Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

One More Preparation Made (by Gary Tanashian)

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Since becoming concerned by the unnatural imbalances being placed upon the financial system in 2002 and becoming outright alarmed by 2004, I have done all I can do to get my house in order, so to speak.  This, as a normal citizen and business owner has included normal things like paying off debt and seeking out the safest cash vehicles (and for this I'll always thank Robert Prechter, no matter what criticism is launched his way from casino patrons), and some abnormal things like becoming a gold bug and a financial market writer.

Today, the requested change (to revoke margin 'privilege') has gone through on our brokerage account, which doubles as the NFTRH 'capital preservation' portfolio.  I mean, in the wake of MF Global and years of knowledge that the modern financial system is ultimately sitting on a foundation built of Balsa Wood and Duct Tape, who needs the convenience of margin anyway?  Routinely shorting the stock market is a fool's game anyway.  I'll use options or those inefficient short funds if I feel a need to hedge.  But this account is for 'preservation' after all, as it is balanced by actual things of value in real life, so going high cash and T bills – as it is now, along with a very few investments – is by far the preferred route.

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Big Cap Tech versus Internet Bubble 2.0 (by Dave Pinsen)

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Big Cap Tech Versus Internet Bubble 2.0

Hey fellow Slopers,

Mike Paulenoff's post Wednesday afternoon ("Big-Cap Tech Stocks to Watch") and the release of Groupon's earnings later in the day, prompted me to take another look the hedging costs of some big cap tech stocks along with the cost hedging Groupon and a few other Internet companies that went public in 2011.

Groupon dropped 15.6% after hours Wednesday after it announced a Q4 loss, but at least one observer was bullish on it on Twitter. You might recognize his name from the late '90s:

 

 

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Gold Stocks (NFTRH172 Excerpt)

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Gold Stocks

This is a snippet from NFTRH172 focusing on the writer's methods of viewing markets from a visual and psychological perspective.  I just want readers to continually think about herds and about what it takes to be able to get contrary these herds at the appropriate times.  NFTRH172 then proceeds on to actual intensive analysis of the precious metals sector and the macro market backdrop.

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Hedging a High Yield Long Idea

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Hedging a High Yield Long Idea

Hey Fellow Slopers,

In a post Wednesday morning ("High-Yield Long Idea Idea Continues Strong"), Tim noted the strong performance of his long position in the SPDR Barclays High Yield Bond ETF JNK. Back in August, I looked at the cost of hedging JNK, but I thought it might be worth taking another look after seeing Tim's post. It turns out JNK is pretty inexpensive to hedge right now. The table below shows the cost, as of Wednesday's close, of hedging it against a greater-than-20% drop over the next several months.

A Comparison

For comparison purposes, I've added six of the most actively traded ETFs to the table. First, a reminder about what optimal puts are, and a note about decline thresholds; then, a screen capture showing the optimal puts to hedge JNK.

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Following Up: Optimal Hedging Costs — a Tell For Stocks?

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Happy New Year, Fellow Slopers,

I hope 2012 is a good one for each of you, and for our host.

Lessons from last year

In his post Monday ("A Major Lesson from Last Year"), Tim wrote about two of the most famous hedge fund managers who are long BAC and SHLD, respectively. There's a third money manager (this one a mutual fund guy, rather than a hedgie), whose shareholders had the misfortune of him being long both BAC and SHLD last year: Bruce Berkowitz, Morningstar's "domestic stock fund manager of the decade" for the first decade of this new century:

Meet the domestic stock fund manager of the decade

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