Yet another stock market thread!

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PAB

Banned
Dec 4, 2002
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Originally posted by: Descartes
Originally posted by: PAB
Originally posted by: bigdog1218
Originally posted by: PAB
Originally posted by: IHateMyJob2004
STOP TRADING!!!!!

After taxes, etc ... YOU WILL LOOSE OUT TO ANY BUY/HOLD INVESTOR!

Buy and hold = Buy and lose. Look what happened with Corning. I waited for a catalyst to get that stock off it's ass for a while.

You can't make money if you hold infinitely. You have to sell and know when the right time to sell it. Sector rotation is important in an economy as diverse and dynamic as ours.

Buy and hold is outdated and wrong. You HAVE to sell eventually or when there isnt a good/compelling reason to own that stock anymore. For example, my compelling reason on CVX was the analyist meeting. The boosted production but forecast a relatively flat year - shortly after I got stopped out and didnt make my full point but caught 75 cents. Not the greatest return ever, but not bad for three days.

Your just said you have owned a stock since 2001 that you've been holding for the past 6 years and still haven't made your money back, so one of these statements is full of sh!t.

And have fun riding ATI to 93.

First on ATOT: ATI hit 107 today.

Your bearish sentiment is proven wrong, for the second day in a row.

You're very inconsistent. All of your posts seem to indicate you're looking for fundamental factors that will take, in most cases, months if not years to ultimately factor into the price (this precludes positive news that creates new buyers or bad news that results in a sell-off of course) yet you make nonsensical statements like "bearish sentiment" in the context of two days. You also jump in here and give everyone intraday prices like it means something, so you're not making any sense.

Can you offer any clarification here? Just curious.

I prefer fundamentals and think that its a far sounder philosiphy regarding investment research. However, with technical analysis and sound fundamentals the combination makes a very compelling argument to take a position.

My broker's job is to represent the flip side of the coin and stop me from doing something stupid. Yes, that IS a full time job :p

When I'm right, I'm right. The technicals of a fundamentally sound company like ATI were good and it did exactly what I said it would - it took a run past 104-105 and actually did a little better at 107. We will see in the next three days whether or not it makes the 110 run and breaks resistance there.

The person I was quoting called me something nasty and declared that ATI would run to 93. I dont wish to make it sound like a I'm right and you're wrong issue, but thats exactly what it is. He/She/It started talking smack and giving them the benefit of the doubt, they're off 10 points.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: sm8000
Originally posted by: Descartes
Why don't you just head to EliteTrader and start a journal? Posting constant updates on ATOT is pretty pointless. All you're going to get are negative comments, and most people don't really care anyway.

Just MHO.

Personally I like reading what he has to say. I'm playing a stock contest for fun on CNBC.com and some of my transactions are influenced by his posts. Guess that makes me the exception :p

Can you trade options?
 

PAB

Banned
Dec 4, 2002
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First on ATOT

PAB's Play of the Day

Boeing is getting close to 92, and is poised to break out of resistance. Sound fundamentals + good technicals makes a hell of a position.

All it takes is one good catalyst to give this stock a run. I think we might catch a few points out of this. :D
 

PAB

Banned
Dec 4, 2002
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Originally posted by: PAB
Originally posted by: snoopdoug1
Originally posted by: PAB

My last date was February 24th 2003. :(

Ouch - chicks dig money though... soon enough my friend.

I'd rather not get a chick that was really interested just in money.

So, today's recap.

BP went sideways again. Damn.

CVX, which I took for a trade held and had a small pop.

ATI, which I said would run - ran to 103.50 and pulled back. I had an order in for 102.50 but I was being cheap and didnt get it since the lowest it went was 102.75. Damn quarter.

COP/SUN/HOC - All technically poised for a breakout, but couldnt break resistance. Damn. Lets see what happens tomorrow. I still believe the 52 week high should be bought not sold.

BA, flying high a point off the 52 week high. Go Boeing!

Lets recap.

BP - Up to 61.50. Damn.

ATI - Up to 108's. Damn.

COP/SUN/HOC - All up, all plays I passed on but reccomended technically. Damn.

