the February $6 calls. They're going for $1.00 to sell. That is $1,000 and the same scenario if you get call out. Here's a good look at a choice and the difference it would make. I say, take the money at hand. Sometimes the near-term option is not going for much, so go on out to the next month. However $900 is $900. If the stock goes down, you can buy-back the option for less, keep the stock and then sell the February's then.
There are similar profits to ELN in JDSU. Also look at MU, RMBS, FRO, and even JBLU.
Happy Investing and Trading. Let me know how it goes or if you have any questions.
Your humble autodidact,
Wade
A New Year
Hello my New Year's Friends.
This is going to be a great year---not because of a rampaging bull-market, but because we deal with the market at hand. We take what it gives us and we put market forces to work for us. I've written several thoughts, about the market, the political arena and the economy.
ITEM #1: I still do not think we'll have that rampaging bull market. Many have commented on the fact that it's an election year. This time, I don't agree. Usually the third year of a presidency is the best of the four years. That didn't pan out last year, with the markets closing up or down a fraction of the beginning. I think political news will give short-term direction to the movements in the market. Notice I didn't say that political news and opinions, would drive the market up a big way, or down by big moves. I think, for the most part, it is range bound. I think the Dow (The DJIA 30 stocks), to the extent that it represents the whole market, will trade between 11,600 and 12,800. And those two points are the extremes. If the market goes higher or lower, I think it will be only temporary---or better said, those moves will be outliers. Then it will settle back within those perimeters. In short, it's stuck. I've written before what it will take, and I'll mention it briefly here: We need a repeal of Sarbanes-Oxley---especially Reg. FD, or Regulation Fair Disclosure. What a destructive law. And it would be a great boon to get rid of the new law passed last summer: Dodd-Frank. We have not yet seen the destruction that this law will cause. It's horrible.
I won't wax too political here, but a simple observation. Many people think that the current administration is dangerous for America. I do too. I project that every time news comes out that the Republicans will win the presidency (and to a lesser extent the Senate) the market will go up, almost despite the quarterly news cycle or news out of Europe. Conversely, every time news or polls come out that point to four more years of the current socialist agenda, the market will go down.
I hear and read this sentiment everywhere. It will get more pronounced as we get near election day.
ITEM #2: I was reading an article in Barron's that said, in regards to the market this year, 2012. He said overall that " . . . state of the market, Corporate America, the economy and the world." I think this mirrors my own feelings, in that there is more to a stock price movement, or a whole market movement than just earnings, though I think earnings are vastly important. Read two paragraphs below.
Recently I wrote a blog entitled "Picturesque." I stated that we look at a stock or a company and have to consider the arena of its existence, the whole market, the economy and the whole world, especially the current state of Europe (Which I hope is not our destiny). I will now add one more consideration to the list: It is the product or service of the company. Look at LuluLemon Athletica (LULU). I think the Barron's quotation is right on, but some of the points seem confusing, in that they are redundant. Again, you will not make decisions in a vacuum. You will not invest in a stock that is unaffected by Presidential decisions or liberal policies.
All of these aspects effect earnings and earnings growth. Remember, a stock price today is based on one thing: "A STOCK PRICE TODAY IS BASED ON THE ANTICIPATION OF FUTURE EARNINGS." Do you see how interest rates, a debt crisis, a lawsuit, a new competitor, or a host of other things effect the price of a stock?
I hope to be of service this coming year. I will study and contemplate things and try to help you connect the dots better.
Wade
This is going to be a great year---not because of a rampaging bull-market, but because we deal with the market at hand. We take what it gives us and we put market forces to work for us. I've written several thoughts, about the market, the political arena and the economy.
ITEM #1: I still do not think we'll have that rampaging bull market. Many have commented on the fact that it's an election year. This time, I don't agree. Usually the third year of a presidency is the best of the four years. That didn't pan out last year, with the markets closing up or down a fraction of the beginning. I think political news will give short-term direction to the movements in the market. Notice I didn't say that political news and opinions, would drive the market up a big way, or down by big moves. I think, for the most part, it is range bound. I think the Dow (The DJIA 30 stocks), to the extent that it represents the whole market, will trade between 11,600 and 12,800. And those two points are the extremes. If the market goes higher or lower, I think it will be only temporary---or better said, those moves will be outliers. Then it will settle back within those perimeters. In short, it's stuck. I've written before what it will take, and I'll mention it briefly here: We need a repeal of Sarbanes-Oxley---especially Reg. FD, or Regulation Fair Disclosure. What a destructive law. And it would be a great boon to get rid of the new law passed last summer: Dodd-Frank. We have not yet seen the destruction that this law will cause. It's horrible.
I won't wax too political here, but a simple observation. Many people think that the current administration is dangerous for America. I do too. I project that every time news comes out that the Republicans will win the presidency (and to a lesser extent the Senate) the market will go up, almost despite the quarterly news cycle or news out of Europe. Conversely, every time news or polls come out that point to four more years of the current socialist agenda, the market will go down.
I hear and read this sentiment everywhere. It will get more pronounced as we get near election day.
