Tuesday, September 8, 2009

Paying China to Play

The Green Prophets of doom are laying the groundwork to pay Red China about $300 billion per year to submit to their human caused global warming delusion.

From FT: "The cost of reducing China's total greenhouse gas emissions is likely to reach $438bn a year within 20 years, and developed economies will have to bear much of that cost, according to a group of Beijing's leading climate economists. ... In May, Beijing said developed countries should spend 0.5 to 1.0 percent of GDP to help poorer countries cut emissions - a contribution that would cost the Group of Eight developed more than $300bn a year."

The theory that humans caused the current multi-century global warming is complete nonsense - a fact that anyone honestly looking at the historical record for the past few thousand years or even million of years knows. This is just another of those natural cycles; why do you think it was just as warm as today in the 12th century ? Did the Crusaders use SUVs to go to the Holy Land ? Maybe Genghis Khan's secret weapon was SUVs ? Scientists runnning giant computer models can make them produce whatever results they wish to get more grant money, and almost no one bothers to check. They are all want to stick their snout in the trough.

Meanwhile, Obama and his believers in their cowls are preparing a giant carbon tax and will soon want you to send an annual check to Red China. Get ready to write that $1,000 check.


Over the weekend I developed a speculation strategy for Obama Fund. I have had much difficulty coming up with US companies that make a significant, growing amount of their revenues from overseas sales. maybe I'm just lacking the research tools. All my names are big companies: UTX, MMM, CAT, BA, ITW, PG. I'm still looking. But for now, to get the multiple return that my speculative fund, I will buy call options with about one strike in the money and dated past Q3 or Q4 earnings releases. I might ladder in some out of the money calls, too, for more zip. Most of my risked capital will be deployed in the "in the money, long-dated" calls, though.

My thinking is that these companies will significantly beat expectations and they will also proved upside guidance as their overseas sales roar. Europe and the emerging markets are coming out of this recession much faster than the US, so I think these companies will outperform. This will send the S&P to 1200 by year end, which is my target.

I plan to buy options representing about 3 to 5x value of my equity capital as measured by the underlying stock values. For example, a call option on a stock priced 75 is counted as $7,500 in total value. The call option might cost just 7.5 points for a 70 strike dated in January. So for example, if there was $$10,000 speculative equity for that name, I'd want options amounting to $30,000 stock value, or four calls. [$30,000 / $7,500 = 4 ] My equity capital risked is 4 x $750 = $3,000 in this example.

Another benefit of this strategy is I don't have to pay the exorbitant margin interest rate that Ameritrade is currently charging. And I don't have to go through the hassle of changing brokers.

Don't do this with your savings or retirement money or any money you can't afford to lose if you are wrong. This is a SPECULATION.

I also intend to rename Obama Fund. It no longer relies on his success, which I now doubt.

Word of the Day

"Desinence" - noun [$100]
Desinence means 1. a termination or ending, as the final line of a work; 2. (Grammar) a termination, ending or suffix of a word.
Sentence: The desinence for the comparative of an adjective is usually '-er' in English. In Polish for adjectives with stems ending in a consonant, one adds '-sz-' plus the usual case desinence. For the masculine nominative singular case, ciekawy means 'interesting' and ciekawszy means 'more interesting'. Aren't you glad English doesn't use desinence to mark word usage in a sentence?

Das Worte der Woche

"Verstehen" - verb
Verstehen means to understand.
Der Satz: Verstehen Sie mich, Punker ?
Sentence: You understand me, Punk ? [said emphatically]


Frosty said...

Bunky...cramer crazy bullish today, must be a reader...call options interesting, feeling left behind today...time decay curve can be a bitch.

Bunkerman said...

time decay isn't so bad on the in the money ones.

On this AM pullback, bought some calls (mostly Nov & Dec) in UTX, CAT, MMM, ITW, PG, BA, RIMM, GOOG.

Bought a bit of COF stock in Fido - lower fees, market share LT play.

Bunkerman said...

I have room to add on all.

btw, MMM, UTX, PG, ITW BA are in Mrs. B's Sky Fund;

RIMM, GOOG are in Fido.

Bunkerman said...

Offsetting the interest carry from AMTD piratical margin rates makes these premiums reasonable to me.

These are mostly low volatility stocks anyway.

1 pt premium on a $70 stock for three months is just 5.7% interest, less than AmeriTurd margin rates.

maverick said...

