Category: Stock Option Advisory

In a video interview yesterday, Jim Cramer (videoplayer.thestreet.com) analyzed several of Warren Buffet’s stock positions. Cramer stated, “There are two Warren Buffet’s. There is the Warren Buffet pre-three years ago… Where if you bought on the announced date what he was buying, you made a lot of money. In the last three years, if you bought what he bought, you under performed.” Cramer supposed Buffet has either lost his edge or he is taking an even longer-term view.

Regulators announced late last week their intention to begin a crackdown on subprime home mortgage lenders as two major lenders are having difficulties with large losses.

Tuesday was a rough day on Wall Street. The Dow Jones Industrial Average took a nearly instantaneous 200-point hit at 3 pm yesterday amid news of uncertainty in Shanghai, Iran, and Afghanistan.

Former Federal Reserve Chairman Alan Greenspan warned recently the U.S. economy’s next phase is recessionary. Mr. Greenspan did not specify when a recession might occur, but indicated it could be as early as the end of 2007. The economy behaves in a cyclical manner: expansion, peak, contraction (recession) and trough. For example, if the last economic phase experienced is expansion, then the next phase is peak, followed by contraction, etc. So Mr. Greenspan’s comments aren’t so surprising, it’s kind of like saying “sunset follows sunrise”, it always happens that way. In the case of sunset/sunrise we know the timing of the event, but in the case of the economy, we don’t know the timing.

In the article, “CME Buying CBOT”, we analyzed Chicago Mercantile Exchange’s (CME) purchase of CBOT (BOT), and in article, “CME Bull Put Spreads Strategy – Slick +5.8% in Jan 07”, we illustrated the profit potential of a bull put spreads strategy for CME and we selected positions for options expiration in February of 2007, which returned a very nice +7.5% in 24 days.

In article, “FedEx (FDX) Delivering Profits – Covered Calls” we analyzed the package delivery business in light of the declining cost of fuel. In article, “FedEx (FDX)/UPS – Covered Call Profits: +1.4% Dec 06”, we evaluated the performance of our selections and we selected new positions for expiration in February of 2007. All of the positions we selected for expiration in February of 2007 were profitable with an average return of +3.3% in only 58 days!

Previously we reported on Jim Cramer’s negative view of the homebuilding industry, “Jim Cramer Bullish on Oil Industry – Part Manufacturers Hanover Compressor (HC) and Universal Compression (UCO)”. This sentiment was reflected in the quote, “I see profit taking emanating initially from the real estate investment trusts.”

Mad Money’s Jim Cramer, in commentary made in a thestreet.com online video, was bullish on Schlumberger (SLB). Other analysts shared his view and the outlook for the company may be rosy: In the video Cramer said, “Schlumberger probably has the best outlook portfolio.” He went on to add, “Energy prices are in a permanently higher echelon. In every case, all the low hanging fruit of natural gas and oil is gone in the world… But, we’re definitely not running out.” He explained the competing forces of the difficulties getting at the supply and the added demand of China and India will keep oil prices higher in the long term.

America’s recent emphasis on ethanol has meant an increase in corn and ethanol production. Like corn, ethanol is generally made in small towns throughout the Midwest. Point-to-point transport of the corn and the transportation of the ethanol to the end user are usually done by train. As ethanol production increases, railroads also must beef up their operations.

The LoJack Corporation (LOJN) recently released its study of the most stolen bikes in the 2006 calendar year. They are, in order of thief’s’ preference: 1. Suzuki 2. Honda 3. Yamaha 4. Kawasaki 5. Harley-Davidson