Is IBM a sucker?

Disclaimer: I own IBM since 3/20/13

It is important to understand your mistakes. So let's review my thinking and see what went wrong.

Why I bought IBM?

What went wrong?

What's next?

How to short gold?

Everyone is talking about it. It is like free money. How to do it?

Below is a seekingalpha post in 2010.

• Basic Approach: Short (GLD) – GLD is the most popular gold ETF with plenty of volume and a small bid/ask spread. By shorting shares, you’d benefit from a downside move. Note however that this opens you up to unlimited losses and if gold really spikes, this could be a dangerous trade.

• Basic Approach #2: Long PowerShares DB Gold Short ETN (DGZ) – DGZ would be a means to limit your losses by buying the inverse and benefitting from a decline. ETNs have some risks including issuer solvency risk and futures roll losses (see ETF 7 Deadly Sins for more on what to watch for). There is no inverse ETF though, so this may be your only choice for a loss-capped 1X approach.

• Buy Inverse ETF: Long (GLL) – This ETF seeks to replicate 2X the inverse return of gold daily. This would amplify both your gains and losses. Note however that leveeraged ETFs tend to lose value over time regardless of the underlying asset performance due to daily resets.

• Naked Calls: Sell Out of Money Calls on GLD – This is also a risky strategy, but a means to capture some option premium on a rolling basis if you believe gold won’t breach the strike price you choose. If GLD is at $134 and you sell a call for $140, as long as GLD doesn’t breach $140 by expiry, that option expires worthless and you keep the premium. It’s risky though, as your losses are unlimited should GLD exceed the strike.

• Naked Puts: Buy Out of Money Puts on GLD – This is an option to benefit from a drop in gold prices while limiting your loss. With GLD at $134, you can buy a put option at 130 strike, Dec expiry for around $3 premium (at a cost of $300 for the contract of 100 shares). Therefore, if GLD drops below $127 by expiry, it’s all profit from there and you’d have capped your loss at $300.

• Pairs Trade: A nifty trend to watch for is when the premium on the Sprott Physical Gold ETF (PHYS) gets ahead of historical norms and you can simultaneously short PHYS while going long GLD. See my recent gold pairs trade result, which was the best risk/return money I’ve made in a long time.

HPQ

Profile: Michael Burry

In Michael Lewis's The Big Short and Gregory Zuckerman's The Greatest Trade Ever, they both told the story of Michael Lewis

Is the bull coming?

From MarketWatch

U.S. stock futures steady ahead of home sales

Oracle shares up in preopen trade after results

By Barbara Kollmeyer, MarketWatch

A previous version of this story misstated the release time for housing data and the date for Ben Bernanke’s second lecture. This story has been corrected.

NEW YORK (MarketWatch) — U.S. stock futures were nearly unchanged Wednesday as European stocks wobbled and commodity prices attempted a rebound ahead of a report that could show a rise in U.S. home sales.

Futures for the Dow Jones Industrial Average DJM2 +0.04%  rose 10 points to 13,118.

S&P 500 Index futures SPM2 +0.03%  gained a fraction to 1,400.20, while Nasdaq 100 futures NDM2 -0.06%  fell 1.75 points to 2,733.75.

Click to Play

Wall Street's close eye on China

Dow Jones Newswires Managing Editor Michael Casey visits Mean Street to discuss pressures on China's economy and the potential impact on the U.S. Economy.

Stocks took a step back on Tuesday amid concern about economic growth in China. The Dow Jones Industrial Average DJIA +0.09%  closed down 68.94 points, or 0.5%, to 13,170.19. The S&P 500 index SPX +0.12%  declined 4.23 points, or 0.3%, to 1,405.52

A single U.S. report is on tap: February existing-home sales are estimated at an annual rate of 4.6 million, up from 4.57 million in January, according to economists surveyed by MarketWatch. The data are scheduled for release at 10 a.m. Eastern.

The existing-home-sales report comes on the heels of February housing-starts data released the prior day. The housing-starts data showed the biggest increase in permits to begin new construction in 3 1/2 years.

Federal Reserve Chairman Ben Bernanke will testify on Wednesday before a House committee about the European sovereign-debt crisis. On Thursday, he will deliver the second of four lectures at George Washington University on the Fed and the recent financial crisis.

Asian shares continued to fall amid lingering worries about China growth, and Japan shares fell for the first time in six sessions.

European stocks largely gave up a run at positive territory, with mining stocks staying under pressure on worries about China growth and demand for resources. The Stoxx Europe 600 index XX:SXXP -0.13%  was flat at 268.93.

Commodities attempted a rebound after a rout the prior session as the dollar pulled back. Gold for April delivery GCJ2 +0.41%  rose $4.9 to $1,651.90 an ounce.

The dollar index DXY +0.01% , which measures the U.S. unit against a basket of rivals, rose to 79.605 from 79.582 in late North American trading Tuesday.

Crude-oil futures for May delivery CLK2 +0.47% , the new front-month contract, rose 31 cents to $106.38 a barrel after data late Tuesday showed a decrease in inventories.

Shares of Oracle Corp. ORCL +1.20%  rose 2% in preopen trade after the company reported an 18% rise in fiscal third-quarter profit late Tuesday, beating analysts estimates.

Jabil Circuit Inc. JBL -0.23%  could come under pressure after it posted a 76% rise in second-quarter profit late Tuesday, but was shy of analysts expectations on the top line.

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

Emerging markets move to stablise currencies

The South Korea central bank surprised the markets on Friday with a $4bn lightning intervention in support of the won, carried out in the last two minutes of trading.

Brazil spent 2.75bn selling dollars the day before.

Does this mean central banks are finally trying to reverse the sharp plunge in their currencies over the past months?

Probably not, currency strategists believe. The best evidence is that the amounts of money involved are not great.

Debt sales set to hit US banks

Banks have had to make concessions to entice a broader range of investors to buy loans linked to mergers and acquisitions, including offering discounts, amid deepening concerns about the US economy.

There is a significant pipeline of debt sales planned for the Autumn. Market participants are waiting to see whether banks would choose to shift commitments, even at a loss, or hold paper in the hope of an improvement in settlement. 'There is clearly less buyer capacity in the loan market,' said one financier. 'But Wall Street is willing to sell paper at levels where they take a small loss, rather than have an overhang.'

Deals backed by private equity groups have struggled to win support among investors. A loan to fund Province Equity Partner's purchase of Blackboard, an education company, was sold at a higher-than expected yield and a substantial discount to par value.

Blackboard's loan was offered to investors at 92 cents on the dollar, according to Standard & Poor's LCD, a debt research company. Financing for KKR's purchase of Go Daddy, also requires a discount.

The Fed said last month it would keep interest rates near zero for two years.

The market is now focused on the financing for Apax's $6.3bn buy-out  of Kinetic Concepts, the woundcare specialist.