BA - Still flying high.

 

PAB

Banned
Dec 4, 2002
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Well, lets see how the naysayers like me after today.

BA - I ordered 400 at 90, got it this morning. I've got 50 cents on the stock right now.

CVX - Up to 73 briefly

BP - Up to 62.25

ATI - Up to 108.50 and change, I'm not counting the 109 and change at open because it would have been untradeable. Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

First on ATOT:

If ATI runs to 110 and holds it and I'm long the stock at the time, I will have bumper stickers made up that say BLUE HORSESHOE LOVES ALLEGHENY TECHNOLOGIES and I will send some to Pat Hassey and Jim Cramer. W
 

dnuggett

Diamond Member
Sep 13, 2003
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Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

I'm not following you here.

If you wrote the call @ 108.50 and went long a lot at 107.50 how's your target price 111.60?
 
Sep 29, 2004
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Scariest thing about this thread:

People that seem to know little about valuation are playing with options.

Man ... that is scary.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: dnuggett
Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

I'm not following you here.

If you wrote the call @ 108.50 and went long a lot at 107.50 how's your target price 111.60?

Well as I said before, the technicals showed a run to 109/110, and $111.40 is going to be the breaking point for the option. If the stock goes sideways or down, I've pocketed the $6.40 premium. Factoring the premium with the strike price the stock has to go avove $111.60, otherwise it is cheaper for the option holder to buy the stock on the open market for less.

I'm hoping the stock runs to $112 so it gets called and I can sit around and bask in a gain just shy of 4 points.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: IHateMyJob2004
Scariest thing about this thread:

People that seem to know little about valuation are playing with options.

Man ... that is scary.

I'm sorry, but options are just as easy as stock if not simpler. You have a choice of long or short, and your losses are limited to the premium invested.

Covered call writing is one of the simplest and most common forms of option trading, and is inherently less risky than long/short hedging by purchases of put and calls.
 

dnuggett

Diamond Member
Sep 13, 2003
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Originally posted by: PAB
Originally posted by: dnuggett
Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

I'm not following you here.

If you wrote the call @ 108.50 and went long a lot at 107.50 how's your target price 111.60?

Well as I said before, the technicals showed a run to 109/110, and $111.40 is going to be the breaking point for the option. If the stock goes sideways or down, I've pocketed the $6.40 premium. Factoring the premium with the strike price the stock has to go avove $111.60, otherwise it is cheaper for the option holder to buy the stock on the open market for less.

I'm hoping the stock runs to $112 so it gets called and I can sit around and bask in a gain just shy of 4 points.


You are still off. How is 111.40 the "breaking" (unsure of that term) point for the option? If the stock is within a quarter point of the strike you will most likely be called. That means you are collecting the premium and being forced to sell it at 108.50. If you bought it at 107.5 and are called you'll be gaining a point there + the premium unless you cover before expiry.

I don't see what you mean by "cheaper" to go buy the stock in the open market. The premium lowers your basis and limits the upside. The operative term you are using of "cheaper" to buy the stock on the open market is what doesn't make sense to me. It is always "cheaper" to write a call and lower your basis. The term you would want to use is advantageous. If you think it's going to run above the price you paid in the open market + the premium from the call write, then it is less advantageous to write a call.
 

dnuggett

Diamond Member
Sep 13, 2003
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Originally posted by: PAB
Originally posted by: IHateMyJob2004
Scariest thing about this thread:

People that seem to know little about valuation are playing with options.

Man ... that is scary.

I'm sorry, but options are just as easy as stock if not simpler. You have a choice of long or short, and your losses are limited to the premium invested.

Covered call writing is one of the simplest and most common forms of option trading, and is inherently less risky than long/short hedging by purchases of put and calls.

It limits the upside to the strike plus the premium. And technically no, it is not less risky then buying a call. When you write a covered call that assumes you also have a capital outlay for 100 shares of the stock that figures into the risk of the position. The maximum risk is that you lose the total you paid for the stock - whatever premium you collected. So let's say you have a stock @ 20. 100 Shares will run you 2k. Let's say you wrote a Jan 25 and collected $5. All you did is cover your ass for 5 points from a risk perspective. You stand to lose a maximum of $1500. If you can't find a call for a ton less that will capture all your upside (i.e. in the money) then you have no business trading options. Your maximum loss is whatever you paid for the contract, and you didn't limit your upside. How is writing a covered call less risky than picking up an in the money call? Besides that, it's apples and oranges, they are only used synonomously by people who don't know the difference.

