boilermaker75
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Posts posted by boilermaker75
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Are you able to (roughly) quantify the intrinsic value of the index?
The S&P500 earnings are around $105 and it's at 1517...so roughly about 15 times earnings. Neither cheap, nor expensive historically. It won't provide you returns larger than growth in GDP and inflation plus dividends. You also have no boost from interest rates, nor profit margins, which are at historical lows and highs respectively. Cheers!
Is there a rule of thumb, or maybe it is available somewhere, to approximate the FCF for the SPX from the earnings?
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In the fall of 1853, an American craftsman named Elisha Otis, who had found a solution to one of the era’s toughest engineering problems, went looking for a grand stage to demonstrate his invention.
At the time, many American buildings had elevators. But the mechanics of how these crude contraptions worked – a combination of ropes, pulleys, and hope – hadn’t changed much since the days of Archimedes. A thick cable pulled a platform up and down a shaft, which often worked well – unless the cable snapped, at which point the platform would crash to the ground and destroy the elevator’s contents.
Otis had figured out a way around this defect. He attached a wagon spring to the platform and installed ratchet bars inside the shaft so that if the rope ever did snap, the wagon spring safety brake would activate automatically and prevent the elevator from plummeting. It was an invention with huge potential in saving money and lives, but Otis faced a skeptical and fearful public.
So he rented out the main exhibit hall of what was then New York City’s largest convention center. On the floor of the hall he constructed an open elevator platform and a shaft in which the platform could rise and descend. One afternoon, he gathered convention-goers for demonstration. He climbed onto the platform and directed an assistant to hoist the elevator to its top height, about three stories off the ground. Then, as he stood and gazed down at the crowd, Otis took an ax and slashed the rope that was suspending the elevator in midair.
The audience gasped. The platform fell. But in seconds, the safety brake engaged and halted the elevator’s descent. Still alive and standing, Otis looked out at the shaken crowed and said, “All safe, gentlemen. All safe.”
TO SELL IS HUMAN, by Daniel H. Pink
giofranchi
Another book added to my ever growing to-read list. I seem to add 3 books to the list for every one I am able to read and take off the list. Thank you for posting this, though, if the rest of the book is nearly as good as that snippet it should prove a fascinating read.
I already own more books than I can read in my remaining time, even if all I do is read starting today! But that doesn't stop me from constantly buying more books. I am like Jerry in the movie Conspiracy Theory. I can't go by a book store without buying a book. But unlike Jerry, at least I keep buying a different book each time. That is unless I forgot I already have it!
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I made a small position in 2014 leap with Moody's today. A bit speculative but my expectation is 12 months from now focus will be back on the earnings power. High 30's operating margin and high 20's net margin, it's twice as profitable than McGraw.
If it goes up when BAC goes down then even better for me.
wescobrk,
How are you defining that MCO is twice as profitable as MHP?
Just a quick look, less than 5 minutes, comparing EV to TTM FCF I am getting 11.8 for MHP and 16.8 for MCO.
TIA,
Boiler
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With a TTM FCF of of $1B and an EV of $12B it looks interesting and worth looking into--but I have not. Thanks for calling it to our attention. The put premiums are attractive to sell with the March 40-strikes going for $1.15, which is how I like to enter positions. If I find time I will also look into it this weekend.
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Can't get enough Big Bang Theory! My wife cannot understand how I can see the same episode four times in two months and laugh harder every time. Sheldon is just brilliant!
I love that show. I work at a research university, so it is almost like a reality show for me, lol.
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There was a period of time where my answer would be zero. Now after we are exhausted at the end of the day the wife and I will sit down and watch a show, or two, until it puts one of us to sleep, usually me. Even when we are watching I'll often be working on something else. So my guestimate now is about 10 hours per week.
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What about SPX and DIA and dollar, or value, cost average in?
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That is great. My daughter bought a place in West Hollywood in March 2012, and she maybe got in at the bottom. It was an REO and she got it for 42% of the previous sale.
