Our Bunge April 2008 $125 Call Options are up 10.26% for us today. Let's sell and take a quick double-digit gain in 8 hours. Why? Hell, just because we can.
We may re-enter this position, or another BG covered call, at a later time.
Action: Sell the Bunge $125 April 2008 Calls (BGDE.X) to lock in a 10.26% gain... The options have gone from $3.90 to $4.30 today.
Good day,
James
Thursday, October 11, 2007
Bunge Trips... As Expected
So Bunge is trading down this morning...
No big shocker there (why is it that stocks always go down at first after you add them to your portfolio?).
But I have to agree with Jim Cramer, who, despite all his rantings, strikes me as a pretty smart guy.
This morning, the Mad Money Man reported that he sees absolutely "no reason" for today's pullback in BG's share price... and that he expects it to resume its upward trend posthaste. He compared it to a recent "random dip" in Nokia shares that represented a short-window buying opportunity.
http://secure2.thestreet.com/cap/login/rm_mbp_yho_july07.jsp?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190&flowid=536721b835&url=http%3A%2F%2Fwww.thestreet.com%2Fp%2F_yahoo%2Frmoney%2Fjimcramerblog%2F10383955.html
As Cramer writes:
If he's right, and we're right, then we stand to lock in some nice gains as this seed company rides the continuing bull market in commodities. Remember, we bought the outlying April 2008 options, giving us plenty of time to be correct in our assessment.
Good day,
James
No big shocker there (why is it that stocks always go down at first after you add them to your portfolio?).
But I have to agree with Jim Cramer, who, despite all his rantings, strikes me as a pretty smart guy.
This morning, the Mad Money Man reported that he sees absolutely "no reason" for today's pullback in BG's share price... and that he expects it to resume its upward trend posthaste. He compared it to a recent "random dip" in Nokia shares that represented a short-window buying opportunity.
http://secure2.thestreet.com/cap/login/rm_mbp_yho_july07.jsp?cm_ven=YAHOO&cm_cat=PREMIUM&cm_ite=003190&flowid=536721b835&url=http%3A%2F%2Fwww.thestreet.com%2Fp%2F_yahoo%2Frmoney%2Fjimcramerblog%2F10383955.html
As Cramer writes:
"Today Bunge is down almost two bucks. There is no real reason for that decline. Deere is running. Mosiac and Agrium are running. Bunge will come right back."Hallelujah, Jimbo! We here at Green Investments couldn't agree more.
If he's right, and we're right, then we stand to lock in some nice gains as this seed company rides the continuing bull market in commodities. Remember, we bought the outlying April 2008 options, giving us plenty of time to be correct in our assessment.
Good day,
James
Wednesday, October 10, 2007
New Recommendation: Bunge April 2008 Call Options
Today we're going to take a flyer on what is essentially a covered call play... by adding the Bunge April 2008 $125.00 call (BGDE.X) options to the portfolio.
We've seen strong action in Bunge (BG) for months on end, and are now up more than 50% on this position.
Continued higher grain prices, the demand for ethanol and corn, and Bunge's positioning as a supplier of foodstuffs to the exploding consumer populations in China and India are all helping push the stock higher.
Commodities in general could continue strong over the next six months (crystal ball warning!) because of the continued volatility and uneasiness in the equity markets (which can drive people into real assets like commodities)... and also the continuing bull cycle for commodities in general, which should run for another few years more at least based on past 16-year bull cycles in the sector.
This is a pure speculation on BG continuing its upward march. And we have a few months to be right... or wrong.
Action: Add the Bunge April 2008 $125.00 call (BGDE.X) options to the portfolio at $3.90.
Good trading,
James
We've seen strong action in Bunge (BG) for months on end, and are now up more than 50% on this position.
Continued higher grain prices, the demand for ethanol and corn, and Bunge's positioning as a supplier of foodstuffs to the exploding consumer populations in China and India are all helping push the stock higher.
Commodities in general could continue strong over the next six months (crystal ball warning!) because of the continued volatility and uneasiness in the equity markets (which can drive people into real assets like commodities)... and also the continuing bull cycle for commodities in general, which should run for another few years more at least based on past 16-year bull cycles in the sector.
This is a pure speculation on BG continuing its upward march. And we have a few months to be right... or wrong.
Action: Add the Bunge April 2008 $125.00 call (BGDE.X) options to the portfolio at $3.90.
Good trading,
James
Tuesday, October 9, 2007
LDK Solar Bounds 19%... Glad We Sold It!
You may recall our very nice 95% gain on LDK Solar, booked just days ago when the stock "stopped out" of our Evergreen Portfolio.
