Some stocks just got a lot cheaper. I believe we saw the wipeout of some momentum traders with their stop-loss orders. I increased the GS call position yesterday during the carnage. As per usual in these situations the implied volatility spiked and it is arguable a better strategy to sell puts. I was somewhat disappointed by today's action as we didn't get a follow-through today from yesterday. Disappointed because I was eyeing some more opportunities. That said we might very well see more weakness ahead.
Notable is that commodities are holding so well through all this. Crude was up for most of yesterday and finished today close to $62.
Another encouraging sign is that the USDJPY remained relatively strong, particularly today. It is much talk about the so called Yen carry trade in the media. It is probably a good thing that everyone is aware of the risks of this trade.
Wednesday, February 28, 2007
Monday, February 26, 2007
Performance
This graph represents the performance data on a NAV basis. I am happy with a 90.4% annualized return compared with 9.7% for the S&P 500 since May 2004. I have also added the NAV numbers in a new section on the right side of this blog.
All trades since September 29, 2005 have been documented on this blog in near real-time.
Thursday, February 22, 2007
Market and Portfolio Update
Commodities show remarkable strength here with WTI crude above $60, silver at new highs above $14 and and gold up some $20 the other day getting closer to $700. I don't believe in chasing crude here, the contract should be bought on weakness under the $60 level.
Boliden ended the day up more than 4%. The company released earnings for full year 2006 earlier this month. The earnings came in over SEK 21 per share. With a share buy-back program of up to 10% of the float and increased dividends the management seems more shareholder friendly. Something I have called for. At the same time we know that the company has locked-in higher copper prices in the years to come, this is good news as it seems the metal is more or less in balance. The exposure still remains in zinc, where we still see very small inventory numbers. The stock is fundamentally very cheap at current levels.
Pare is a very volatile stock. I firmly believe that once the company reports a full quarter with 20,000 bpd in production the stock will be much higher than today.
Google proves once again that the stock should be bought aggressively every time PEG dips below 1 on forward earnings. The company just announced a premier edition of Apps which will compete head to head with Windows Office. We know Gdrive is still in the pipeline and could be launched at any time. There have recently been a lot of news surrounding Viacom and YouTube. I would like to point out that Joost is not a competitor to YouTube, still Google needs to be present in the new TV platforms, either with a GoogleTV solution or directly with Joost as I have suggested here before.
The equity markets continues to trade with a historical very low volatility, which have dampened my trading activity somewhat. I have been successful with S&P shorts recently and right here I find myself once again closer to a short hedge than an increased market exposure.
The GS call option strategy is working extremely well as the stock remains undervalued. Calls should be accumulated on weakness which could be triggered by a market sell-off.
There are two interesting IPOs one should keep an eye out for; Interactive Brokers and Clearwire. Maybe the first one more than the latter but of course all given pricing. Clearwire is a pure play in Wimax in the US. I strongly believe that the Wimax adoption for phones will be considerably faster than 3G due to cheaper technology and packet based (IP) data. Wimax is what 3G shold have been.
Boliden ended the day up more than 4%. The company released earnings for full year 2006 earlier this month. The earnings came in over SEK 21 per share. With a share buy-back program of up to 10% of the float and increased dividends the management seems more shareholder friendly. Something I have called for. At the same time we know that the company has locked-in higher copper prices in the years to come, this is good news as it seems the metal is more or less in balance. The exposure still remains in zinc, where we still see very small inventory numbers. The stock is fundamentally very cheap at current levels.
Pare is a very volatile stock. I firmly believe that once the company reports a full quarter with 20,000 bpd in production the stock will be much higher than today.
Google proves once again that the stock should be bought aggressively every time PEG dips below 1 on forward earnings. The company just announced a premier edition of Apps which will compete head to head with Windows Office. We know Gdrive is still in the pipeline and could be launched at any time. There have recently been a lot of news surrounding Viacom and YouTube. I would like to point out that Joost is not a competitor to YouTube, still Google needs to be present in the new TV platforms, either with a GoogleTV solution or directly with Joost as I have suggested here before.
The equity markets continues to trade with a historical very low volatility, which have dampened my trading activity somewhat. I have been successful with S&P shorts recently and right here I find myself once again closer to a short hedge than an increased market exposure.
The GS call option strategy is working extremely well as the stock remains undervalued. Calls should be accumulated on weakness which could be triggered by a market sell-off.
There are two interesting IPOs one should keep an eye out for; Interactive Brokers and Clearwire. Maybe the first one more than the latter but of course all given pricing. Clearwire is a pure play in Wimax in the US. I strongly believe that the Wimax adoption for phones will be considerably faster than 3G due to cheaper technology and packet based (IP) data. Wimax is what 3G shold have been.
Monday, February 12, 2007
Friday, February 09, 2007
The Right FIG Trade
The way to play the Fortress IPO craze is GS. This could be the trigger for GS multiple expansion. Hence, the GS calls should be bought aggressively on any dips, currently they have a $20 bid.
On another note, WTI Crude is once again above the $60 mark.
On another note, WTI Crude is once again above the $60 mark.
Friday, February 02, 2007
Two Trades
Exiting oil at $58.850 after a huge recovery. The contract gained $4.275 in one week, which is quite remarkable.
Shorting ES as a hedge here at 1451.25, as we might very well be in for a pull-back.
Shorting ES as a hedge here at 1451.25, as we might very well be in for a pull-back.
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