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Follow-Through Friday – How Low Can We Go?


That's the only word we can use to describe this SPY chart (David Fry's) and, of course, all the other charts as well as we are now approaching our August lows but STILL nowhere near where we were in June (SPY $125, S&P 1,266), when we were down another 10% from here.  

Back in late May, our big worry was Europe and the Euro was way down at $1.24 and Greece and Spain both looked like they were about to collapse and the Dollar was 83.50 and TLT was $129 and the VIX was at 27 – now THAT's a panic!

At the time I said: "If it wasn't for bad news, Europe would have no news at all" and, in the May 30th post, as we fell to our lows, I called the turn saying:

Meanwhile, on the US side, we're getting worry fatigue and we're ready to rally – as was made clear by yesterday's bullish action which took us over our weak bounce levels, which actually held up for the day.  Now we'll get a proper test this morning as we had a nice sell-off in the Futures but we flipped bullish on oil (/CL) already in the Futures as it tested the $89 line and, of course, we closed yesterday out bullish as our weak bounce levels held up which means the weakness in the Futures is hopefully just a flush – to clear out the weak hands ahead of a proper bounce

Why be bullish?  Well, aside from the technicals per our 5% Rule, there's also the Stock Market Theory of relativity which states – if the World went completely to Hell and everything was destroyed in a storm of fire and brimstone – there would be a market for brimstone futures a day later (see "Christmas Time in Hell" for perspective).

Well, now we're down from overbought to oversold levels and SOMETHING is bound to rally the markets and it doesn't really matter what it is – we're just primed for it.  We could go lower – the S&P's 200 dma is down at 1,283, which is 3.6% down from here – but it's a healthy-looking bottom down here and we know how to buy stocks for 15-20% off and that's WAY below what we believe to be solid support – Christmastime in Hell!!! 

The Dow fell ANOTHER 400 points by the end of the week and the S&P was 17 points below my target and that gave us fantastic entries on all sorts of stocks – including AAPL at $517 but only for people who were prepared to take advantage of it.  That's why hedging is so important – so you have cash ready to deploy on a drop and, if you don't have hedges – then stop-losses are a MUST.  You can't just stand there like a deer in the headlights watching your portfolio melt away.  

There is nothing more dangerous than a fully committed portfolio.  You need to always be a buyer of stocks so that, when they go ON SALE – you are ready, willing and able to buy more.  There are several ways to accomplish this – like selling your winners and getting back to cash in positive cycles, stopping out using the Cal-Slim method withe 8% stops on equities or generating a regular income on all of your holdings through option selling – a method we prefer here at PSW.

We have our annual investors conference this weekend in Las Vegas and it's going to be a perfect time to discuss these strategies as well as target some really great stocks that are going on sale for the first time since June.  While we were buyers in June, at S&P 1,400 in August, I lost interest in buying stocks and we "missed" a lot of the rally that took the S&P all the way up to 1,474 in September because, fundamentally, I didn't see the value.  

NYMOAll we are doing now is burning off the over-excitement as the market finally realizes the fundamentals we've been concerned about since summer.  As you can see from the NYMO chart – we are NOT yet at a panic low but we are at a spot where we've reliably turned back up several times and we STILL know how to buy stocks – giving ourselves 15-20% discounts on our entries and the rising VIX makes that easier for us so – whether we turn up next week or next month – it's time to get into a buying mood because NOW we're back at levels I can get excited about.

It's hard to call an exact bottom but a little cautious buying around here can give us real bargains on blue-chip stocks like BA, where we can sell the 2015 $60 puts for $7.20 for a net $52.80 entry – that's a 25.5% discount to the current price.  I'm not talking about a BET, but an investment where you REALLY intend to own BA for the long-term so why not buy it now for 25% less than it costs?  According to ThinkorSwim, you can sell 5 of those contracts for $3,600 and the net margin cost is $3,000 so you stand to gain 120% on the margin you use over the next two years.  What's the worst case?  If BA goes below $60, you can get assigned 500 shares at net $52.80, so $26,400 is $13,200 worth of margin you need to allocate for a worst-case of buying BA for 25% off and the $3,600 you collect is still 27% of your full allocation.  

That's all it takes to give yourself a very nice annual return and you are only using a small fraction of your cash and margin allocation unless BA takes a real dive and that means you can sweep the cash into interest-bearing accounts as well or use the spare margin to sell premium – like we do in our Income Portfolio when the VIX is high.  

We're not there yet but aside from BA at $71 and AAPL at $537, we have CSCO at $16.50, ABX at $36, BRK.B at $85, RIG at $46….  We can give ourselves additional 25% discounts from these prices and, if you don't like those entries – shouldn't you be in cash and lining up at WMT for the gun sale on Thanksgiving (don't forget the ammo!)? 

I'll go out on a limb here and predict the World probably won't end this time either.  Not to say we don't have a rough ride ahead but if you're not willing to buy low – how on Earth do you play the markets?

Have a great weekend,

- Phil

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  1. Good Morning!

  2. Oil Lines

    R3 – 87.48
    R2 – 86.59
    R1 – 86
    PP – 85.11
    S1 – 84.52
    S2 – 83.63
    S3 – 83.04

    Yesterday's high and low – 85.7 / 84.22

  3. Some people have not taken the election loss well…

    And their language sounds a little over the top… That video looks like something Goebbels would have produced! I guess they could not get rights for Wagner's music.

  4. Apple – Besides using market cap net of cash which Phil has pointed out numerous times, that cash balance is going to build.  Cody Willard made a good point on marketwatch about how Apple's cash balance will grow and EV multiple decline while we wait for fundamentals to trump technicals…  "I’d answer it like this though — if Apple generates $60 billion in net cash next year, $65 billion in 2014 and $70 billion in 2015 and pays out $12 billion, $14 billion and $18 billion in dividends respectively over that time period, the company will end up with more than $300 billion or so in net cash since they’re already sitting on $130 billion in net cash. Further, let’s say the company sees absolutely no growth after that, so it generates $70 billion in earnings/cash flow in 2016 too. For the technicals to trump those kind of fundamentals and to presume, say, just another 10%-15% decline from the current levels, you’d be talking about a stock trading at a $500 billion market cap with $300 billion net cash, paying a 6% dividend with an enterprise value to earnings ratio of less than 3x. Over that scenario, I think the fundamentals would push AAPL higher, thus trumping whatever technical issues the stock is currently facing, as always is the case."

  5. Phil, From yesterday:
    I have the Jan 12/15 BCS that is deep in the money-thanks for that one. I need the protection, so I'm thinking to roll the 12 calls to the 13 calls for a credit? Or what would you suggest. Thanks

  6. AAPL – For now, forget the justifications to buy, just watch those technical levels….seriously……..

  7. Pharmboy – CLSN to open strongly.  Do you know the company ?  Thoughts ?    Thanks.

  8. Income Portfolio news:

    CSCO – Downgraded from Buy to Neutral at JP Morgan
    BBY – Reuters reports that the Schulze bid will be below $24/share. Our net in the Income portfolio is $18.84 (15 + 6.04 – 2.20) so we should be fine.