ITEM #2: I was reading an article in Barron's that said, in regards to the market this year, 2012. He said overall that " . . . state of the market, Corporate America, the economy and the world." I think this mirrors my own feelings, in that there is more to a stock price movement, or a whole market movement than just earnings, though I think earnings are vastly important. Read two paragraphs below.
Recently I wrote a blog entitled "Picturesque." I stated that we look at a stock or a company and have to consider the arena of its existence, the whole market, the economy and the whole world, especially the current state of Europe (Which I hope is not our destiny). I will now add one more consideration to the list: It is the product or service of the company. Look at LuluLemon Athletica (LULU). I think the Barron's quotation is right on, but some of the points seem confusing, in that they are redundant. Again, you will not make decisions in a vacuum. You will not invest in a stock that is unaffected by Presidential decisions or liberal policies.
All of these aspects effect earnings and earnings growth. Remember, a stock price today is based on one thing: "A STOCK PRICE TODAY IS BASED ON THE ANTICIPATION OF FUTURE EARNINGS." Do you see how interest rates, a debt crisis, a lawsuit, a new competitor, or a host of other things effect the price of a stock?
I hope to be of service this coming year. I will study and contemplate things and try to help you connect the dots better.
Wade
Monday, January 2, 2012
EL Stock Split
Estee Lauder is doing a 2:1 stock split on Jan 12th. Look at the chart below. It's a perfect stock split chart. See how it ran up on the announcement. Then it formed a bit of a rolling pattern, with an upward bias. It looks good around $108 to $110 to buy a call.
That would be the trade to catch the rolls, and then try to position in, like MOlly did with Ross Stores, on the rally into the split. I just read an article about EL and it's doing very well.
That would be the trade to catch the rolls, and then try to position in, like MOlly did with Ross Stores, on the rally into the split. I just read an article about EL and it's doing very well.
WRITING COVERED CALLS
We've had a few disappointments with some of the stocks chosen to use for covered call writing. We can always improve in the choice department. If we look at just the numbers we often get a lopsided picture. We also must remember to put in our stop losses to protect the downside.
These stocks and their options are not that large in terms of rate of return. In fact they're weak. Why? Part of this is that the market is range-bound. Look at a chart of the Dow. Look below at the DIA, an ETF stock of the Dow 30. It looks like the current range for support to resistance is about 350 to 400 points---say, 11,800 on the support side and 12,200 or so on the resistance end. Will it go higher? Who knows. We're heading into January, but the market is climbing a wall of worry.
So, don't look for great options. The implied volatility in the option prices is lower right now.
LOOK AT THESE DEALS:
CLWR: the stock is at $1.90; a thousand shares is $1,900. the February $2 calls are.20 cents, or $200. But see commissions wipes out a lot of this.
FRO looks good. This is a large container shipping company, Frontline. The stock was $4.10. The Jan $4 calls were .40 X .45 cents. So .40 cents to sell, or $400. The Feb. $4 calls were .65 cents to sell. Seven weeks for $650 now, and maybe a give back of $100 as the stock is .10 cents in the money, or $100.
ROYL was $4.60 and the Feb $5 calls were .30 X .55 cents. There is such a large spread you can probably get .40 cents.
YHOO at $16.08 has Jan $16 calls at .77 to sell and Feb $16 calls at $1.19.
Even Sprint (S) is at $2.28 with Feb $2 calls at .42 cents.
Look at MBI. This used to be one of my favorites. Stock at $11.60 and the Feb $11 calls were going for $1.60 and the Feb $12s were going for $1.12 to sell.
This last one looks good. check it out. I also like FRO. Big decisions ahead for you and your broker.
More later.
Wade
These stocks and their options are not that large in terms of rate of return. In fact they're weak. Why? Part of this is that the market is range-bound. Look at a chart of the Dow. Look below at the DIA, an ETF stock of the Dow 30. It looks like the current range for support to resistance is about 350 to 400 points---say, 11,800 on the support side and 12,200 or so on the resistance end. Will it go higher? Who knows. We're heading into January, but the market is climbing a wall of worry.
So, don't look for great options. The implied volatility in the option prices is lower right now.
LOOK AT THESE DEALS:
CLWR: the stock is at $1.90; a thousand shares is $1,900. the February $2 calls are.20 cents, or $200. But see commissions wipes out a lot of this.
FRO looks good. This is a large container shipping company, Frontline. The stock was $4.10. The Jan $4 calls were .40 X .45 cents. So .40 cents to sell, or $400. The Feb. $4 calls were .65 cents to sell. Seven weeks for $650 now, and maybe a give back of $100 as the stock is .10 cents in the money, or $100.
ROYL was $4.60 and the Feb $5 calls were .30 X .55 cents. There is such a large spread you can probably get .40 cents.
YHOO at $16.08 has Jan $16 calls at .77 to sell and Feb $16 calls at $1.19.
Even Sprint (S) is at $2.28 with Feb $2 calls at .42 cents.
Look at MBI. This used to be one of my favorites. Stock at $11.60 and the Feb $11 calls were going for $1.60 and the Feb $12s were going for $1.12 to sell.
This last one looks good. check it out. I also like FRO. Big decisions ahead for you and your broker.
More later.
Wade
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