Maybe I made all the stupid moves in real estate and she'll have nothing but good luck.
I moved to Silicon Valley in 1976 and never bought, only rented.
In Dallas in 1984 when I sold my house I had to write a check at the closing :(
I have been in my current house since 1985, but we have torn down, rebuilt, and remodeled so much over the years I'll have a loss whenever I sell.
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I would say I am in the $1billion plus, but usually companies above $10 billion like BRK, WFC, BAC, DOV, MDT, ITW, PH, etc. I also do a lot of put writing on the companies I am investing in. So I like a company that has many strike prices and high option volume.
I am usually about 90% invested. I usually have open put positions that would put me on margin by about 10% if I was put to on everything. I get put to only on about 5% of my option positions because I am writing puts at strike prices which I believe afford a considerable margin of safety. So when I get put to I often keep the position, adding to my LTBH positions. Otherwise I turn around and write a covered call usually at the price I was put to.
That's a good way to have good above average returns and steady income with little downside, occasionally having to buy a good company at a bargain price. How did you do in the 2008 2009 market meltdown, if I may ask? What are your cumulative or average annual returns from 2007 thru 2012?
The percentage I am in cash, and the number of potential positions because of being short puts, does vary. But I have been doing some form of this over the time period you ask about. Here are my returns for recent years
2007 22%
2008 -5%
2009 13.7%
2010 17%
2011 5.4%
2012 18.3%
Those are very good returns! They are even more impressive when adjusted for volatility. Congratulations! :)
twacowfca,
Thanks. Also almost all of my long positions were established by being put to. Writing a put helps me to be patient and wait for my price. There have been very few stocks that I have wanted to acquire where this did not work as a way of establishing my position.
Boiler
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I would say I am in the $1billion plus, but usually companies above $10 billion like BRK, WFC, BAC, DOV, MDT, ITW, PH, etc. I also do a lot of put writing on the companies I am investing in. So I like a company that has many strike prices and high option volume.
I am usually about 90% invested. I usually have open put positions that would put me on margin by about 10% if I was put to on everything. I get put to only on about 5% of my option positions because I am writing puts at strike prices which I believe afford a considerable margin of safety. So when I get put to I often keep the position, adding to my LTBH positions. Otherwise I turn around and write a covered call usually at the price I was put to.
That's a good way to have good above average returns and steady income with little downside, occasionally having to buy a good company at a bargain price. How did you do in the 2008 2009 market meltdown, if I may ask? What are your cumulative or average annual returns from 2007 thru 2012?
The percentage I am in cash, and the number of potential positions because of being short puts, does vary. But I have been doing some form of this over the time period you ask about. Here are my returns for recent years
2007 22%
2008 -5%
2009 13.7%
2010 17%
2011 5.4%
2012 18.3%
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I would say I am in the $1billion plus, but usually companies above $10 billion like BRK, WFC, BAC, DOV, MDT, ITW, PH, etc. I also do a lot of put writing on the companies I am investing in. So I like a company that has many strike prices and high option volume.
I am usually about 90% invested. I usually have open put positions that would put me on margin by about 10% if I was put to on everything. I get put to only on about 5% of my option positions because I am writing puts at strike prices which I believe afford a considerable margin of safety. So when I get put to I often keep the position, adding to my LTBH positions. Otherwise I turn around and write a covered call usually at the price I was put to.
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I was reading the article and got to the company Moog and thought I was going to be reading about a company that makes synthesizers, lol.
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I would think many companies on the Dividend Aristocrats list would be such companies. I have invested in many of them.
http://www.dividendgrowthinvestor.com/2011/12/dividend-aristocrats-list-for-2012.html
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Welcome aboard Grizzly Rock!
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Possibly *because* of home alarm companies ;)
No because of Roe versus Wade,
http://pricetheory.uchicago.edu/levitt/Papers/DonohueLevittTheImpactOfLegalized2001.pdf
And/or the decrease in lead exposure during childhood.
http://3.bp.blogspot.com/--MITcvOw0QQ/UO0GUwa1UGI/AAAAAAAAguY/VFpNow1JNfs/s400/Lead_Crime.gif
I was not aware of the lead study. Thanks for posting.
