Irrationality of Mr. Market (9/26/12)

Early this AM: Added $AIG Jan'13 $35 C @ 1.10 Avg 1.52 now. 

RT @annemarietrades Here's a look at $AIG on the daily  http://stks.co/hBuN

RT @beckyhiu $AIG Potential bounce. http://t.co/kbfEpScd #WORDEN //it did bounce off that level. (see below)

RT @beckyhiu Observing some MACD c/os on the stocks I watch. $JCP $AIG $SPY //was consistent with the bounce

RT @bespokeinvest SPX 7th decline in 8 days //wowza. More volatility to follow IMO. 

Ultimately, price will reach intrinsic value of a stock. How long would that take? Idk. Markets can remain irrational for an extended period of time, a clear reflection of the nature of mankind, depraved and irrational majority of the time. Short-termism has been the culture of the US financial markets and corporations, unlike the "keiretsu" orientation of the loyal Japanese.

I consider myself both a short-term trader and long-term investor (I believe in the margin of safety concept). The former because, well, it's more fun and the latter for the long haul (price meets value, eventually). I realized that I've done better trading what I know (stocks I don't mind holding for the long haul) using longer dated options as I can get a better sense of how the stock might react, just like knowing someone well, you can guess what they're going to say next. Intimacy with a stock gives you more leeway. Learning as I go. 

Resilience is key.

$JCP - My Personal Shopping Tour

So, I finally stepped into the one of the only 2 $JCP locations in Iowa - the one in Des Moines (there's apparently another at Southridge Mall on the southside of IA). A lady approached me by the $JCP brand apparel and asked for help, thinking I was one of the store "specialists". I LOL-ed pretty hard (I was wearing a lanyard around my neck in office attire). Since she questioned me, I thought it'd be only "fair and square" (no #pun intended) if I questioned her about her shopping experience at $JCP thus far (she was an elderly lady, in her mid 50s, I'd say). Not surprising when she mentioned that it's more "hip", less cluttered, "trendier", more options, and of course...affordable (just the magic word we all are looking for, ey, since a lot of us are "cheapskates"?). I thanked her and went on my way. 

Stopped to chat to a few more customers and they said the same thing in different variations. Traffic wasn't too bad on a Tuesday night. Long sleeved, plain colored women's JCP-branded shirts for $9 is really, really decent (I got 2 myself). Arizonas bermuda's for $8? Wowza, I grabbed some (even though the weather's shifting to a more moderate, Fall temperature, $8 was a steal). Flannel's all the rage too (especially in the Midwest) and John Bay's were going for $12-20. Decent...

Some pictures below:

No revamp of the main sign...yet.

There's that RFID, RJ was talkin' about. 

There's $NKE, $ADDY for those loyal fans

Sephora

Levi's w/ a specialist on standby

$JCP's very own brand - decent prices! (this was where that lady thought I was a worker, lol)

The colored denims are all the rage now!

Pretty small store in DSM, 2 floors (men's and women's)

The outside of the store (plain and simple?)

There was an Iowa Hawkeyes/Cyclones section in the men's department, catering to the mad fans out there (I'm assuming there'll be other football fan sections in other $JCP outlets across the states ...Ohio Buckeyes, and of course, the Green Bay Packers). //I still think football should be called "egg-ball" or "ball-in-hand" or "hand-ball" (see below). Growing up in an EPL (European Premier League)-fanatic country really shifts my biases.

When I checked out at the counter (not typically a shopper by any means myself (I prefer buying stuff online on $AMZN per se) but I managed to get $50 worth of stuff), I took the chance of interviewing the cashier on duty. She's been working there just for 6 months and said she's seen traffic increase in the last few. They restock inventory Wednesday and Friday nights typically. I really don't know how many more stores they can "squeeze" into what they have without cluttering the space and digging too much into the aisles. She said it's packed during the weekends (in Des Moines, malls close @ 1800 hours on Sunday) as this is one of the 2 locations here. I should make a note and check it out one of these weekends prior to Thanksgiving and Christmas to avoid seasonal shopping (I'll also check it out when it comes to seasonal for a feel).

