On May 18th I wrote. (Referring to JPMorgan.)
" I think the trading losses will spread to $5B."
Today this story is released...http://www.ft.com/cms/s/0/fc973b58-c129-11e1-8179-00144feabdc0.html#axzz1z7GUt1Vj
"JPMorgan Chase is expected to announce losses of about $5bn related to trades by the so-called London whale at its second-quarter earnings presentation in two weeks."
There should be no mistaking what was originally called a hedge as a proprietary trade.
A hedge is designed to protect against losses not increase them. Hedges are sunk costs designed to mitigate risk. The cost is known. There are hedges that increase opportunity costs, but that is not the same thing as loss.
x
Thursday, June 28, 2012
Tuesday, June 26, 2012
Scorching Hot Stock pick....
Guess the stock that is up 17% for the month of June and up 30% since it hit bottom on June 6th.
I will give you a hint...Starts with "F", ends with "K" and is not the word that most people used after its famously failed IPO just about 1 month ago.
I will give you a hint...Starts with "F", ends with "K" and is not the word that most people used after its famously failed IPO just about 1 month ago.
Sunday, June 24, 2012
Indian Casino Farmers
http://www.sfgate.com/default/article/Yolo-tribe-adds-farms-to-casino-neighbors-unhappy-3654203.php
This is a very weird article about an Indian casino in California that is turning their vast land holding into farms. Capay Valley is a very pretty valley about an hours drive from San Francisco. A two lane highway runs through the valley. In the middle of the valley is a huge resort casino. The traffic congestion can be very bad, but the casino itself is a financial boon to the locals who embrace the traffic and the Indian tribe itself.
For fun, let's look at some of the quotes.
Marshall McKay, the tribal chairman, sits at a board table looking serious and presidential as he contemplates the question. (Referring to farming and gambling.)
"They're both gambling," he deadpans.
Next is the strangest quote from the article
"Selling the idea to the rest of the tribe in the beginning was problematic. We are not farmers," McKay says, adding that for thousands of years his people were hunters, gatherers and fishermen.
I think he should have said "...hunters, gatherers, fishermen and casino operators."
It is strange how so often a person who represents a group can make such racist comments about the group they represent. Imagine what McKay would say if someone else wrote. "Indians cannot farm, they are hunters and gatherers."
Let's read from the opposition.
"It's sort of like someone coming from New York to Napa and throwing tons of money into planting vineyards," says Tom Frederick, who along with his wife, Pam Welch, owns Capay Valley Vineyards. Welch is president of Capay Valley Coalition, an organization of about 100 residents dedicated to keeping the area zoned mostly for farming. "I think they're using the farming to distance themselves from the casino," he says.
"It's like having a super developer with unlimited funds and no rules and accountability living alongside us dirt farmers," Frederick says. "They'll always have the biggest and best tractors."
It always comes down to size doesn't it?
By the way, if you go over the hill behind the casino, they have one of the prettiest golf courses I have ever seen.
This is a very weird article about an Indian casino in California that is turning their vast land holding into farms. Capay Valley is a very pretty valley about an hours drive from San Francisco. A two lane highway runs through the valley. In the middle of the valley is a huge resort casino. The traffic congestion can be very bad, but the casino itself is a financial boon to the locals who embrace the traffic and the Indian tribe itself.
For fun, let's look at some of the quotes.
Marshall McKay, the tribal chairman, sits at a board table looking serious and presidential as he contemplates the question. (Referring to farming and gambling.)
"They're both gambling," he deadpans.
Next is the strangest quote from the article
"Selling the idea to the rest of the tribe in the beginning was problematic. We are not farmers," McKay says, adding that for thousands of years his people were hunters, gatherers and fishermen.
I think he should have said "...hunters, gatherers, fishermen and casino operators."
It is strange how so often a person who represents a group can make such racist comments about the group they represent. Imagine what McKay would say if someone else wrote. "Indians cannot farm, they are hunters and gatherers."
Let's read from the opposition.
"It's sort of like someone coming from New York to Napa and throwing tons of money into planting vineyards," says Tom Frederick, who along with his wife, Pam Welch, owns Capay Valley Vineyards. Welch is president of Capay Valley Coalition, an organization of about 100 residents dedicated to keeping the area zoned mostly for farming. "I think they're using the farming to distance themselves from the casino," he says.
"It's like having a super developer with unlimited funds and no rules and accountability living alongside us dirt farmers," Frederick says. "They'll always have the biggest and best tractors."
It always comes down to size doesn't it?
By the way, if you go over the hill behind the casino, they have one of the prettiest golf courses I have ever seen.
BBBY on Sale
Bed Bath and Beyond is a very well run home store that recently lowered guidance for the coming year.
http://www.investingdaily.com/15380/bed-bath-beyond-falls-out-of-bed
I think it is on sale so I broke with my tradition in the option portfolio and retook a position and sold the call for BBBY.
This puts the option account at 6.92%
Buy list is at 6.16%
S and P 500 is at 6.16% YTD
http://www.investingdaily.com/15380/bed-bath-beyond-falls-out-of-bed
I think it is on sale so I broke with my tradition in the option portfolio and retook a position and sold the call for BBBY.
This puts the option account at 6.92%
Buy list is at 6.16%
S and P 500 is at 6.16% YTD
Saturday, June 16, 2012
June Option expiration
For the Option Account,
HPC and SYK optioned out from the Call sale.
We now have 10 stocks and $5,000,000. in cash.
Our option account is now at 7.11% including July contract sales.
Our buy list recovered nicely from the May slam to 7.3%
The S and P 500 is at 6.78% for the year.
HPC and SYK optioned out from the Call sale.
We now have 10 stocks and $5,000,000. in cash.