And what does the purchase of a put have to do with covered call writing? When you write a covered call you either utilizing an income strategy or hedging your downside by the premium amount. Both of those scenarios are fundamentally different then buying a put.

Also to say that options are just as easy as stock if not easier IMO is categorically incorrect. You speak nothing to strategies or valuations when you say that. I'm a bit perplexed that you follow a covered call strategy but don't realize time value and volatility. Or that you write both time value and volatility off to being as easy as purchasing stock. If I were you I'd learn a bit about the most advantageous call to write in a series based on the time value left in the call that you are writing. Especially if you are looking to create a strategy that uses concepts like a ratio of maximizing your return with a consideration for time. Or is it your broker that does that for you? If it is, tell him to read this post. From some of your posts I have read, you seem to be capable of understanding such things. Most people can't/don't get it.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: dnuggett
Originally posted by: PAB
Originally posted by: dnuggett
Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

I'm not following you here.

If you wrote the call @ 108.50 and went long a lot at 107.50 how's your target price 111.60?

Well as I said before, the technicals showed a run to 109/110, and $111.40 is going to be the breaking point for the option. If the stock goes sideways or down, I've pocketed the $6.40 premium. Factoring the premium with the strike price the stock has to go avove $111.60, otherwise it is cheaper for the option holder to buy the stock on the open market for less.

I'm hoping the stock runs to $112 so it gets called and I can sit around and bask in a gain just shy of 4 points.


You are still off. How is 111.40 the "breaking" (unsure of that term) point for the option? If the stock is within a quarter point of the strike you will most likely be called. That means you are collecting the premium and being forced to sell it at 108.50. If you bought it at 107.5 and are called you'll be gaining a point there + the premium unless you cover before expiry.

I don't see what you mean by "cheaper" to go buy the stock in the open market. The premium lowers your basis and limits the upside. The operative term you are using of "cheaper" to buy the stock on the open market is what doesn't make sense to me. It is always "cheaper" to write a call and lower your basis. The term you would want to use is advantageous. If you think it's going to run above the price you paid in the open market + the premium from the call write, then it is less advantageous to write a call.

Ok, look.

I own ATI. My cost on the stock is 107.50. Premium was $6.4 when I wrote the 105.

I have sold an option to buy my stock at $105, with a $6.40 premium. Unless the stock gets close to $111 - it is cheaper for the option HOLDER to buy stock on the open market instead of calling my stock at $105 when you factor in the option premium. If they call it I'm still ahead of the game with the premium.

And yep - I sold BP early. Oh well, at least I was right in principle on the energy sector.
 

PAB

Banned
Dec 4, 2002
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Originally posted by: sm8000
I just bought 500 more of BP and 500 more of SUN.

I hate SUNW so bad. Seriously. Scott McNealy needs to be shot.

Get into (pick one)

RIG
NOV
AAPL
ATI
FCX
RIO
C
BAC
NYX
UNP
 

PAB

Banned
Dec 4, 2002
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Originally posted by: sm8000
I dumped all my SUNW in favor of SUN(oco) ;) And ATI was the first thing I bought.

I'm just joshing you, I noticed you were still holding SUNW a few posts up.

So, mind telling ATOT how much fake money I made you and on what positions?
 

iversonyin

Diamond Member
Aug 12, 2004
3,303
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Originally posted by: PAB
Well, lets see how the naysayers like me after today.

BA - I ordered 400 at 90, got it this morning. I've got 50 cents on the stock right now.

CVX - Up to 73 briefly

BP - Up to 62.25

ATI - Up to 108.50 and change, I'm not counting the 109 and change at open because it would have been untradeable. Ordered at 107.50, and called it 50 cents off the bottom of the day. Wrote the April 105 at 108.50 at a $6.40 premium putting the stock at my target of $111.60 before my stock gets called.

