06/24/2011
December 3, 2017
06/11/2011
December 3, 2017

06/18/2011

Currently I’m trading stradles and strangles with options, just looking for a directional move for profit.
Many of the charts I view have a downward trend from $30 to $20. Is it easier for the a stock to rise to $25 since it only has to move 20% compared to go down to $15 since it needs to go down 25%.
I guess my question is, is going down and going up equal, or is it easier to make a stock rise than fall? If I had 100,000 shares, by selling or buying, which trade could I make the percentage move the most?

If you’re asking me this, you probably shouldn’t be trading options….

Stocks tend to fall faster than they rise, but I hate paying for options unless it’s very long dated and a I have an opinion on a much bigger move than 20-25%


http://www.paperage.com/foex/pulp.html

NBSK price trend is still up, MERC price trend is down. Am I missing something, or is the market missing something? There’s been some pretty big MERC insider buying lately.

I’d bet on the insiders over the market here. I’m pretty tempted to buy more if it drops much more. 1.5x cash flow is just silly.


Interesting, ratings agencies getting tough all of a sudden! This woman was briefly China’s richest in ’07, when the stock was over $20. It was $5 this morning, now who knows…

In our view, Nine Dragon has an aggressive debt-funded growth appetite. We withdrew the ratings because we have insufficient access to management and therefore cannot fully understand the company’s strategy and financial management or assess its future credit risks.

http://www.reuters.com/article/2011/06/14/markets-ratings-ninedragonspaper-idUSL3E7HE0Q720110614

This is from a good friend of mine. I’ve always joked that if you want to research a Chinese company, you’re better off reading a fortune cookie than the financials. I used to joke about it, but now it seems that I’ve been right all along…..I was hoping that at least one was honest… Maybe not?


I believe the negative Tax Rates are a result of Politicians being so good at supporting America’s One growth Industry – Tax Credits.

Did you know the US Treasury as an entire Department (www.cdfi.gov) that assigns New Market Tax Credits. A department Dedicated to reducing Taxes for Financial Institutions if they make investments that dovetail with the Executive Branch’s interests.
Yes, Tim Geithner over sees the passing out of Tax Credits to Financial Institutions and Non-Profits called CDEs or CDFIs.

The New Market Tax Credits are kind of the secret sauce of Washington DC and the Banking Industry. An entire Industry of Lawyers, special departments in Banks and Investment Houses, and non-profits that often funnel the Tax Credits to Banks.

Perhaps you’ve seen these urls at the end of commercials for Banks – these are advertisements for the New Market Tax Credit operations for Goldman and BofA on CNBC….
http://www.goldmansachs.com/progress
www.bankofamerica.com/opportunity

Its probably more detail than you were interested in….
Thanks for helping with my re-education.

I have posted this for readers with an interest in how we are all being stolen from. I have a funny feeling that this process doesn’t stop until we all sharpen our pitchforks a little bit…


I’ve been looking through the Chinese Fraud Stocks, they all seem “pretty cheap” on paper. Do you think any are less fake than the others? Do you plan to sort through them and find the less criminal ones?

You sound like a friend of mine in college who used to try to convince me that some of the girls at the bar were less ugly than the others…. I’m sure you can get lucky if you try, but why bother. There are so many easier ways to make money.


It was interesting to read your toilet paper play, since we are already long CFX.TO, a pure play NBSK producer and probably the highest yield one, at that.
http://tmx.quotemedia.com/quote.php?qm_symbol=cfx&locale=EN

While low-priced companies may have increased volatility, the 40 cents per Q payout on Canfor, yielding between 9 and 10%, at least pays you while you wait.
My question is whether you considered this one and rejected it. If so, I’d be interested in why.
Thanks…I enjoy your efforts and appreciate your generosity taking the time.

I looked real quick and I thought that the worse balance sheets at MERC or FBK would give me better optionality if I was right on the cycle. Those two are really publicly traded LBOs. Of course, I took more risk by doing this. I also didn’t really want the exposure to paper manufacturing. I’m certainly not saying that I chose the right ones. CFX could be a better choice. There is also a Scandinavian one that I passed just because I was too busy on other things–not because I know anything about it good or bad.


Kuppy, You have been quite on stock picks lately. Is there a reason?

Look, if you want a stock of the week, there are plenty of guys who will charge you money for that. I’m only writing about what I’m doing at my fund. We’ve been 20-30% cash for over a year now. We just haven’t found much that interests us. Sure, there are cheap companies, but nothing with the upside for us to really get excited.