Well, since I'll probably be paying a visit to $JCP more often, I got myself a $JCP credit card. :) 

***Bear in mind, $2/square foot for the cost of retail space is dirt cheap. Also, turnover takes time. Patience, young grasshopper...

Trades 9/24/12 & 9/25/12 $UA $JCP $AIG

9/24/12:
1211 Added $AIG Jan'13 $35 C @ 1.75.

1236 Added $AIG Jan'14 $35 @ 5. Avg 5.35 now.

On 9/13, Added $UA @ 2.90, avg now 2.48 //added more $UA Oct $60 C today, avg now 1.19 //playing 50 SMA (1354 hours) //did a very thorough analysis of $UA for my Equity Valuation class last spring. Based on my valuation, we could see $UA at $100 (post stock split). I need to present a detailed valuation analysis once this semester is over to lay out my thoughts on $UA as a growth company. Mid cap now, might be large cap later in this trend carries on. When you go to middle/high school/college games, what do you see people wearing? $UA. More and more of my peers are wearing them. My college's apparel shop carries $UA merchandise now. Speaks somewhat. Logo's pretty "cool" too, and spelling armor like "Armour" is neat. 

1435 Added $JCP $30 Jan''14 $30 C @ 3.76 on this 24.50 bounce. Avg 5.15 now. //BTO $JCP Jan'14 $30 C @ 5.85 //in light of $JCP presentation's "hopefullys" @ 9/20 //next post will be on my personal shopping experience @ JCP in Des Moines, IA (one of the 2 locations in DSM).

9/25/12:
Added $AIG Jan'13 $35 C @ 1.51. Avg 1.60 now. //I should have waited as it seems it wants 32.50. Been making nasty calls lately. However its price action yesterday was decent. Held up pretty well despite the -ve markets. $STUDY

9/20 & Jitters 9/21

9/20 Trades:
BTO $JCP Jan'14 $30 C @ 5.85 //in light of $JCP presentation's "hopefullys"
BTO $AIG Jan'14 $35 C @ 5.15
STO $AIG Jan'14 $32 P @ 1.42
BTC $BAC Jan'14 $7 P @ 0.76 from 1.22, +.46 //adding liquidity
BTC $F Jan'14 $10 P @ 1.39 from 1.95 +.56 //adding liquidity

9/21 Trades:
STC $F Oct $10 C @ 1.44 from 1.29, +.15 //in light of "Iran-Israel" scare
BTO $SPY Sept 28'12 Ws $145.5 P @ 0.50 //in light of "Iran-Israel" scare
STC $AIG Jan'14 $35 C @ 1.63 from 1.93, -.3  //in light of "Iran-Israel" scare
BTC $AIG Jan'14 $32 P @ 1.55 from 1.42, -.13 //in light of "Iran-Israel" scare

$TWIT:

 Excellent! RT @StockTwitsU A list of financial book reviews from @AbnormalReturns on @MoneyMarketsHub http://stks.co/cAjB  $STUDY

RT @FinancialTimes Walmart to stop selling Amazon Kindle http://on.ft.com/PXO91E

RT @JackDamn $AIG - Sideways chop for the past month 1/2. B/O above 35. Below 33.5, stand aside. http://tmblr.co/ZbMubyTmgOrO 

RT @stockchartscom StockCharts Technical Alert: "Nasdaq sets 52 week high" on 21 Sep 2012 @ 9:33 AM ET #sccalerts#stockcharts $QQQ

0936, 9/21 RT @beckyhiu $ONTY huge gap to $8

RT @denverbusiness Rate on 30-year mortgage falls to record 3.49 pct. http://dpo.st/SEIH0c 

Update 9/19: $CRM $JCP

9/19 0904 RT @CNBC ALERT: August existing home sales rose 7.8% in August to its fastest pace in over 2 years.






9/19 0935 RT @beckyhiu Got in CRM Oct 155 puts @ 6.40. //bailed up the upshoot @ 1018 @ 5.50, -.90 //RT @L777: Benioff on Mad Money tonight with Cramer.Shorts be careful. Cramer is a great pumper.









