Well firstly I hope everyone had a great Christmas, I have been reviewing some longer term plays for my Account.I am starting to increase the useage of LEAPS to play these sort of situations.For those of you not familiar with LEAPS then please go to this link. http://www.investopedia.com/terms/l/leaps.asp
Basically they are long dated options plays-which allow me to control stocks for a lot less margin than buying them outright, the fact that they are long dated means the time decay is not such a big factor but I can still participate in the upside.
I have placed 3 positions today they are as follows :
MSFT-Microsoft
Microsoft is incredibly cheap right now and generates massive cash flow, I think that in the near term it is a good buy up to $30 and I am buying the Jan 2009 25 Calls
JOE-St Joe
St Joe owns massive tranches of Florida and despite the potential issues in the Housing Market I feel that the Mkt Cap of St Joes is massively undervaluing the value of the land that it owns and as such is a great long term bet , when people wake up to this fact then I think we will see a good re rating of the price of the company.
Again I am buying the Jan 09 45 Calls
WMT-Wal MArt
Wal Mart seems to either generate tremendous hatred or dedicated followers, personally I am only interested in looking at companies that I believe will generate a great return for my portfolio
Wal Mart is breaking in to the massive markets in China and India with some well placed strategic acquisitions and partnerships, when you consider the potential in these mkts I think this will prove to be an excellent move in the medium to long term and I ma buying the Jan 09 40 calls.
I am aware that not everyone is familiar with options or LEAPS and if people want a bit more insight I will be happy to pass on a bit more insight into their use.Alternatively you can just stick with buying stocks as the fundamentals are the same.
As ever these are not recommendations but an insight in to what I am doing , please make sure you do your own research and evaluate any positions based on your own situation.
RT