That's the name that I finally selected for my growing options consulting business which has now passed the $6 million mark for private accounts with TD Ameritrade under advisement. The date of incorporation will be early January 2014 by which time I will have passed the Series 65 exam and will officially be licensed by the State of California as a Registered Investment Advisor (RIA).
Whereas hedge funds these days charge clients 2% of the amount under management plus 20% of the profits, I charge 1% of the amount under advisement and nothing whatsoever regarding percentage of profits. Oh yes - one other thing; my performance these days routinely overshadows what you get with hedge funds.
I will be closing my business to new clients once total amounts under advisement reaches the $10 million to $12 million area as anything much above that would in itself affect the prices of naked puts and that wouldn't be fair to existing clients.
While I applaud this move --- I would suggest that you don't recommend any more garbage stocks like JCP for your clients, otherwise you will have the shortest executive career since that Pope that got poisoned. (To borrow a line from the movie Wall Street)
JCP stock was doing just fine until Sept. 25 at which time the Goldman research department inexplicably came out with a scathing report saying that essentially JCP was way too much in debt for a company its size. That to me was just an astounding report given that it was Goldman itself that saw fit to lend the company so much based on the newly-appraised value of the real estate.
I mean really now - have you EVER heard of a major lender issuing such a report a mere four months after the loan was made and when the turnaround efforts were exceeding analys consensus expectations?
Of all the risk factors that I considered, a super-bearish report by the company's major lender was certainly NOT on my list. Nevertheless, even the most bearish of reports can't change the fact that the company IS exceeding analyst expectations and that's what's worth all of the marbles. That's the simple fact that will in short order have me showing profits on this portfolio whereas I was approaching a stunning quarter-million dollars in losses just two weeks ago.
Being able to do heavy-duty analysis is right in my wheelhouse and I'm not at all worried when my work is contrary to what many so-called analysts are saying. I feel that I am simply better than they are. I've proved this several times now - starting with Tyco and then with Pfizer and Bank of America. I had the correct take on those three stocks and I'm sure I'm now right on Penney.
In situations where it's me against the world, if the smart money isn't betting on me, they should be. I really am that good putting false modesty aside.
JCP isn't at all a "garbage stock;" when I got involved in the mid-teens, it was merely a garden-variety multi-year turnaround situation. What happenened essentially is that the bears mounted a concerted effort to try and drag the stock down. In order to be able to do this, they had to frighten analysts and investors to the point where they essentially took leave of their senses.
In May of this year, JCP asked Goldman Sachs to lend them $1.5B based largely on real-estate holdings . Goldman asked Penney to appraise all of its properties and lo and behold the appraisals came back showing the properties to be worth $1.1 billion more than what the books had as the cost basis. Accordingly, Goldman saw fit to actually lend the company $2.25B when JCP had originally asked for only $1.5B.
Flush with the borrowings, management naturally wanted to refurbish and try and turn around the fortunes of the stores as quickly as they could an by the end of July, they had already spent about $1.8 billion of the $2.25 billion that they were borrowing. There was absolutely NOTHING wrong with Penney going through all that cash so soon; after all they were borrowing for a purpose and they wanted to show maximum turnaround efforts for the current year.
But then along came the bears to say that at the rate that JCP was going through available funds, they wouldn't even have enough to pay off their suppliers come Christmas. Well, did anyone really think that JCP would CONTINUE to spend money at the rate they had been? But that's the nature of bear raids; they count on investors and analysts reacting emotionally instead of with reason.
The SECOND-best thing that I have going for me is my superior options methods. But the BEST thing is that I can sit back and dispassionately analyze the facts. Just because short-sellers are talking about the company blowing through all of its cash and facing illiquidity and maybe even bankruptcy certainly doesn't mean that I have to fall into lin
Liar! Compare your returns to September 23 with these, which unlike your amateurish insanity, aren't limited to a measly six million:
1. Senvest Partners, LTD - Class A has returned 46.44% in 2013
2. Marilyn Fund LP is up 45.21% this year
3. Andurand Commodities Fund has a return of 44.44%
4. Perceptive Lifesciences Offsh fund, Ltd has returned 44.22%
My high-water mark for 2013 was on Sept. 19 when I was up by 423K on a 952K beginning balance or 44.4%. At that time, I was almost certainly ahead of the funds that are currently up by 44% to 45% now given that the S & P at the time was 1,722 whereas now it's at 1,762.
But even if a few funds matched my 2013 performance, they certainly haven't done so over a THREE-year time frame from the end of 2010 inasmuch as my combined portfolio earned a stunning 58% in 2011 (in a flat market no less) and I followed that up with 42% gains last year. And even with the JCP travesty, I'm still up by 31.5% year-to-date in 2013 and I'll at least match last year's performance if JCP is $8 or more at the end of the year (it's $8.14 now). Nobody but me can reel off returns of 40% or more a year and do it virtually every year like I can.
My business has huge advantages over the funds as I charge just 1% of the amount managed for my efforts; a far cry from the typical 2% plus 20% of profits that is standard in the hedge fund industry these days. Moreover, with me, nobody actually turns over his money to me; everyone has an individual private account with Ameritrade and all that I have is trading authorization. I cannot deposit or withdraw any money myself to support a high lifestyle, etc. Can you imagine Ameritrade ever writing a check to ME personally for funds that are in the private accounts of my clients? So nobody has to rely on my honesty or whether the statements are correct, etc.
Very few fund managers start out being crooks; but some end up that way in the face of market adversity when they "borrow" clients' funds intending to repay when market conditions change but if things don't turn around for them, they end up as ponzi Scheme operations. That can never happen with me as there is never any temptation put in my path given that i absolutely do NOT have authorization to withdraw any client funds.
aw jeez... i cant remember what i did on sept 23rd. i'm sure i sharted and wet my diaper. (THATS AN EVERYDAY THING). but why dont you go back 12 weeks and check the results...
off to the potty