  9. Kass is on record saying he is buying Apple:
    The shares now stand at $536, and I am buying.
    Now let me explain why I have just purchased shares in Apple (my answers correspond to the list of concerns listed at the beginning of this column):

    As expressed in today's opening missive and in my writings over the last few weeks, I am now less concerned about a global economic slowdown than most.
    Investors are no longer smug and have grown increasingly (and arguably fully) aware of the challenges of the delivery of current and future new products.
    Apple's shares are no longer the beneficiary of fund flows — just the opposite has been occurring, which has materially pressured the shares down to attractive levels.
    At $700, Mr. Apple Orchard — er — Mr. Market was likely imputing a 2013 new "wow" product (Apple TV?). At current prices, the next "wow" product has been discounted away, and the company's completely refreshed product line (no mean feat in such a short time frame, and if supply comes in line, CEO Tim Cook's main goal for 2013) should be plenty enough new stuff to once again propel earnings throughout 2013. Also, here is a link to AppleInsider, which hints about a possible new product associated with the automotive industry.
    At $536 a share, a discounted dividend model implies that the future growth rate in profits at Apple will be only about 5%. This is too low — Apple's share price decline has likely now overly discounted most (if not all) of my concerns.

  10. stjean
    way too early for those kind of videos

  11. This is what scares me, Q: Who’ll win in 2016? A: Twitter’s darling
    Doesn't matter 2014 is first, Got to get rid of that guy even though most people like him.

  12. Here are the polls prediction for the Chinese elections:

    Screen Shot 2012-11-08 at 3.19.07 PM

    Apparently, no margin of error!

  13. AAPL – I just can't see it. After Ipod, Iphone, and Ipad, how can TV and Autos move the needle?
    Isn't GOOG headlong in the things that AAPL is moving towards as well?
    The sandbox will only get bigger….

  14. stjeanluc/polls – All that red hurts my head….. :)

  15. CLSN/albo – yes, we were in them several years ago, rode them up to the $3 range, and moved on.  Very similar to BSDM, where they are using 'formulations' to activate chemotherapeutics in localized cancer by heating them up. 

  16. Probably meaningless but the increased awareness is worth something: Montana Voters Deprive Corporations Of Their Humanity

  17. Not a good week for FAS Money!

  18. BBY – Cramer on CNBC – Put BBY wiith Radio Shack, Groupon, what do you have.  Scaring people out of BBY?

  19. Pharm – from what I read PGNX has no debt and their cash level makes them at least worht $1.51 a share, how much lower do you see them going? I doubled, tripled, and quadrupled down the past week. I sold covered calls so my cost basis is down around $2.40 and definitely will hold this long-term (like I did ARNA) but was just curious of your opinion. Thx

  20. I guess it's fair to say that we need a turnaround from AAPL now! 

    AAPL – Net $60.51 on the Apr call.

  21. Anyone know when Obama talks the cliff?
    Love that everyone wants to buy APPL but forget TV and Autos.

  22. Regrettably I will not be able to join you guys in Vegas. If anyone is interested they can take my spot.

  23. Phil you seem to be right, exactly 15minutes and IWM reversed with a normal false start.

  24. Really big volume on AAPL at the bell.

  25. As with the 25KPA, I rolled the loss from the previous 550 calls to the 500 calls in order to get a correct picture of the spread.

  26. CSX starting to look good @ $20 (on support) with a PE of 11.2, foward PE of 10.5 and yield of 2.8%.

  27. nicha / vegas — Sorry to hear that.  Hope all is well.

  28. We also need some help from AAPL here!

  29. Silver breaking out from a month long mini correction despite higher dollar. Will be really interesting to watch the metals when the President speaks.

  30. Shadow
    I heard the Prez speaks at 1:00PM EDT

  31. Weathering the storm quite nicely Peter! Maybe time to sell more premium?

  32. csx/rain
    That one is on my watch list also.

  33. CCJ Jan $17 puts @ $1 are starting to look tasty as well.  Have to see a turn in the overall market trend before committing anymore capital though.

  34. Good morning!

    We had a 2.5% down day and a 1.25% down day and, if we're going to drop 5% and stop, then we can expect a 0.625% down day BUT then you hit the -4% line which, if we're going to bounce back – is the weak bounce zone off the 5% drop we didn't even get yet.  So holding up there, at a 4% drop, with a decelerating sell-off, is a pretty good sign that the selling is coming to an end.

    So we'll call the drops from the Sept highs (rounding and throwing out spikes) which were tested in Oct and we get:

    Dow 13,600 to 12,800 is 5.8% and 20% is a normal overshoot AND this is not an exact science – always keep that in mind but then we expect -5% to hold (if we're going to get bullish) and that's 12,920 so we need to see that on the Dow and then the weak bounce is 13,056 and strong bounce is 13,192 so 13,200 is our goal to get bullish again – anything below that we should remain cautious.

    S&P 1,460 was the non-spike high (and see the Sept flatline for a good consolidation) and we're bottoming (so far) at 1,375 and that's also 5.8%.  There are two ways to calculate a bounce – one is to add back 20% of 85 (the drop) to 1,375 to get a weak bounce at 1,384 and another 9 for a strong bounce at 1,393 but that's not what I did with the Dow because, if we're going to assume this drop is temporary, then we have to assume 5.8% is an overshoot so we use the 5% line as a base and a weak bounce is then 96% of the top (1,402) and a strong bounce is 97% off the top at 1,416.   Obviously, since we're looking for confirmation that it's a good time to spend money – we should be conservative with our targets.  Also, of course, if we bounce 0.8% and we fail to take back the -5% line – that's not bullish at all, is it?  

    That Nasdaq is a bit tricky as it's been yanked all over the place by AAPL but let's call it 3,175 and we're down to 2,900 so 275 out of 3,175 is a whopping -8.6% and, like the -5% line expecting -4% to hold up, a -10% move should have resistance at -8%, which would be the weak bounce zone there.  AAPL is down over 20% and is 20% of the Nasdaq so, by itself it's accounting for 4% of the drop and that means that the Nasdaq is really down about the same 5.8% as the other two (you don't throw out AAPL completely but you can adjust it for a more normal weighting).  So let's say we call 2,950 our base and that's down 225 so 20% is 45 and that means we'll look for 2,995 as a weak bounce but, since we are estimating here, let's say 3,000 and 3,050 are going to be the bounce lines we're looking for.  That's simply not going to happen (3% bounce to weak) without AAPL recovering from $536, down from $700 so call it $540 for an even 20% and that means we need to see AAPL $572 for a weak bounce and $608 for a strong or I just don't see how the Nas recovers and, if the Nas doesn't recover, the markets won't recover and once again we are forced to conclude it's the APPLeconomy.

