One of my favorite movies is Casino Royale, the new one with Daniel Craig and Eva Green. Besides the great verbal interchanges between the two stars the most interesting moments for me are the two where James Bond must make decisions about how his nemesis is going to play his cards and should he go all in on the hand and pot. For those of you who watched the movie you know Bond loses the first hand and wins big on the second hand. There are moments like that for me when selling put options and then waiting to see if the position is a winner. Since as I have mentioned in earlier posts how I diversify and spread risk over several positions and stocks I rarely have a moment where I go out of my standing portfolio for positions. However the option I will be selling immediately after this post is for my purposes a "all in" position.
I have opined regularly on Goldman Sachs, symbol GS, and the concern over the pending Congressional investigation and US Attorney General's inquiry into the firm's investment practices. Despite all that I have noted that since the firm donates hundreds of thousands of dollars to Obama's reelection coffers that there is the likelihood that he will pull the plug on investigations and protect his money flow. But of course in Washington there are no givens, so one best be careful of deployment of assets here.
However yesterday I see where none other than Warren Buffett is taking a position in GS, he bought in at the tune of $5 billion of preferred stock and took warrants for another $5 billion later. So it seems Warren believes GS has long term value. Who am I to argue with Warren? Goldman Sachs is laying off 1100 people in the USA and hiring 330 in Singapore. This likely is a sign that GS like other multinational banks is headed overseas with their business since the Dodd-Frank financial regulation bill has limited the opportunities for trading profits in the USA, which is another positive sign. So effective with this posting I will be taking a put position in GS that is considerably larger than I had planned and at a higher strike price as well. Yeah, not quite the size of Warren, but who is counting.
I hereby name this my "Casino Royale" moment. Wonder if Eva is looking?
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