meiroy

Well, I wouldn't touch BAC in the first place if I thought it might get to 0 and if someone is indeed worried about that surely they are worried about general market risk as well. In this case, why not just buy a BAC put? The risk:protection from the WFC put doesn't seem that attractive (for the purpose mentioned.) As a side note, owning the common is a temporary loss of capital compared to permanent loss of capital, so just owning the common a market crash situation isn't that intimidating (assuming capital invested is not in need which is how it should be in the first place.) In general I understand this comment keeping in mind your previous comment that it's best to leverage at market bottom, but not with the purpose of the trade. With the margin account loss you could have used the cash in the first place to buy the calls anyhow. I mean, the above comment seems unrelated to the trade. I have almost zero experience with options, just trying to pick your brain.

Market crashes. WFC goes to 22 and BAC to 5. You get called on the WFC trade costing 8-3 =5 and on the BAC you can get 7-5-0.805=1.2 to a total loss of 5-1.2 = 3.8 per share in addition of course to the paper loss on the common. Did I get that right? I did not understand the importance of mentioning the percentage of notional.

I'm looking forward to the seniors discount. (I think some might start as early as 55) My parents are making out like bandits. Oh, and they're getting cheap stuff too. ;)

Sometimes I will write a put and use the proceeds to purchase calls. Like say for example I want to go long 100% notional BAC but I'm worried about systemic risk in the global banking system originating from a potential disaster with the Eurozone periphery states. I can: 1) write puts on something else and collect "the proceeds" upfront 2) use "the proceeds" to either buy calls on BAC or purchase puts on BAC This is a "Frankenfolio". I might have 100% upside BAC but with 0% downside of BAC. This is what options markets are designed for -- swapping risk with others. My guess you wrote puts on WFC. Correct? Joel Greenblatt did 40% over a period of 20 years, with a way of thinking which is somewhat similar to yours: 1. keep all in context (the BAC thread shows beautifully how you guys consider it a good investment not just because of the discount to TB but because of the context of the change in the business itself, something many analysts would miss. That is, intrinsic value is business intrinsic value, which might not be only seen from the accounting numbers. Numbers could be the same, conclusion different. Thanks for that!) 2. consider the risk:reward and use leaps/options when possible. 3. highly concentrated portfolio. And he did that with well over 10M, returning capital to clients when the fund got too big.

At least he didn't mention we're all going to die eventually, so he must be optimistic. What I took from it is that he considers corporate bonds as a decent investment option. The rest, to sum it up is: looks bad, really bad, but it's so complex maybe something new will happen and make it better, not the same as before, just better than how it is now. Or maybe it was bad before, we just didn't notice, so it's actually not that much worse now. I read another article yesterday how cheap energy and 3D printing is going to give the USA the edge over Asia and the needed boost to its economy (seems to be quite a few of these lately.) Sounds right to me.

I recall that last time someone started such a thread was around the beginning of the year after that rally and we know what happened than. So if it falls it's all OP's fault.

" In 1977, Lynch was named head of the then obscure Magellan Fund which had $18 million in assets. By the time Lynch resigned as a fund manager in 1990, the fund had grown to more than $14 billion in assets with more than 1,000 individual stock positions. From 1977 until 1990, the Magellan fund averaged a 29.2% return" Lynch is one of my favorites as well, really enjoyed reading his books, great humor and fantastic investing insights.

A moral violation in a no-God paradigm? I've been arguing this conditional: if God does not exist, there are no necessarily true moral propositions. Well, I still think that is true. As near as I can tell, you agree. At first look it seems that morality (meaning a general concept based on the assumption that all people have certain rights regardless of who they are, their race and their sex) is quite uncertain compared to religious regulation (also called [religious] morals for some strange reason). In practice, religious regulation is not that clear in itself and depends on specific people's interpretation. It's enough to just take Christianity as an example, there are plenty of variations out there with differences in regulation. Sometimes it depend on which Church you'd go to. Continue to add other religions and I'd say we'd be far better off relying on morality as defined in the first sentences. (P.S the USA if composed of about 80% white, and religious distribution of all population is Protestant 51.3%, Roman Catholic 23.9%, Mormon 1.7%. I'll leave it at that).

That's exactly what I was thinking while reading this thread now. A more general idea would be to make registration free yet a bit more difficult, i.e. if someone can't be bothered to spend a couple of minutes to finish a task it's fine if they do not register. So it can be a couple of sentences for why they want to register, or what is compound interest etc.. Assuming registration can be linked to emails like this. Would that actually save time for Mr. Parsad or add more I'm not sure...

This discussion can go all day, bottom line it is about perception of reality, the difference between a religious view and a non religious view. Mentioning morals in the context of religion is nonsense, it should be read instead "because my god said so". Hopefully the USA will not slip [back] too much into religious territory. Plenty of such countries around. I'm not a US citizen, never been there, yet I feel quite lucky to be alive in an era which is under the indirect rule of our American Overlords even with all their shortcomings (e.g. starbucks coffee).

I can't vote for Republicans because they advance the agenda of the religious conservatives. Which leaves me with only Obama to vote for. Amen to that. (there you go Kraven)

The writer of the piece is their "not-republican contributor of the day." Fox is still Fox :)

Haven't sold anything nor bought any hedges, if it goes down will ride it through and if it crashes badly will try to exchange cheap stuff for extremely cheap stuff. Tried this market timing before, doesn't work out too well, at least for me.

