THIS IS NOT INVESTMENT ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN
Congratulations to our subscriber who purchased the BP January options at a $50 strike price for $0.15. He had a one day return of 52%! It was a great buy at $0.15 and still looks good at $0.24. The 52.50's are now looking good. BP is very hot right now. It will have a new chairman on Friday. It did a "tester" bond issue today of $2billion (its first flotation since 2009) with an A2 rating. It received orders for $10billion. Does anyone doubt BP's ability to handle the $30 billion cost of the clean up? Just watch what happens when the dividend is reinstated.
Speaking of options, today the U. S. government announced it was selling all of its Citicorp (C) trust preferreds in the next day or so and will be out of all C common by the end of February. For those of you who follow Cramer, he has lambasted the government for months on how poorly it has traded down its C position and its resultant depression of C stock which has struggled to get above $4. Buying some April, 2011 options at the $5 strike price looks very tempting.
Keep your eye on all AIG securities. As you know, I have played AIG through the 2011 and 2017 bonds and the exchange traded debt, AVF and AFF both of which pay about 8% in interest. Tomorrow the government may announce the its AIG exit strategy---remember AIG owes the U S about $100 billion. Once its future is viewed as secure, these should jump.
Both the C and the AIG moves are obviously political plays so that the Obama administration can boast in advance of the elections that the taxpayers have been repaid by the worst actors of the 2008 debacle; even though a little bit of patience would result in much greater profits
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