South Dakota State in Ames this week?

Frosty said...

Bunky...where are the fins...how can you not buy fins...until you buy some fins I will take this as another beefer style follow the crowd move on your part.

Bunkerman said...

the fins don't fit my theory - US bound mostly.

have a good bit of HBC still in Sky Fund.

Bunkerman said...

I really do use my brain on these ideas - not just a basket play.

I am not a ping-pong player.

Je n'est pas un joueur de ping-pong.

Bunkerman said...

aka un pongiste

Spin-em said...

beantowners 9 games outgeez Louise..droppin faster than the Crimson Tide after Hunter floated the radio bouy.....

....come onnn Texas...kick em in the balls and send em home cryin in theya lobsta bibs

azzheads can still can bring up the payroll thing....LLLLOOL

thanks for your attention

Bunkerman said...

azzhead ... hmmm

Bud, c'est un pongiste sans cervelle.

Bunkerman said...

Obama: US should explore taxes on soda, sugary products, according to report

What a swine !

Frosty said...

so your thesis is more important than maximizing profits...perfect logic indeed...fat al no worries next flapjack contest.

Bud said...

" Bud, c'est un pongiste sans cervelle "

huh?? i have no idea what that means.........i have a different strategy when it comes to languages and expressing myself

lemme give you an example

"frosty a f'ng douchebag "

no ambiguity....no confusion....no misunderstanding........both parties quite clear on the meaning

Bud said...

hey Bman

can you devote tomorrows post solely to the options strategies.........you confused me today

Bud said...

southern tennesee state in death valley next week ???

Death valley ??.......more like Pussy valley

Bud said...

oops forgot.....hey bob

PS.......still wanna be friends ???

Bunkerman said...

sheesh frosty, I did buy a bit of COF.

Which US fin should I buy that will amke oodles on money overseas ?

HBC I already have. Maybe I should buy some call on that. Good point ...

Thinking ...

Bunkerman said...

Bud, that is a restatement of what you often say:

You are a brainless ping pong player.


Bud said...

Bman do yourself a huge favor..............don't listen to frosty when it comes to stox................he almost drove mern into bankrutcy

nice call on the QID douchebag

PS......still wanna be friends ??

Bunkerman said...

frosty ws right ... bought some HBC calls, too.

Bunkerman said...

I was focussing on the industrial & consumer plays ... just overlooked the fins.

Bunkerman said...

frosty's imprimatur means nothing to me, but I always listen to ideas and then make my own conclusions.

that was a good one.

Frosty said...

HBC I like....52-55 channel, I would buy a breakout or dip it bottom of channel near 50 day support...C is the US global horse...if you are right year end, I'd say C trades 6-6.25...I hate COF, stocks I loath tend to do well in a bull move.

Spin-em said...

(linda ronstadt style)poor...poor pitiful mern.....poor poor pitiful mern......hope he's in jail

Bud said...


did bob just surrender ??? i think he did...............he went all serious on us...........with symbols and prices...........alright

'callin off the dogs'

Frosty said...

listen up you fing prick...looking out for Mrs B, the sausage king not gonna be around for ever...I'll knock you teeth out.

Bunkerman said...

I'm about 300% long effectively in the Spec Fund now via the calls..

Bunkerman said...

bot some MT calls, too.

that's it for now.

Bud said...

'the sausage king'


mfl59 said...

300% long???? did i miss something, or?

Bunkerman said...

"effectively" - based on total value of stocks covered with the calls.

Bud said...

Bman don't you think it's highly irresponsible of you to make outlandish statements such as '300% long' ??

i mean didn't you once say you have alot of 'retirement type' readers...........or was that statement only directed at the ping-pong players

Bud said...

at the ping-pong player .........singular

cuz we all know frosty does alot of empirical anlysis via his ops expo open interest spreadsheet to pick winners.............what a f'ng douchebag

oh wait............i called off the dogs

'sorry bob'

Bunkerman said...

well, I did post in the blog for people to NOT do this except with speculation money.

Bud said...

loooool Bman

your disclaimer sounds very similar to the SKF and SRS ...............why you always pissin and moanin against inverse etf's ??? they also say .......... this is for 'speculative' money only

holy smokes.............i'm pitchin a shutout today

Spin-em said...

maaan Adami sounds lower than a beaten down Sox fan