Did I get your attention? Good! Because what I am posting is quite important. I briefly heard last week a report on CNBC about the net worth of the members of congress. The headline for them was about the how many members were in the top 1%. Since I am not one to rely on my memory to give the accurate details, I found a USA Today article that reflects that story on CNBC. The title of the article is 57 members of Congress among wealthy 1%.
Now that statistic may be considered interesting, but I personally wasn't all that impressed. The one that really caught my attention blows a whole in the assumption that I made in my August 8, 2011 post entitled August 2011 Budget Bill: Where the US Government Went Wrong and reiterated again in my October 11, 2011 post entitled Again, Why Politicians Should Take a Pay Cut.
Apparently not all politicians are well off, but 5% of them are financially STUPID! Out of the 530 members of congress, 28 of them have a net worth of 0 or less. That's right! When you take the value of their assets and subtract their liabilities, the result is that they are not even treading water. Of these 28 members of congress, 4 are breaking even and the rest are drowning in debt. One is even over $4 million in the hole. That's right! $4 MILLION. And of all people, it is Democrat Alcee Hastings of Florida. But don't get too proud Republican readers. First runner up is Republican Stephen Fincher of Tennessee, with over $3 million.
To round out these statistics, let me mention that 12 of these fiscal idiots are Republicans and 16 are Democrats. I was actually surprised to see any Republicans this low in the list considering their mountain top cry for fiscal responsibility. Taking this into consideration, I don't see how anyone can side with one party or another about achieving fiscal responsibility. With only a marginal deviation, both sides of the aisle are equally inept about fiscal issues. And then today, the Super Committee "throws in the towel" in regards to coming up with a plan. Just sad.
My opinion, congresses first step should be to eliminate their own dead weight. Drop the bottom 28 members of congress and make it IMPOSSIBLE for a fiscally irresponsible person to even run for congress. They are a waist of tax payer money. Then they can take the pay cut I previously mentioned.
That is my opinion, you can take it or leave it.
Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
Monday, November 21, 2011
Friday, November 18, 2011
Portfolio Update
It has been way too long since my last post, and there is a lot to cover. So without further ado, I will get right into it.
As a result of all the European debt issues, on November 4th I STC my position of CPLP call options I BTO on October 20th. The result was a loss of ~57%. Since then, CPLP has continued to decline, and I sold my entire position on November 15th. That sale resulted in a loss of ~39%, not taking into account any of the dividends I received in the past or the dividend I received on November 16th. After doing that I continued looking at the chart for CPLP and it is channeling slightly to the upside. I might consider buying a couple Call options slightly out of the money and way out in time and wait to see if there is one of those pops that CPLP has done in the past. But at the same time, I finally learned what it means to compare PEG ratios, and apparently CPLP is over priced. So with this new knowledge, I found a couple of really "cheap" stocks in comparison that also pay dividends, GLNG and TDW.
Back on October 14th, I rolled an AAPL Call option to a higher strike price that profited me enough that I would be playing with the houses money. On November 7th I rolled this option out for another month, but unfortunately AAPL has been on the decline. Right now the AAPL Call option I own is almost worthless. At this point only a little of the profit from the original AAPL Call option position remains. I don't think I will be doing anymore rolling of this option. If it does not start rebounding, I will accept the loss.
On November 16th, I BTO positions in IWM and GLD. The plan with these is to build up positions that reflect the four asset classes. IWM for the broad market of stocks, GLD for gold, and in time, with the execution of my open order that is still pending a lower price, TLT for long term treasury bonds. The forth asset class is cash which remains in my account for the purpose of selling put options against. This is an imitation of the American Asset Management investment portfolio owned by Julian Rubinstein. And if I can hold to my plan, I should be able to produce better than his 9% a year track record.
Finally, on November 18th, I sold my lossing position in DWA. The final result of this was a loss of ~43%. As was mentioned with CPLP, I found out that the PEG for DWA indicated that it was over priced. On top of that the expectation I had that people would spend more time in theaters than traveling was too ambitious in these turbulent times. However, my research did reveal that there are two stocks in the same industry that are doing well, CNK and RGC. These two are the theaters that DWA movies play in. Despite the disappointing attendance in comparison to previous years, they both have nicer earnings than DWA. On top of that, they both pay a dividend. I might take a position in either or both stocks at some time in the future.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple Inc.
