closed at 1985. nice runup from about 1400 to 2100 or so. but it's a little too far too fast so i'm back in cash. if we do go back down how low before the dip buyers come in?
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- Thread starter Baker
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Nas at 1760 right now. Im guessing we'll go back up but im not very confident about this and even if we do then maybe not for long. today Im back in about 50% and if we drop more i may add to it. Kind of miss that bull market of the past twenty years as sure was a lot easier to make money. oh well.
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Nas at 1760 right now. Im guessing we'll go back up but im not very confident about this and even if we do then maybe not for long. today Im back in about 50% and if we drop more i may add to it. Kind of miss that bull market of the past twenty years as sure was a lot easier to make money. oh well.
Baker first off good call, I thought the rally of November, December would go into the new year.
the rally for some of these stocks were strong on for the most part no news, or little good news still these stocks climbed higher. I believe the Enron and accounting issues are the reason the market is concerned, also the valuations are still not cheap and when you have accounting issue on top of that the market pulls back.
I at most usually hold 30% in cash, there is usually a stock, bond, option that I feel can give me a better return in cash. however sometimes I wish had more cash on hand to take advantage of opportunities.
currently have 15% cash and that amount will be lowered. most of my positions I have covered calls, against them.
Recently have been looking at Williams WMB - they have been caught up with Enron and also have problems of their own.
still Feb 19, close $16.72
1. WMB buy 400 $16.72
sell covered calls August $17.50 (last $2.40) bid $2.20 ask $2.50
400 X $2.20 = $880
2. WMB write 4 August 15 puts last $1.95 bid $2 ask $2.40
400 X $2 = $800
plus commissions costs
warning = usually trade Canadian stocks would rate Williams risk level high. still let us see how it turns out.
thanks
selkirk
the rally for some of these stocks were strong on for the most part no news, or little good news still these stocks climbed higher. I believe the Enron and accounting issues are the reason the market is concerned, also the valuations are still not cheap and when you have accounting issue on top of that the market pulls back.
I at most usually hold 30% in cash, there is usually a stock, bond, option that I feel can give me a better return in cash. however sometimes I wish had more cash on hand to take advantage of opportunities.
currently have 15% cash and that amount will be lowered. most of my positions I have covered calls, against them.
Recently have been looking at Williams WMB - they have been caught up with Enron and also have problems of their own.
still Feb 19, close $16.72
1. WMB buy 400 $16.72
sell covered calls August $17.50 (last $2.40) bid $2.20 ask $2.50
400 X $2.20 = $880
2. WMB write 4 August 15 puts last $1.95 bid $2 ask $2.40
400 X $2 = $800
plus commissions costs
warning = usually trade Canadian stocks would rate Williams risk level high. still let us see how it turns out.
thanks
selkirk
Nas at 1731. Just sold half my position as don't feel we're getting the bounce I was expecting but i'll still cling to what I do have in as im trying to slowly work my way back into a buy and hold position. Im still not 100% convinced we don't retest sept lows. if we are then i wish we'd just get it over with. what to do. what to do.
Selkirk, thanks for your response. I know nothing about writing covered calls. Maybe sometime when you've got some spare time you could give me a few rules of thumb, as I've heard of others who use this often. For example do you generally "want" to get called out of your position and then if so do you rewrite it later. would you sell your stock prior to expiration if you think its going down or just rewrite another call?
I hadn't heard of WMB. Looked it up and saw theyve some issue with a spinoff telecom that's headed south? Anyway, hope it works out well for you.
Selkirk, thanks for your response. I know nothing about writing covered calls. Maybe sometime when you've got some spare time you could give me a few rules of thumb, as I've heard of others who use this often. For example do you generally "want" to get called out of your position and then if so do you rewrite it later. would you sell your stock prior to expiration if you think its going down or just rewrite another call?
I hadn't heard of WMB. Looked it up and saw theyve some issue with a spinoff telecom that's headed south? Anyway, hope it works out well for you.
