Category: Media

I pulled this from “In Play” on Yahoo! Finance today. They referenced this press release from overstock.com’s Web site.  (I watch In Play throughout the day to get the short story on what’s moving the markets.)
9:08AM Overstock.com issues press release related to Reg. SHO (OSTK) 20.15 : Co announces that “yesterday marked the 800th trading day that the co has appeared on the Regulation SHO threshold list”. The CEO said “While this may seem paradoxical, the facts can be reconciled. One need only understand that our capital markets have been hijacked: our settlement system no longer settles, our New York financial media no longer investigates, and our regulators no longer regulate. For further explanation, see the fine example of investigative journalism that appeared this week on DeepCapture.com”.
Deepcapture.com posted a long (about the size of a small book) article about the corruption in shorting stocks on Wall Street including names of the alleged culprits.  I have no idea if this is true, but it’s a great read.  I didn’t get through all of it due to time constraints and thought many of you would enjoy reading as much of it as you have time for.

I saw this article on money.cnn and thought it was worth sharing.  Basically it highlights the same thing that many of us have read for years - the roaring 80s and 90s won’t be seen again.  I take from this yet another reason to follow the naked put selling trading model. 

If the markets stay at a 8-9% annual clip, selling naked puts is the way to go.  Once you get closer to the previous average in the high teens it seems more productive to buy calls.  Either way, investing with options is the best way a mature investor should work the markets.

I haven’t made it through this week’s Barron’s yet and don’t see it happening.  I read more than half of it, but couldn’t get into it with most of the stocks they highlighted.  I was surprised to see Michael Santoli moving away from being a solid bear and even hinting towards a bullish lean soon.  I don’t think I’ve read his bullish side in months.  Maybe I misread it…

I did find a few stocks worth mentioning though.  Before listing them, I happened to check out the put/call ratio which signaled heavily bearish.  That could help explain the dump the market took on Friday (expiration day) and why yesterday faired so much better.  Once those options were out of the way the market could resume a more normalized cadence.  Monday morning still included a lot of the clean up from Friday.  That cleared and we headed back up.  I’m interested to see the put/call ratio in this coming week’s paper to see what type of change we’ve had. 

Anyway, to the stock picks…

On page M7 Kopin Tan keyed in on refining stocks VLO, SUN and TSO.  All are down right now, but could be due for a big run again soon.  SUN might have support at 70.  VLO could find a floor at 65.  TSO might bounce off of 45.

On page 23, Jonathan Laing focused on SHLD and thinks …

For those who don’t read Barron’s (you should) the format is pretty basic.  It generally comes in two sections unless there’s a special.  Each section starts with one or two long articles summarizing the past week’s market activity.  Following the summaries are more in depth articles on individual stock picks or pans and some follow-ups.

This week all three summaries painted a fairly bearish picture.  (Admittedly, Kopin Tan who is often the bullish one of the bunch didn’t write this week.)  On page 13, Michael Santoli pointed out that even with a potentially believable bullish case the markets are up 10% in a month and 15% since the intraday low on August 16th. 

On the other hand, a few of the stock picking articles seemed like they have ideas that could work out.

RRD - Writen about on page M4.  The premiums aren’t worth selling options.  I might have to think about buying calls based on the 25-30% upside Barron’s thinks it could have within the next 18 months.

CVS - Writen about on page 21.  These premiums could be worth selling naked puts, but I’d like to target the December expiry which aren’t available yet.  Hopefully it will wait before climbing too much too soon.  Otherwise I might have to buy calls farther out based on the 20% growth potential CVS has over the next year.

NOV - Writen about on …

I spent a lot of time reading this weekend and in a rare moment of focused attention, I finished reading all of Barron’s before the weekend was over.  I also read an aging Smart Money magazine I hadn’t finished yet.  The whole time I read I kept a pen and piece of paper next to me and wrote down every stock ticker with a bullish mention in both sources. 

I plan to use this throughout the week to research further and use a limit orders for naked puts where I see fit.  This is the list of stocks I gleaned from my reading, although I haven’t had time to do my own analysis of any of these yet. 

ANW - Kopin Tan wrote about it on pg M7.  It’s 31.70 now and he quoted an analyst who said it could hit 42.

ORCL - Beat earnings, could make another run

AM - Moved to the profitable side of the game

CODI, MVC, HTCC, ARCC, ACAP - Michael Santoli listed these as private equity companies that could be due for a closer look.  He focused more attention towards CODI.

LEH, PHG - Both covered in the Barron’s follow up piece.  Funny that later in the same edition I read a bearish case for LEH’s sector compared to the bullish article that touted their global exposure as a key to success.  Walk softly with this pick.

PPG - From page 23

CMCSA …

This week’s Barron’s offered insight on how they find a lot of their stock picks.  You don’t have to be a subscriber to see the contents of the page which I recommend you visit.  Just because a stock is listed here doesn’t guarantee it’ll go up, but at least they’ve done a lot of the leg work for you in narrowing down which stocks to further research.   

As I use the print edition for new investment ideas each week, I’ll use this page to give me more ideas mid-week when I have time to do my digging.

I copied the below picks from their page to give you a hint of what they offer.  You can also see the full view of all of the 400 companies on the list along with charts of how the Barron’s 400 has compared to the major indexes.

Largest companies in the Barron’s 400*

Ticker

Grade

Name

XOM

63.57

EXXON MOBIL CORP

MSFT

78.18

MICROSOFT CORP

CSCO

71.23

CISCO SYSTEMS INC

CVX

70.76

CHEVRON CORP

WMT

69.32

WAL-MART STORES INC

*By market capitalization. As of September 4, 2007
 

Smallest …

Marketwatch has a really good article today on charting and the author’s thoughts on whether or not this is a dead cat bounce we’re in now.  He also lists a few stock picks worth checking out.

It appears I might have missed my chance on CAT that I mentioned yesterday as it’s up good again today.  I put a limit order for $2.00 to sell one Sept 75 naked put.  It could dip down and hit at any point, but I could have sold a market order yesterday and gotten more. 

EDIT: My limit order for the September 75 (CATUO) naked put hit not long after I posted this and I received $189.25 after commissions.  CAT was trading at 78.14 on its way down to 77.90 before coming back up from its morning dip in the shallow end of the pool.  Yesterday’s close for this option was 2.42.  I regret leaving that money on the table, but prefer to spread out my orders these days in the likely event of another beating to be issued again without too much warning.  The high for my put that I sold at 2.00 is 2.02 so far.  I’m happy being that close for the day, especially with CAT moving north again.

Technorati Tags: naked puts, investing, stocks, options, covered …

I read a good article on MSN Money today that seemed to echo what I said last week in my post about risk.  Apparently Jim Juback reads my blog and must be getting ideas from me (of course I’m kidding, probably).  Here’s a quote from his article:
“My argument breaks down into two main parts. First, the same macro trends that are almost uniformly negative for bonds have some undeniable upside for stocks. And second, the structural problems in today’s bond market that will drive down bond prices in the next bond panic are largely irrelevant to stocks.”
Instead of repeating all of his points, I suggest taking the time to read his full article.  My point is as we continue to get the random jitters from the fluctuating bond yield, stocks are still a better buy than bonds. 

Technorati Tags: investing, stocks, options, covered calls, trade, bonds