Our option account is now at 7.11% including July contract sales.
Our buy list recovered nicely from the May slam to 7.3%
The S and P 500 is at 6.78% for the year.
Saturday, June 9, 2012
Dean Foods Stock Highlight
Dean Foods is a stock on our buy list that is up 43% for the year. This may seem great except it is down from its high of $47 from 2007.
Dean Foods Company is a food and beverage company. It operates through two segments: Fresh Dairy Direct-Morningstar and WhiteWave-Alpro. Fresh Dairy Direct-Morningstar is a processor and distributor of milk and other dairy products in the United States, with products sold under more than 50 local and regional brands and a range of private labels. WhiteWave-Alpro markets and sells a variety of dairy and dairy-related products, such as Horizon Organic milk and other dairy products, The Organic Cow organic dairy products, as well as other plant-based beverages and soy food products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk plant-based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-Alpro also offers soy-based beverages and food products in Europe and markets its products under the Alpro and Provamel brands. On February 1, 2011, it completed the sale of its Mountain High yogurt operations.
According to Eddy Elfenbein's "Simplest Valuation method." the stock still has room to move up based on next year's earning estimate of $1.33 per share.
Dean Foods Company is a food and beverage company. It operates through two segments: Fresh Dairy Direct-Morningstar and WhiteWave-Alpro. Fresh Dairy Direct-Morningstar is a processor and distributor of milk and other dairy products in the United States, with products sold under more than 50 local and regional brands and a range of private labels. WhiteWave-Alpro markets and sells a variety of dairy and dairy-related products, such as Horizon Organic milk and other dairy products, The Organic Cow organic dairy products, as well as other plant-based beverages and soy food products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk plant-based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-Alpro also offers soy-based beverages and food products in Europe and markets its products under the Alpro and Provamel brands. On February 1, 2011, it completed the sale of its Mountain High yogurt operations.
According to Eddy Elfenbein's "Simplest Valuation method." the stock still has room to move up based on next year's earning estimate of $1.33 per share.
Thursday, June 7, 2012
HP....Getting into the Coffee Business
This article is about how Meg Whitman is going to turn around HP like Howard Schultz did at Starbucks.
While the opportunity to poke fun at this is obvious, I will let Whitman set up the joke...
"Usually, these kinds of turnarounds take anywhere between four or five years," Whitman said at the company's Discover conference in Las Vegas. "To have HP humming exactly the way I envision it - this is a big undertaking."
"There's nothing fancy about these turnarounds," Whitman said. "This is not advanced business, this is 101."
"If we can bridge the consumer with the enterprise and create desirable devices, that's a big opportunity for HP," she said. "Ultimately, we have to solve the mobility challenge."
Really?????
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/06/BUN41OTPQU.DTL
While the opportunity to poke fun at this is obvious, I will let Whitman set up the joke...
"Usually, these kinds of turnarounds take anywhere between four or five years," Whitman said at the company's Discover conference in Las Vegas. "To have HP humming exactly the way I envision it - this is a big undertaking."
"There's nothing fancy about these turnarounds," Whitman said. "This is not advanced business, this is 101."
"If we can bridge the consumer with the enterprise and create desirable devices, that's a big opportunity for HP," she said. "Ultimately, we have to solve the mobility challenge."
Really?????
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/06/06/BUN41OTPQU.DTL
Monday, June 4, 2012
ETF Hell Part 1
Anyone who knows me and discusses investments knows that I distrust EFT's immensely. This is for 1 simple reason. I do not know what they are. Yes, I know they are funds that trade like stocks, but still...
Today let us look at ProShares Trust II. (UVXY)
http://www.google.com/finance?q=NYSEARCA:UVXY
From the website:
ProShares Ultra VIX Short-Term Futures ETF seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to twice (2x) the performance of the S&P 500® VIX® Short-Term Futures Index.TM
As far as I can tell, the ETF started trading in October 2011 for at $244. On March 8th, it reverse split 1:6 (If you had 6 shares, they were now 1 share for 6 time the March 7th price of $5.00).
Currently the ETF is trading at $21.60.
Here is the part that caught my attention. The Dec 2012 option price for a $22.00 strike is $10.00. This means that the price would have to drop below $12.00 to lose money.
This should be fun to watch.
Today let us look at ProShares Trust II. (UVXY)
http://www.google.com/finance?q=NYSEARCA:UVXY
From the website:
ProShares Ultra VIX Short-Term Futures ETF seeks, on a daily basis, to provide investment results (before fees and expenses) that correspond to twice (2x) the performance of the S&P 500® VIX® Short-Term Futures Index.TM
As far as I can tell, the ETF started trading in October 2011 for at $244. On March 8th, it reverse split 1:6 (If you had 6 shares, they were now 1 share for 6 time the March 7th price of $5.00).
Currently the ETF is trading at $21.60.
Here is the part that caught my attention. The Dec 2012 option price for a $22.00 strike is $10.00. This means that the price would have to drop below $12.00 to lose money.
This should be fun to watch.
Saturday, June 2, 2012
End of May
End of May...
Buylist 4.56%
S and P 500 2.28%
This is the first time this year our buylist has been above the S and P 500.
And then came June 1st...
The Dow drops 274 points,
our buy list drops to 2.28% and the
S and P 500 drops to 1.63%
The June option list is still at 4.56% with BDX being repurchased on 5/29 and then dropping another 2$.
Buylist 4.56%
S and P 500 2.28%
This is the first time this year our buylist has been above the S and P 500.
And then came June 1st...
The Dow drops 274 points,
our buy list drops to 2.28% and the
S and P 500 drops to 1.63%
The June option list is still at 4.56% with BDX being repurchased on 5/29 and then dropping another 2$.
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