BTO - buy-to-open/bought-to-open
CNK - Cinemark Holdings Inc
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation SKG
GLD - SPDR Gold Trust
GLNG - Golar LNG Ltd.
IWM - Ishares Russell 2000
PEG - Price-to-Equity by Growth Rate ratio
RGC - Regal Entertainment Group
"rolled" - (rolling) - to sell-to-close one position and buy-to-open another position in the same group of options to take profit or extend risk.
TDW - Tidewater Inc.
STC - sell-to-close/sold-to-close
As a result of all the European debt issues, on November 4th I STC my position of CPLP call options I BTO on October 20th. The result was a loss of ~57%. Since then, CPLP has continued to decline, and I sold my entire position on November 15th. That sale resulted in a loss of ~39%, not taking into account any of the dividends I received in the past or the dividend I received on November 16th. After doing that I continued looking at the chart for CPLP and it is channeling slightly to the upside. I might consider buying a couple Call options slightly out of the money and way out in time and wait to see if there is one of those pops that CPLP has done in the past. But at the same time, I finally learned what it means to compare PEG ratios, and apparently CPLP is over priced. So with this new knowledge, I found a couple of really "cheap" stocks in comparison that also pay dividends, GLNG and TDW.
Back on October 14th, I rolled an AAPL Call option to a higher strike price that profited me enough that I would be playing with the houses money. On November 7th I rolled this option out for another month, but unfortunately AAPL has been on the decline. Right now the AAPL Call option I own is almost worthless. At this point only a little of the profit from the original AAPL Call option position remains. I don't think I will be doing anymore rolling of this option. If it does not start rebounding, I will accept the loss.
On November 16th, I BTO positions in IWM and GLD. The plan with these is to build up positions that reflect the four asset classes. IWM for the broad market of stocks, GLD for gold, and in time, with the execution of my open order that is still pending a lower price, TLT for long term treasury bonds. The forth asset class is cash which remains in my account for the purpose of selling put options against. This is an imitation of the American Asset Management investment portfolio owned by Julian Rubinstein. And if I can hold to my plan, I should be able to produce better than his 9% a year track record.
Finally, on November 18th, I sold my lossing position in DWA. The final result of this was a loss of ~43%. As was mentioned with CPLP, I found out that the PEG for DWA indicated that it was over priced. On top of that the expectation I had that people would spend more time in theaters than traveling was too ambitious in these turbulent times. However, my research did reveal that there are two stocks in the same industry that are doing well, CNK and RGC. These two are the theaters that DWA movies play in. Despite the disappointing attendance in comparison to previous years, they both have nicer earnings than DWA. On top of that, they both pay a dividend. I might take a position in either or both stocks at some time in the future.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple Inc.
BTO - buy-to-open/bought-to-open
CNK - Cinemark Holdings Inc
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation SKG
GLD - SPDR Gold Trust
GLNG - Golar LNG Ltd.
IWM - Ishares Russell 2000
PEG - Price-to-Equity by Growth Rate ratio
RGC - Regal Entertainment Group
"rolled" - (rolling) - to sell-to-close one position and buy-to-open another position in the same group of options to take profit or extend risk.
TDW - Tidewater Inc.
STC - sell-to-close/sold-to-close
Saturday, October 29, 2011
Portfolio Update
Since my last post I have made trades with AAPL, CPLP, DWA, and GLD. I have also continued to add cash to my account as said I would. This is how my portfolio stands at this time.
On October 11th, I had a BTO call option position for AAPL at the 450$ strike price. Three days later I rolled the position to the higher strike price of 485$. This profited me a net of ~95$ or 20%. The gross profit was ~375$ or 79%. This means that I am currently playing with "the houses" money as a gambler would say. This is good for me because the value of that option is now down ~98% with 22 days until expiration. I am still bullish on AAPL, but would not be surprised if I would have to roll this option at a loss just to get a little more time to see my target realized since "Black Friday" comes after this positions expiration.