9/19 1003 RT @beckyhiu 11:00 AM J.C. Penney ((JCP +1.1%) says it will add Disney boutique stores in at least 52 stores across the U.S. in time for next year's back-to-school season. The merchandise at the Disney shops will include exclusive products and will also be sold online. //roughly 31k C (3X) and 20k P crossed the tape on 9/18/12. Long strangle (Sept 30) @ .44 and .43 each, .87 net debit. (27.13,30.87 range). Puts are the options of choice, P/C int ratio @ 2.22, confirming puts > double C over the next 3 months. Trading in 29 range in the AM. Source: http://bit.ly/OF03yN

Webcast Link: http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-irHome

9/19 0906 and 0927 RT @beckyhiu trying a $JCP 33/36 C Oct C spread for .45 and .39 //in time for the JCP webcast @ 1345 CT. //for notes read previous blog post. Terrible call...I couldn't close out the spread (which was up astronomically (200%+) due to the 10% bump during the analyst call due to fears being called a PDT (called once before and don't want to be coded as that, yet...still a small timer but I'm getting there)). Oh well, lesson learned here (still better off with trading LEAPs IMO). It's down 10% on 9-20!!!

Goodies to read for myself: http://viewer.zmags.com/publication/09f72a62#/09f72a62/1

JCP Analyst Day 9/19/12 - Comments and Q&A with RJ

Pardon the typos/grammatical errors. Will edit later.

JCP Analyst Day - Comments and Q&A with RJ

• Started late! 1402 instead of stated 1445 ET (I dislike in-punctuality)
•  4th time in 8 months RJ has spoken
• Today's purpose is l-t ...the new JCP "transform not improve"
• Goal: "America's favorite store" ...redefine way America shops
• Promotional dept store --> specialty dept store (shops-street-square) (today's just racks) (boutique = apps analogy)... 17 now, 100 later...each is pure (DIS store, feels like it etc...exactly like the authentic, make them believe)
• Street...expanded aisle by 5 ft...$2/ft cost of RE ..."don't need to leave the store to continue with your life"...replace checkout with seating...1/2 mile long when completed..."lego tables" (place for kids, mom shops, iPad/Mac tables)..."kids street"
• Square...dynamic seasonal space...25 to change every year (rotate in)...2.5x faster than normal shopping shops...unique seasonal items, light foods (nov, dec)...leaving marks here...new imprint...1.6m free haircuts, building relationship with the customer
• 130k sq ft when completed
• Mentioned Nina Garcia "get ready America"
• JCP research...now 12 shops...validates idea...evidence: When? 12 days ago, did research...who? 5 groups of shoppers, mix of skeptics, neutrals and supporters. What? pre-tour preceptions of JCP, 90-min self and guided tour, post-tour perceptions of new JCP.
• Pretour: Words: value, loyal, bargains, quality
• Bad: kids and older people, traditional, old ladies, polyester, childhood, disorganized, outdated
• Real consumers not paid actors video (let people know the truth): 
• Place? - fun, organized, vibrant, cuppa joes, different boutiques, knew what they doing (sales), knowledgeable, little stores, upscale, trendy, setup makes people want to shop more, all in one,  everyone gets something out of this, seating ares (like), iPad interaction, step ahead, bright and catches your eyes (kiddo, lol, with mom, lol)
• Product? Younger look, more modern than before, new brands, more vibrant, quality is good, different perception of the merchandise
• Pricing? More for less, price points excellent, reasonable, "fair and square"
• Vs. other stores: way better than Kohls, quality, layout, merchandise, Macy's (top notch for more expensive....JCP almost there, same quality, same look), kiddo: way more clothes (seems like she's been bribed, lol). 
• Post-tour: (100 mins) modern, innovative, good value, sophisticated, trendy, organized, higher quality at lower prices
• Sephora, Levi (fastest growing), IZOD (growing 50% over last year's) ...fav place to put their brands
• Liz, JCP women's off the charts, men's a little behind (stock issues, smaller sizes, colors)
• 12 today, 40 a year from now (holiday 2013), 2.5x where we are today...10-15% the spaces...shops b/w shops..."shops interest growing" ...mentioned $DIS (I trust them with my brand), Dockers, Haggar now interested (now they want to put their shops into JCP). 
• Joe Fresh, Bodum, Giggle, Sephora can reach great market here in the US via JCP....beginning the relationships with the first child, lol (low cost way to the customer)
• CBOU, Sugar Shack (7 kids mom), Paciugo (44 stores...Italian yogurt), dpHUE opening 
• Biggest change is pricing strategy...no coupons, no sales, want people to put stuff in the dept store, "protect integrity" of brands ...it's all about the goods, willing to get the goods, running sales down
• Been a hard year, back half similar to first half, "depromoting", "impact" the business
• RJ giving $AAPL story - investment during the downturn, turned out OK but not easy//this point JCP is trading at 30.17, down from HOD of 32.55 (closed gap)...was up 10% at HOD 

