Octopus Overlords

nasai wrote:I sell credit spreads in SPX and RUT for a hedge fund. Obviously, the market downturn and added volatility created an excellent day and pay off for us.

I'm curious who here is into similar strategies, and/or the like? What are you doing to offset risk? I'd love to hear of others who are successfully navigating the summer (slight VIX) swings.

Thanks.

Yahoo wrote:KMP unitholders will receive 2.1931 KMI shares and $10.77 in cash for each KMP unit. This results in a price of $89.98 per unit, a 12 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 11.4 percent based on the July 16 closing price reference date used by the parties during the negotiation of the transaction.

LawBeefaroni wrote:

nasai wrote:I sell credit spreads in SPX and RUT for a hedge fund. Obviously, the market downturn and added volatility created an excellent day and pay off for us.

I'm curious who here is into similar strategies, and/or the like? What are you doing to offset risk? I'd love to hear of others who are successfully navigating the summer (slight VIX) swings.

Thanks.

Very short term trades in SQQQ options and VXX. Strangles.


But I'm not sold that it's going to turn just yet. My parents/in-laws haven't started asking about stocks they saw on CNBC and cab drivers haven't started asking if it's good time to get into the market.

LawBeefaroni wrote:Sold some Aug DIS $86 calls right around open this morning. Left some money on the table ($25/contract as I'm typing) but averaged from around $1.60 to around $2.25. Been a lot more conservative on the long side lately and happy to take anything positive in a what was an 8 or 9 day trade.

Have some ORCL $44 calls that are going to expire worthless tomorrow. Small position and a small bet but it seemed like a good idea back in June.

A friend of mine had an Aug XONE bullish put spread on. I encouraged him to cover yesterday, cost him $400 but would have been a loss of 2 or 3 grand today.




On to the next one.

Carpet_pissr wrote:From what I understand, the deal was done primarily as a vehicle for tax inversion.

GreenGoo wrote:

Carpet_pissr wrote:From what I understand, the deal was done primarily as a vehicle for tax inversion.

That's the plan.

They have similar market caps. They must be offering something to Tim Horton's for them to be interested though.

GreenGoo wrote:Here's as good a place as any.

Burger King and Tim Horton's (a big deal up here in the snow zone) are in talks, with Burger King (~9 billion market cap) looking to acquire Tim Horton's (~8 billion market cap) which would put them in 3rd place over all in the quick service market I believe.

Timmy's (as it is called sometimes up here) has an order of magnitude more restaurants in Canada than it does in the US, and Burger King is lookng to help Tim Horton's go international.

We'll see.

It's a bit of a cultural icon up here, so without that recognition and appeal, I'm not so sure it will find international success, but hey, have at it.

Pyperkub wrote: DIS is interesting. I've been holding them ever since they bought Pixar. I liked Pixar back in the day and figured that it would be a nice, safe place for my Pixar gains to add wealth. It's been bery bery good to me.

Pyperkub wrote:Funny thing is, back in '79 or '80 - 7th/8th grade I think - we had a math(?) class where they were teaching us about stocks and the stock market, and we had to pick a stock to track,chart, etc. for a month. I chose Disney and it was one of only 2 stocks in the entire class which went up for the month.

Had to be an omen, sign from the future - right?

El Guapo wrote:

GreenGoo wrote:

Carpet_pissr wrote:From what I understand, the deal was done primarily as a vehicle for tax inversion.

That's the plan.

They have similar market caps. They must be offering something to Tim Horton's for them to be interested though.

There's some political risk in that plan, I imagine. Tax inversion rules are already attracting political heat. BK's such a big company and so branded with America that if they do this and their tax bill is slashed dramatically it could lead to a pushback against current tax inversion rules.

Though unless the IRS can undo that via regulation (which I doubt) that would require Congress to pass a law, which it doesn't enjoy doing these days.

Howard Roark wrote:It seems very unlikely that inversion turns out to be an important or even meaningful part of this deal, though it will be probably be an important part of the narrative.

Some things to note: Inversion does not allow companies like Burger King (or Tim Horton's) to avoid taxes on their US operations, even if they are headquartered in another country. Admittedly, they can try fancy tricks to increase foreign earnings (for example, selling the Burger King trade name to a subsidiary in Bermuda). But they can try this with or without inversion. Neither BK nor THI actually does as best I can tell.

Also, BKC today has about 50% of its operations outside the US. It currently already pays lower foreign tax rates on those operations, not US tax rates. It must, however, pay repatriations taxes if it wants to bring those profits back home. The only thing inversion does for BKC is eliminate that potential future repatriation liability. But Burger King does not actually have a big build up of foreign cash awaiting repatriations. Therefore, its actual tax payments already look extremely similar to the same BKC that was headquartered in, say, Canada.

Tim Horton's has 80-85% of its operations in Canada. If it was acquired by BK and suddenly had its headquarters in the US, those Canadian profits would suddenly have a deferred repatriation liability attached to them for US taxes. That seems a little strange. The only other country in the world besides the US where that situation would apply is...Eritrea. The combined BKC/THI would have more than 50% of its earnings and operations outside of the US. The word inversion has a particular connotation.

