Friday, February 11, 2011

11 February 2011 Oh Lord It’s Hard To Be Humble


11 February 2011 Oh Lord It’s Hard To Be Humble

A guy by the name of Scott Davis was making the rounds in Lubbock Texas. His song writing talents got noticed by the Sinatra organization (no not that organization), but by Nancy’s company Boot’s Enterprises. Scott Davis wrote a few songs for Nancy Sinatra then he wrote a song for Elvis called a “Little Less Conversation” (Which was hit for Elvis after he died.) He also wrote a huge hit “In the Ghetto”, for Elvis (It was originally written for Sammy Davis, JR., but he did not want to touch it with a ten foot pole.) Scott Davis took up a stage name Mac Davis and the rest was history. In 1980 he wrote this cute song “It’s Hard To Be Humble”.

Now you might wonder why we took this trip down memory lane. Well, Sunday night, in our prognostications for the week (we did pretty good this week) we went way out on a limb and called the close for the S & P 500 for the week. And we quote, “So how will the market end next week. The S & P 500 closed at 1,310.87 on Friday. It will close at 1,329 next Friday.” Well boys and girls the S & P 500 closed at $1,329.15. Damn were good!

Ok but did we make any money?

When the market opened today is was like day one of a cricket match. No one did much at all. Volume could have been counted on the hands and feet of about 9 people. Everyone was waiting to see what was going to happen in Egypt. Once Mubarak had been convinced to head to Sharm (We called that too, yesterday. Well we guessed Sharm or Hurghada.) the market corrected upwards, still on very quiet volume. The direction and volume was enough for us to take a nice quick profit on our calls for SWKS Skyworks, so you are off the hook Megan. We bought some Feb 19 55 dollar calls on the 7th for 1.60. Despite a quick setback we doubled down for ours and several other portfolios. That gamble paid off today as it returned to 1.60 and we enjoyed a 37% gain. We still like the stock. We are looking at some March calls and will let you know if we get back in again. Great stock.

We also added more of the March 19, 2011 $55.00 calls for $3.70 a IDCC contract. We think these might start to sing after the 19th of February. DO YOUR HOMEWORK.

CAUTION, we do not want to paint too rosy a picture for options. You have to really have a feel for the market and the sector for each day. Volume and volatility makes all the difference in the world. If you could see my portfolio at the moment, we have about 22 call options between next week and January 2012 and their average gain is a NEGATIVE 41%. If you don’t like looking at carnage everyday, options are probably not for you.

Pick of The Day

As a nice gift for you, we thought we’d send something spicy your way. CMG Chipotle Mexican Grill, Inc. engages in the development and operation of fast-casual, fresh Mexican food restaurants in the United States and Canada. Its restaurants serve a focused menu of tacos, burritos, salads, and burrito bowls. As of June 23, 2010, the company operated 1,000 restaurants. Chipotle Mexican Grill, Inc. was founded in 1993 and is based in Denver, Colorado.

The McDonald’s Spinoff was up almost 5% today on massive volume. “Brian please gives us an operational definition for “massive”.” Ok, their 50 day average volume is just shy of one million shares a day. They moved 7 million shares today. The shares go for $268 a share. That puts their P/E ratio above 40, but the growth of this food company is stellar. WE DO NOT OWN this gem yet, but it is going on our watch list. We are looking for a small pull back, not to buy it cheaper, but to see a perfect cup and handle chart. I know I am getting geeky with the chart stuff, but it has been working for us. A perfect handle for this stock would be an entry point of $258-260. In case you are wondering we will be looking for in the money call options with march or April dates. In the money means that if the stock is selling for 260, we will be looking at $255 or $250 calls. DO YOUR HOMEWORK.

Enjoy your weekend and well talk to you Sunday Night if not sooner.

Salve Lucrum


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