ZINC partial liquidation

November 3, 2008

Since my last review of ZINC, zinc commodity price has sunk rapidly from $0.70 per lb to $0.50 today. Even with half of 2008 and 2009’s production capacity hedged at $0.90 per lb, Horsehead probably requires a zinc price of $0.70-$0.80 per lb to break even. With zinc prices at $0.50 and many major zinc […]

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Writing WMT put options

November 2, 2008

I have recently sold put options for WMT at a strike price of $45 expiring in November 2008 (WMTWI) and January 2009 (WMTMI) at $0.80 and $2.25 per contract respectively. This is in keeping with my new strategy of writing options on stocks that I would like to acquire at strike prices that I find […]

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Are we headed for a depression?

October 31, 2008

Nowadays, every stock seems to be trading not based on their fundamentals, but based on the fear that the economy will sink into a depression. If indeed this fear proves to be true, then buying stocks now would be a mistake. In the Great Depression of the 1930s, US GDP shrunk by 27%, pushing the […]

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Kapstone Paper : Microcap with a dominant market position

October 27, 2008

Kapstone Paper (KPPC) is a microcap paper company specializing in the production of kraft paper, the strong brown paper used for packaging and paper laminating applications. Kraft paper is made into grocery bags, consumer packaging for flour/sugar/pet food etc., industrial packaging for fertilizers/cement/dry chemicals etc, wrapping papers (the kind found around a burger at a […]

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Writing options

October 13, 2008

Now that my entire portfolio is underwater, I am resigned to holding most or all of my positions for the next 1-2 years. However, due to the dramatic upswing in volatility recently, many options are now priced at incredibly expensive levels, especially the puts. While I wait for the market to recover, I have decided […]

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Turbulent times

October 11, 2008

In the past month, I have increased my exposure to the stock market, primarily in the technology sector, only to see my positions decimated. Stock prices now seem completely divorced from fundamentals. Even companies with substantial cash reserves and well-positioned to ride out the economic storm are now trading at below cash value. To quote […]

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Taking a position in Methanex (MEOH)

September 27, 2008

Methanex (MEOH) is the world’s largest producer of methanol, supplying about 17% of the global market. Methanex is headquartered in Canada, and has plants in Chile, Trinidad and New Zealand, all utilizing natural gas as feedstock because methanol can be manufactured much more cheaply from natural gas than from coal. Approximately 39% of global methanol […]

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FMD : In praise of securitization

September 19, 2008

In the wake of the credit crisis, many of the recently invented financial products will be found wanting and discarded. Since massive losses in mortgage-backed securities were the immediate cause of the current crisis, many people have suggested that securitization itself is intrinsically flawed, and the entire CDO/ABS/MBS industry will cease to exist in the […]

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The financial crisis and the stock market

September 17, 2008

Hank Paulson’s refusal to rescue Lehman has been a rude shock to bond holders. Until last Sunday, the main losers in the financial crisis has been equity holders, while bond holders have seen their assets protected by the government. As a result, Treasury yields plunged to new lows on Monday as bond investors fled bank […]

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HIMX liquidation and MKTAY initiation

September 10, 2008

I like to buy when the general market is down, and sell when the general market is up. I took advantage of the down market today to increase my holdings of NVDA and ZINC, and to reduce my holdings of CCIX. However, the declining market also triggered my stop on HIMX, causing the liquidation of […]

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