Comments on: WTF HUM? – This is why you diversify

By: Options Strategery

Options Strategery — Fri, 14 Mar 2008 10:00:19 +0000

I thought it would never happen, but it’s up. This *never* happens to any falling knives I try to catch. Grrr.

By: Alex Fotopoulos

Alex Fotopoulos — Wed, 12 Mar 2008 21:10:02 +0000

Exactly, was there ever any doubt? ha ha

By: Options Strategery

Options Strategery — Wed, 12 Mar 2008 16:49:43 +0000

HUM down another 25%. See, now you look brilliant:).

By: Alex Fotopoulos

Alex Fotopoulos — Tue, 11 Mar 2008 23:03:43 +0000

@7 – I’m with you, it’s not just that e is dropping, but the muliples we’re allowed to get away with are coming down too. That’ll change again though.

By: Alex Fotopoulos

Alex Fotopoulos — Tue, 11 Mar 2008 22:58:15 +0000

Man JG, now you’re just rubbing it in that I dumped my AAPL 115 puts.
Congrats on the good holds. I’m with you. It takes a lot to hold onto some old losers to wait for these big days. I had to have a lot of good ones to make up for HUM – these were the biggest: POT (+13.19), MON, NYX, VIP, FWLT – oh, everthing I was long on except BA and that’s just in my IRA so I’ll wait it out.

By: Options Strategery

Options Strategery — Tue, 11 Mar 2008 22:58:07 +0000

I have NVDA $22.5 out the wazoo. AMD/ATI is barely competition so the business is solid. E is gonna take a hit due to consumer spending drop. The problem I think that’s killing us right now is the P/E contraction across the board. Look at the Nasdaq 100, just a horror show.

By: jgoldstein

jgoldstein — Tue, 11 Mar 2008 22:18:07 +0000

Thank G-d for today!! Although we all “know” that we are in a “corrective” market, human nature makes us believe that it can’t get any worse. My AAPL has stayed between my $115 puts and $140 calls; MICC scared me when it touched $101 yesterday ($100 puts). I also hold the NVDA $20 puts. I have a long way to catch up on other positions. Emotion is keeping me in!I thank all of you for your comments – its reassuring to see others with a similar take in investing and I learn from all the comments.

By: Alex Fotopoulos

Alex Fotopoulos — Tue, 11 Mar 2008 21:51:45 +0000

I ended the day up $42, so that’s better than down and I’ll try not to think of the “what ifs” since that’s just part of investing. I bought back one of my puts above the close and one a few bucks below. That’s just how it works I guess. I could’ve held, but agree it could end up drifting lower just as easy as it could drift back up, especially since they haven’t reported a revision in their earnings yet, just Well Point did.

Yep, I go up to 12-15% usually, but will let myself slip higher sometimes like on NVDA which clearly was a mistake. I don’t think I could find enough stocks to trade that I like if I kept myself limited to 5%. That would only be $4k per stock. I’d have to hold 40 stocks to be invested double like I aim for. ((80k*2)/(80k*5%)=40)

13% per equity lets me hold 15 stocks if I’m fully invested x2. ie 80,000 (my approx balance lately) x 2 = 160k/15 = 10,667. I go a little higher when I see a stock like POT and want to trade the 135 strike ($13,500) or in this case HUM at 65 ($13,000).

By: mule65

mule65 — Tue, 11 Mar 2008 21:36:22 +0000

Best to stay under 5% of portfolio and avoid leverage on any single company. 200 HUM put at $65 would be $13,000 which was too much. You’re not alone, I learned the hard way too. Now I only use leverage on certain ETF’s. Buy the dips in a bullish market and sell the peaks in a bearish market. Good luck.