First on ATOT:

If ATI runs to 110 and holds it and I'm long the stock at the time, I will have bumper stickers made up that say BLUE HORSESHOE LOVES ALLEGHENY TECHNOLOGIES and I will send some to Pat Hassey and Jim Cramer. W

From $107 to $110...whats the big deal?
 

iversonyin

Diamond Member
Aug 12, 2004
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Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: iversonyin
Originally posted by: PAB
Originally posted by: bigdog1218
Originally posted by: PAB
Originally posted by: IHateMyJob2004
STOP TRADING!!!!!

After taxes, etc ... YOU WILL LOOSE OUT TO ANY BUY/HOLD INVESTOR!

Buy and hold = Buy and lose. Look what happened with Corning. I waited for a catalyst to get that stock off it's ass for a while.

You can't make money if you hold infinitely. You have to sell and know when the right time to sell it. Sector rotation is important in an economy as diverse and dynamic as ours.

Buy and hold is outdated and wrong. You HAVE to sell eventually or when there isnt a good/compelling reason to own that stock anymore. For example, my compelling reason on CVX was the analyist meeting. The boosted production but forecast a relatively flat year - shortly after I got stopped out and didnt make my full point but caught 75 cents. Not the greatest return ever, but not bad for three days.

Your just said you have owned a stock since 2001 that you've been holding for the past 6 years and still haven't made your money back, so one of these statements is full of sh!t.

And have fun riding ATI to 93.

Right, because I was drinking the buy and hold kool aid. I'm holding corning NOW because their diesel/LCD business has shored up nicely and I'm waiting to get in the 30's before I sell.

My investment philosiphy has changed, obviously since 2001. I bought corning with the buy and hold mindset - and I just said buy and hold dosent work and I illustrated my point perfectly.

And when ATI hits 93, I'm buying more. I'm calling you out on that one. If/when ATI hits 93, I'm going to average down and when it hits 103 a week later I'm going to post trade confirmations and PWN your ass.

If you knew anything about ATI you'd know that they've got a very solid business, and their stock goes down for short periods of time and comes right back. They are a quality company with a great product, great margins, and are poised to make a lot of money off the ethanol craze - which I have market research supporting that ethanol is NOT going away anytime soon, and they're suppliers of high performance products to Boeing, which is having a spectacular run.

When earnings comes out on ATI in April, we'll know who's right.

And are you the only guy on the street that discover ATI is a great business? What gives you an edge? Cramer?

Low cost index fund beat almost everything in the long run for most individual investors.

And if ATI is such a great business....tell me about what they do and how much they make from each of their businesses...which one of its business drove the growth it had in 2005-6? Which one of its business are you seeing growth in the future 2007-2008? How big its margin going to get?

High performance metal, stainless steel, titanium, engineered products, etc. They even make armor plate!

I guess what you're asking is if I've bothered to do any homework on what the company makes, where they make it, and how much they sell it for - all information that is readily available in their annual report.

Aerospace represents 25% of their 2005 sales. Titanium, andi their alloys (representing 18% of their business in 05) are going to be used more extensively in avation throughout 2008.

Growth in Oil/Gas Drilling and Exploration increases demand for ATI's products as well....

I could go on and on.

BTW, Cramer pumped up CAT bigtime recently. I dont know if this is a smart move and here's why.

ACERT still isnt operationally sound. I havent heard one good thing about it. Did you know CAT acknowledged they would not meet EPA deadlines on getting ACERT into production and would have to pay fines to the EPA for not being in compliance?

North America still represents their largest sales area, not to mention one of their most visible.

On Highway Engines represents a gigantic part of CAT branding. When truckers stop saying IF IT AINT A CAT ITS A DOG - thats a big problem. The OHE business is one of their most visible product lines, representing 29% of their 2005 sales. 29% = $3,000,000,000 in revenue. Thats a lot of yellow paint. The big problem right now is that PACCAR, which owns Peterbilt and Kenworth both offer CAT engine options.