On October 20th, I BTO 3 CPLP call options for the 7.50$ strike price. I did this because it broke through it's most recent resistance level of 7$. I was expecting a little more upside with the breakout, but since then it has only been trading within pennies of this resistance/support level. I am thinking that it will pull back some, but afterwards power through to at least the next resistance level of $8. I also BTO this position with 5 months until expiration, so I have time on my side.
On October 27th, I BTO two more call options. The first was a for DWA at the 25$ strike price. I BTO this position because it broke a current downward trend line almost two weeks before, and then on the 27th broke above it's recent 20$ resistance level. This position also looks like it will be pulling back some before going up much higher. Fortunately for me, this position is also good until March of 2012, so I have time to wait and see.
The other call option position I BTO on the 27th was for GLD at the 180$ strike price. I BTO this position because it had already broke above the 165$ resistance level it gaped under back in late September and just finished filling the gap created back between September 22nd and 23rd. Gold has a pretty good run during the winter holidays so I believe GLD should be going up in the next few months. I only have up until the December expiration, so am looking for profit by "Black Friday".
In other news, my CIM stock position just recently paid me for holding on to it. Not a lot but, it does help to own dividend paying stocks. It has broken a recent downward trending line but still has one more and a resistance level it failed to break through back in August. That being said, my put option I STO looks like it will expire worthless. If that is the case, I still get to keep my 20$ premium I collected for selling the option and my 250$ that is securing it.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple, Inc.
BTO - buy-to-open / bought-to-open
CIM - Chimera Investment Corp.
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation SKG, Inc.
GLD - SPDR Gold Shares (ETF)
"rolled" - (rolling) - to sell-to-close one position and buy-to-open another position in the same group of options to take profit or extend risk.
STO - sell-to-open / sold-to-open
On October 11th, I had a BTO call option position for AAPL at the 450$ strike price. Three days later I rolled the position to the higher strike price of 485$. This profited me a net of ~95$ or 20%. The gross profit was ~375$ or 79%. This means that I am currently playing with "the houses" money as a gambler would say. This is good for me because the value of that option is now down ~98% with 22 days until expiration. I am still bullish on AAPL, but would not be surprised if I would have to roll this option at a loss just to get a little more time to see my target realized since "Black Friday" comes after this positions expiration.
On October 20th, I BTO 3 CPLP call options for the 7.50$ strike price. I did this because it broke through it's most recent resistance level of 7$. I was expecting a little more upside with the breakout, but since then it has only been trading within pennies of this resistance/support level. I am thinking that it will pull back some, but afterwards power through to at least the next resistance level of $8. I also BTO this position with 5 months until expiration, so I have time on my side.
On October 27th, I BTO two more call options. The first was a for DWA at the 25$ strike price. I BTO this position because it broke a current downward trend line almost two weeks before, and then on the 27th broke above it's recent 20$ resistance level. This position also looks like it will be pulling back some before going up much higher. Fortunately for me, this position is also good until March of 2012, so I have time to wait and see.
The other call option position I BTO on the 27th was for GLD at the 180$ strike price. I BTO this position because it had already broke above the 165$ resistance level it gaped under back in late September and just finished filling the gap created back between September 22nd and 23rd. Gold has a pretty good run during the winter holidays so I believe GLD should be going up in the next few months. I only have up until the December expiration, so am looking for profit by "Black Friday".
In other news, my CIM stock position just recently paid me for holding on to it. Not a lot but, it does help to own dividend paying stocks. It has broken a recent downward trending line but still has one more and a resistance level it failed to break through back in August. That being said, my put option I STO looks like it will expire worthless. If that is the case, I still get to keep my 20$ premium I collected for selling the option and my 250$ that is securing it.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple, Inc.
BTO - buy-to-open / bought-to-open
CIM - Chimera Investment Corp.
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation SKG, Inc.
GLD - SPDR Gold Shares (ETF)
"rolled" - (rolling) - to sell-to-close one position and buy-to-open another position in the same group of options to take profit or extend risk.