Burger King's effective tax rate prior to the merger has recently been running at 25.6%. Tim Horton's effective tax rate prior to the merger has been running...28.5%! Canada has a low federal tax rate but very high provincial taxes that are more difficult to avoid than US state taxes.

This is almost certainly not a tax deal in any important sense. But let the music play.

Carpet_pissr wrote:Nice! I love a good debunking counter!

noxiousdog wrote:

Burger King's effective tax rate prior to the merger has recently been running at 25.6%. Tim Horton's effective tax rate prior to the merger has been running...28.5%! Canada has a low federal tax rate but very high provincial taxes that are more difficult to avoid than US state taxes.

This is almost certainly not a tax deal in any important sense. But let the music play.

GreenGoo wrote:

Carpet_pissr wrote:Nice! I love a good debunking counter!

First, I'm not well versed on tax law, let alone corporate tax law. That said, reading the debunk, it seems like the points he makes would apply to pretty much any tax inversion situation. I.e. if this debunk is true, wouldn't it mean that any attempt at tax inversion would suffer the same consequences as outlined above? If there are repatriation "fees/taxes", wouldn't any attempt to bring the profit back into the US be met with the same profit eating fees/taxes?

GreenGoo wrote: I guess I'm asking, if inversion doesn't work in this case, what case would it work for?

xwraith wrote:*Eyes AAPL*

Down off its highs. Some risk going forward if the product announcements aren't received well and there are Q4 earnings at the end of October. I'm thinking there is a good chance of a 5% rise in price by Jan 2015 though. I can do covered calls as well, looking at mid-October with a max 5% return if the stock strikes over $101. Thoughts?

LordMortis wrote:
/wonders how much money he's going to lose through a learning curve.

noxiousdog wrote:

LordMortis wrote:
/wonders how much money he's going to lose through a learning curve.

None. Buy SPY and forget about it for 20 years.

LordMortis wrote:

noxiousdog wrote:

LordMortis wrote:
/wonders how much money he's going to lose through a learning curve.

None. Buy SPY and forget about it for 20 years.

That's pretty much the goal (except I dream of retiring in 11 to 13 years and I think I might be able to make it happen if I'm not stupid with my money and the world doesn't crash around me.

noxiousdog wrote:Even if that's the case, you're still planning on living 20 years, I hope

LordMortis wrote:I should be happy I haven't set up my IRA yet, even if I apparently picked the July market peak to max my 401k contributions.

I spoke to my old man this weekend and we discussed gas falling below $3 a gallon for the first time since Obama took office. He informed me that ISIS is funding their war by selling oil on the cheap and Europe is buying it like mad driving the price of oil through the ground. I was under the impression (from OO or perhaps GG) that the cost of oil has little to do with how much is mined but rather the world's capacity to refine oil and the investment cost and time it would take to increase refining capacities. I was also under the impression that instability in the middle east drives oil prices up.

Any how. Kinda something not sure what how gas retail prices get slashed by 25% in less than a month and my portfolio takes a 12% hit when it was already slowly bleeding in that same time.

LordMortis wrote: In the mean time, all of the large investors seem to be turning themselves liquid at the expense of the 401k investors, who auto contributed during this "overvalue" time. Man, the game is rigged. I have to keep telling myself, when this bounces back I'm now contributing money that will be more valuable later, right? Right.

LordMortis wrote: I also love how the investment companies show you are making money before they take their vigs... um commissions... um brokerage fees. So in a year when when you make 5% and they take their 1% (or whatever it is), you actually make less than 4%. In a year where you lose 8%, you actually lose closer to 9%. If they're so damned good, why aren't their fees based on how much you make, rather then how much you have invested?

LordMortis wrote:I should be happy I haven't set up my IRA yet, even if I apparently picked the July market peak to max my 401k contributions.

I spoke to my old man this weekend and we discussed gas falling below $3 a gallon for the first time since Obama took office. He informed me that ISIS is funding their war by selling oil on the cheap and Europe is buying it like mad driving the price of oil through the ground. I was under the impression (from OO or perhaps GG) that the cost of oil has little to do with how much is mined but rather the world's capacity to refine oil and the investment cost and time it would take to increase refining capacities. I was also under the impression that instability in the middle east drives oil prices up.

Stocks are mixed Monday, with the Dow dinged by a big profit miss from IBM.

As of 1:20 p.m. ET the Dow Jones industrial average is off 0.2%, a loss of 24 points. The blue-chip index dove about 100 points just after the 9:30 a.m. opening bell, with Dow component IBM alone accounting for around 85 points of that early plunge.

Global Services has two major divisions: Global Business Services (GBS) and Global Technology Services (GTS).
...
IBM Global Business Services (GBS) is the professional services arm of Global Services, including management consulting, systems integration, and application management services. Revenues from the Global Business Services were $18.6 billion, down 4 percent in 2012 compared with 2011.
...
IBM Global Technology Services (GTS) primarily reflects infrastructure services. It includes outsourcing services, business continuity and resilience, Integrated Technology Services, and Maintenance. Revenues from the Global Technology Services segment in 2012 totaled $40.2 billion, a decrease of 2 percent compared with 2011.