    NYSE we'll call 8,500 and now 8,000 is a 6.25% drop and 8,000 better hold!  That's easy as we're down 500 so weak bounce is 100 to 8,100 and strong bounce is 200 to 8,200 and add another 100 to call 6.25% an overshoot and we'll use 8,200 and 8,300 as our marks for weak and strong bounces.   

    Generally, the RUT is 10% of the NYSE and they tend to line up.  The RUT was messy in Sept but I'm comfortable calling 850 a non-spike top and then we can look for the same 820 and 830 to be happy (even though the RUT is testing 790).  

    That means we expect the best move back up to come from the RUT so, if you want to make a bullish gamble – the TNA Dec $47/52 bull call spread is $3 and you can sell the FAS Nov (next week) $98 put for $1.85 for net $1.15 on the $5 spread that's about 100% in the money here so a fantastic pay-off if we hold and, if not, then the FAS gets rolled down and you stop out of TNA by $1.15 and either we get FAS puts to expire worthless at some point or we're stuck long on them with QInfinity still in play.  Let's do 10 of these in the $25KPA and 10 of the bull spread only in the $25KPM.  

    Wow, that took me a long time.   Good consumer sentiment numbers means our bullish premise on 4 more years of Obama is still in play – just need the rest of the market to come around to our thinking:

    Nov Reuters/UofM Consumer Sentiment84.9 vs. 83.3 expected and 82.6 prior.

    Sep Wholesale Trade: Inventories +1.1% to $494.2B vs. consensus of +0.3%, +0.5% in Aug. Sales+2% to $414B. Inventory-to-sales ratio at 1.19.

  35. dclark Thanks now all I need is to be allowed on air or the media decides it is not suitable for the daytime TV.

  36. Ughh, account value down to my low of the year.  WTF happened to the YE rally or the post election rally?  F me.

  37. Hang in there Burrben. Still a lot of noise to put to rest.

  38. Thanks, stjeanluc.  Although we want to sell more premium, VIX is not cooperating (staying low), and the election premium is evaporating quickly.  I'll have to look harder I guess.  OK, buy 5 RUT Dec 660 puts for $1.1, sell 10 RUT Dec 655 puts for $1.025.

  39. Phil Thanks for the math, does take time.

  40. Phil: MCD
    For the most part I sell premium on stocks I wouldn’t mind owning, but also don’t mind selling a ratio of calls going the other way. For example I sold 6 MCD Jan 13 87.5 puts and now that they are less than 50% premium I’m thinking of rolling to 10 Mar $82.50 or the $85 with the plan to sell  a couple of front month calls to boost the return on margin. Or would it be better to roll the puts out much further and down?  At some point I do think I want to own MCD although with the selling of premium against my margin I’m not sure I really need to own shares outright in anything.  In some cases just selling some calls against the puts is equivalent to the dividend that would be received by owning the stock.
    Ps if there is any excess of my Vegas deposit over what LV needs you can put it in the pot for the last hand of poker J

  41. And where is Iflan these days? With AAPL's wild ride Id have expected him to have been trading the sh!t out of it.

  42. shadowfax
    Obama acording to Bloomberg big talk to walk at 1PM EST
    Please lets not mention AAPL today any more so not to spook it!!!

  43. Lincoln 
    Sorry to miss you in Vegas. I am mainly selling Ps these days also.  I don't understand your selling front month calls on MCD if you don't own it? I can't sell naked calls in my account. Do you have higher level?

  44. Phil,
    Looking for some feedback on  my put selling rationale re BRK/B: in the instance of  selling 6/13 75 p for 1.59 vs 1/14 p for 3.05, the 6/13 provide about the same per mth return while obligating you to a shorter commitment exposure. Would the preference therefore be for the 6/13 ?

  45. Video/StJ – Notice how all these Republican guys have dead eyes, like sharks?  What's up with that?  Notice it was published Nov 6th by Heritage – they sure didn't give bi-partisanship much of a chance, did they?  

    AAPL/Terra – Good math.  

    TZA/Jomp – With TZA at $17, your Jan $12 calls are $5 and that's 66% more than you make cashing the spread at max.   The $15 caller is $2.66 and I would roll to the April $16/22 bull call spread at $1.40 and that pulls $1 off the table and doubles your potential upside on a spread that's $1 in the money.  Assuming you paid less than $1.50 for the spread, you essentially have free insurance for the next 10% drop in the RUT and, if it doesn't drop 10% – then you didn't need the insurance anyway so why worry about it.   Since this insurance is free and pays 2x – you might also consider cutting back some and cashing out some of your winnings here.

    AAPL/1020 – So if they don't dominate a new market and just get a 10% share and make a few Billion more, they are a failure?  This is a unique way to model a consumer products company I had not been previously aware of – no wonder they are selling off….  8)  

    BBY/StJ, Jfaw – That's what I thought, there was no indication Shultze had backed out.  A lower priced offer is appropriate but we weren't counting on $25 anyway.  Cramer trying to help his fund buddies load up. 

    Montanna/Rain – That's encouraging. 

    FAS Money – Been so long since we had a bad week but nothing expiring we need to worry about.

    $25KP – Could have taken + $2K and ran so don't complain now! 

    AAPL Money – Now all we need is that bounce.  Stop on the short $700 calls at $60 and we'll choose a new cover in short order.

    Obama/Shadow – 1pm

    Sorry to miss you Nicha.

    CCJ/Rain – I like those guys. 

    Account/Burr – The question is, when you are next at the highs, will you just leave it all or will you take profits next time?

    MCD/Lincoln – They don't have 2015 yet so consider the cost of a roll now vs. waiting.  I don't see the point to March – if you want to sell premium – sell premium, the 2014 $77.50 puts are $5 (.50 more) and $10 lower (11%) so you get paid to take an additional 11% discount or, if you REALLY want to own MCD, then you can get paid +$4.20 for selling the 2014 $85 puts ($8.70).  Seems like a good net to me and aggressive enough that you may get your wish of having it put to you for net $78ish.

  46. The Opesbridge LP October 2012 Comment Letter is available.  Please write to me at if you would like to receive it.

  47. Good Morning
    sorry you wont be able to make it Nicha
    Obama talking to his campaign staff—-no wonder these kids are so inspired

  48. Phil/AAPL  I would never say AAPL or even a GOOG could be a failure, as long as they remain on the cutting edge….
    To use the S.F. Giants as an example, you never know when the next superstar will appear.  :)

  49. Phil— what do you think about PCLN buying Kayak?

  50. AAPL/ Phil: can you give me a hint on the cover for the April $570s? I'm away from the mother ship today and would like to get this wrapped up.  Thanks. 

