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  • "The market can remain irrational longer than you can remain solvent" - John Maynard Keynes

    Monday, May 03, 2004

    I haven't done this before but I'm going to make three price calls. I current believe that three securities that I own are at good prices given my outlook for them. OCA is currently trading at $7.17, Rising Rates Opportunity Fund (RRPIX) is trading at $23.91, Pfizer $35 Jan 2006 calls (WPEAG.X) are trading at $4.7. I would recommend buying 50/40/10% of each. I think all three have the potential to double over the next 2 years.

    I would add that when the Nasdaq hits it's next 52 week high, I plan to wait 5 days and if it doesn't hit another high I'm going to use some method to short it, either by buying puts or going long a Nasdaq short fund or even a leveraged Nasdaq short fund.

    I possibly won't write when I sell any of the above positions but I would start selling some OCA at $14 and the some of the Pfizer calls when the options double up. As for RRPIX, perhaps when the Fed next EASES but there is a resonable chance of a long term pick up in inflation so perhaps not. Anyway I wouldn't sell any RRPIX until the 30 year reached around 8.5%.

    I also like AES and Oil Sands Split Trust ( a leveraged play on Canadian Oil Sands ( or COSWF). COSWF is probably 50% undervalued but there have been better entry points recently, similarly with AES. If you were to add these two, which I don't think you are getting the best entry price on but there is still much upside potential then I would recommend the following percentages.

    Oil Sands Split Trust - 25%
    AES - 20%
    OCA - 20%
    RRPIX - 15%
    WPEAG.X - 10%

    If you were to follow me into my short Nasdaq trade (which I may already be too late for but I think we'll see a 52 week high before the election) then I would leave aside 15% for that trade, probably into a 125% Nasdaq 100 short fund.
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    Disclaimer and Disclosure Analyses are prepared from sources and data believed to be reliable, but no representation is made as to their accuracy or completeness. I am not paid by covered companies. Strategies or ideas are presented for informational purposes and should not be used as a basis for any financial decisions.
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