STO - sell-to-open / sold-to-open
Tuesday, October 11, 2011
Portfolio Update
Since my last portfolio update, I made a few trades. But in addition to that I followed through with adding funds to my trading account. In fact, I set up a weekly transfer of funds into my trading account. I have this as part of my budget now.
The first thing I have to report about my trades is that the call option I STO against my position in DWA expired worthless. That means that I get to keep the $34.37 premium I received. I am currently planning my next move with DWA.
My next trade was to BTO a put option against RIMM for Nov 19 2011 at the $23 strike price. This trade was STC 6 trading days later and profited $10.75, or ~5%.
Two days later I BTO two put options against RIMM for Oct 22 2011 at the $20 strike price. This trade was STC 3 trading days later and profited $49.39, or ~23%.
I currently have 4 open or pending orders, 3 open stock positions, and 1 open option position. My plan is to wait to see if my 1 open option position expires worthless or has me put into CIM for another 100 shares at $2.50 a share. My 3 open stock positions are all in the red still, but there is past performance that suggest the possibility for eventual turn around. My 4 open or pending orders are for a position of call options on AAPL, a position of put options on RIMM, a position of call options on CIM, and a position of a call option on CPLP. I am bullish on AAPL, bearish on RIMM, bullish on CIM, and Bullish on CPLP.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple, Inc
BTO - buy-to-open / bought-to-open
CIM - Chimera Investment Corporation
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation, Inc.
RIMM - Research In Motion, LTD
STC - sell-to-close / sold-to-closeSTO - sell-to-open / sold-to-open
The first thing I have to report about my trades is that the call option I STO against my position in DWA expired worthless. That means that I get to keep the $34.37 premium I received. I am currently planning my next move with DWA.
My next trade was to BTO a put option against RIMM for Nov 19 2011 at the $23 strike price. This trade was STC 6 trading days later and profited $10.75, or ~5%.
Two days later I BTO two put options against RIMM for Oct 22 2011 at the $20 strike price. This trade was STC 3 trading days later and profited $49.39, or ~23%.
I currently have 4 open or pending orders, 3 open stock positions, and 1 open option position. My plan is to wait to see if my 1 open option position expires worthless or has me put into CIM for another 100 shares at $2.50 a share. My 3 open stock positions are all in the red still, but there is past performance that suggest the possibility for eventual turn around. My 4 open or pending orders are for a position of call options on AAPL, a position of put options on RIMM, a position of call options on CIM, and a position of a call option on CPLP. I am bullish on AAPL, bearish on RIMM, bullish on CIM, and Bullish on CPLP.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
AAPL - Apple, Inc
BTO - buy-to-open / bought-to-open
CIM - Chimera Investment Corporation
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation, Inc.
RIMM - Research In Motion, LTD
STC - sell-to-close / sold-to-closeSTO - sell-to-open / sold-to-open
Again, Why Politicians Should Take a Pay Cut.
The following article from Yahoo! News reflects my thoughts in the article I posted back in August. ( http://investorsopinion.blogspot.com/2011/08/august-2011-budget-bill-where-us.html )
Yahoo! News
Yahoo! News
Sunday, August 21, 2011
Portfolio Update
Since my last portfolio update, I've made one change. In my last portfolio update, I stated that I bought 3 puts against DWA and that the trick was going to be knowing when to get out. Well, only days later did I get out. The result was a meager profit of just under 25%. Other than that, the only other thing to report is that I collected a dividend on my CPLP position.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
CPLP - Capital Product Partners, LP
DWA - Dreamworks Animation SKG
Monday, August 8, 2011
August 2011 Budget Bill: Where the US Government Went Wrong
Once again the US politicians prove that they don't have a clue about, or an interest, in the greater good. Just like with the Health Care Bill, this Budget Bill is tossed together with little intelligent thought or understanding of governments role. If the US politicians truly cared about balancing a budget and creating jobs, they would have agreed to a bill that would have done that.
The first step in balancing the budget would have been a show of good faith from the politicians themselves. They should have agreed to a deep cut in their own salaries. I say 100,000$ since I believe that they all have their own businesses that they run and in no way need the US public funding them. Public service shouldn't be for their own capital gain. It would only cut the budget by 54.8 million dollars, but it would be a step in the right direction.