  51. Go Team AAPL!

  52. Savi / Obama — Broken link.  Appears to be to your web based hotmail account?

  53. Now we're talking…. Go market!

  54. What a difference 2 hours makes – $800 in the FAS Money portfolio! 

  55. ….."I'm not going to tell you how to get there"  Rep. boehner on deficit reduction.

  56. This indicator is really bearish now… We need a big bounce to bring it back:

    As of yesterday, only 56% of the S&P 100 stocks were above their 200 DMA. That was a dramatic move.

    More on this indicator at this link.

  57. BP idea: buy 2015 33/42 BCS @$5.20.  $9 Spread that's $8 ITM.  And sell 2015 33 Puts for $4.45. Net debit of $0.75 that pays $8 if BP holds current level. Always the risk of more trouble in the Gulf but they've managed (managed their costs, anyway)

  58. I hope this isn't the truth about "the grand bargain."

  59. barf, the market just let the premium seller off the hook, on a Friday too!

  60. jomp / grand bargain — Any reason to believe it's not the truth?  Seems to fit in nicely with kleptocracy/corporatocracy addenda on both sides.

  61. thats what I'm afraid of Rain. maybe they need corporate $ more than their supporters

  62. BRK.B/8800 – You also have to consider whether the VIX will remain high enough or Berkshire will remain low enough to allow you to make the 2nd sales at the same strike and price.  Sounds to me like you want to bet on Berskshire, not invest in it so the shorter time-frame works in your favor – assuming you are right about the direction.   This is not really why we sell puts.  If I REALLY want to own BRK.B, now $85, then I want to ell the 2014 $80 puts for $4.25 for a net $75.75 entry, which is a 12% discount to the current price.  Net margin is $12K to make $4,250 for selling 10 and I allocate double that ($25K) to the position and forget about it and I either get to buy Berskshire cheaply in Jan 2014 or I get paid $4,250 not to buy it.  That's it – move on to something else.  If I have a $500K portfolio and I tie up $250,000 in positions like this – I net $42,500 in sold premium (which I collect up front) and the INACTIVE part of my portfolio can make 8.5% of the ENTIRE portfolio's value while I mess around with more active trades.  And that's not even a good stock to sell puts against!  

    AAPL/1020 – AAPL now is much like IBM was back in the 60s – they have a lot of market-leading stuff and a lot of stuff in development and tons of cash and a culture of excellence that attracts top talent (and it would take years of messing up to destroy that mystique – look at MSFT!).  Why would anyone bet against that?  

    PCLN/Jabob – Indicates to me the overall weakness in their own growth story.  What can Kayak possibly offer them except a few more eyeballs.   Only a company that doesn't know how to grow buys a lesser competitor at premium prices. 

    AAPL/Newt – I'm uncovered back to $575 at least and I'd still like to see $600 but, if you feel the need to cover, I'd go with the Dec $580s, maybe a 2/3 cover at $12.35 – that shouldn't get you in too much trouble and it's about 20% of the price of the Apri $570s ($40) and pays for a roll (at 2/3 or $8 per long) down to the April $550s, now $49 so you're buying about $20 of downside protection and getting paid $8 per long for it and, if AAPL goes up, they don't go in the money until over $590 and that's up $40 and the April $530s are $59.50 so you gain $19.50 before you have to give your callers back their $12.35 – so good insurance going both ways. 

    Boehner/1020 – Not exactly encouraging but he had nothing new to say at all.  He's just loving his bonus 15 minutes as we have another round of negotiations.  Hopefully this time he won't have a temper tantrum, like last year.  Never forget what assholes these people are!  It's easy to underestimate Republican idiocy as it's so far beyond what normal people can imagine – even if they try to imagine complete idiocy as a starting point…  They wouldn't even give up tax breaks on Corporate Jets – what is the compromise when you can't even put that on the table?   

    200 dmas/StJ – I don't see how 44% of the S&P below the 200 dma is considered bearish – why isn't that considered a cheap buying opportunity?  Clearly there's support here as we bounce off 52.50 in June and that was only a quick spike so SOMEONE is willing to buy at these prices.   Also, you have to consider that we had an irrational rally pre-QE3 and that means the 200 dmas are higher than they should be anyway so a bit of time below them is only moving to a sustainable norm.

    BP/Rexx – That company is involved in a lot of shady stuff, beware of over-committing.  

    Mandate/Jomp – He makes a good point.  Had Romney won by a single electoral vote the GOP would have screamed mandate and shoved their entire agenda up everyone's asses. 

    AAPL back to testing $555 from the bottom. 

  63. Phil
    I with you even if we are the only 2 that saw yesterday as the bottom, like I said yesterday this is your capitulation point on the s curve.

  64. Phil: Nice. Thanks. 

  65. shadowfax – Good call on AAPL bottom yesterday. Next time you draw your lines, please post. Thanks!

  66. Notice how we're pretty much stuck at that expected 0.8% bounce waiting on Obama.   He needs to say something good now to bring us another 1% up to our weak bounce levels (not too likely today but hopefully next week if the fear factor weeds out). 

  67. Phil/boehner   In the interest of self preservation, when will he push back on grover and tell him "your way is not working" ?……

  68. Wow, Obama has a whole binder full of women behind him…

  69. OBAMA… Ladies Man! LOL

  70. Are they bound? I can't se their hands.

  71. Oh, wait their clapping :)

  72. Grover/1020 – That guy is amazing.  How he gets his claws into everyone is beyond me.  Boehner is not going to be the guy to stand up to him – I think the Reps will generally stay on this path to their eventual doom.  Parties don't last forever, this one may have run its course.

    Good from Obama – "We can't just cut our way to prosperity, if we are SERIOUS, we must also raise revenues" and then he goes right to raising taxes on wealthy – good strategy.   He's "open, committed, balanced…."  - good positioning, making Boehner look very lame in his comments by comparison.

    Calling for action right away on middle class tax cuts – giving Congress plenty of rope to hang themselves with.  Very clever.  "Uncertainty" used several times – ie. market crash is GOPs fault.  Senate already passed "I've got the pen, ready to sign" it's all up to Congress (ie Reps).  This is brilliant stuff strategically (and also what the country needs). 

    Very good speech – gotta go to Fox to find flaws in it…

  73. A nice speech to end a verrry nice week…… :)

  74. Nice reaction, the super rich don't change investments minute by minute but some greedy minute traders hate Obama. Lets hope they only caused a flush.

  75. Phil/boehner  He can't do it alone. He needs to form a coalition of like minded Congressmen and Senators, to begin the push-back.
    I know, I know…wishful thinking.

  76. JRCC…whoa!
    FU OBAMA!!!!

  77. Keep in mind its the rich who own stocks so we're right back to cap gains profit-taking off Obama's comments.  As long as we don't drop back to lows, it's a net positive – now we know where both sides stand, more or less.  

