Wednesday August 22 2012
I e mailed those on the e mail list, well hard to e mail you if you were not on the list, but failed to put on the blog that I sold all 40 some odd TLT puts yesterday about 1:45 PM CST. The stock market had rallied from 1270 to 1420 without much correction and TLT had fallen to my third wave target of 121. Sure enough this morning the
122s are down 55 cents and the
125s are down 85 cents, which is 85 bucks each in real money The distribution was lopsided but assuming it had been even the decision to sell was worth
20 x $55 = $1100
20 x $85 = $1700
which is $2800
Or this morning I would have a paper loss of $2800 from the close yesterday. All of this is to make the point that an option is not a long term investment in a blue chip stock. Not bad but if I had really been thinking I would hav bought a few TLT calls just as a short term hedge against an overall market decline.
Gold is holding up and most of our holdings are down less than 1%. But this is to be expected after such an extended rally. Frankly I am surprised stocks are only down a bit. Apparently everyone is waiting for some whiff of QE 3. No matter our view is unchanged that higher commodity prices lie immediately ahead.
When I make a substantial post or there is a change in ownership like yesterday, I send an e mail out. If you would like to be added to that list e mail me at