openhandedgrouse (< 20)

openhandedgrouse's CAPS Blog

Listen to your gut. The voice of reason when it comes to Apple.

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February 20, 2013 – Comments (8) | RELATED TICKERS: AAPL , GOOG , GRPN

The only thing for certain is that the market acts like it is bipolar. Experts seem to overreact to every hill or bump in the road. If it is a bad day, it's not just a bad day, the end of the world is coming. For example, I liked Google when it was $600, so I started watching it. When Google hit $450 about a year ago, I had a gut feeling that Google was oversold and just to cheap to pass on. However, "expert" after "expert" said, Google only makes money from advertising and their earnings are shrinking and so on and so on. The "experts" said to stay away, so as a novice in comparison, I did. Now about a year latter Google is 800 dollars a share and working on all cyclinders. Apparently, now a days, Google can do no wrong and Apple is the bad step sister. And good for Google they deserve it. I only wish I had not listened to the noise, but listened to myself when there share price was $450. I have had similar gut feeling that stocks were to cheap from time to time. For example, I thought BAC was to cheap at $5, right before Warren Buffet stepped in and bought a large number of shares, of course after that it was $8 in a few weeks. I thought Apple was to cheap when it dropped to $80 a few years ago before it's run to $700. I thought Groupon was to cheap at 2.63, though I just sold half my position and would not buy it before it reports in feb. Now again I think shares of AAPL are to cheap but don't take it from me, listen to your gut.

I don't have a lot if money to invest so I am using options to express my view. I purchased a call butterfly Jan 2014 and Jan 2015. For Jan 2014, I bought one 550 call, sold two 625 calls, and bought one 700 call for about $650. $650 is the most I can lose, I can make up to 7,500-costs if AAPL is close to $625 in Jan 2014.

For less than one share of AAPL, I bought a January 2015 butterfly. I bought one 700 call sold two 800 calls and bought one 900 call for about $400 and I can make up to 10,000-costs if AAPL is close to $800 by Jan 2015.

8 Comments – Post Your Own

#1) On February 20, 2013 at 1:52 PM, sgestrella (< 20) wrote:

Please spell check and proofread. Your article uses "to" when you clearly mean "too" and "there" when you clearly mean "their."

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#2) On February 20, 2013 at 6:15 PM, openhandedgrouse (< 20) wrote:

Thanks sgestrella. I probably should have done that. I am a terrible at grammar and spelling obviously.

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#3) On February 20, 2013 at 10:30 PM, awallejr (80.10) wrote:

Wish I had spellcheck when I use Firefox. It doesn't work here hence my many a spelling mistake. Plus I suck at proof reading when I have a scotch or 2.

As for your option play I wish you good luck.

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#4) On February 21, 2013 at 3:50 AM, openhandedgrouse (< 20) wrote:

Thanks Awallejr for the positive mojo. Cheers!

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#5) On February 21, 2013 at 10:14 AM, Mary953 (38.74) wrote:

Listening to the message here and not the way it is spelled. I would love to have a better feel for math so that I could confidently work with options, puts, etc, but it confuses me so much that I have to stick with just buy, sell, limits, and stops. I can edit just about anything, but that does not make the kind of money that you are talking about. I also hope that AAPL is on its way back up because after passing the last time it was in the $400-500 range, this time I bought in a bit. It would be lovely to be able to do so at a lower cost, but I couldn't sleep at night for fear I had done it wrong and gambled more than I could lose.

In this financial blogging world, I am strictly the one with questions. I have no answers and am grateful for those who do and who share so generously. (Yes, Andy aka Awallerjr, I am including you. I am always listening for the help you provide to me and to others.)

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#6) On February 22, 2013 at 1:12 PM, lemoneater (86.84) wrote:

Earlier this week I was talking to my husband about the stocks that got away. Stocks I liked enough to choose on CAPS like CNI and PZZA, but did not invest in at the time for a variety of reasons.

I'm taking your heartfelt advice and going with my gut about Compass Minerals (CMP) a stock that Cato recommended to me a long time ago. With a milder winter the price is lower right now for this salt stock than it might otherwise be. Its trading at a mid-range. I never seem to be able to buy stocks at a 52 week low without them going even lower. Soon Compass will pay its dividend. I like it for long term. Add salt to your portifolio, not your diet. :)

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#7) On February 25, 2013 at 2:11 PM, valuemoneygreen (79.37) wrote:

This isn't English class....I wouldn't worry about your spelling or grammar. The only thing I would worry about is listening to your GUT FEELINGS. Please use numbers and common sense. Never use gut feelings in investing. The numbers will tell the truth. When I hear about gut feelings I think it is a guessing game.

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#8) On February 26, 2013 at 3:04 AM, valuemoneygreen (79.37) wrote:

Sorry I thought about it. There is an exception. If your gut feeling tells you to stay away..... then that is fine. There are a lot of investments to choose from. Don't pick any on GUT FEELINGS. Keep those for CAPS and see how they turn out. Pick something you are very confident in. I have about 80 companies I follow that I am confident in.... 50 or so that I am very confident in. I only need about that many to follow and take advantage of when the market misprices them to make money.

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