Peterbilt's Denton, TX factory has 500+ tractors sitting at the factory waiting for CAT engines. This is not good news. In fact, I'm somewhat inqusitive about it. I wonder if dealers and end users will go to something like an ISM/ISX from CMI instead of waiting around for big yellow.

Anyhow, thats my .02 cents on it. I might sell the put on CAT and see use it as a cost reduction strategy to get the stock cheaper if the buyback pops it up. I personally dont see a particularly (get the joke?) strong catalyst thats going to propel CAT up anytime soon.

edit: show me a low cost index fund that you like, and I'll show you a fund that I probably own that has outperformed it.

Be careful of what you show me and that past performance is NO WAY an indication of future performance. For regular investors, you are better off buying something like Vanguard Total Market Fund or similar funds that track S&P 500. Of course, you you add a little exposure to the Russell 2000 tracker (5-10%). But most of your portfolio would concentrate in Big Caps Index.

Also, to outperformed the S&P 500, you have to outperform it on Reward-Risk basis. You can't have a small cap fund that return 20% last year and said you "beat" the market.

Most people don't follow the market and bother spending hours reading about a company. Passive index fund is the way to go. Even you do spend time doing your "homework", what make you any better than the pros who spend countless of hours reading the same thing and having MIT grads run quant models trying to figure out how to outperform the market (and only 3-5% of them outperform in the long run).

I do, however, believe in hard work, skillful traders- who is discipline enough to apply tools and STRICT money/risk management to trade the market SHORT term. BUT THAT requires your FULL attention...and most people have their business/ fulltime job that they can't pay full attention to the market.- and those players probably has their retirement fund set aside in a conservative portfolio/index funds.

I'm glad that you are so enthus about trading, and the bull market had been treating you well I assume. But I'll be very careful of those Cramer's picks in the future.

I disagree. A "passive" index or total market fund has limited options. As I said, even if you want to go on a fund to fund benchmark - I'm more than 50% certain that I own one or more funds that outperform almost anything from Vanguard and their balanced, total market, or target products.

A contrarian philosiphy has made my family a lot of money in the past in FCNTX and its continuing to make us money in JSVAX. I believe that you can beat any index, dow, S&P, russell, with the proper selection of diversified funds.

....plus, I called my broker to get my orders in for the day. Even with the dip, I am still outperforming the DJIA and SPX since inception.

Have your broker statements for last 5-10 years? As I said...there's only 3-5% mutual fund managers beat the index in long run 10 year. When you have wide selection of funds...your risk profile is no longer SIMILAR to the S&P 500 or the Dow. You are expect to to get more reward for more risk taken.

And can you explain to me what is a "contrarian philosophy" to you? Contrarian means that people who short into the bull market...and looking at those funds return, it doesn't seem like it contrarian to the market- or else it would've have opposite of the return of the market if its contrarian. These funds you listed seem to be highly correlate to the market.

And once again, you not understanding "outperforming the market" when you said you called your broker. Having ATI, RIG and whatever else you listed in your portfolio...you are not diversified- meaning you are taking on MORE risk. You are not necessarily beating the market on reward/risk basis.

Ohh, and we are talking about after tax and fees return. Passive index funds charge way less fees.
 

Steve

Lifer
May 2, 2004
15,945
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www.chicagopipeband.com
Originally posted by: Lothar
Originally posted by: sm8000
I dumped all my SUNW in favor of SUN(oco) ;) And ATI was the first thing I bought.

Why don't you join our game here?
http://forums.anandtech.com/messageview.aspx?catid=38&threadid=2011914

And you too PAB...

I'm already playing a game at CNBC.com, but I'll take a look at this and if I can make the time...

Originally posted by: PAB
Originally posted by: sm8000
I dumped all my SUNW in favor of SUN(oco) ;) And ATI was the first thing I bought.

I'm just joshing you, I noticed you were still holding SUNW a few posts up.

So, mind telling ATOT how much fake money I made you and on what positions?

I honestly haven't been paying close enough attention, but here's an updated snapshot of my portfolio, and this is by far the best shape it's ever been in:

http://pics.bbzzdd.com/users/sm8000/portfolio.jpg