  78. cnbs is trying so hard, to seem cool……

  79. Obviously the rich don't understand that if you're stock goes down 20% by the time you sell it, it wasn't worth saving the 5% in your gains in it if they still exist.

  80. That is under the assumption that cap gains tax will move up to 20%

  81. WU – 2014 $13 puts can be sold for 2.35

  82. Once again, apparently taxing people making over $250K another 4% will spell doom… Listening to these guys, compromising means making sure we implement the Romney plan. How many elections do they need to lose?

  83. elections/stjean
    One more, they need to lose the House.

  84. stjean
    At this point they are just being obstinate……well….just to be obstinate! Just because they give an inch doesn't mean that necessarily agree with their counterpart. For god's sake learn to live to fight another day! By the time they are done they will be the party of nothing. Too many white guys living up to the label they have been effectively labeled.

  85. Rustle
    The issue isn't net it is who get a part. Over 80% of insurance premiums got to litigation to limit payment. This is how you limit money to the undeserving at your own expense. To them money well spent and "They can afford it !"

  86. dclark or as Phil said no party!

  87. Buying opportunity / Phil – Recent history has shown that having 50% of the stocks below their 200 DMA was not necessarily a floor:

    Over the last 2 years, we have gone below 30% every year. Not saying it will happen again, but sometimes these technical levels become self-fulfilling.

  88. BP – "shady stuff" – You mean their secret plan to get their customers to help melt the Arctic Ice Cap so they can drill there too?

  89. AAPL – would sure be nice to see it close over 556

  90. This argument that increasing taxes on the wealthy is too small to help doesn't hold much water when they fight tooth and nail to not pay this inconsequential amount.  

    The real issue is corporate profits.  They paid less than $300Bn last year and AAPl alone made $50Bn in profits with XOM, CVX, GS, JPM, not too far behind.  Overall, if you don't deduct losses from other companies, US Corporations netted about $3Tn and paid less than 10% effective tax.  Just tax them 20% flat and 1/3 of the deficit is gone.   This is not rocket science…

  91. STJ
    There is a minimun level, not sure what it is called but government, business, and individuals will reach equallibrium at a minimum level and it is my belief that we are running at that level, even unemployment shows very little progression, there is no bubble to pop, or excesses.

  92. Boehner will be Speaker for the rest of the decade unless the tea party takes him out. The Republicans have a lock on many safe seats. Look at Ohio – 14 House seats were contested, the Republicans won 11 of them with only 53% of the vote.  (Boehner's seat wasn't contested but he always gets 70% when it is).

  93. Phil
    Is it your intent to cover AAPL long calls before the weekend?

  94. Guys, have a great time in Vegas, and remember "What happens in Vegas ……….

  95. Apple’s New iPad Patent Reveals The Absurdity Of Our Patent System
    Round corners only on Apple pads? Then all the other makers can sue Apple for injury settlements for injuries caused by pointed corners. They will deserve that but will the justice system say you must buy the safer product when there is only one safe product, BK for the rest of them. Monopolies win?


  97. cnbs – President Obama will VETO any extension on taxes for earners over 250K…..

  98. ….sorry folks….

  99. SShadowing read that and laughed an evil laugh knowing that apple has rights to any tablet in the shape of a rectangle with rounded corners. Muhahaha! To think that all the other so called competitors will now have to sell their customers squares with razor sharp corners. Muhahaha!

  100. Ok, my last message for Shadow. I am not real good typing on my new iPhone 5!

  101. Gains/Rustle – More than enough people who can't do math for a short-term panic move like this but the rapidly slowing decent shows it's just those people selling – not real fund selling.  This whole correction is 6% off the top and people are freaking out – they want magic markets that never go lower – ever, ever….

    200 dmas – So, at no point, 6 months later, did people regret buying at this point but, if you wait for a break below 50, then you would have missed multiple opportunities for nice gains.  Again, if people scale in – this is the right time.  On an all or nothing commitment, then you are right – people who tend to invest like schmucks should wait for a clearer sign.

    BP/Rexx – Aside from their obviously spotty attitude towards safety, they are the top International bribers – in bed with all sorts of bad people.  Over time, things blow up in their face because they take a lot of risks.  Still, it's a buying opportunity when it does because their slimy business practices make a fortune but I'd rather wait for them to be in the dog house again before jumping in.  

    CNBC perpetuating the bad math of changes in taxes.  Cramer saying sell now, it may go to 40%.   Stupidity…

    AAPL/DC – No, I'm very confident they go back to $600 and worried it may be sooner than later so I'd rather wait at least through next week to see where they close November options.

    Round corners/Shadow – They should have patented non-jagged glass.

    Doctors/1020 – That's a great program.

    Patents/DC – I'm going to get out there and patent a tablet shaped like a pointy stick – will probably be a market at that end of the spectrum too….

  102. dclark corners
    There is a thing refered to as the grandfather clause. They all did it before the patent HA HA! This is what drives me nuts about Apple management and when are they going to get the microsoft boot in the ass?

  103. Phil AAPL I was hoping you expressed the feeling to wait with covers as the after election shock will slowly die down.
    All have a nice time in LV

  104. Phil don't forget square is OK if you can stand the ribing!

  105. Second thought! Have you noticed the widscreen takes more scroling down? Anyone what to invest in that?

  106. Phil
    Thanks and have a great weekend and that goes for going to Las Vegas.  I hope to go maybe next year.

  107. Shadow
    I own some apple calls.  Please stop bashing aapl until it goes up at least to 600.  Seriously your'e going to start a crash. 

  108. to the LV contingent……may the dice roll 6 and 8 all night long and the tables deal you 20's til you have stacks enough to get you a free night.

  109. People still selling into the weekend.  

    Poor AAPL rejected at $555, back to $545.

    CNBC telling people to get out – always a bullish sign.  They just can't believe the recently re-elected president, who ran a campaign saying we need to raise taxes on the wealthy – is actually going to raise taxes on the wealthy.  This despite the fact that the GOP also lost Senate seats and stayed flat in the house.  It's madness I tell you – MADNESS!

  110. Williex
    :) !

  111. Another shocker – a spy had an extra-marital affair!  

  112. Cramer/Phil
    He really said 40%??  That's more than a the highest rate you would have from a short term gain since the max fed rate is not even 40%.  With the increasing litigious society we live in, how do we not have a class lawsuit against stations that pose as news that misreport and distort facts and sometimes just flat out lie.

  113. P/E are contracting to attractive levels:

    At least for people who don't invest like schmucks!   :-)

  114. Yeah, Petraeus resigns over extra-marital affair.  Why would you guess that this happened a few days before he
    was to testify about Benghazi ?  Curious.  Conspiracy theorists will have a field day on this one.

