|Trading Thoughts... |
Just a couple of quick thoughts, as I am hosting a large
group of family & friends over the holiday weekend...
Wednesday and again today, I've been "selling puts" in the
Oil ETF (USO) and in oilpatch stocks (drillers and E&P's).
Once again, you only "sell" PUTS in stocks you want to
buy, and own.
Selling puts is a great strategy to "marry" along with your
initial entry buys into a sector. If you're looking to enter
the oilpatch here, and are trying to pick a bottom, using
put "sales" is a great way to make your initial entries, or
to "cushion" your initial entries.
I think everyone realizes the fundamentals of demand destruction
that we are witnessing, as well as the power of momentum, as it
swings in the opposite direction. And, we now have many stocks
selling for deep discounts to book value, and the OSX index
is back to 1997-1998 levels.
Want a couple of "bones?"
Here's just a couple...
DPTR is at $4.91 today and you can sell the March '09
$5 PUT for $1.75 premium.
Best case - DPTR closes over the $5 strike and you pocket
a big, fat, juicy $1.75 premium.
Worst case - DPTR closes below the strike and you buy
the stock (that you want to own) and get paid a $1.75
"rebate" for doing so.
For example if DPTR closes below the $5 strike at $4.91,
you pay $4.91 - $1.75 (retained premium)= $3.16 cost basis.
PTEN is at $12.36 today, and you can sell the May 2009
$12.50 PUT for $2.50.
You either get to keep the $2.50 premium, or you get to
buy PTEN for sub $12.50 - the $2.50 Premium, ie: for $10ish,
if the stock closes under, but close to the strike price.
PTEN was featured as a pick on CNBC today, is selling at
about 1/2 the valuation that Grey Wolf was taken out for,
and is at a deep discount to book, and has a super solid
Want to make an initial entry into oil via USO, but worried
that oil may continue lower?
USO is at $35ish today. You could sell the July 2009, $24 PUT
for a $2.63 premium. Or, you could sell the Jan, 2010 $20 PUT
for a $2.75 premium. USO would need to fall another 40% over
the next year to lose your premium.
Take a look at the PUT premiums on your favorite oilpatch
stocks, the premiums are still rich, and if you're toe-
dipping into oils, or just trading, these PUT sales are
now offering excellent risk:reward opportunities.
My goal is to retain 50-75% of my premiums. And often I get
to retain 90-100%. You can adjust how deep of a strike price
you want vs. size of the premium accordingly.
You can also adjust your risk:reward ratio by how you buy
"time," in selling January vs. April 2009 puts, vs. 2010,
or 2011 LEAP puts for example.
I usually look for a mix of higher risk/return plays like
a DPTR balanced with a stronger balance sheet stock like APA.
FWIW, I like the oil leveraged E&P's the best here.
Good luck and enjoy the Holiday Weekend.
PS: Here's a link to a fascinating documentary film made
by the Hollywood Producer who did Bette Milder's "The Rose" and
"Trading Places" with Eddie Murphy. His name is Aaron Russo.
Russo sadly passed away recently from cancer. He was a well known
and respected movie producer and concert promoter, who also
ran for Governor of Nevada. He lost the governor's race, but
beat the sitting Lt. Governor and collected over 20% of the vote.
This documentary is 1 Hour & 51 Minutes long. And I give it
my personal "must watch" highest recommendation.
Interesting enough, this film started as a documentary on
the Internal Revenue Service and the Income Tax. But, as
Russo did interviews with people like the former IRS
Commissioner Sheldon Cohen, the movie took on a much
broader scope and deeper purpose...
I promise you, that if you have not seen this movie, that
the pixels were start coming together very quickly.
From a historic and factual perspective, this is THE
seminal work on the IRS, the US Income Tax system,
the 16th Amendment, on the how the Federal Reserve's
"debt money" system works.
When you see Russo's interview with former IRS Commissioner
Sheldon Cohen, along with interviews with former IRS Special
Agents, and an incredibly moving interview with a juror from
a major tax case, and the sad story behind former Heavyweight
Boxing Champ Joe Louis, you will never view taxes, or this
country in the same way.
But those pieces on the IRS and the Income Tax, were not the
parts that I found most revealing about the rapidly unfolding
plans of the globalist Think Tanks, and One World Government
elitists, and the coming police state.
Here's a quote from Henry Kissinger that I had never heard
before. It's chilling, and it is perhaps the one single quote
that is most telling about what is planned for America over
the next 2 to 4 years, and how the global elitists feel about
the people they govern.
"Military men are just dumb, stupid animals to be used as pawns."
-- Henry Kissinger
When I heard that quote, I got a sick feeling in my stomach.
You know, what's unfolding in America seems surreal to most.
It did to me until recently.
It started with just "feeling" that everything that's unfolding
just wasn't -- "adding up."
That this was something more, and something bigger than just
"the Patriot Act."
And I started reading.
And I started to talking to people. Asking questions.
Friends, and family in law enforcement and the military.
And they were "feeling" the same things, and shared their
thoughts with me. And then this financial crisis unfolded.
It wasn't just the market crash, it was the economy coming
to a near dead stop, and everyday people in America all
feeling that something was wrong, very wrong.
...that this is something more than just a recession.
...that this something more than taking prudent security measures post 911.
...that this is something that many of us wished would just go
away, but isn't going away... it's accelerating.
And the sad part, is that "something" has always been there,
right out in the open.
We just needed to connect the dots.
Dots like these...
"Today Americans would be outraged if U.N. troops entered
Los Angeles to restore order; tomorrow they will be grateful.
