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Pfizer Inc. Message Board

  • goin4thegoldin03 goin4thegoldin03 Jan 25, 2011 5:52 PM Flag

    chrty/alan

    keep watchin... avy late tonight..and even you will soon comprehend the lesson i outlined on how to tell nippy, avy and goldie apart..he bees here if he can..

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    • Nobody can know for sure what will happen to Pfizer with a time frame such as three or four decades - any more than folks couldn't have forecast the demise of General Motors in 1970.

      But using a time frame of just ONE year, it should be obvious to all that about the worst-case scenario for Pfizer would be something like perhaps $13 on the stock. After all, it could only go as low as 411.62 at the very bottom of the crash and there were a lot more uncertainties at that time than now. Plus the fundamentals and dividend payout are better now and it's two years closer to finally getting beyond the patent expiration cliff and beginning the extended time period where there's a paucity of big expirations.

      It makes a huge difference in calculating the reward/risk ratio whether there's five points of realistic possible downside in the next twelve months or if there are EIGHTEEN points.

      If the realistic risk is just down to $13 and then only at the very bottom, I can hardly get destroyed writing 15-strike puts, can I? Especially when I receive over $70 per contract up front.

      If I sell 80 contracts and the stock doesn't fall apart, I earn $5,500 or so on cash required of 18.5K which is around 30% - a handsome return indeed.

      At the very worst, I would lose about 10.5K if I panicked and sold out right at the bottom assuming that $13 was the bottom.

      Even that proposition is fairly attractive as the chances of the stock going to $13 are so much less than remaining above $15.

      But even $13 hardly destroys me as I would have no intention of panicking out at that kind of price. What I would do first of all would be to roll the 15-strike naked puts out nine months to a combination of 13 and 14 strikes. I would be able to do that at no cost. Doing that would cut down on the ultimate return of course but I'd still earn 15% or more a year even if the stock two years out got over $14, a pretty safe bet.

      Compare that return with how a buy-and-hold Pfizer investor would do buying 1,000 shares at 418.50, watching the stock go down to $13 and then recovering to maybe $15.

      Who does better in that scenario - me who would end up with $5,500 in profits for the two years? Or someone buying the stock at $18.50 and seeing it at 415 two years later?

      My play is MUCH safer than buy-and-hold given the fact that there ARE downside limits for a stock with such solid fundamentals.

    • You have continually said that I was way overstating the returns on the naked puts and that they had to be considered with respect to the idea that everything could be lost, etc.

      Just the other day you mentioned in connection with my writing 80 of the 15-strike naked puts that I should use 120K as my base in calculating the return as opposed to the 18.5K in actual cash that I have to come up with.

      120K is a far cry from just 18.5K. Are you going to now deny that you told these good folks that 120K needed to be used?

      When calculating returns, it has to be assumed that every play is able to stand on its own. I don't know of a lot of dudes that just have a spare 500K lying around - to say nothing of the 2M that you stupidly mentioned in your post.

      I simply assume that the cash required to do the naked put plays is about all that the investor wants to put in - other than a little in reserves for an extra deposit that might be needed if the stock really tanks.

      I'm not about to allow you to take me or the board completely off topic by asking what the returns would be if there was an unlimited amount of margin availability, etc. That's just not real life for most folks - and that certainly includes ME. Because while I have over 300K sitting in cash in the account, only a little over 100K is FREE CASH - all the rest of it is serving as collateral for naked puts already written. And I'm hoping to take much of that Free Cash out and put it into a new annuity or something - I certainly don't want to abuse margin and tie up more than I already have.

    • Learn to read, twinky. I said nothing about taking money out of equities to purchase fixed investments.

      That rest of your asinine message is nonsense.

    • Interest rates were only one aspect of bond prices - the LEAST important one.

      The MOST important was the ability of the companies to pay. What do you suppose happened to the price of GE debt as the stock was plummeting from $42 to $5.75? We all saw what happened when that once bluest of blue chips had to agree to pay Buffett 10% as well as warrants in order for him to lend the company money.

      What do you suppose happened to the price of C and AIG bonds during the crash? Or even stocks like M, X, etc?

      Despite the drop in interest rates, corporate bonds FELL for the most part and in some cases even PLUNGED.

      I'm here to inform and educate and if anyone here could use a financial education, it is YOU.

      Now go back to that trailer of yours in that gas-stop of a town you live in.

    • Wrong again, dummy. As interest rates declined, the value of those bonds increased big time. You do understand the relationship between rates and bond prices, don't you? Naw, you don't understand what day it is, amateur.

    • I also post about the stock. Your annoying posts occassionally get to me and I post at you. You are continuing your A$$ Clown behavior by posting me.

    • whats your lame excuse???

    • Just face it cool. You are an A$$ Clown who only posts about charty whether directly or regarding others.

    • The only way you will ever convince me is to do as I say - arrange a meeting between your various identities and the old coot. He'll ask questions of whoever you bring that only a board regular could know so you bringing two friends isn't going to work if they really don't post here.

      There is little reason why such a meeting for lunch or drinks can't be arranged if you all live fairly close to each other.

      As I said, this is the ONLY way you will ever convince me as anyone can deliberately strive to change writing styles, etc. The fact that your identities continually congratulate each other and say hi to each other is just a dead giveaway as is the fact that apparently your various identities all misspelled the word "worry."

      There is simply no way of recovering from thsee things - it's almost 100% certain that it's three identities but just one as*hole. The onus is on you to prove otherwise and I just told you how to start.

    • suckin on chrtyazz for 5 years, everyday...clown!

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PFE
30.05+0.13(+0.43%)Sep 16 4:02 PMEDT

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