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Possibly *because* of home alarm companies ;)
No because of Roe versus Wade,
http://pricetheory.uchicago.edu/levitt/Papers/DonohueLevittTheImpactOfLegalized2001.pdf
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Here is a post from a poster I know some of you may know from a couple of different Yahoo groups, Cougar, on the topic of technical analysis. When Cougar ran his own private message board I was fortunate to be a member for a few years.
http://finance.groups.yahoo.com/group/chucks_angels/message/8964
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History as it happens is interestiing. But history is almost never told as it happens and that's the danger of it. Complexities and messiness wither away, the loser's tale gets lost and later people interpret it with the eyes of another time with a different set of moral and scientific axioms and ideologies. It gets fitted into a nice narrative which suits a specific implicit or explicit agenda.
This always fascinates me when I read a biography. Who told the author this and why? What's in the interest of the author? To write a readable story which sells (and in the case in which the author is hired or sanctioned by the biographee, optics matter even more) and not to give the historical truth. I think this is well illustrated in the fact that Newton's story of the falling apple is completely made up - about 20 years after he published his Principia Mathematica. And why? Because Newton realized that it was a great narrative and boy was he right.
Newton was one sharp dude, except when it came to investing!
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That's a silly article. That's a pretty long list of professions already. It seems as though more recent and prolific psychopaths have been video-game playing, Nazi-sympathizing, white males. And where do psychopaths like Willie Pickton from Vancouver fit in...Pickton was a pig-farmer who killed over 50 vulnerable women, and even fed some to his pigs?
I don't think there is any clear cut way to define what makes a psychopath. We're animals born of specific genetic material, mutated by the environment we live in, shaped by the experiences we endure. It's far to complex for any idiot to generalize in an article! Cheers!
You can tell with a proper MRI study. Certainly how well a sociopath functions in society is determined by environment.
There are definitely degrees to this dysfunction as well as vast differences on how it is expressed in different people. The sociopath or psychopath who becomes a senator or president is behaving differently than the serial killer who kills people and eats them. True the president may be killing far more people by proxy, but the serial killer is doing it himself personally. I wonder is this just different manifestations of the same dysfunction expressed differently because of environment or do these people have a different severity of the same dysfunction, or a different problem all-together?
I read a book on the subject written for the lay person, The Sociopath Next Door, by Martha Stout. Stout was on the clinical faculty at Harvard Medical School for over 25 years.
It has been a while, and my memory is not what it used to be. My recollection is both nature and nurture were involved but you could identify them with an MRI.
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That's a silly article. That's a pretty long list of professions already. It seems as though more recent and prolific psychopaths have been video-game playing, Nazi-sympathizing, white males. And where do psychopaths like Willie Pickton from Vancouver fit in...Pickton was a pig-farmer who killed over 50 vulnerable women, and even fed some to his pigs?
I don't think there is any clear cut way to define what makes a psychopath. We're animals born of specific genetic material, mutated by the environment we live in, shaped by the experiences we endure. It's far to complex for any idiot to generalize in an article! Cheers!
You can tell with a proper MRI study. Certainly how well a sociopath functions in society is determined by environment.
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I have my LTBH position in BAC, but I have been continually selling puts at-, or slightly out-, of the money for the last six months. The option premiums have been too good to resist. I wrote some March 11-strike puts today for $0.35 per share. Eleven will probably be my highest strike price.
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up 17.4%
AAPL, SPY, AMZN, GOOG and GLD "mini" options: New Tools For Your Strategy
in General Discussion
Posted
I had not heard of this before, thanks for posting.
I do like the weekly options. A couple of months ago I starting writing weekly put options on several different stocks each week.
I have looked at APPL the last few weeks and almost wrote some put options about a week ago. I might be more likely to start writing puts on APPL if I could start at a lower level.