The second step would have been to come to terms with an acceptable flat tax for all individuals with tax reimbursements for those have an imbalance in their income to the average cost of living for the area they live in. What this means is that I would agree to a non-refundable 15% tax rate for everyone from the millionaire business owners and investors, all the way down to the individuals that are Just Over Broke (at the poverty line). Only those that earn less than the average cost of living in their area would get a tax reimbursement after filing their taxes. But that reimbursement would only cover the difference of their after tax income to the average cost of living amount for their area, and max out at the 15% tax rate that they paid, or should have paid through out the year.
Third, supply tax incentives to businesses. For instance, if a company increases their number of US based employees through out the rest of the year, reduce their tax liability. Isn't it better to collect from the working public? (Oops, we just slipped into job creation.) Also, increase the tax penalty on US companies that outsource work to other countries. Nothing outrageous. Just enough to get them to at least think about keeping more jobs at home. Increase the tax on imports. Again, nothing outrageous. Just enough to get them to look into local companies to produce the goods. What all of these numbers are would be best asked for from a panel of economists majors.
Fourth, reform the government agencies. Put quotas in place to achieve better performance for the pay that the directors are receiving. This would set a benchmark that would cause the private sector to re-evaluate the salaries that they offer their executives. And although this may be too late to the party, for all the companies that are still holding on to the bail out money they receive three years ago, start leaning on them to pay it back, by getting their executives to take temporary pay cuts so that bailout can be paid back. Especially if they are the same ones that were there before 2008.
Lastly, to increase the number of jobs and lessen the dependency on foreign oil, actually work on funding the U.S. infrastructure. That means solar, wind, and even tidal generated power. Use U.S. based manufactures to build and assemble the generation units and higher U.S. citizens to build, assemble, install and maintain the devices.
I have several more ideas, but these alone I believe will actually produce a shocking change in economy. I would really like for someone to show me how I am wrong. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
The first step in balancing the budget would have been a show of good faith from the politicians themselves. They should have agreed to a deep cut in their own salaries. I say 100,000$ since I believe that they all have their own businesses that they run and in no way need the US public funding them. Public service shouldn't be for their own capital gain. It would only cut the budget by 54.8 million dollars, but it would be a step in the right direction.
The second step would have been to come to terms with an acceptable flat tax for all individuals with tax reimbursements for those have an imbalance in their income to the average cost of living for the area they live in. What this means is that I would agree to a non-refundable 15% tax rate for everyone from the millionaire business owners and investors, all the way down to the individuals that are Just Over Broke (at the poverty line). Only those that earn less than the average cost of living in their area would get a tax reimbursement after filing their taxes. But that reimbursement would only cover the difference of their after tax income to the average cost of living amount for their area, and max out at the 15% tax rate that they paid, or should have paid through out the year.
Third, supply tax incentives to businesses. For instance, if a company increases their number of US based employees through out the rest of the year, reduce their tax liability. Isn't it better to collect from the working public? (Oops, we just slipped into job creation.) Also, increase the tax penalty on US companies that outsource work to other countries. Nothing outrageous. Just enough to get them to at least think about keeping more jobs at home. Increase the tax on imports. Again, nothing outrageous. Just enough to get them to look into local companies to produce the goods. What all of these numbers are would be best asked for from a panel of economists majors.
Fourth, reform the government agencies. Put quotas in place to achieve better performance for the pay that the directors are receiving. This would set a benchmark that would cause the private sector to re-evaluate the salaries that they offer their executives. And although this may be too late to the party, for all the companies that are still holding on to the bail out money they receive three years ago, start leaning on them to pay it back, by getting their executives to take temporary pay cuts so that bailout can be paid back. Especially if they are the same ones that were there before 2008.
Lastly, to increase the number of jobs and lessen the dependency on foreign oil, actually work on funding the U.S. infrastructure. That means solar, wind, and even tidal generated power. Use U.S. based manufactures to build and assemble the generation units and higher U.S. citizens to build, assemble, install and maintain the devices.
I have several more ideas, but these alone I believe will actually produce a shocking change in economy. I would really like for someone to show me how I am wrong. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
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