It was a rather sad day in a way, because LDK had been up more than 100% for us... for several weeks... before finally triggering our trailing stop (having sunk 25% from its high).
But who could have predicted what would have happened right after we sold at $53 levels?
LDK's Sudden, Shocking Free Fall
Since then, the stock went into a freefall... sinking into the low $40's before bouncing back some today... some meaning about 19%.
Still, the stock is trading around $44 as I write... well below our exit price.
Unfortunately, a former official at the company has announced that he believes LDK's technology is not up to snuff... and a Midwestern lawfirm has filed a class action lawsuit against the company on behalf of shareholders!
The suit alleges that LDK management overstated the company's profitability, and therefore defrauded shareholders (some of whom have booked 95%-plus gains). Who knows whether there's any truth to these allegations?
The lawsuit was just announced, so we'll have to see how it plays out.
However...
This could have been pricing into the stock before the news even went public... illustrating the opacity of the markets, especially when it comes to individual investors (and perhaps lending some small credence to Burton Malkiel's nefarious efficient-market flapdoodle).
For more on the lawsuit against LDK, visit:
http://biz.yahoo.com/bw/071009/20071009006638.html?.v=1
This just reaffirms my commitment to our Green Investments system... whereby we place trailing stops underneath certain positions to lock in gains as they come, and to ensure that we never lose our shirts.
Our System Is Functioning Perfectly
To read more about this system, please read my prior post on the topic:
http://greeninvestments.blogspot.com/2007/10/why-we-use-trailing-stops.html
Anyway, it's not often that you see one of your former positions soar almost 20% in one session... and breathe a sigh of relief for having sold it... But this is one of those rare days.
Let's hope LDK irons out its problems (which could be at least half PR-related) and gets back on track. If it does, we might re-enter the position at a later date.
Till then, good trading all,
James
It was a rather sad day in a way, because LDK had been up more than 100% for us... for several weeks... before finally triggering our trailing stop (having sunk 25% from its high).
I couldn't help but smile when LDK rose about 5% the very next day... But we stuck to our guns. When you sell, you sell... Stick to your discipline, even when it hurts I say.
But who could have predicted what would have happened right after we sold at $53 levels?
LDK's Sudden, Shocking Free Fall
Since then, the stock went into a freefall... sinking into the low $40's before bouncing back some today... some meaning about 19%.
Still, the stock is trading around $44 as I write... well below our exit price.
Unfortunately, a former official at the company has announced that he believes LDK's technology is not up to snuff... and a Midwestern lawfirm has filed a class action lawsuit against the company on behalf of shareholders!
The suit alleges that LDK management overstated the company's profitability, and therefore defrauded shareholders (some of whom have booked 95%-plus gains). Who knows whether there's any truth to these allegations?
The lawsuit was just announced, so we'll have to see how it plays out.
However...
This could have been pricing into the stock before the news even went public... illustrating the opacity of the markets, especially when it comes to individual investors (and perhaps lending some small credence to Burton Malkiel's nefarious efficient-market flapdoodle).
For more on the lawsuit against LDK, visit:
http://biz.yahoo.com/bw/071009/20071009006638.html?.v=1
This just reaffirms my commitment to our Green Investments system... whereby we place trailing stops underneath certain positions to lock in gains as they come, and to ensure that we never lose our shirts.
Our System Is Functioning Perfectly
To read more about this system, please read my prior post on the topic:
http://greeninvestments.blogspot.com/2007/10/why-we-use-trailing-stops.html
Anyway, it's not often that you see one of your former positions soar almost 20% in one session... and breathe a sigh of relief for having sold it... But this is one of those rare days.
Let's hope LDK irons out its problems (which could be at least half PR-related) and gets back on track. If it does, we might re-enter the position at a later date.
Till then, good trading all,
James
Correction: Professional Money Managers Are Even Worse!
In yesterday's post I originally said that less than 80% of professional money managers are able to beat their benchmark indexes...
That was accurate, in a pure sense. But...
What I really meant to say was less than 20% of them are able to do this! In other words, some 80% of actively managed mutual funds fail to beat their benchmarks!
Amazing, huh?
For more on this topic, check out this article:
http://www.investmentinternational.com/specialF/Does_active_stock.htm
Good investing,
James
That was accurate, in a pure sense. But...
What I really meant to say was less than 20% of them are able to do this! In other words, some 80% of actively managed mutual funds fail to beat their benchmarks!
Amazing, huh?
For more on this topic, check out this article:
http://www.investmentinternational.com/specialF/Does_active_stock.htm
Good investing,
James
Monday, October 8, 2007
Random Walk Down Green Investment Street
I don't agree with everything Burton G. Malkiel has to say. For example, he believes in efficient market theory - the idea that at any given time the market is determining a sensible price for any given stock.
