Citi, BofA May Need to Increase capital

By | Daily Report | No Comments

According to Wall Street Journal, U.S. regulators told Citigroup Inc and Bank of America Corp they may need to raise more capital. The shortfall in capital amounts to billions of dollars at BofA, the paper said, citing people familiar with the bank. Both banks, whose officials are objecting to the preliminary findings of the tests, plan to respond with detailed rebuttals, the people told the paper, adding BofA’s appeal is expected by Tuesday. It is likely that Citigroup and BofA are not the only banks that the Federal Reserve has determined might need more capital, the paper said. Expect more…

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OPN Apr’09 +12.5%, 15th Positive Month (Out of last 16)

By | OP Newsletter, Option Trading, Past Performance | No Comments

Get ready for an action filled week that has lot of economic data flowing in, traders returning from holidays and banks announcing earnings. Of course, Banks have to have positive impact due to “relaxation” in Mark-to-market accounting rules. This week is also flooded with other earnings and option expiration schedule, an excellent environment for exceptional opportunities. April was another winning month for OPNewsletter. 15th out of last 16 months. In spite of the whipsaws we observed, this month didn’t require much adjustment, almost sitting idle generating cash for OPN trades. OPN has successfully rolled over the portfolios for May holdings…

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Bank of America (BAC) : A Speculative Trade

By | Calendar spread, Investment Strategy, Trade Ideas, US Market | No Comments

Before I start the post, let me warn that trading into financial is full of risks and you may lose your capital. You should make sure that you have a proper risk management plan in place to handle this and should only invest what you might be willing to lose 100%. And this particular trade you should not try if you think BAC is headed for bankruptcy/ nationalization, wiping out shareholder’s equity. (As a general suggestion, one should never invest more than 2-3% into any speculative trade. A good money management is extremely important as these have high risk for…

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The Geithner Put – The Public Private Investors Partnership Fund

By | Market Psychology | 2 Comments

The Geithner Put – PPIP Plan I have been thinking about this for a while on how best to simplify and John Hussman did an excellent write-up to explain his thoughts, similar to mine, about this whole PPIF program. So without any modifications, let me share what what he thinks- Last week saw a continuation of the impenetrably misguided policy response to this financial crisis, which seeks to address the downturn by encouraging more of what got us into this mess in the first place. The U.S. Treasury’s toxic assets plan, for instance, looks to “leverage” public funds (with the…

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Berkshire Hathaway’s worst year, Buffet Speaks, Likes Long Term

By | Investment Strategy, US Market | No Comments

Berkshire Hathaway (BRK.A) had its worst year on record, Chairman Warren Buffet told shareholders Saturday that the economy would remain in “shambles” during 2009 and beyond. His 22 page annual letter is full of wisdom nuggets. Also you may wanna read the annual report. Though I am capturing key points per my understanding, I shall encourage my readers to read the full letter as it offers valuable insights. Berkshire Hathaway profits dropped 96%. The per-share book value of both Class A and Class B shares of Berkshire fell 9.6%. For beginners, Berkshire Hathaway has produced a compounded annual gain in…

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Outperformance Continues at OPNewsletter

By | OP Newsletter, Option Trading, Past Performance, US Market | No Comments

When compared with broader markets, Feb was an excellent month for OPNewsletter coupled with a few good learnings (kinda reinforcement, been there done that, but forget that). Overall, OPNewsletter for Feb closed up +5.6% x-commissions and +2.6% including commissions. Capital preservtion and thus allocation was higher priority vs missing an opportunity. These results doesn’t include the speculative directional trade which were shared here (only OPN subscribers can see this thread) and here at my profile on InvesCafe (Free) which includes likes of RIMM +40%, V +7.8%, BIDU +5.2%, BAC +10% to +40%, ESI + 33%, SRS, STT, WHR, BTU, AXP,…

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