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One Idea to Rule them All


hyten1
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sorry i had to do this

 

if you had to BUY one stock right now to do what eric has done (lever up, concentrate) what would it be :)

 

for me hmmm ..... maybe HHC or BAC :)

 

sorry for the lord of the ring reference.

 

EDIT: I know it might not be the best time considering many stock have went up, but just trying to force the idea, so you will really think about it which stock to pick if you had to pick one.

 

EDIT #2: I check options for HHC, not much there

 

hy

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No need to buy today unless there is a compelling reason.

 

Jeez...you guys are harsh.  I think the author recognizes this.  It is a hypothetical...framed with "If you had to".

 

FCBN

 

 

Please tell us about  First Citizens Bancorporation.

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What is the hypothetical goal (i.e. double your stake?) and hypothetical time frame? If I had to pick only one leveraged play it would be BAC class A warrants. The dividend reduction and longish expiration offers more safety than LEAPs while still offering good upside. If things go well you could see a 3-5 X return. Some of the other warrants look interesting (HIG, FFBC for example). But I have not been following them enough to say that I would or would not take a serious position. I own a tiny amount of FFBCW.

 

Leveraged positions in LUK and BRK are interesting but the features you get with the BAC warrants offer much more of a buffer in the event of any catastrophic market events IMO. My stated opinion is based on the requirement of picking only one leveraged postition.

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No need to buy today unless there is a compelling reason.

 

Jeez...you guys are harsh.  I think the author recognizes this.  It is a hypothetical...framed with "If you had to".

 

FCBN

 

Please tell us about  First Citizens Bancorporation.

 

I started buying at $400 a couple years ago.  I was pretty sure I had wrote this up on here before, a year or two ago.  I just searched though and didn't find it.  Maybe it got deleted.

 

Anyways, its a cheap, well-run, conservative, family-controlled southern bank.  FCNCA is a sister company controlled by same family.  They have links between management, boards, and back office systems.  Not much more to say.  All of their financials are public.  90's through 2006 was filed on SEC, financials since then are posted on website. 

 

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BRK, obviously with the free put.  However, with BRK trading about 11% above the "strike price", I wouldn't lever up a lot unless that gap narrowed.

 

IMO that "free put" is going to support the stock in times like these, but in a severe crash I think it's going down just like it did in the last severe crash.  So I like the strategy in terms of using the "free put strike" as a lower bound of a volatility range to trade around, but if I was going to lever up substantially I'd be using real puts.  Just me though.  I am pretty scarred by that 2009 experience and Berkshire was no safe haven for a highly leveraged BRK position.

 

 

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I don't have any I would lever up on, but companies I have been writing puts the last couple of weeks, NOV at 65-67.5, APPL at 410-440, AIG at 37.50-38, WFC at 35 and below, and BAC at 11-12. I only write puts at prices and companies I would be happy to be put to.

 

If BRK would pull back I would be happy to start writing puts at 92 and below.

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