In other words, whatever news or information there is available on a stock is already priced into that stock by the market.
With all due respect to Professor Burt, the "strong form efficiency" model (i.e. that share prices reflect ALL information and no one can outperform the broad markets) would fail to explain about 90% of what I see happening in the markets on any given day.
And there are boatloads of analysts smarter than I who would agree.
Where Malkiel Is Getting It Right
However, I do agree with one of Malkiel's most persistent ideas: For most investors, it makes better sense to put your money into an index fund and park it there for the long term, rather than pick individual stocks.
Hell, less than 20% of professional money managers beat their indexes on a yearly basis. That tells you something right there.
Malkiel's major point is that funds provide instant diversification, and therefore lower your downside risk the moment you add them to your portfolio.
4 Advantages to Green Investing through Index Funds
The other advantages he cites in his excellent book The Random Walk Guide to Investing are:
1) Index funds simplify investing... Like the sector or the index? Buy the fund.
2) They're cost efficient... because many offer low or no expense charges and most index funds do little trading
3) They're predictable... You know you'll at least keep up with the index's model portfolio
4) They're tax efficient... By owning index funds that don't trade from security to security, you can avoid taxable gains
Of course my point here is that sustainable investors should consider adding at least one good index fund to their portfolio.
Our Powershares Cleantech Portfolio ETF (PZD) would be a perfect example. Not only does it give you broad exposure to this exploding clean tech sector in one investment... it lowers your overall portfolio risk in the process.
A great one-two punch, and further proof that you can invest sustainably, and prudently at the same time.
Our next recommendation could be even further along these lines... including a possible hedge or zero-downside play as the markets continue into a period of slow growth and volatility.
Good investing,
James
In other words, whatever news or information there is available on a stock is already priced into that stock by the market.
This is clearly a bunch of crap.
With all due respect to Professor Burt, the "strong form efficiency" model (i.e. that share prices reflect ALL information and no one can outperform the broad markets) would fail to explain about 90% of what I see happening in the markets on any given day.
And there are boatloads of analysts smarter than I who would agree.
Where Malkiel Is Getting It Right
However, I do agree with one of Malkiel's most persistent ideas: For most investors, it makes better sense to put your money into an index fund and park it there for the long term, rather than pick individual stocks.
Hell, less than 20% of professional money managers beat their indexes on a yearly basis. That tells you something right there.
Malkiel's major point is that funds provide instant diversification, and therefore lower your downside risk the moment you add them to your portfolio.
4 Advantages to Green Investing through Index Funds
The other advantages he cites in his excellent book The Random Walk Guide to Investing are:
1) Index funds simplify investing... Like the sector or the index? Buy the fund.
2) They're cost efficient... because many offer low or no expense charges and most index funds do little trading
3) They're predictable... You know you'll at least keep up with the index's model portfolio
4) They're tax efficient... By owning index funds that don't trade from security to security, you can avoid taxable gains
Of course my point here is that sustainable investors should consider adding at least one good index fund to their portfolio.
Our Powershares Cleantech Portfolio ETF (PZD) would be a perfect example. Not only does it give you broad exposure to this exploding clean tech sector in one investment... it lowers your overall portfolio risk in the process.
A great one-two punch, and further proof that you can invest sustainably, and prudently at the same time.
Our next recommendation could be even further along these lines... including a possible hedge or zero-downside play as the markets continue into a period of slow growth and volatility.
Good investing,
James
Sunday, October 7, 2007
The Best of 4 Cleantech Indexes
As you may know, we recently added the Powershares Cleantech Portfolio ETF (PZD) to our Evergreen Portfolio.
It's already showing us a modest 2.44% gain, and I believe there's much more to come here.
We chose this fund over several competitors because of its valuation, price action and higher volume.
But if you'd like to take a look at the "losers" in the competition to become our primary cleantech ETF holding, check out this excellent website: http://www.sustainablebusiness.com/stocks/
You'll also find dozens more stock plays in the sustainable area categorized and linked to their Yahoo! Finance pages.
A great way to spend an afternoon, if you're a serious nerd like me.
Cheers,
James
It's already showing us a modest 2.44% gain, and I believe there's much more to come here.
We chose this fund over several competitors because of its valuation, price action and higher volume.
But if you'd like to take a look at the "losers" in the competition to become our primary cleantech ETF holding, check out this excellent website: http://www.sustainablebusiness.com/stocks/
You'll also find dozens more stock plays in the sustainable area categorized and linked to their Yahoo! Finance pages.
A great way to spend an afternoon, if you're a serious nerd like me.
Cheers,
James
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