Tempting Tuesday – Murdochs Testify to Parliament
by Phil - July 19th, 2011 8:29 am
NWS is down 20% of late.
Today we hear from the Murdoch family, owners of the venerated Wall Street Journal as well as Dow Jones, Inc., who will be explaining how their company allegedly broke the rules, lied, threatened and/or bribed almost everyone, engaged in cover-ups, slandered anyone who got in their way and callously ruined the lives of innocent people – all in the name of profits. Already Sean Hoare, the reporter who blew the whistle on Murdoch has been found dead inside his London apartment. "The death is currently being treated as unexplained, but not thought to be suspicious. Police investigations into this incident are ongoing," said a police statement.
Would that be the same British Police Department that’s had two high-level resignations over accepting bribes from Murdoch’s organization? The Daily Mirror newspaper quoted an unnamed friend as saying Hoare "thought that someone was going to come and get him, but I didn’t know whether to believe half the stuff he was saying." In other words, Hoare was poor and intimidated by NWS (he was refusing to testify against them) while the Murdochs are rich so every possible benefit of the doubt is being given to them just like Rebecca Nalepa was found with her hands and feet bound with a rope around he neck hung off a balcony in a San Diego mansion and the police there are thinking "suicide."
As F. Scott Fitzgerald once said: "The rich are different than you and me – they have more money." As Bill Domhoff pointed out this weekend, when we talk about the rich, we don’t mean the top 1% – people who "only" make $1.6M a year or more. Sure those of us in that group may have a "get out of jail free" card for when we speed and we may get our buildings approved quicker than most and we may get a local ordinance passed here or there but, when you move up to the top 0.1% ($36M or higher per year income) or the top 0.01% ($450M or higher annual income), where Mr. Murdoch lives – not only do you get both national and international laws rewritten to suit your needs (like taking over 100% of the UKs satellite broadcasts), but the other laws don’t even apply to you.
This lack of accountability leads to increasing bad behavior, as evidenced by our…
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DiggMake Billion$ With StockTwits (and Win a Free Quarter!)
by Phil - July 9th, 2011 4:34 pm
Billions!
That’s right, if you followed Philstockworld on Stocktwits this past month and followed our trade ideas, you could have made Billions of Dollars. Not bad but that’s only a tiny portion of what you get at PSW every day. Needless to say, we’ve had a good month but it’s no fun being right if nobody knows it so let’s review a month of Tweets and also make it worth your while to send others to Our StockTwits Link and follow us there.
For the month of July, every new follower will be entered in a random drawing and one will be selected to win a free 1-year subscription to the PSW Report – our twice-daily Email that gives you access to all of our non-Premium posts as well as Stock World Weekly. If you are already a paying PSW subscriber and win this drawing, we will give you a 3-month extension of your Current Membership Level instead added to your current subscription.
If you are a Member and your friends subscribe and tweet us your name – one of those named members will also be the winner of a 3-month extension of that member’s current level. The more friends you have, the better the chances to win!
We’re doing this because we need to build up our social networking presence so I’ve been tweeting more in June. You can go to our StockTwits site and see all 45 Tweets posted since June 1st (there are many also before that) but I’m just going to review the ones that were less generic (we auto-tweet my posts) to give you an idea of what kind of value your friends can get out of this free service:
philstockworld Phil Davis
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Stock World Weekly: Fireworks! Our 12 Dow Plays Make $6,720 in 2 Weeks!
by SWW - July 3rd, 2011 11:54 am
$6,720!
Not bad for our little newsletter… On June 19th, we published this list of 12 bullish trade ideas on the Dow in the weekend edition of Stock World Weekly that are already up $6,720 in just two weeks! How’s that for value?
The July $119/116 bear put spread was still at .90 on Monday, well after we flipped bullish (the "Bernanke Bottom" was called by Phil on Thursday Morning, June 22nd and reported in last week’s SWW) so a nickel loss on that side (5% or $50 on 10 contracts), which was well offset by the following gains:
- AA July $15 puts sold for $0.63, now $0.09 - up $540 (85%)
- BAC 2013 $7.50 puts sold for $0.60, now $0.61 – down $10 (1.6%)
- CSCO Jan $14 puts sold for $0.92, now $0.60 - up $320 (34%)
- DIS July $37 puts sold for $0.55, now $0.06 – up $490 (89%)
- GE 2013 $15 puts sold for $1.40, now $1.16 – up $240 (17%)
- HD Aug $32 puts sold for $0.82, now $0.17 – up $650 (79%)
- HPQ Jan $31 puts sold for $1.60, now $0.93 – up $670 (41%)
- INTC Jan 2013 $20 puts sold for $2.71, now $2.24 – up $470 (17%)
- MMM July $87.50 puts sold for $0.71, now $0.07 - up $640 (90%)
- MSFT 2013 $22.50 puts sold for $2.75, Now $1.94 - up $810 (29%)
- VZ 2013 $35 puts sold for $5.10, now $3.82 – up $1,280 (25%)
- WMT Jan $50 puts sold for $2.05, now $1.43 – up $620 (30%
That’s a total profit of $6,720 on these 12 positions in just two weeks. As our daily readers know, Phil called for cash on Friday so short-term bullish plays like these were taken off the table as we flirt with potential disaster next week.