This is especially true if they were told there was an outside
threat from beyond, whether real or promulgated, that
threatened our very existence. It is then that all peoples of
the world will plead with world leaders to deliver them from
The one thing every man fears is the unknown. When presented
with this scenario, individual rights will be willingly
relinquished for the guarantee of their well being granted to
them by their world government."
-- Henry Kissinger
"The Constitution is just a goddamned piece of paper.
-- President George W. Bush, November 2005.
"It is the sacred principles enshrined in the United Nations
charter to which the American people will henceforth pledge
-- President George H.W. Bush
Addressing the General Assembly of the U.N., February 1,1992
"This regionalization is in keeping with the Tri-Lateral Plan
which calls for a gradual convergence of East and West,
ultimately leading toward the goal of one world government.
National sovereignty is no longer a viable concept."
"The technotronic era involves the gradual appearance of a more
controlled society. Such a society would be dominated by an
elite, unrestrained by traditional values. [...] The capacity
to assert social and political control over the individual will
vastly increase. It will soon be possible to assert almost
continuous surveillance over every citizen and to maintain
up-to-date, complete files, containing even most personal
information about the health or personal behavior of the
citizen in addition to more customary data. These files will be
subject to instantaneous retrieval by the authorities."
-- Zbignew Brzezinski, National Security Advisor and mentor
to Barack Obama.
"For more than a century, ideological extremists at either end
of the political spectrum have seized upon well-publicized
incidents to attack the Rockefeller family for the inordinate
influence they claim we wield over American political and
economic institutions. Some even believe we are part of a
secret cabal working against the best interests of the United
States, characterizing my family and me as "internationalists"
and of conspiring with others around the world to build a more
integrated global political and economic structure - one world,
if you will.
If that's the charge, I stand guilty, and I am proud of it."
-- David Rockefeller, Written in his 2002 autobiography 'Memoirs' [pp 405]
I stand on bended knee people, begging you to wake up. For years
I also thought most of this Trilateral Commission, Bilderberger,
New World Order stuff was a crock of shit.
But, then 911 happened.
And in the name of "The War on Terror" we passed executive
order, after executive order, that stole our liberties, and
restricted our freedoms.
From FEMA kicking in doors and seizing legally held firearms
from law abiding citizens in New Orleans, during Hurricane
...to near strip searches of 80 year old grandmothers, and
freckle-faced, red haired 8 year old boys by TSA agents
at US airports - while drug dealers and illegals pour over
our open borders by the hundreds of thousands.
...to random police check points, and the use of the military
in daily violations of The Posse Comitatus Act all across
...to RFID chips in drivers licenses, surveillance camera's at
every intersection, and now over 800,000 Americans on no fly lists.
...to open telephone, internet surveillance and data
mining of all of our financial and banking transactions.
... to paramilitary SWAT Team raids on family farm stands.
... to Congress called behind closed doors, and threatened in a
"secret meeting" with Martial Law if they didn't hand Hank
Paulson an $800 billion dollar blank check.
... to hundreds of FEMA detention camps built all across
America to house millions of American's in the event of
civil unrest - that are manned by U.N. and foreign troops
now being trained by the tens of thousands at U.S. Military
-- Threats of "Martial Law."
-- Secret "behind closed door" meetings with Congress.
-- FEMA camps & UN Troops on U.S. soil for "civil unrest"?!?!
...what do you suppose they're afraid of?
Another 12 Saudi's with box cutters, or 120 million armed, and free Americans?
And in case you're worrying about the President, or Congress
passing a law to where they can confiscate your gold...
THEY ALREADY DID!
"The Government claims the power to seize all financial
instruments, currency, gold, silver... if they deem an
-- U.S. Treasury Department Letter, August 12, 2005
And here's a few more rights you may not be aware that you
no longer have...
Executive Order #10999
- Allows the government to take over all modes of transportation.
Executive Order #11000
- Allows the government to mobilize civilians into work brigades under government supervision.
["If you think all those FEMA camps are "urban legend" read
Executive Order #11000 above and focus on the words "work brigades."]
Executive Order #11921
- Proves that the President can declare a state of emergency
that is not defined and Congress cannot review the action for
Senate bill #1873
- Allows the government to vaccinate you with untested vaccines
against your will.
Congressman Sensenbrenner's bill (HR 1528)
- Requires you to spy on your neighbors, including wearing a
wire. Refusal would be punishable by a mandatory prison
sentence of at least two years.
The Patriot Act I and II
- Permits secret FBI and police searches of your home and properties.
- Permits secret wire taps on your phone, computer, or internet.
- Secret investigations of your financial records.
- Secret investigations of your library and book activities.
- Secret investigations of your medical, travel and business records.
- The freezing of funds and assets without prior notice or appeal.
- Creating a secret "watch list" that bans listed people from
air or other travels.
The FDA says Americans do not have the right to know which
foods are genetically modified. Because of globalization the
U.S. must accept other nations' laws. Under the CAFTA treaty
the sale of vitamins and supplements will be illegal.
The President of the United States
President Bush has signed executive orders giving him sole
authority to impose martial law, and suspend habeas corpus.
This gives him dictatorial power over the people, without any
checks and balances. The government can now jail you for life
without charges, without a trial, and without a lawyer even
with the people knowing.
PPS: One last thought...
"On the plains of hesitation, lie the blackened bones
of countless millions who at the dawn of victory, sat down
to rest... and resting died."
And remember, the only thing they fear more than your vote,
is that you continue to cling to your gun, your God, your Gold,
and your belief in the Bill of Rights, the U.S. Constitution...
From our cold dead hands.
Please watch this film: