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dswinters (94.76)

Oil and NFLX to 100

Recs

6

October 20, 2010 – Comments (2) | RELATED TICKERS: MO , PM , NFLX

Coming into the Winter months, I am sticking with my Oil bet. Think the economy will still steady and Oil will rise slightly and top off around 100. I will then sell all my Oil plays in the mid 90's to 100. Until green technology is better, we will continue to see oil in the 40-100 trading range based on the time of year and economy. In addition, it is nice to own a "hard asset." 

 Neflix is a great service and great company, but 62 P/E? Come on. Even a pull back to 75 from 150 would give us a PE in the 30's. Apple is on top of the world and trading in the mid 20's. Do not understand how this stock is priced. Will continue to short until at least a 20-30% pullback, but 50% is more likely. Company has a valuation that says its earnings should 4.5X what its previous year (which was a record).

 I am closing in on doing CAPS for 4-5 years and I have made some great picks and some terrible ones, but the biggest thing that I have learned is over the long term, quality plus dividends equals profits. My best picks continue to be the JNJ, PG, MO, PM and other blue chip dividend companies that keep growing and paying their owners for that growth. For any long term investor, I would preach dividends. They are simply the best thing for an investor. Dividends provide a dollar cost averaging that is automatic and let you sleep at night. Frankly, American investors need to re-think their positions and rebuild America by owning dividend providing companies because most companies cannot manage their excess cashflow like Warren Buffet and own their short term and intermediate bonds and ladder these bonds to provide additional yield and liquidity. My two cents. Thanks for reading.

Derek 

2 Comments – Post Your Own

#1) On October 26, 2010 at 4:39 PM, jason2713 (< 20) wrote:

Hows the NFLX short treating you now?  I too have shorted teh stock around the 171ish level and it boggles my mind how anyone can want to own the stock at these levels.

Well good luck.

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#2) On October 28, 2010 at 11:25 AM, dswinters (94.76) wrote:

They are killing me. I will be taking a rather large loss on this one. If there is a good size pullback to the mid 100's, I will probably eat my 50 plus point loss. Win some, loss some. Still really believe this stock should be worth around 75 even with the growth. Sometimes the market is fickle, but I am still patient.

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