MT is attractive again

Arcelor Mittal (MT) has become very attractive from a short PUT at strike 13 for 2016.  Check out the return profile etc.  A 10.2% annualized return if the PUT doesn't get exercised and a great price if it indeed does for one with an eye on the long haul.

TSLA : to buy or not to buy

TSLA - to buy or not - that is the question that I get asked all the time.  There are some solid reasons NOT to buy, and you can find them in the following MorningStar article if you can access it:

http://news.morningstar.com/articlenet/article.aspx?id=665082&pgid=stockarticle

BUT, consider selling  a PUT for say 220 strike for Jan 2016 which fetches a premium of 15% of the strike.  It may even get better if TSLA goes forther down.  THAT, to me, is appealing and much less risky.

IBM again

With a 185 Put for Jan 15 yielding a premium of 10.30, it does appear to be a low risk, high reward strategy after all to write such a put.  Consider the annualized return if the Put is not exercised as well as the downside risk for this stock.

Get IBM on your watch list !

IBM is beginning to look attractive.  Here are the key facts:

1. It is punished by the market for a low P/E.
2. The above ignores two key facts - E goes up when shares are bought back (and IBM bought back a huge number in what should be considered a well thought out move) depressing P/E; the company is moving from low margin (27%) hardware business to high margin (87.5%) software business.
3. Buffet has an ownership of approximately 6%
4. Business quality is rated best.
5. Valuentum gives a rating of 7/10 which could quickly move higher putting it in the buy list
6. Dividend of 2.4%

I am watching but not yet buying.  Not enough opportunity to hedge well yet unless you will be happy to finish the year with some 7% or so total return.  Morningstar recommends a buy price of 148 which may be ridiculously low against a fair market value of 212 given by them but we could do better than the present market price.   Nevertheless, the stock may have a further downside of some 3%-5% to present valuation.  If it does, put writing may give some solid opportunities.

You can see some detailed analyses in:

http://seekingalpha.com/article/2229723-does-ibm-deserve-a-low-p-e?uprof=45

http://seekingalpha.com/article/2229713-dont-expect-another-earnings-per-share-target-from-ibm?uprof=45

Overall, as rightly noted in one of the pages above, it does remind one of Buffet's saying: "I try to buy stock in businesses that are so wonderful that an idiot can run them.  Because, sooner or later, one will."
I worked in AT&T when Armstrong ruined it and know that all too well.  IBM is slowly getting to a point where it may become idiot proof.

Stratasys (SSYS) review

http://seekingalpha.com/article/2169663-stratasys-changing-the-outlook-in-3-d-printing-services-business?isDirectRoadblock=false&uprof=45

I found the above quite useful.  Thought others might too.

APPLE split

http://blogs.wsj.com/moneybeat/2014/04/23/apples-7-for-1-stock-split-is-very-unusual/?mod=yahoo_hs

What is my take ?  Smart move on the part of AAPL.  This makes the stock affordable to a heck of a lot more and also gives them the ability to book profits or take losses on a portion of their investment etc.  This will increase the demand for stocks in the short run, and like anything else as demand goes up the price will go up creating an upward momentum.  Yes, in the long run other things remaining the same, this effect will
get set back since valuation will determine price, but in the short run it is good.  More importantly, with a very large number of stock holders, a small few cannot exert all kinds of pressures like what happened with AAPL.  Will Google take note or can a similar move even help Google, given they have a very different governance structure altogether?

The importance of hedging

With any new technology, there are risks - the biggest being expectations and hype from the market players.  In this arena, it is so easy to unknowingly become a gambler instead of being an investor.
That is why I hedge.  With respect to 3D systems, this is a series worth reading and keeping in mind.
Buy low and hedge always if you are to get involved in such technologies except when you know the companies and the business first hand.  Or else you can become the proverbial "next fool" to buy vapor ware.  That said, for 3D, my take is that: stay with market leaders, buy low, hedge, hedge, hedge ....

http://seekingalpha.com/article/2146183-3d-printing-debunked-part-2-industries