Tuesday, August 31, 2010

Thursday, August 26, 2010

Pot Luck Redux Redux Redux

(c) 2010 F. Bruce Abel

So bad on the AAPL September 260 calls I am not even checking this week.  All to get out of the August ones which I did with only losing 1/2 their value.

Wednesday, August 25, 2010

Mad Money Recap | Nightly Recap for:  Tuesday, August 24, 2010

Mad Money Recap Nightly Recap for: Tuesday, August 24, 2010: "You don't want to endure that kind of pain, while waiting for the chart to tell you whether it's safe to buy, or if it's time to sell. So again, go through your positions... If you have some profits, and you're afraid to lose them, take them!"

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Monday, August 23, 2010


(c) 2010 F. Bruce Abel

OK he did it.  Tonight he matched his "Bernanke Federal Reserve Rant."  13 minutes. I TIVO'd it for posterity. Will it work as the last one did?  I hope so. 

He started with Sunday's lead article in the New York Times, about the exodus of the individual investor from the stock market.  He attacked the entire Wall Street money managers and exchanges.  He also slipped in strong ideas for Obama including a second stimulus and reduction in taxes on capital gains for the small guy.  He said hire 50,000 people for the SEC to send some of the axxholes to jail.

More on this later.

Op-Ed Columnist - What Roger Clemens Wants - NYTimes.com

Op-Ed Columnist - What Roger Clemens Wants - NYTimes.com: "Except that cheating did taint Thomson’s famous shot. For decades, it was rumored that the Giants’ amazing 1951 stretch run — they made up a 13-game deficit to force the playoff with the Dodgers — had been abetted by a sign-stealing system devised by their manager, Leo Durocher. Finally, the truth leaked out: For the last 10 weeks of the season, and throughout the showdown with the Dodgers, the Giants used a centerfield telescope and a complex system of signals to tell their batters what pitch was coming next."

Thursday, August 19, 2010

Pot Luck Redux Redux

(c) 2010 F. Bruce Abel

So I got into 10 September 260 AAPL calls at $5.50.  Loss so far.

Tuesday, August 17, 2010

Pot Luck Redux

(c) 2010 F. Bruce Abel

Little did I know that my Friday heading "Pot Luck" might meant "POT" luck.  Whereas I waited through a poor day yesterday and cleared out of my 10 260 July AAPL calls near the high today (still for a $600 loss),  POT got a takeover offer and soared 33 points.  Except that I sold it yesterday before the takeover, for a $4 profit.  I had 50 shares of POT.

Saturday, August 14, 2010

Pot Luck

Photo (c) 2010 Rebecca Abel Worple
(c) 2010 F. Bruce Abel

Wireless was slow up here in Canada Thursday.  After a week or so of no trading I placed a number of orders before hours Friday morning, below the market (except for one order, mentioned below).  Then wireless was slow again and the Schwab 800 number doesn't apply from Canada.  So I was kept in the dark until I logged on at 2:15 am Saturday (today).

For some reason on Friday afternoon I could get on the NYT and I could see the daily pattern of the indexes on the NYT website, so I figured that I may have executed around mid-day and maybe had a profit by the end of the day.

Not exactly.  I had forgotten my quickie placement of an order for 10 Apple 260 calls expiring next Friday  at 1.13 (execution price).  Put on due to a comment by Cramer in his Thursday night Mad Money.

My philosophy: life trumps trading.  My mistakes often are my best winners.  We'll see how this all pans out.  My other orders. except for 50 POT, expired at the end of the day without triggering.  POT does show a $15 profit.

Sunday, August 8, 2010

Worth a Re-Read: The Spys Who Loved Us

(c) 2010 F. Bruce Abel

This Friedman piece of July 13, 2010 attracted a lot of attention to this Blog.  I like it too, obviously, if only because it highlights that Singapore is worth studying for its fine governance.  And ministers are paid $1 million a year.  So we know the best and the brightest are equal to the people they are regulating.


Saturday, August 7, 2010

How to play commodities (and not get trampled) - The Globe and Mail

(c) 2010 F. Bruce Abel

Maybe it's just the clear air here in Cottage Country, but this Saturday Globe and Mail piece on the various ways to invest/trade commodities, I give high credence to.  Contango, for example is explained, and its effect on return within an ETF.  And since it's a Canadian newspaper I give high credence to mining discussion.  Here's a snip and the link for the full article.