If, however, the weekend goes smoothly and the markets maintain their bullish bent – we have all this lovely cash to deploy next week (and there are two brand new bullish trade ideas in this weekend’s edition of Stock World Weekly) and that BAC play still hasn’t made it’s money yet while GE is up "just" 17% so far – so both of those trade ideas are still ripe for new entries but, as Phil likes to say:
"Never worry about getting back to cash – I’m sure we’ll find something to trade tomorrow."
Click here for the latest Stock World Weekly: Fireworks
We hope you and your family have a very happy holiday weekend.
All the best,
Ilene & Elliot
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Testy Tuesday – Dow 12,000 or Dow 11,500?
by Phil - June 14th, 2011 8:26 am
Are we "still too heavy"?
That was what I said about valuations back on May 4th, when we set new watch levels. $96 was our goal on oil, we hit that and went long yesterday. Of course, in our upside-down Wonderland Market, falling oil prices are somehow BAD for the Transports and we thought we accounted for that with our 2,448 target but they failed that last week and fell another 125 (5%) since then. Similarly (easier to write than say), the Nasdaq blew through our 2,700 line and bottomed out at 2,639 yesterday (-2.25%) but the Russell has been the biggest surprise, leading us all the way down to 773 in yesterday’s action before bouncing back to lucky 777.
As we expected yesterday, the Dollar was sacrificed on the altar of keeping the markets from going to Hell in a handbasket – dropping all the way from 75.20 to 74.80 (0.5%) which gave us only a flat market but the 74.60 line held in overnight and we’re back to 74.80 and now the pre-markets are wondering why they gained 0.75% in overnight trading. Oil popped all the way back to $97.80 before failing spectacularly back to $96.50 but we have stayed on the sidelines so far, waiting to see if we can establish a new (hopefully lower) range to trade in.
We did take a poke at higher oil prices with the USO July $39 calls at $1.10 and they finished the day right at $1.10 so very dull so far but we figured oil might be good for a pop into Wednesday’s inventories. We also shed most of our bearish bets on yesterday’s dip and flipped fairly bullish but we haven’t done a lot of bottom fishing yet as our main plan is to use a fake market rally to cash out the longs we have left and flip short into the holiday weekend. As the moment though, I have noticed that the Dow has been holding up much better than it’s peers and we have that lovely 12,000 line to use as a stop so let’s construct a short hedge that pays big bucks below 12,000:
Notice how the Dow is holding up better than the other indices. Part of that is a flight to safety as several Dow components are considered "safety stocks" like KFT, MCD, JNJ… But, in the long haul, they all fall down eventually so we…
Wednesday: Wiping Out All of 2011′s Gains!
by Phil - June 8th, 2011 7:54 am
S&P 1,260. That’s the line we need to hold.
That’s where we started the Year on January 3rd and we finished that day at 1,271, beginning a fine tradition of making almost all of our gains on the first day of the month, continuing a very disturbing (and very fake) year-long trend that I am calling "sell the next day (of the month) and go away." (chart by Bespoke).
Notice that this trend became very disturbing at the same time Uncle Ben announced his fabulous QE2 plan that showered money on his fellow Banksters according to a nice, predictable schedule that allowed them to lever up their investments to inflate stocks and commodities, trapping index fund investors (especially the working poor who make monthly contributions to IRA and 401K accounts in a nice, predictable and controllable fashion). It’s a simple plan, index fund managers get your pension money at the end of the month, they are required to buy baskets of stocks to balance their funds and that action can be manipulated by clever bankers who jack up the prices and then sell into the fake demand they created – effectively stealing tens of Billions each month out of the paychecks of working Americans. Just another one of those great crimes they commit where they steal a little bit of money from everyone, every day.
Speaking of robbing from the rich to give to the poor (see "The Dooh Nibor Economy"), it’s time we said happy 10th anniversary to the Bush/Obama tax cuts that have, as Barry Ritholtz put it: "driven the balanced budget he inherited from President Clinton deep into the red." So deep in the red, in fact, that even now Congress is still debating about extending the $14.5Tn deficit that the Congressional Budget Office says will double over the next 10 years if these cuts remain in place.
That’s right, those same tax cuts that are "off the table" in negotiations in Congress are, other than war spending, the sole cause of our nation’s deficit. This country does not have a spending problem, it has a collecting problem! As Mike Konczal, a research fellow at the Roosevelt Institute, noted: "It’s not like this has unleashed a wave of productivity, or better incentives, or increased work output. It’s mostly just rich people got a lot more money."