Baker will start up a thread on options. The main use for me, in playing options is to protect my portfolio and as a hedge and always have cash coming into the portfolio.
here is some info on Williams, you are correct very high risk. they may need to come up with $2.1 billion.
some basic info (this company is not easy to understand, at least for me).
book value = Jan 2002 $15.50 (approx.)
div 2001 .68 2002 .80 2003 .80-.84
(do not believe they will increase the div in 2003, I still wonder if it was such a good idea to increase it from 2001 levels.)
cash flow/share 2001 1.83 2002 $4.25-$4.70 2003 $4.50-$5.10
(I know there is a big spread but many things can happen, would take the lower number and maybe even 10% below that, just in case)
Feb 1 Moodys confirmed WMB debt BAA2. S@P has stated WMB is under review with possible downgrade. Fifth also confirmed debt rating.
the company has $2.1 billion in guaranteed WCG obligations.
to pay for this and reduce debt on the balance sheet Williams is going to sell $1 billion- $1.5 billion in assets. the risk is what they get for the assets and trying to do it without hurt future earnings.
Williams this month has announced it will sell its Midwest Petroleum Pipeline and terminals to their 60% owned Williams energy Partners (WEG). the pipeline is 9100 miles and 40 terminals in 11 states.
WEG market cap around $450 million this will be a large acquistion but it should be able to be done. If not Williams can sell it to another master limited partnership run by a different company. Would be much better if they can sell it to their own WEG, which they should be able to do.
also hopefully by April and May Williams will have signed some long term energy contracts, there is a risk these may be derailed by lack of capital available to many firms. however the company says 5 transactions are in advanced stages and have not yet been delayed (important).
by the way borrowing cost for Williams will also increase in this current market.
the sale of the pipeline to their limited partnership ( or other company) and to get a good price for some of these assets will be very important going forward.
they should be able to survive the money they receive from asset sales espcially the Midwest pipeline is very important.
on one critical note I have no idea why management ever raised the div from .68 to .80. they should have kept the div the same and repaid down debt and improved the overall business. would cut the div in half to save cash but this would push the stock down something they do not want if they have to issue more equity or a convertible. would be fairly dilutive at these prices.
thanks
selkirk
here is some info on Williams, you are correct very high risk. they may need to come up with $2.1 billion.
some basic info (this company is not easy to understand, at least for me).
book value = Jan 2002 $15.50 (approx.)
div 2001 .68 2002 .80 2003 .80-.84
(do not believe they will increase the div in 2003, I still wonder if it was such a good idea to increase it from 2001 levels.)
cash flow/share 2001 1.83 2002 $4.25-$4.70 2003 $4.50-$5.10
(I know there is a big spread but many things can happen, would take the lower number and maybe even 10% below that, just in case)
Feb 1 Moodys confirmed WMB debt BAA2. S@P has stated WMB is under review with possible downgrade. Fifth also confirmed debt rating.
the company has $2.1 billion in guaranteed WCG obligations.
to pay for this and reduce debt on the balance sheet Williams is going to sell $1 billion- $1.5 billion in assets. the risk is what they get for the assets and trying to do it without hurt future earnings.
Williams this month has announced it will sell its Midwest Petroleum Pipeline and terminals to their 60% owned Williams energy Partners (WEG). the pipeline is 9100 miles and 40 terminals in 11 states.
WEG market cap around $450 million this will be a large acquistion but it should be able to be done. If not Williams can sell it to another master limited partnership run by a different company. Would be much better if they can sell it to their own WEG, which they should be able to do.
also hopefully by April and May Williams will have signed some long term energy contracts, there is a risk these may be derailed by lack of capital available to many firms. however the company says 5 transactions are in advanced stages and have not yet been delayed (important).
by the way borrowing cost for Williams will also increase in this current market.
the sale of the pipeline to their limited partnership ( or other company) and to get a good price for some of these assets will be very important going forward.
they should be able to survive the money they receive from asset sales espcially the Midwest pipeline is very important.
on one critical note I have no idea why management ever raised the div from .68 to .80. they should have kept the div the same and repaid down debt and improved the overall business. would cut the div in half to save cash but this would push the stock down something they do not want if they have to issue more equity or a convertible. would be fairly dilutive at these prices.
thanks
selkirk
Selkirk,
Looking forward to your options thread. Hope I didn't give the perception that I knew what the hell I was talking about with Williams
because i don't. LOL
Important thing I think is stay protected (especially in these times and with enronitis accounting) from big sudden drop whether it be from stops or hedges.
Looking forward to your options thread. Hope I didn't give the perception that I knew what the hell I was talking about with Williams
because i don't. LOL Important thing I think is stay protected (especially in these times and with enronitis accounting) from big sudden drop whether it be from stops or hedges.
Baker management of this company has done some large mistakes, the trades look okay except for maybe the calls, time will tell wether I did the correct trades.
thanks
selkirk
thanks
selkirk