  115. Phil/spy  – You mean General Patraeus?…..

  116. Petraeus – Yup, One of Obama's hobby's is taking pictures of people that work for him, that are in extramarital affairs….

  117. I don't understand why he would resign from an extramarital affair.  Sounds like a personal issue.  If people resigned from their jobs from extramarital affairs, according to statistics, our unemployment rate would be around 65% right now.

  118. FB/phil – filled a gap, close to their low.. thoughts?

  119. I'm glad Kennedy and Clinton didn't feel the need to resign.

  120. Actually Phil, he is a General who was the head of the CIA. He is a super sharp guy who definitely cared about winning the hearts and minds while in Iraq and Afghanistan. 

  121. williex
    I am not bashing AAPL its the government that issues the stupid patents and as a investor you should realize the management puts too much money fighting fair trade. I truly believe that noone listens to me and AAPL will be back over $600 by the end of the month. By January  earnings my bet is around $700 maybe higher if they have enough phones for christmasand I think they will, China needs more manufacturing. It is a big FU Americans! If I could afford them I would buy buy buy @ the sale price. Kiss $550 goodby next week on the next moon shot.

  122. Cramer/Rustle – It's amazing that the stations don't even worry about their own credibility but, then again, CNBC has Kudlow so Cramer seems like Honest Abe by comparison.  

    CNBC spinning it that the President "is not bending" – so ridiculous.  He's proposing $3 in cuts for $1 in revenue increases – that's pretty bent already.  They are focusing on one of the only things actually going up.  The President just said he will sign legislation tomorrow that extends tax cuts for the bottom 98% – now you see the GOPs true colors – they have no interest in that at all.  The more they push this position, the deeper the hole they are digging for themselves.  Any compromise going forward that raises any taxes on the bottom 98% now is going to cost them house seats but they will fight to the bitter end because they truly don't give a crap about anybody in the bottom 98% – this is a party of the 1% and the other 1% is only being included by accident.  

    Also, speaking on behalf of many 1%'ers – the bottom 98% are my clients and I WANT them to have more money.  That's true of most small business owners.  I'll be happy to pay 5-10% more taxes if my clients have 5% more money to spend because I know I will make more money that way so, if I have $1M in sales now and $500K in profits and pay 35% tax ($175K).  If I get $1.1M in sales and $550K in profits and pay 40% tax ($220K) – I still end up with $5K more and then you have to factor in that I'm no longer worried about my business declining because my customers are now doing well or maybe my business does a bit better than flat.  Real small business owners understand this – only the GOP doesn't – because they don't want to.  Small business to them is the Kochs or BaineCapital.

    P/E/StJ – Financials still looking juicy.  

    Spy/1020 – Yes, Patraeus. Not a proper spy but head of the CIA now – it comes with the job I imagine.  And I know what I'm talking about because I just watched a whole James Bond film festival…  ;)

    FB/Scott – Yes, a good price at $19 but there are better bargains out there.   

    Patraeus/Jrom – I know, a good guy.  Silly thing to ruin a career over. 

    Turns out guy who famously said he would have to lay off half his staff if Obama was elected was totally lying (Westgate).  What a surprise…

  123. We landed in Vegas and checked in.  Who's up for dinner??   :)

  124. shadowfax
    Now you talking!!!!

  125. I look forward to meeting everyone on Sunday!
    Enjoy your fish Saturday night – I'll be at a nearby IMAX, taking in SkyFall with the family…. :)

  126. Phil – My family are big 007 fans….

  127. Hope I did not offend the sushi eaters in the house with my "fish" snark….. :)

  128. Sorry all.  Busy with family in town, biotech startup, animal health biotech startup, MarketShadow and finally PSW Does Vegas…..slides are coming together, and not sure if I am going to have time based upon the heavy hitters talking before me.


    PGNX/jabo – I am a buyer, and they are one I am talking about in Vegas.  :)   There will be one other, I hope, that will be for all to see in the City that never sleeps…..

  129. Pharm- Whats up for YMI? Is the Dec meeting a big catalyst? Thanks.

  130. Have a good time in Vegas everyone

  131. yodi
    ME THINKS $548, last chance!

  132. Phil,
    Just came in from yard work.  That pointy stick thing you want to patent.  Give it a graphite core.  And put a rubber tip on the other end for safety! 

  133. And another idea, make it out of something renewable like wood.

  134. Well, mission accomplished for today – we stopped going down.  Now it's up to Asia and Europe to cheer up next week.

    Looking forward to seeing you guys tomorrow.  I'm resting up tonight as we have 3 packed days ahead of us!

    Have a good weekend everyone – wish you could all be here but I'm sure we'll figure out an audio thing for Monday.  

  135. Phil – do you see downward pressure on FB with lockup period ending next Friday?

  136. Good idea Grant – We'll call it the "Stick in Your i" 

  137. FB/Crussell – Baked in I think but it's certainly not an incentive to buy ahead of it.  

  138. Wow, Not much of a bounce in Fas.

  139. Last chance, any sponcers. I start driving tonight. Space on the floor and leftovers would work. I don't and never gambled, poker for tooth picks?

  140. Pharm / vegas — You hosting a happy hour again tomorrow night?  rainman.investing at

  141. Have fun in Vegas guys….

  142. You'll have to call it eyestick since istick is probably patented.

  143. Phil
    Hope you can get the voice feed. Please post ASAP!

  144. rainman the small "i" is patented but we all used it before it was granted, to bad for new babies they are in the can down the road.

  145. Extramarital affair aside, people like Petraeus make a mockery of the idea that you need to pay millions to attract top talent. A four star general manages an organization that rivals in size and budget many of the Dow companies and yet they only get paid 10% of what the top CEO's get. And yet, we seem to have no trouble finding enough talent… 

    Yes, they end up in big corporations eventually, but not after having spend the best years for the lives not motivated solely by money. 

  146. Democrats win election -  gasoline prices fall

  147. Title:
    PSW_Vegas Day 1

    Sun Nov 11 10am – 6pm (PST)


    Who: via*


    Add to calendar »

    Your Agenda for Sun Nov 11, 2012

    No earlier events

    PSW_Vegas Day 1

    No later events

    view my calendar »


    You have been invited to an online meeting using
    I'm a participant:
    Nothing will be downloaded, but Flash is required on a PC or Mac.

    I'm the organizer:
    1) go to and log in
    2) go to scheduler and click start
    Or, if you have the desktop app installed, launch it and select the meeting.

    Audio options:
    No matter how you join the conference, everyone will be on the same audio call.

    1. Conference call number:
    Conference number: +1.862.367.5900
    Conference ID: 173-037-854#
    Are you outside the USA? Check the telephone tab for the latest international numbers.*

    2. Join by internet: 
    You can join the audio conference by internet (VoIP) when you have entered the meeting.
    Click on the phone icon in the toolbar to connect. A small download might be required.

    *Long distance charges may apply.

