Big Winstar bucks

Way back in the day I invested in Winstar Communications, Inc., a telecomm that got busted in the big telecomm bubble.  I didn't invest too much, luckily.  Years later, circa 2006 or so, I got a letter in the mail from a law firm saying that I had been defrauded and maimed and pillaged and raped of my precious money by the Winstar management and that, if I wanted to, I could join the class-action lawsuit by filling in the included form, mailing it in, waiting for a few years (three or so if I recall correctly), and then possibly receiving a bonus bonanza check in the mail for my pain and suffering.  So I did it.

My check arrived a few days ago.  I unfortunately immediately threw out the accompanying letter, but it stated that investors had lost somewhere in the neighborhood of $2.4B (another "B" for billion).  The total settlement for all defrauded and maimed and raped (and pillaged) former shareholders came to somewhere around $12M (that one is an "M" for million).  So far we're down by a factor of 200 or so.

My check?  I am staring at it right now, salivating more than I do when I am staring down a 1 1/2 pound prime rib dinner (just ask my wife).  I am about to deposit it.  But I don't think that $8.55 will go very far toward my kids' college educations, unfortunately.  Maybe a McD's lunch sometime ...

A few years ago I got another settlement check from another bum telecomm-related burst-bubble class-action lawsuit.  I sent that form in too.  The check I got for that one?  $.02.  That may actually be worth the "... but that's just my 2 cents" jokes that come to mind, but it wasn't worth any more than that.  And, yes, I deposited that one too, salivating all the way to the bank.

Disney buys Marvel

Long ago I purchased a buttload (a relative term) of shares of Marvel Entertainment (MVL - formerly Marvel Enterprises and several other company name iterations).  Cost basis is just over $5 per share.  I bought these shares almost entirely in 1999 and 2000, and slightly more in 2002 and 2005.  This past Thursday, December 31, 2009, my fellow Marvel shareholders and I voted to allow The Walt Disney Company (DIS) to purchase our entire company for both cash and stock.  Each Marvel share will fetch $30 in cash plus .745 Disney shares.  At Disney's closing price of $32.25 on Thursday, this means that each of my Marvel shares is worth

($32.25 x .745) + $30 = $54.03

My MVL cost basis is $5.30 per share.  So my return on that investment is

$54.03 / $5.30 = 10.19 or 1019%.

Not bad ...

I screwed up a bit with the recent AMZN options, but I have made some very profitable bets on other deep-in-the-money calls, and this one is a once-in-a-lifetime bonanza!  So it's not all bad ...

u. n. c. l. e.

"You sold to close 30 puts of QZN-MP at $0.01."

Or so says the automated e-mail from my account.  Oh well ...

And even more on AMZN options

So I have almost ... just about ... cried UNCLE!  The stock itself, up until a day or two ago, just refused to go down (not bad otherwise for me, since I purchased a chunk long ago at ~$7 per share which I still own).  It topped out at $145.91 last Thursday, just 3 trading days ago.  Wow!  Completely unreasonable!!!  That is almost 50% percent higher than when it took its big jump on October 23, the same day I looked at it and said to myself:

"Self ... not only can this not continue much more, but it must go down ... It is just too big a jump!"

And how wrong I was.  Little did I know ...

What with this whole recession thing ending (more pundit-speak) and the holiday season upon us (yeah, I think this was my biggest mis-timing issue --- everyone is just so freakin' happy to buy things again), the stock price just kept climbing.

BUT ... these last 2 days she has sold off, down to ~$134 per share today.  HOORAY!!! (sort of)  And my options SOARED from their low of $.07 way up to a towering $.10.  That is a 43% jump just today!!!  Wow!  So I shall, very soon, place a limit sell order at, maybe, $.20, bite my lip at the loss, think better next time, and be on my way.  And enjoy the huge profit that I DO have on the shares themselves.

Even more AMZN options

My limit order went through this morning.  AMZN closed UP, amazingly, to $130.54, waaaaay above what I figured it would be on this day and will be in the next few weeks.  The math:

$1,270 / 30 Jan 80 AMZN Puts = $.423/option

So my cost basis has averaged down from my initial $.53/option to $.423/option.  That is the good news.

The bad news: They are options, and they expire in just over 2 months.  I have to hope that everyone will see the (very short-term) light and sell AMZN down a bunch.  Don't know how I'll do ...

More AMZN options

My Yahoo! Finance page tells me that my AMZN options closed today down to $.34.  So of course I am buying more --- a limit order to buy 10 more at $.32.  What's another $320?  Now I just need a really lousy holiday buying season, preferably within the next few weeks so's I can sell these at a vast profit, followed by some amazing holiday buying by the general public, so that my long-standing purchase in AMZN shares will continue on it's upward ascent, hopefully to buzzillions of dollars per share.

So everyone, in, say, mid-December, please go directly to Amazon.com and buy away!!!!

Definition:
"buzzillions": Pronounced buz-ZIL-lions; Meaning: Lots of 'em

Amazon.com options

So the other day I revelled to my wife the fact that Amazon.com (AMZN) shares popped about 25%, up to ~$118 per share, on the company's positive quarterly earnings news.  That made me happy, since I bought my AMZN shares at just over $7 a piece, back in the very early part of this century.  A 15-bagger, as they call it, is unusual and something to be savored.  Be happy, enjoy it, bask in the glow, and all of that crap.

So I immediately decided to bet against myself.  On some future date I will explain how I have made some money in the past by buying deep-in-the-money Call options on various companies that expire several months out, hoping for upward share price movement.  AMZN, however, suddenly --- VERY SUDDENLY --- being at an all-time high (yes, higher even than it's price during the Dot Com boom), was way too high too fast.  So, not wanting to sell any of my shares (I just plain like the company and its CEO, Jeff Bezos), I decided to look into buying some Puts that are a few months out, assuming that this sudden price peak is an anomaly, at least temporarily.  So off I went into my Ameritrade account and delving into the Yahoo! Finance pages, looking through all of the relevant research.  I found some $80 Puts that expire in January 2010 (just 2 months out) that were priced at $.50 - $.60 each.  Buying 10 would only cost me ~$500 - $600.  I'll take that gamble.  So I bought my 10 January AMZN Puts with a strike price of $80 at $.53 each.

That was a couple of weeks ago.  AMZN's price went down a bit and my options went up a bit, and then they both reversed course by this past Friday -- AMZN closed at ~$126.  So this morning I picked up another 10 identical Puts at $.42.  My average price is now down to $.475.  Soon I shall place a good-til-cancelled (GTC) limit order to sell them for around $.58 each, which will net me some $2000.  I don't know how far down AMZN needs to go in the near-term for my Puts to go up that far, but I am hoping that everyone's damned holiday cheer and gift buying and such won't screw up my plan.