Author Topic: Stocks  (Read 304036 times)

Offline coralsnake

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Re: Stocks
« Reply #1170 on: May 17, 2015, 08:42:07 AM »
Again, read up about margin of safety.
I own and have read the Intelligent Investor multiple times.

For a short term play while limiting downside you're still better off with options. End of story.
"Here at DansDeals we donít do buses." -Dan

Offline Ephraimh

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Re: Stocks
« Reply #1171 on: May 17, 2015, 09:54:53 AM »

Those stocks all had major warning signs or were just not good at all.
So no idea what you're so worried about.
Again, read up about margin of safety. If a company has significant  assets that back up their market value, going bankrupt won't mean that shareholders don't get paid.

So a one in 100,000 chande of collapse of a terrible company where you still own the underlying assets vs losing your entire investment in a 50/50 chance.
+1
You could invest in a solid company, if your call didn't make it through the finish line your premium is toast, whereas when buying the stock outright you just end up with a smaller profit
Ps. I believe Lehman shareholders ended up recovering at least 40-50% of their investment.
Same with American Airlines, I sat through the entire bankruptcy fiasco not selling a single share, and ended up (as did all who slept through the roller pasted) with a 200% gain when the US Air merger details were executed, nobody could've predicted it with an options call...

Offline yuneeq

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Re: Stocks
« Reply #1172 on: May 17, 2015, 09:55:43 AM »
I own and have read the Intelligent Investor multiple times.

For a short term play while limiting downside you're still better off with options. End of story.

If you call plunking down money in companies that can go bankrupt in the next few days -"investing"- I hear.
Live forever or die trying.

Offline ckmk47

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Re: Stocks
« Reply #1173 on: May 17, 2015, 11:07:26 AM »
Later expiration = more $$ spent on time value. Seems like a waste of money.
Since I wasn't expecting to keep the option very long, I would have sold back most of the time value.

Offline ckmk47

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Re: Stocks
« Reply #1174 on: May 17, 2015, 11:58:56 AM »
yos9694
You taught me something.  Thank you.


To pass on his lesson.
Buy 100 of the stock @ 126 or so each (the price when I first wrote about it)
[The cost $12,600 - more than I care to spend on one gamble.  But you buy it on margin.  That is- you use the money of the brokerage house.  But that cost lots of money.  Not in this case, because it's for such a short time. 2-3 weeks.  At an interest of 7.5%,  each week cost less than $20.  So 3 weeks cost up to $60 per 100 stock.]
(In the same purchase transaction) Buy a put option at a strike price about $4 less than your purchase price.  That is - buy the ability to make someone else buy the stock from you for $122. This might have cost $3 per stock, which you have to buy in lots of 100 for each 'option'.
So your cost per stock is 126 + 3 =$129
If the stock goes up:
to $135, you sell the stock.  135 - 126 - 3 = $6 profit
to $128, you sell the stock.  128 - 126  - 3 = -$1 loss
etc
If the stock goes down, as it actually did:
a) It goes down below 122 - the put price:  you sell the stock for 122.   net cost: -126 - 3 + 122 = -$7 or a maximum loss of $7.
b) If it goes down to somewhere between 126 and 122:  you lose (126 - new stock price) + 3 (put premium)
But this will max out at the $7 of scenario (a).

Offline joshnuss

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Re: Stocks
« Reply #1175 on: May 18, 2015, 10:59:08 AM »
Anybody here ever write articles for these stock sites like seeking alpha? they pay like 35 dollars per article if it gets approved and 10 dollars more per 1000 views

Offline Am

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Re: Stocks
« Reply #1176 on: June 01, 2015, 10:02:02 AM »
I have such a difficult time selling. I find it so much harder than buying

Offline jackofall

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Re: Stocks
« Reply #1177 on: June 01, 2015, 11:58:22 AM »
I have such a difficult time selling. I find it so much harder than buying
My 2 cents. In order to successfully play the market, you should have an exit strategy before closing on a position thus eliminating the need to make tough decisions on the fly.
If you focus on being a boss, you will never be a leader. Leaders lead people to growth and improvement.

Offline Mordyk

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Re: Stocks
« Reply #1178 on: June 01, 2015, 12:00:53 PM »
My 2 cents. In order to successfully play the market, you should have an exit strategy before closing on a position thus eliminating the need to make tough decisions on the fly.
every trader will agree to that. but many times you must reconsider for one reason or another. like if the news has a very strong effect and sends the stock away from the regular levels, it might be wise to reconsider the strategy

Offline nobiggy

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Re: Stocks
« Reply #1179 on: June 01, 2015, 12:41:06 PM »
If you call plunking down money in companies that can go bankrupt in the next few days -"investing"- I hear.

Offline nobiggy

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Re: Stocks
« Reply #1180 on: June 01, 2015, 12:40:27 PM »
If you call plunking down money in companies that can go bankrupt in the next few days -"investing"- I hear.
It's called speculating. 

Offline 12HRS

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Re: Stocks
« Reply #1181 on: June 01, 2015, 10:43:33 PM »
moving this here. can anyone explain what deferred tax assets could have to do with the deal?


Quote
Responding to speculation in the card industry that Citigroup gave too much to Costco in negotiations earlier, Corbat said the deal is "without a doubt accretive" to shareholders and would be even if Citigroup did not have deferred tax assets it can use to shelter income from taxes.

Offline menachem_m

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Re: Stocks
« Reply #1182 on: June 01, 2015, 10:51:28 PM »
moving this here. can anyone explain what deferred tax assets could have to do with the deal?
Citi has $50B or so of deferred tax losses (which I think start to expire soon.)

So that puts then at a 35% (or whatever their effective tax rate is) advantage over Amex or anyone else.

Therefore they can drop their interchange fees so low that Amex would be losing money after taxes if they would give Costco the same rate. (Or at least it wouldn't be worthwhile.)

Offline 12HRS

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Re: Stocks
« Reply #1183 on: June 01, 2015, 11:01:34 PM »
thanks,

i guess businesses can't carry deferred tax losses forever?

Offline menachem_m

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Re: Stocks
« Reply #1184 on: June 01, 2015, 11:07:38 PM »
They changed the law around two years ago, not sure if Citis money gets grandfathered in or not.