CNBC's title sure is confusing, my understanding the bet was done years ago and recently cancelled and not that it was cancelled 5 years ago. Is that right? Context: http://www.youtube.com/watch?v=3kc3bQF1fhY "Warren Buffett is Berkshire Hathaway Chairman & CEO. "Muni bankruptcies will increase as large cities default" [We saw a rise in bankruptices, California, Stockton...should we be worried about that?] "The easier it becomes the more tolerable it is. Once people find the cities works the next day it is easier to deal with bankruptcy. The stigma is reduced....the very fact they do it makes it more likely. Plenty of cities have problems. Huge problems" [Meredith Whitney says we could see hundreds of billions of bankruptcies. Are we at the precipice?] "It may not quite be what people associated wtih bankrupticy before they saw a few of these"."

oddballstocks,, Thanks for the prompt reply and suggestion; unfortunately I'm pretty sure that is not going to work where I'm at, for sure it will be perceived as a threat, I did go and eat at some places to see what they sell... Yes, agree about the possible high profit margin for a pizzeria which is why we're looking at it and not a restaurant and it does seem to be much simpler to operate, the oven has already been chosen (first thing to choose when it comes down to it) and there is indeed some element of differentiation which could be easily copied like anything else. Thanks again.

Myself and some friends are looking to open a pizzeria, or a variation of a sort. We're still in the "thinking about it" stage, yet it's quite likely to happen. It would be very interesting to read some 10Qs and listen to conf. calls of companies which you guys consider to be good examples of "how to run a successful F&B" or examples of how not to... Thanks for any ideas.

Thank you guys for writing so clearly about your experience and allowing us to learn from it. A couple of questions/thoughts: 1. Your comments might explains clearly why you thought the company risk is limited, yet even in such a situation how could someone be invested 100% considering there's also the market risk and a possibility of a permanent loss of capital? It's fantastic to see that it worked out though. 2. This applies to BAC as well, especially what's going on in Europe right now where it's highly likely it will at least partially collapse. You could be completely right about BAC's individual risk and still encounter complete loss of capital due to market risk. 3. In another thread someone calculated that the warrants (A I assume) would yield 40% more than the commonat expiration date, even if the final number would be even higher due to dividend/common per warrant adjustment, is the risk:reward worth it considering a permanent loss of capital? 4. Before reading this thread, I read quite a few post showing some hatred towards the short-sellers. Regardless of why they did what they did it seems it created an amazing opportunity for individual investors. Wouldn't mind it happening to one of the stocks I'm following...

http://www.nanex.net/aqck/2804.HTML it seems it represent more the amount of quotes than the amount of trades: "It's not high frequency trading (HFT) that concerns us. It's high frequency quoting, and it should concern everyone. ... while trade frequency has stalled and is actually lower than it was years ago. " http://www.nanex.net/Research/ExhibitA/ExhibitA.html "Quote traffic, like spam, is virtually free for the sender, but not free to the recipient. The cost of storing, transmitting and analyzing data, increases much faster than the rate of growth: that is, doubling the amount of data will result in much more than a doubling of the cost. For example, a gigabit network card costs $100, while a 10 gigabit network card costs over $2,000. A gigabit switch, $200; a 10 gigabit switch, $10,000" "But in those limited contexts where the interests of long-term investors conflict with short-term trading strategies, the conflict cannot be reconciled by stating that the NMS should benefit all investors. In particular, failing to adopt a price protection rule because short-term trading strategies can be dependent on millisecond response times would be unreasonable in that it would elevate such strategies over the interests of millions of long-term investors – a result that would be directly contrary to the purposes of the Exchange Act. "

First time I've watched Bloomberg TV, these guys talk like they're describing a terror attack on an ice cream booth which is happening right now in some wall... weird stuff. Haven't seen Buffett in about a year now, he sure looks much older, bummer. Something press the stop button!

I think he's spot on as far as the macro goes.

Nothing yet. The stuff I've been watching has gone down some but not by enough. Maybe it's comparison bias, but that just how it seems. I'm 60% cash with 30% in leveraged financials.

Well, the sizes are insanely large. You order a glass of something and get a gigantic flower vase filled to the brim with sugar-water. The sizes of the people follow. I cannot wonder, though, if the "law of unintended consequences" will cause this new law to backfire and make things worse. A better solution might be to inflate even higher the ridiculous high health costs, maybe then people will get the message...

;) LOL This thread is a riot. Hey, this site isn't just about making money, but how to spend it and live your life too! We seem to have one of these threads every year. I remember last year's was on groceries and people's buying habits! I believe that was the thread where Ericopoly said his wife had just choked the chicken...literally! She had broken the neck of a hen bare-handed, and that was that night's dinner! ;D Cheers! Yeah, that brings back memories. The best way to dispatch the chicken and drain the blood without getting it on anything other than the ground is to grab the chicken by the back of the head, pinching the neck with the thumb and forefinger, swing the chicken around the wrist once or twice, then suddenly stop the motion of the forearm and pop the wrist (this is called wringing the chicken's neck). The head and neck will then come off the chicken, and the headless chicken will flop around on the ground and actually get up and run around flapping its wings while splurting blood onto the ground through the headless opening for about a minute before expiring. Cheers! (for all but the chicken and the other birds in the flock that will not be pleased by this activity) Is this an analogy about RIM? Either way I'm going vegan for the next year. Thanks.

I've been keeping an eye on 3D printing as well, the stuff that has been coming out this past year is truly impressive. Oh, and this is how Technology Will Save the World: 1. Advance in technology exponentially increases efficiency. 2. Everyone becomes unemployed, no one is required to work. 3. People are so bored from reality shows they throw themselves into the oceans. 4. No more civilization. "The World" is saved.

How is what Parsad doing any different than anticipating a turn in a cyclical industry? If one is under the impression that the process has began it would only be wise to take advantage of it (above posts have not even mentioned the coming hard landing in China). P.S the bank warrants are timing the market.