How to play commodities (and not get trampled) - The Globe and Mail: "The creation of commodity-based exchange-traded funds made it a lot easier for the individual investor. But pitfalls exist there, as well, because of a futures-market phenomenon known as “contango,” when the price of a futures contract exceeds the spot price of a commodity."

Friday, August 6, 2010

'The Death of the Adversary' and 'Comedy in a Minor Key' by Hans Keilson - NYTimes.com

'The Death of the Adversary' and 'Comedy in a Minor Key' by Hans Keilson - NYTimes.com: "This unusual strategy is employed throughout “The Death of the Adversary,” whose narrator, a young man growing up during the ascendance of National Socialism, is at once obsessed with Hitler and unable to speak or even think the name of the F├╝hrer, whom he can refer to only as “my enemy” or, occasionally, “B.” The word “Nazi” is never mentioned, and only the most coded allusions are made to the fact that the protagonist is Jewish.

How I became a real Canadian - The Globe and Mail

How I became a real Canadian - The Globe and Mail: "Will future generations of Canadians continue to believe that the wilderness is central to our identity? I'm not sure. Will it ever even occur to the kids of newcomers from Pakistan or China to have sex in a canoe? I have no idea. What I can tell you is that, in the interest of research, I tried it once myself. Like most wilderness experiences, it involved a fair degree of inconvenience, effort and discomfort. But I didn't mind. At last I knew I was Canadian."

The revenge of Conrad Black - The Globe and Mail

(c) 2010 F. Bruce Abel

I like Margaret Wente on a beautiful 7:30 am morning in Cottage Country.  She writes for adults. I've liked her ever since she wrote hilariously last July that she had had sex in a canoe (  http://www.theglobeandmail.com/news/opinions/how-i-became-a-real-canadian/article1199231/ and see earlier blog)

A Canadian is someone who knows how to have sex in a canoe, -- Pierre Berton

Herein her column today on Canadian Corporate Baron and criminal Conrad Black.

The revenge of Conrad Black - The Globe and Mail: "Dear Lord Black,
Please forgive us. The envious, spiteful media mob was wrong, wrong, wrong about you all along. We hereby take it back. You are not a corporate kleptocrat. You are the victim of prosecutorial vigilantes and corporate-governance terrorists run amok, who railroaded an innocent man for their own self-aggrandizement. That dreadful law they used to throw you behind bars? Garbage! Every single judge on the Supreme Court said so. We’ve been insufferably smug and arrogant – labels we once applied to you. But now the schadenfreude is on the other foot."

Still Paying for Lehman’s Demise - Opinionator Blog - NYTimes.com

Still Paying for Lehman’s Demise - Opinionator Blog - NYTimes.com: "Oh come now, Cohan, ever hear of the corporate veil, or Indemnification Agreements or mandatory indemnification provisions of Certificates (or Articles) of Incorporation and By-Laws? How about D & O coverage? These former officers of Lehman were acting for and on behalf of Lehman, a juristic person incapable of acting without human intervention. Whatever Cohan might think, not a one of them intended to harm Lehman, just the opposite - they wanted to save it. Moreover, what person in his or her right mind takes on the risk of defending endless lawsuits without demanding protection from the institution on whose behalf he or she will be acting? Of course the Lehman estate (or the insurers) should make certain that these people are protected, even from their own mistakes, with the customary exceptions for fraud or self-dealing. The idea that still-innocent corporate servants should be stripped of the protections that are both standard and were probably bargained for is silly. Universalizability is a good test of ideas such as this: what would happen to our still-surviving capitalist system if every corporate officer and director in making every decision would first worry about his or her own potential for not just ultimate liability but for huge legal expenses? We would have exceedingly mediocre financial and business results, if not outright failures, as business risks were avoided like the plague."

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Thursday, August 5, 2010

Procter Puts

(c) 2010 F. Bruce Abel

OK, I'm siting up here in Canada with excellent wireless link and nothing but nature sounds to disturb the Procter conference call August 3rd at 8:30 am.

Sat through the whole hour and a half.  Smooth, incredibly well-done conference call.  And I had boned up on the jargon (organic sales, FX).

Procter is betting on the if-come!  Maybe that's always the case, I don't generally listen to their conference calls.  But this reminds me of the Dirk Jagger (sp?) years.  If so maybe that print at 39 during the Flash Crash wasn't so out of line.

