Category: Stock Option Investment Advice

Jim Cramer’s acronym for the hot places to invest is BRIC ME. This stands for Brazil, Russia, India, China and the Middle East. But, in his usual hyper kinetic reasoning, he often clarifies this by saying the Rest of the World really includes nearly every country but Japan and the United States.

Shipping stocks have almost universally gained over the past two years. Many of the sectors stocks, Alexander and Baldwin (ALEX), Knightsbridge Tanker (VLCCF) and TBS International (TBSI) to name three, are up over 30% since the beginning of the year.

Utilities are another sector considered to be less prone to an economic virus. When the economy is feeling ill, people still use electricity, water, gas, etc. Some utilities with a heavy emphasis on supplying industrial customers could be negatively impacted during tough economic times, but utilities supplying its wares to the general population are generally inoculated from catching an economic malady.

Alcoa (AA) and Alcan (AL) shares surged amid news of Alcoa’s planned takeover bid. Alcoa’s stock is up 5.2% this morning to a 52-week high of $37.50 while Alcan’s stock raced up 34% to $81.77.

In article “AMD vs. Intel (INTC) – Semiconductor War” we mused about the prospects for AMD and decided AMD may indeed turn it around in the long run, but in the short run AMD is one semiconductor wafer short of a full load. In the article, we also selected a bear call credit spreads position for AMD and the position was fully profitable returning a sweet +14.7% return. AMD recently posted a larger quarterly loss than was expected. AMD also plans to make fundamental changes to the company for the longer term, but AMD did not provide specific details regarding pending changes.

In an article, “Cure for Montezuma’s Revenge – Covered Calls”, we delved into investing in covered calls stock options for Mexican companies. The average return for the covered calls selections was 4.5%. Every covered calls position selected for April 2007 for the Mexican companies was fully profitable. Mexico has some serious issues on the table to resolve. For example, its oil industry is nationalized and the citizens of Mexico pay significantly more for gasoline than the people living in the state of Texas located just north of the Mexican/U.S. border. Jesus Reyes Heroles, the CEO of the Mexico’s state oil company Pemex, recently stated as it currently stands, Pemex will run out of oil in about nine years, unless new investment is poured into finding new oil reserves.

In article, “CME Buying CBOT”, we analyzed Chicago Mercantile Exchange’s (CME) purchase of CBOT (BOT) with an eye for a bullish strategy for CME. We continued the CME bull put credit spreads saga and for the month of April, the strategy returned a very nice +9.9% return. Overall the CME bull put credit spreads strategy has returned a whopping 40% return in only five months!

Today, PowerOptions takes a quick look at companies specializing in alternative energy and potential covered call opportunities. Audio Podcast: An audio podcast of this article is available at: poweropt.com/podcasts/2007_04_19_AltEnergy.mp3 Signup now for PowerOptions free 14-day trial Because the price of gasoline has lately been the focus of so much consternation, alternative energy company’s stock prices may increase as their products become more widely accepted.

Last week, Dean Foods (DF) issued a special $15 per share dividend to stockholders. Following the dividend, the stock dropped about $15. It is typical for a stock to drop the amount of the dividend. However, the stock gained close to 8% since last week.

The railroad sector posted gains yesterday on news of Berkshire Hathaway’s purchasing a major stake in the Burlington Northern Santa Fe Corp. (BNI) and may potentially invest in two other U.S. railroads. Today, the PowerOptions weblog will take a look at covered call investments with the potential of benefiting from this news.