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.

Actions

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]