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Pfizer Inc. Message Board

  • suckeesuckeesuckee suckeesuckeesuckee Jun 7, 2011 9:37 PM Flag

    Chartnuts, in hundreds of thousands of posts promoting your options

    programs, you have not once warned any innocent readers that your $500K bet could end up costing you $2.5 million.

    Why not? This is necessary information for anyone reasonably to calculate a risk assessment.

    If your estimate of potential losses differs, please reply to this or my previous messages asking you to provide such absolutely essential figures.

    Either that or quite pimping such an insanely dangerous, irresponsible, self-destructive, addictive gambling, O/C maniacal "strategy".

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    • The 1974 bottom was at around seven times earnings. That's actually not all that much less than what Pfizer is at now. That kind of multiple would make PFE a $16 stock - about where it was just after Thanksgiving.

      From where I sit, $14 is theoretically possible - about matching the mid-2010 low. But it would have to be an absolute worst-case scenario to see that - something just above an end-of-the-world kind of thing.

      Interestingly enough, the margin-safe point on 12.50-strike naked puts is fourteen bucks.

    • The March 2009 low of 666.79 got pretty close.

    • If the S&P's current P/E is around 17 but secular bear markets end with valuations of 5 to 8 times earnings, then the index needs to drop to about 400 to 600.

      Probably won't go that low, but shows what's possible, going by 1949 & 1974 bottoms.

    • Your betters have repeatedly taught you that the 1929-49 secular bear market ended when the NYSE P/E bottomed out in June 1949 at 5.82.

      Why can you not recall this fact after so many repetitions? Why do you still not understand what defines bear & bull cycles & secular trends?

      http://www.gurufocus.com/news/135300/stock-market-valuation-june-2-2011

    • When will you learn that what you recall seeing doesn't matter?

      You don't need a chart. The actual numbers have been posted here for you many times, as well as charts.

    • I've never seen a chart of a post-Depression year where the average PE was less than seven. That occurred at the bottom of the severe 1973-74 bear.

    • Those are historically high P/Es. Obviously you have never studied history.

      The current secular bear might end where the 1929-49 bear did, with average P/E of five. combined with lower profits to boot.

      Draw a line from the 1932 Dow low of 41 to the 1974 low of 570. See where it is today?

    • I can't lose a multiple of what I have invested. The lions' share of my Pfizer investment is in long 10 and 12.50-strike LEAPS calls. The worst I could do on those is lose my investment but not more than that.

      As for the naked puts, they are all way out of the money with the exception of the 25-strikes for PFE (59 of the Jan. 2012).

      A big reason why I lost as much as I did during the crash is that the options exchanges simply didn't offer DEEP out-of-the-mnney naked puts. So perforce I had to sell those that weren't that far out of the money. I thought they were still relatively safe as it never occurred to me that Pfizer could possibly break $20 on the downside. Not after holding there even when they lost 60% of the Cox-2 franchise in 2005 and were threatened right then and there with the imminent loss of domestic Lipitor exclusivity. And then on top of that, in late 2005 there was generic Zocor looming just six months away.

      I felt that if the stock couldn't break $20 with all that adversity, it never could.

      At any rate, with almost all of my naked puts being as far out of the money as they are and with the ability to roll down stil further, I can realistically only lose a portion of those investments.

      This time around, I also don't have a big portfolio of other stocks as I did three years ago; this time the collateral is virtually all cash. And cash doesn't go down in a stock market crash.

    • that is three of alans--right there---there aint no fool like an old fool---magine when sinility sets in---lolol nuff fun for tonight--

 
PFE
35.01+0.57(+1.66%)Jun 29 4:00 PMEDT