  148. Second day remote access details:

    PSW_Vegas Day 2

    Mon Nov 12 6am – 1pm (PST)


    Who: via*


    Add to calendar »

    Your Agenda for Mon Nov 12, 2012

    No earlier events

    PSW_Vegas Day 2

    No later events

    view my calendar »


    You have been invited to an online meeting using
    I'm a participant:
    Nothing will be downloaded, but Flash is required on a PC or Mac.

    I'm the organizer:
    1) go to and log in
    2) go to scheduler and click start
    Or, if you have the desktop app installed, launch it and select the meeting.

    Audio options:
    No matter how you join the conference, everyone will be on the same audio call.

    1. Conference call number:
    Conference number: +1.862.367.5900
    Conference ID: 173-037-854#
    Are you outside the USA? Check the telephone tab for the latest international numbers.*

    2. Join by internet: 
    You can join the audio conference by internet (VoIP) when you have entered the meeting.
    Click on the phone icon in the toolbar to connect. A small download might be required.

    *Long distance charges may apply.

  149. JCP
    They are loosing money but maybe it will stop. The plan was to stop having sale after sale changed to continuous lower prices. The problem was they continued to advertise the new plan and send out catalogs to everyone in the US and maybe more. The problem is advertising has an extremely high cost and a few post cards and TV 10 second spots would continue the message. I have stopped getting the expensive high gloss catalogs advertising everyday low prices. Just maybe they have figured that out. Everybody knows about JC Penny and without excess profits they can cut back, forget sponcering race cars and super bowl adds. They are not their customers.

  150. Reality for disability
    At my own expense I expose some personal so that the well off in this group get a hint on what too many deal with every day.
    After falling into the " donut hole" in August I have had to stop taking medications. It is change your plan time and I have spent seriously 12 hours finding out what is best for me. Drug D plans are controled by the Insurance money machine, some cover this some that and it changes every year so if you don't hopp around every year you will get raped. First I need coverage through the donut hole and second pain may be a vital sign but it is not believed because man kind has always wanted to escape through intoxication.
    I pay $99 per month for medicare and now $100.20 per month for drug coverage without a so called detuctable. I report, you decide and maybe think about this in 2014.
    In January my cost is $366, Feb. Mar. $166 April $248 then 166×2 248 until Dec. First why is January $118 more if this plan has no yearly deductble? Second this still costs 20% of everything else like seeing the doctor to get the scrips, $,1000 deductable if I got to the hospital and what ever it is for part B deductable. All this on $1,500 per month, the average SS receipient gets under $800.
    Do the math! Tell me this country has no death clause, it is full of intilement blood suckers and killing yourself is unthinkable. This is the conservative insullated bubble that needs to effect their families with a giant POP!

  151. Hi anyone/vegas
    what is planned for Monday and what electronic device(s) does one need to have?
    will an iPhone do?
    if not, will an iPad be enough or does one need a fancy laptop?

  152. Maya1
    Look above a few, seems a phone or computer with speakers and microphone will work. Phone will incluse long distance charges, I get weekend free minutes. Good luck, be patient, these things usually have huge problems but lets hope for the best.

  153. Phil
    Thanks for the in-depth review of the bounce lines.  The repitition helps. 

  154. Vegas
    I am going to be in Vegas Sunday most of talks and Monday
    do I need ANYTHING electronic to participate?

  155. Maya — last year, almost everyone (or maybe everyone) had a laptop.  LV's wifi is good!  It helps to have your trading platform open, on Sunday, and especially Monday, when we will be trading.

  156. Maya1
    Trying to remember. Are you a doctor in southern California?

  157. Escohen

  158. So much for a mandate in Congress Mr. Boehner:


    While Republicans hung onto control of the House of Representatives after Tuesday's election, Democratic candidates across the U.S. received more total votes than Republican candidates did.

    While not all ballots have been counted, Democrats hold an edge over Republicans in overall votes. According to ThinkProgress53,952,240 votes were cast for Democratic candidates, while Republican candidates received 53,402,643. However, thanks in part to redistricting, Republicans will hold more than half the seats in the House while receiving less than half of overall votes.

  159. Votes/StJ – Redistricting saved the GOP.  May take years to unwind what they did.  

    Also, the GOP lost 2 seats in the Senate but only 10 GOP seats were up for vote this cycle vs about 25 Dems – next election, about 20 more GOP seats go up for vote and they can't hide from the popular vote there.  

  160. Like I said yesterday- time to start nibbling:
    I like the 14-Jan 80's; even the 85's. Sell some front month calls as it moves over 90.
    This stock is a very good value here.

    For all the adulation he receives, Warren Buffett isn't getting credit where it arguably counts the most: his company's share price. Berkshire Hathaway's Class A shares trade around $128,000 a share. While that's a big number, it's less than 1.2 times the company's book value of $111,718 per share, as of Sept. 30. Berkshire's Class B shares (worth 1/1,500 of the A) fetch around $85.
    Berkshire looks appealing because the stock's price/book ratio is near the bottom of its 10-year range and just above a threshold of 1.1 times book at which Buffett has said the company stands ready to repurchase shares. Berkshire (ticker: BRK.A) is sitting on $42 billion of cash—$11.5 billion in the holding company and the rest in its insurance affiliates.

    Enlarge Image

    Andrew Harrer/Bloomberg
    Buffett has said that two potential deals, each worth $20 billion or so, fell through this year. Don't expect him to stop looking.

    "Berkshire is very cheap here," says David Rolfe, chief investment officer at Wedgewood Partners in Ladue, Mo. He argues that Berkshire offers an "incredible margin of safety" at current levels because of limited downside and significant upside, if investors are willing to assign a higher price/book multiple to the stock. He says he's "resigned" to the idea that Berkshire may appreciate only in line with book-value growth, but with book growing at about 10% annually, that's not such a bad thing.

  161. txchili: naked calls
    sorry I didn't see your question yesterday.
    Assuming you can sell naked puts and calls, (prohibited in regular IRA accts), I will usually sell a few calls against a position of short puts and visa versa  For example if I have 10 naked MCD puts I might sell 2 otm calls for added premium without any additional margin.  Of course I expect I'll likely have to DD and roll out and up at some point.  It is all about maximizing the premium return on margin for me. ex. sto 10 jan 14 85 puts for $8600, $8340 of which is premium and margin is $21,335., selling something like 2 of the Mar $87.50 calls a couple times a year might add 6%- 10% to my total return on that margin.  I'm comfortable doing this with stocks I want to own at some point and know that they are not likely to get bought out at some crazy premium.  I'm also getting used to one position doing well while the other does poorly but realizing there are adjustments that can be made to improve the one going badly, and sometimes they both actually go the right way ;)
    Check with Phil, I think he has said this makes sense if your sold puts are deep in the money.