According to Citizens for…
WHO’S FULL OF CRAP? GE, The New York Times, And The Hazards Of “Tweeting The Record Straight”
by ilene - March 29th, 2011 12:56 pm
Courtesy of Henry Blodget at The Business Insider
The New York Times is full of it. Just ask my PR team.
We spent much of this afternoon sparring with GE’s public affairs division on Twitter over a New York Times report that GE paid no US taxes last year.
GE had taken to Twitter to blast the New York Times for "misleading" everyone about this fact.
So, naturally, when we saw that GE was trying to set the record straight, we asked some specific questions of GE--because we wanted to determine whether the New York Times was wrong or whether GE was just trying to spin everyone.
Either was fine with us, by the way — especially after New York Times editor Bill Keller’s latest lecture this weekend about why the New York Times is great and everyone else sucks.
 NYT’s KELLER: "We believe in verification rather than assertion" |
Bill Keller’s message in his latest lecture was "We believe in verification rather than assertion."
So when we got a tweet from GE …
Bullish Player Initiates Three-Legged Spread on Cisco Systems
by Option Review - March 18th, 2011 4:20 pm
Today’s tickers: CSCO, CECO, SPG & GE
CSCO - Cisco Systems, Inc. – Shares in the world’s largest maker of networking equipment increased as much as 2.5% during the session to secure an intraday high of $17.42 after the company announced it will pay its first ever cash dividend on April 20, to shareholders of record on March 31, 2011. Cash-rich Cisco Systems said the dividend will amount to $0.06 a share. Shares in the San Jose, CA-based manufacturer of switches and routers are still hovering around their lowest level since April 2009, and fell to a new 52-week low of $16.97 earlier this week. But, it looks like one big option strategist is looking for the price of the underlying to rebound ahead of January 2012 expiration. The investor initiated a three-legged bullish play, selling puts to partially finance the purchase of a call spread, in order to position for brighter days in CSCO’s future. The trader sold 40,000 puts at the January 2012 $15 strike at a premium of $0.95 each, purchased the same number of calls up at the January 2012 $17.5 strike for a premium of $1.72 per contract, and sold 40,000 calls at the higher January 2012 $22.5 strike at a premium of $0.42 apiece. Net premium paid to initiate the spread amounts to $0.35 per contract, thus positioning the investor to make money in the event that Cisco’s shares rally another 2.5% over today’s high of $17.42 to surpass the effective breakeven price of $17.85 by expiration. Maximum potential profits of $4.65 per contract are available to the trader should shares in CSCO jump 29.2% to exceed $22.50 ahead of expiration day next January. Shares in the name last traded above $22.50 back in November 2010.
CECO - Career Education Corp. – Put options on…
Warren Buffett’s Secret to Making 100% a Year
by Phil - February 26th, 2011 10:51 am
I love the Berkshire Hathaway annual report!
Especially Warren Buffett’s letter to shareholders. The report gives us a great view of the overall economy from a man who has his finger in every pot and his letter to investors gives us a very good insight as to how things are going in the various sectors his operations cover. Most importantly, what I have learned in my own 40 years or reading Mr. Buffett’s reports (my Grandfather was a shareholder) is what should shape any long-term investing strategy: Patience and performance.
I often preach to members the joys of letting gains compound and our $25,000-$100,000 Virtual Portfolio, which is currently at $27,531 (up 10%) after 4 weeks, is an exercise in how to quickly compound small gains over the course of a year. Primarily, we try to follow Warren Buffett’s Number One Rule of Investing, which is: Don’t Lose Money. Buffett’s Rule #2 is: See Rule #1 and like us, it’s not that nothing Warren Buffett ever buys loses money – it’s just that he doesn’t ever buy things he isn’t willing to stick with UNTIL they make money. Sure we take a few losses along the road but, by being selective in our entries, we don’t discard stocks that we carefully selected just because the market temporarily disagrees with our valuations.
In our $25,000 Virtual Portfolio, it’s only been a month so we’ve only closed our winners so far and they were SPWRA with a 100% gain (these are option trades), INTC with a 40% gain, NFLX with a 42% gain, EDZ with a 75% gain, XLF with a 15% gain, VIX with a 50% gain, USO with a 53% gain and XLE with a 5% gain. In 19 trading day we have made 28 virtual portfolio moves (counting each leg) and, as I said, netted a 10% return to date. Interestingly, we’ve been playing it very cautious as we still have over $18,000 of virtual cash on the sidelines, hoping for a sign to get a little more aggressive next week.
How, you may wonder, are we going to get to $100,000 by December with just $27,531 in February? THAT is the lesson Warren Buffett has to give us and that lesson is COMPOUNDING RETURNS! Since 1965, Berkshire Hathaway has returned an overall gain of 490,409% to it’s shareholders. $10,000 handed…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(