Cabin's journal of buys, sells, and covered calls...

I've been chewing on a few things for the last couple of days.

"Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry." Hamlet

I overheard something in the airport the other day. One company is trying to buy out another. They can't get financing. Then I saw this by Kevin O'Leary about companies having to go into "the shadow banking" system for funds.

Banks are also under pressure as they brace for higher capital requirements, O'Leary said. Many have started to pull back on writing new loans, with lending conditions tightening the most on record this past April, according to Morgan Stanley.

"That is going to cause a real run again on these banks. Because if you have a payroll account at a regional bank right now … you're quietly moving it to Citi or JPMorgan or Morgan Stanley." O'Leary said in an interview on Fox Business on Sunday.

The trouble will ultimately spill over to small businesses. Practically "no one" is lending to businesses with under $500 million in sales, he added, which he believes is causing some companies to turn to the shadow banking market.

"This is causing some real chaos in the very short term," he warned, predicting that lending pressures would reach a boiling point sometime between September and November of this year. "[If] you don't put any capital into the small business sector, which is 60% of the jobs in America, you're going to start to see some real chaos."

Many of you are not old enough to remember 1979-1981. This is when rates went up to about 20%. Many many small businesses went by the way side. We know about the problems in the commercial property markets.

Just my thoughts...Cash will be king for the next few months. Apple can buy so many companies, for pennies on the dollar. Those with great balance sheets, should do OK. Those who have great products...But crappy balance sheets, will either go under or get cannibalized by other companies.

I can see this, but I don't know how to profit from it at this time...

Thoughts please...
 
Summarizing... Businesses can't find lenders because of greater capital regulatory requirements for banks.

If the economy dumps, it's less bad to lose a business than a bank, and it can't be a bad thing to require more financially sound banks, no?

Why is there a surge of capital demand from businesses? The economy isn't bad, full employment, higher minimum wages, higher general pay for blue collar labor... What's the hang up? What am I missing?
 
Summarizing... Businesses can't find lenders because of greater capital regulatory requirements for banks.

If the economy dumps, it's less bad to lose a business than a bank, and it can't be a bad thing to require more financially sound banks, no?

Why is there a surge of capital demand from businesses? The economy isn't bad, full employment, higher minimum wages, higher general pay for blue collar labor... What's the hang up? What am I missing?

Small and medium size businesses are getting squeezed for the next few months...That is what I get out of it.

Maybe short a small growth ETF for Dec/Jan??
 
One quick buy today...Starbucks.

I bought 100 shares for $97.17 I then did a covered call for the June 24 $100, for $8.45.

It seems they are gaining and holding market share...I don't know how long that will last. They will need to close some lower performing locations. Still expanding into Targets. I was on Delta Airlines this week and they were serving Starburcks...They have tie ins with both Target and Delta. When you get your curbside pickup at Target, they will run out your Starbucks order at the same time!!

I did the call close to the money. I was looking at the $105., but was thinking recession and all those employees with their benefits. They will be wanting wage increases too...

I have my eyes on two drug companies today...We'll wait and see.

Cabin...
 
I'm not going to start a new thread...Just want to pose a question. Please no Google/AI answers.

How can you tell if a company could/would be a buyout candidate?

Just off the top of my head things like; They are gaining, holding market share. They have refinanced much of their debt at a low rate. Their board is exercising options and not selling their stock. In drug companies, their drug pipelines are moving along into next phases.

Was thinking of optioning a drug stock...But...

PS If Warren Buffet is sampling your products...See See's Candies
 
Well did 3 trades in the last couple of days.

First did an option on our Boston Scientific (BSX)...300 shares. Did a covered call for the June 24 $70...Got .65 for each=$195.

The other day I/we bought (BMY) BRISTOL-MYERS SQUIBB...100 shares at $61.41. Then did a covered call for the $62.50 for June 24...We got $4.40 for the option.

We also bought 100 shares of Merck (MRK) at $108.20. We than did a covered call for the June 24 $120. and got $4.20 ($420.) for the option.

Both BMY and MRK have fair dividends with a chance for growth.

Just looking for some stable income flow...
 
On Target today...They paid their dividend today, (I just happened to see it in the history at Fidelity).

I have lost about five thousand something on this company. Great plans, but shrinkage (theft) and the woke issues have hurt them. I like the idea of putting Starbucks in their stores. It should pay off over the years.

I had a covered call for Jan 24 for $220. I bought it back for .06 ($6.). I then did a covered call for the June 24 $170. I got $1.70 ($170.) for the option.

Good company...Just trying to keep that income flowing.

I do plan to hold this during a recession...It's a long term hold (core holding) for me.

Just doing a long call...Way out of the money. Set it and forget it...
 
The economy isn't bad, full employment, higher minimum wages, higher general pay for blue collar labor... What's the hang up? What am I missing?
The USG debt is not sustainable especially when deficit is increasing, no end in sight.
 
Quick option (covered call)...Genmab (GMAB). It's a Danish biotech company...Just 100 shares.

Sell to open Feb 24 $45. I got $1.16 ($116.00) for the option. Generate income while I wait for more trials to be complete...
 
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