I had bought the puts because of a deep-seated feeling that the Euro was going to be a problem and the pin-action from the Clorox, or was it Colgate, miss of last week.

From the conference call I gleaned that the Euro was not a problem.  And Moeller does not "dig" hedging, so P&G glided out of Euro problem by the natural action of the market on Euros (back above 130).  He did say FX and commodities would be a headwind going forward, so there's something to be learned about how their accounting works on this.  Makes Procter another Enron -- pretty impossible to figure what's going on.

Yes, thank God! I made money on the puts.

Monday, August 2, 2010

Procter Puts

Qty Change Open $ High Change Close $ Current Price Symbol Name Market Value Low Cost Basis Cost per Share P/L $ P/L $ per Share Bracket Sec Type Exp Strike Under

20 ($0.03) $0.60 ($0.25) $0.49 PG 09/18/2010 57.50 P PUT PROCTER & GAMBLE $57.50 EXP 09/18/10 $980.00 $0.49 $1,662.90 $83.14 ($682.90) ($0.34) none Opt Sep 18 '10 (47 days) $57.50 PG

Sub-Total $980.00 $1,662.90 ($682.90)

Cash $55,982.50

Total $56,962.50

8/2/2010 at 18:32 EDT

Monday, August 2, 2010

The Striking Price
MONDAY, AUGUST 2, 2010 Don't Gamble on Procter & Gamble


Goldman Sachs is recommending a bearish options trade on the consumer-products giant.

GOLDMAN SACHS IS TELLING clients that shares of consumer-products giant Procter & Gamble (ticker: PG) could decline after reporting fourth-quarter earnings early Tuesday.

Already, the $61.75 stock is down slightly since the bank's influential derivatives strategists, John Marshall and Maria Grant, told clients to buy August $62.50 puts for $1.02 when the stock was at $62.70.

The bearish trade is driven by concerns that Procter & Gamble's management will release full-year guidance that falls short of what analysts expect. The company's consensus-earnings estimate is 73 cents a share, though estimates amongst the 20 analysts who follow the stock range from a low of 70 cents to a high of 78 cents.

Though the stock has already fallen, the move was likely prompted by broad investor reaction to last week's news that the U.S. economy grew less than expected, which exacerbated ongoing fears that consumer spending, which drives the economy, is declining.

These broad issues will come into sharp focus Tuesday for Procter & Gamble, which is why anyone who owns the stock and is interested in hedging the shares, or anyone who is interested in speculating on its further decline, should consider buying defensive puts.

The price of the August $62.50 puts has, however, increased to $1.94. The August $60 puts, which also could be considered, are trading at 82 cents.

If the stock price continues to decline, the August $62.50 put will increase in value. The same is true for the August $60 puts. Should the stock advance, put buyers risk losing the premium paid for the put.

Andrew Sawyer, who follows Procter & Gamble for Goldman, is concerned about the company's full-year earnings-per-share outlook because American and European growth rates are tracking slightly slower than expected, while the company seems inclined to reinvest revenue to drive growth rather than using productivity savings to boost margins.

Investors expect 9% year-over-year earnings-per-share growth, which he thinks is aggressive. He estimates a range of $3.80 to $3.95 versus a consensus estimate of $3.98.

Indeed, Procter & Gamble's year-to-date stock performance has been weak. Shares are barely changed for the year, and have declined about 1.6% in the past three months.

The implied volatility for one-month puts and calls is about 16.5%, down two points in the last month. Marshall and Grant estimate Procter & Gamble's options imply the stock price will make a 2.3% earnings day move, up or down, compared to a median 2.9% move, up or down, over the past eight quarters.

As investors are increasingly trying to gauge future-earnings potential, any company that issues disappoints earnings guidance is likely to see its stock decline. For this reason, buying puts on Procter & Gamble seems like a worthy hedge.

.Comments: steve.sears@barrons.com


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Lines on Plagiarism Blur for Students in the Digital Age - NYTimes.com

Lines on Plagiarism Blur for Students in the Digital Age - NYTimes.com: "And then there was a case that had nothing to do with a younger generation’s evolving view of authorship. A student accused of plagiarism came to Mr. Dudley’s office with her parents, and the father admitted that he was the one responsible for the plagiarism. The wife assured Mr. Dudley that it would not happen again."

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