lost in the bermuda triangle
FRO : Frontline Ltd. is a shipping company, headquartered in Bermuda.
great thinking guys.
P/E < 10. positive cash-flow. high, consistent dividend.
I HAD a slightly in the money covered call on this. Now it's slightly out of the money.
Their operating income seems to be falling. The amount of sell-off seems irrational.
should have stuck with married puts!
Options, intrinsic and premium
So I charted it. Intrinsic vs. Premium, normalized by Price. The distribution pretty closely matches my sketch from an earlier post. But it does illustrator a slight difference. Premiums are highest at-the-money, But they are also slightly higher in the money.
time decay
A chart that illustrates time-decay of option premium. Lots of "learn about options" guides briefly touch on time decay. It pretty key to realize the premium is whats decaying.
probably the most important thing to understand about options
this illustration is probably the single most important thing to understand about options. A few disclaimers: I drew it in photoshop. If you actually plot historical option data a better fit could probably be found with some sort of polynomial function, or normal distribution, but this is just to illustrate a point: Premium is almost always higher near the money.
There are of course outliers. If you plot a bunch of intrinsic and premium data there will certainly be exceptional cases. These cases are what I am most interested in. They could be thought of as "bargains" or "market inefficiencies".
I feel that premium and intrinsic are probably the most fundamental variables related to options. Technical and Fundamental analysis both use math and comparison of ratios to spot outliers. However technical analysis makes an assumption that price is bound to some sort of probability distribution. It's not.
finding temporal bargains @ finviz.com
This is a demonstrations of how to use the finviz.com screener to find stocks that will likely rebound soon. We used a very loose set of criteria for this example, but the fundamentals of how to look for such deals are well visualized. The screening criteria at finviz are split into quantiles, sometimes making it difficult to narrow potential prospects to an optimal number. It requires a lot more playing around with than google finance's screener. It does offer many more criteria, and it's free. No complaints.
AMD Fusion preconceptions
My opinion is slightly biased because I have a lot more familiarity with nvidia architecture.
The main advantage of modern graphics cards is their extremely high number of cores to low cost ratio. One of the major reasons chip manufacturers can achieve this core-cost balance is that GPUs are simple, in comparison to CPUs. There is a percentage of errors for each batch of silicon wafers that go through the process of becoming processors. There is a strong relationship between how complicated a processor architecture is, how many cores it has, and the percentage of useless chips that manufacturing will produce. The "fusion" style chips that include more complex elements than traditional GPUs will certainly suffer the side effects.
To balance my bias, nvidia too is making GPU architectures more elaborate, however not to the scale of the high level descriptions of AMDs Fusion's proposals. The processing power of this new generation of chips will almost certainly have it's niche, but the loss of it's cost effectiveness will probably put it outside the limit of many budget proposals.
What the GPU industry is in major lack of is standards. Almost each manufacturer of massively multi core graphics cards is doing something a little different and trying to patent the best parts. Even within each company there is a considerably big issue regard backwards comparability within the same architecture families.
These types of issues are probably an unavoidable component of multi core progression. The bottle neck it's creating is the ability of software compilers to efficiently and effectively convert higher level code to something that does a good job of taking advantage of each architecture. As of now many of the optimizations and configurations are far from automated, meaning that it will be much more complicated than hiring a C# or Java programmer if you really want to see your application cook on one of these architectures. Even if you shell out the big bucks to have your application optimized, chances are it will only work on one specific graphic card family, and will have far from typical results on much older cards, or future cards even from the same family.
Until these optimizations and configurations can be automated by compilers, insuring seamless compatibility with future graphics cards, this technology will be looked at as highly experimental.
Moose Pick
The markets been pretty volatile the past couple of weeks. Looking at longer term charts is a good way to calm your nerves and keep you head level. Notice the ttm still seems to be pointing pretty directly in the recovery direction.
SSW - another great buying opportunity in a market shaken up by EU credit concerns and offshore oil leaks.
Recent plans to drill off the Atlantic coast have been canceled due to the leak in the Gulf of Mexico. This could slow inflation/economic growth, but is not anywhere near significant enough to turn things negative. I have a desire to see the environment conserved, so there are lots of benefits for me personally. Besides the environment, it's just another motivating factor in the race to lose dependence on oil. We're on the brink of an alternative energy source. Once it's clear what it will be there will be massive growth. Most significant prospects are much more environmentally friendly than oil as well.
Greece has agreed to Austerity measures that would reduce government spending. I am sure there are some social services that will suffer from these measures, but hopefully it will have a much greater positive effect, perhaps creating greater transparency of government spending, and hopefully helping clear up some of the worst cases of corruption in the EU.
The biggest concern in the EU is no longer Greece, its other countries which may need similar bailout packages. There will be waves of good and bad news related to economic legislation being cranked out like sausage to deal with the economic bottlenecks. They will eventually pass, and markets will respond positively (in the long run).
Deciding whether a down day like this is a buying opportunity or a good time to run is like asking yourself if you believe in the boogeyman. I can't say with 100% certainty that he doesn't exist, but I have a feeling his bad reputation has been blown way out of proportion. This is a great opportunity to average down. I have made 2 fairly reactive trades in the past 2 days. They are largely based on technical analysis(recent lows) even though they are in companies with strong valuations.
I need to keep in mind that negative inflation can occur temporarily, and that temporarily can mean years. I have definitely taken some steps to profit from the inflation that will almost certainly counteract the recent dips in the market. So if I am using the car shocks metaphor, it's like my shocks have begun to absorb the impact of these couple of down days (by averaging down my cost basis), but I want to make sure my shocks don't bottom-out. I will evaluate the steps I've taken and how much travel I have left (ability to average down farther if there is a lower local minimum). Hopefully I could absorb a shock to say Dow 9000 level.
Update: Wow bad week. I've firmed up my bear market plan: another buy in if Dow gets to 10,000 level, another at 9,500 level, and save a real mother load for a 9,000 level market which I suspect we won't see.
Moose Pick
Reinforcing GSH with some calls. This is the biggest loser in my portfolio, so I closely scrutinized my valuation of it. It's pretty hard for me to imagine that the low price is anything other than a strong BUY opportunity.
Look at that damn P/E(<10 at the time of this post)!
Moose Picks
good values: Ameren Corporation (Public, NYSE:AEE) AND Overseas Shipholding Group Inc. (Public, NYSE:OSG)
Also suggesting trimming back preferred stocks. most fears of bankruptcies and credit downgrades have settled, and most preferred shares prices' reflect it.
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