  162. Good morning in Vegas!  Just checking into the Venetian.  If anyone else is here or nereby, and wants to share a cab to Nobu this evening, give me a shout.  503-200-9557

  163. Psta:  Very interesting.  I might wait just a little while longer to start loading up for next year.  The Euro might have a very nastly slide this week, it's currently down at 1.27 and UBS is calling for 1.15 by year's end, which sounds a little dire, but here's the potential problem, that may show itself this coming Thursday:  [FT]
    "If the Euro-area is to recover within its structurally flawed shell, then rising demand and inflation in Germany would be an important means of depleting existing trade and competitive imbalances; but increasingly, the view is that Germany is being dragged slowly into the mire – with the recent, much publicised, fall in unemployment to a post-reunification low now in full reverse. A negative third quarter GDP print would do little to dissuade those of a gloomy disposition on Germany’s outlook, which means that November 15th, when said report is released, might well prove to be a pivotal moment in the crisis."

  164. Hey Vdara group, I'll be at the bar at 5:30.  First round is on me 

  165. Just added a new post in the Virtual Portfolios tab:

    This is a recap of all the portfolios this weekend. I added some notes for the positions we have in the Income portfolio.

    Phil – Like I said this week, I think that it makes more sense to recap in a new post in the portfolio tab so that everybody can have access to the latest comments without having to go back to old posts. If you have any comments and changes, it would be great to post there. Thanks.

  166. Stockbern/Savi
    Just checked in to Vdara.
    omahony.mail at gmail

  167. Well Stockbern, it's gonna be a race; my flight gets in at 4:30.  Hopefully, I'll meet you guys at VDARA.

  168. Vdara gang,
    Looking forward to meeting you all, I'll see you at 5:30!

  169. good afternoon.  i just checked into the trump hotel.  if anyone else is staying here, feel free to call me at 310 800 0000.

  170. In at vdara see you all soon

  171. Made it, although not staying at Vdara :(  Looking forward to some Nobu, especially after I ate at Zushi Puzzle last night in SanFran. 
    Mobile : 570-436-5567

  172. Nobu opens at 6:00.   I will be at the bar, stop on by!

  173. Vdara folks,Partha and I are in front of the bar – really busy down here!

  174. the new opesbridge website is now live.  check out

  175. use ( has not yet updated)

  176. Zero- I don't disagree with your cautious premise near term. Thanks for noting the German GDP issue as US markets should follow the Euro down if the past patterns continue. Nibbling only on the long side but I am much more comfortable with BRK/B than anything else at this point.
    Frankly, I am enjoying the fruits of the Obama post-election rally as there are many bearish setups for swing trade opportunities plus an expanding list of potential bargains for the long term with Berkshire by far my favorite.

  177. pstas,
    Joining in the BRK topic, I too feel BRK is worth a serious look but am concerned about the long term future when WB leaves the stage. The AAPL situation may not be directly comparable but we have seen (and felt) the consequences of replacing the founder of a dynasty with someone less able. That may not arise at BRK but the possibility does give me pause. What are your thgts re the succession issue?

  178. BRK-  Buffet's departure from active management will not be positive however i am confident subsequent leadership will hold fast to the Berkshire cultural standard. I attended the last annual Omaha meeting in May. My objective was to get a read on exactly that. I have been a stock holder for a long time and have read all the books, annual reports and articles which explored the various aspects of this rather uniquely extraordinary company. Being there and seeing Buffet, Munger,, in action alleviated my concerns. They are all very conscious of the value this culture brings to the table and have  plans in place to insure continuation. 
    An oft repeated Buffet philosophy is buy companies which an idiot could run because one day , one likely will. Given the bounty of excellent businesses which comprise the Berkshire family I have little fear of an eventual idiot's destiny.
    The AAPL/Jobs comparison is valid to a point however, If my understanding is correct, Jobs was hands on to an extreme whereas Buffet is quite the opposite. Except for capital allocation decisions, operations are decentralized almost to the point of neglect. This is possible with superior management which is in abundant at Berkshire. Also, Berkshire is not just insurance and a stock portfolio but a conglomerate of businesses from railroads to manufacturing to jewelry, underwear and shoes and yes, pontoon boats. Hard to conjure a scenario where all or many of these hit the skids whereas AAPL is subject to tech innovation and fashion trends which are less predictable.
    While I think AAPL post Jobs will continue to prosper because of what he established it is a tad riskier.

  179. Pstas,
    Thanks for the insights/distinctions re BRK vs AAPL. Agree that Brk is and will be in btr shape than AAPL regarding ldrshp but some concern remains. Re AAPL, it is worrisome that the I phone supply/assembly issues arose on Cook's watch who is supposed to be an operations, go-along-to-get-along guy/team player. AApl's tour de force was its innovative spirit which is characterized more by individual initiative than team efforts. Raises serious questions going forward. 

  180. fyii, the screen sharing and conference number of the vegas meeting is now active:
    and Conference number:
    Conference ID:

  181. same details will also work tomorrow at 6am pst.    the second screen link we're using is "psw_vegas_screen2" at the website.

  182. Phil — Westgate — isn't that hilarious? In point of fact, he gave his employees all a 5% raise (in response to all the pain his employees will now feel via the gov't). Now if that's not irony….

  183. Virtual Portfolios/STJ – that's a great summary, thanks.  I noticed a minor bug – the image for the 25KPM is the same as the 25KPA. 

  184. lost sound on the call.  don't hear anything.  

  185. no sound

  186. Thanks Scot! Fixed…

  187. StJ – how's it going!

  188. no sound for me.

  189. still no sound here either.

  190. RE Opesbridge hedgefund: 4(2) exemption probably applies to non-accredited investors in this case (Reg Rule 506).

  191. sound is on

  192. Was there a special sign in or did the phone # change I can't get the webiste or into call?

  193. Just a reminder; lvmoda posted an updated password for the joinme meeting below.  If anyone is still having trouble, post here, and I'll ask him about it. 

  194. bolt
    How do you get sound on the computer?

  195. I couldn't get the sound to play yesterday either

  196. If you have Skype you can join the meeting, open Skype and then join the conference call.  If you have an old OSX version audio may not work through the Join me site.

  197. bolt
    Every thing seems to be working. Is anyone speaking now, or are they between sessions? The sound isn't great.

  198. no sound this morning

  199. no sound either

  200. edro00
    I am getting sound. It just sounds like they are between sessions. ?????

  201. weii, I can see the cursor moving but no sound

  202. Are you folks without sound using the phone number for sound, or trying to get it from the web meeting?  If the latter, I didn't think sound was provided from that route.

  203. I was assuming the sound would come with the picture – No??

  204. No sound via the web meeting.  
    Just a reminder to all; sound for the web meeting lvmoda posted below is provided by phone at 862-367-5900.

  205. If anyone is still having trouble, please comment on today's post from here out.