Archive for the ‘Option Trading’ Category

Luck, Poker, Investing and why luck matters!

June 2, 2007

A short run of bad luck can realy wreck havok on your portfolio. I knew I was having a run of bad luck when while playing No-limit Texas Hold’em poker. I keep having my full house beaten by a four-of-a-kind, flopping a nuts straight only to be beaten by a full house by the turn, having pocket aces lost to pocket 8s in preflop all-in showdowns.

Similarly, my portfolio suffered. My core holding – Suntech Power (STP) – reportedly announced capacity expansion by about 30% (due to explosive demand for solar panels) but the stock dropped due to weakening margin concerns. WHAT is with these investing wall street types?? So what if I earn only 10ct per item sold instead of 12ct when I can sell twice as many items??? I still make more money right??? Don’t tell me they recommend selling less to earn more per item?! No, what they want is to sell more and keep the margin intact… talk about having your cake and eating it! While I know that the stock will appreciate accordingly in the long term, options are wasting assets and my options expire in July. I don’t have time to wait for them to wake the f**k up!

So contrary to what I used to believe, I think Luck IS a factor in both poker and investing… so perhaps I should consider adding Feng Shui to my portfolio….


Diamond Rings and Stocks

April 6, 2007

While researching on diamonds for, I suddenly realised that if I had bought some TIF call options like 2 months back, I could have been researching on a big purchase instead.

I knew that Tiffany is undervalued and should appreciate to somewhere around $55 in maybe a year’s time but just did not realised it had gone up so fast (from $40 to now $47 in less than 2 months). I am bullish on Tiffany’s recent foray into China, which I consider to be a good long term strategy, and long term is like 2 years – not 2 months.

So I went into LJ International (Nasdaq: JADE) instead. It is a pure China jewelry play with some very aggressive growth and a market cap of less than 10% of Tiffany’s.

JADE however, hovered around the $10 while TIF rallied… *sigh*… well hopefully JADE trade at $12.50 soon so that my JADE JUN 7.50/12.50 bull call spread can hit MAX profit!