Suggestion for you:
Best time to initiate teh short is AFTER we have had a spike in volatility.
I would not initiate a new position unless Spot VIX is at least 15 (and futures higher)
Too much risk for not enough reward.
I agree with you on all your points.
I hope to be back in at some time, but K & S deal, as well as future sales growth and pricing will determine my reentry.
I do wish you the best!
I agree with you.
Places to go are smaller and smaller (which results in me having more cash on hand- (waiting for a pullback so I can put it to good use)
FYI- I just bought some Facebook this morning after the selloff. I am willing to hold this for several years as I believe in the long term story.
Earnings of 51 cents and dividend of 38 cents
Payout is almost 80% and does not leave much margin for error (also not much margin to increase the dividend)
Also, what happens if the K & S deal goes through?????
Best of luck,
I would agree with you.
Anyone holding should sell on the small gain in the morning and wait to buy back in the low 20's (if not lower)
Good luck to everyone.
when I bought back in, I had sold this weeks 96.50 at 70 cents to try to protect my downside a little.
with the market turning down, I just bought them back and sold the 95 calls and added another 45 cents.
just trying to protect my downside some.
I hope the market turns positive next week!!
That was a very good trade (not to quival with you but the day you bought back in, the low price of SVXY was 79.44. Even if you bought at the low, you would be up a little over 17%).
I actually bought in a few days later (July 10th at $74.72 and sold out at $92.25). I am hoping for a few dollar drop here so I can buy back in.
Great trading for you!
Hey Bustin (AKA Dr. Contango)
Good hearing from you again! Hope all is well.
I just sold my other half of SVXY at $92.25
Will wait for another opportunity to arise (pigs get slaughtered)
I have been around, but not posting a lot here (get tired of one person saying we are going to a Trillion dollars and another person talking about how it can't be done because there are not enough buyers on the long VIX side). I have been posting a lot on Seeking Alpha
Anyway, I bought in last Friday when Greece announced their deal (at $74.72) and cashed out half the other day. Holding the other half until we get to the mid 90's and then reassess.
Pre-market looking very good (back to $89)
Hope you are doing well.
Even if we see another 10% correction, SVXY would still be up at a compounded rate of 40% per year (started 10/4/11 at a split adjusted price of 10.53). Right now, the compounded annual growth is 70% per year.
Key is :
1. Avoid the large drawdowns (if you can)
2. If you can't, hold on for many years (and do not worry about the drawdown- easier said than done though)
A couple of comments:
1. You are assuming that both prices and quantity sold will stay the same. I see that as highly unlikely with China slowing down.
2. You are assuming that the K & S purchase does not go through. If it does, what happens to free cash flow if they have to borrow 8 Billion, pay interest at around 4-5% and pay this debt off in 10 years or so?
3. You are using a stock price of $20 in your analysis. That is a 30% reduction from the price right now. While I would agree with you that a price of $20 would be a screaming buy, a price at 29-30 is not.
Too many possible problems for me to be a buyer at this price.
While RSI at 30 is a bad place to sell, you have to look at what is causing the problem.
As you mentioned previously, all commodities are taking a hit (read the Alcoa earnings) and see the slowdown happening in China.
For potash, Canoptex still has to negotiate a second half contract with China. It would not surprise me to see less tonnage than last few years and a lower price than a few months ago.
Not a good time to be in all commodities
Deal doesn't go through, worldwide demand picks up, potash prices move to $450 mm tonne, Potash Corp sells at least 11 mm tonnes and I will return even sooner.
Exactly as I feared.
Deal goes through freezes free cash flow for another few years.
Then, I may join the longs in about 2020.