• Q&A:
• Denim - commitment for Docker stores...incremental sales of Levi, shops work
• Rolling out..training, labor etc...inventory (shop by shop basis)? A: "really hard" //lol??? More complicated but getting better, specialty experts (Sephora eg, figured it out), staff to do the work (payroll staff), long-term transformation "none will be easy", back to school haircuts
• Fast fashion threats - H&M expansion, innovative new online retailers, bring people back to the store? A: compete like them (price goods everyday and price the goods), shorten supply chain, emulate them, internet retail (bricks and mortar retailers, omni channel strategy, $M, $JWN), team working hard on that ..."we'll get there" (lol).//at this point JCP lost all the gains it had. Flat EOD.
• Need to share l-t profit margins with retailers in stores, work together
• Infrastructure change (RFID)? Perfect control and replenish stock, let's customer check out in 25% of the time (transaction has been the hardest), be a leader (haven't figured out exactly??? personal check out and check out in pockets...check out with iPod/phone but has redundancy of cash reps).
• Update on marketing? Registry? Present company?
• Learning from adding the shops? A: shops turned out good…lots to learn
• Ended up flat EOD. What a crazy run!

via Seeking Alpha: 3:50 PM Shares of J.C. Penney (JCP +3.8%) spike higher in late trading after CEO Ron Johnson says the retailer's "Shops" are doing 20% better than the rest of the store. Shares were as high as +7% before it became clear that the retailer's overall sales could still be subdued with the stores concept still a work in progress. Johnson's comments were made at an Open House Tour for investors and analysts.

9-17 and 9-18 Updates

For 9/18:12: Did no trades. Was out of the office in and out. Weather was excellent. #ptl Markets were slightly off. 

For 9/17/12:
RT @AnalystWire Argus Downgrades Under Armour, Inc. ($UA) to Hold http://stks.co/dAUj //still holding $UA Oct $60 calls for a breakout to new highs. <

RT @beckyhiu Glad I got out. RT @MarketWatch $GRPN shares close down 10%, triggering Nasdaq short-sale circuit breaker http://on.mktw.net/S0uwC9

1102, 9/17 RT @beckyhiu So many eyes are on $AIG on a breakout watch of $35+. Fundamentals of the company are great. Core insurance business is a cash cow. $$

1321, 9/17 RT @beckyhiu Added some $AIG Jan'13 $35 @ 2.17. Avg 1.90 now

RT @Mark_J_Perry Buying a home is now 45% cheaper than renting on average across the country | AEIdeas http://www.aei-ideas.org/2012/09/buying-a-home-is-now-45-cheaper-than-renting-on-average-across-the-country/ …

iVol article: http://www.ivolatility.com/roller/page/trader?entry=volume_12_issue_37_br //great article on the VIX premiums. //need to fully comprehend.

$AIG keeps bumping its head on the $35+ mark. It didn't hit $35 at all today after gapping down at the open ($34.90 at the open) before trending lower for the day (partially due to the trend in the markets today).

Seems frustrating that $AIG keeps bumping up against the $35+ mark

$SPY downtrend the entire day with a slight rush EOD

$AIG never did bump the $35 mark on 9-17-12