Adam Warner Destroys Kramer!

Discussion in 'Trading' started by stonedinvestor, Sep 26, 2007.

  1. Someone named Adam from daily options report did his work here! I love guys like this and I'm so into busting this lier. I have sent Kramer numerous e mail challenges he wants no part of the stonedinvestor and when you read through his latest gobbligook you will see why. It is amazing to me that people will follow along see his lies and then climb all over each other to ask another question. I even want to invest in Street.Com because I think it will get bought and I just can't. he stops me. he's disgusting. He'll make money. behind the scenes I'm actually now working AGAINST the deal... Anyway from His Lieness...

    Four for five ain't bad in baseball, and in options its pretty unbelievable.

    If you did any of my five options trades on Monday, you made enough to pay for a lifetime of Action Alerts PLUS and RealMoney.

    But all good things come to an end, and I need you to take profits.

    To recap, I talked about buying September in-the-money calls -- the ones that were flat with the common -- on the following companies:
    Schlumberger (SLB)
    Caterpillar (CAT)
    Procter & Gamble (PG)
    Altria (MO)

    My bet was that this could be an explosive expiration because so many funds were set up short or underinvested and any surprise or even just a quarter-point cut in the fed funds rate would yield big gains. But I didn't know how big.

    Here's how big: 7 points in Schlumberger, 5 in both Caterpillar and Boeing, 1 1/2 in P&G -- it did go to the $70 strike -- and Altria broke even.

    >> From Adam

    I really don't know where to begin.

    OK, let's start first off with a review of all his other calls before the Fed that went bad, summarized in this post. Included is his prediction of what might happen, ""It would be catastrophic for them to do 50.....that would show we're really alot more trouble vs. what they've been saying". His recommendation to sit it out "But I am, again, willing to let it ride without me and wait for a better opportunity. Not to mention his recommendation to load up on a bunch of underperforming soup and soap names and get out of a gang of big performers.

    Even setting aside that's a a good call in a sea of bad ones, it's still an incredible misrepresentation. Let's go back first and see his initial recommendations.


    If it weren't enough to have big broker earnings and a Fed meeting and a ton of macro data, it is expiration week. That means we are going to see some stocks pinned higher and lower.

    Let me give you some interesting plays along these lines to use near-term calls as proxies:

    1. Procter & Gamble (PG) thrives for a lot of reasons as I mentioned earlier today and I think this stock could power to $70 -- and deserves to. Maybe a September 65 call?
    2. Altria (MO ) could return to where it was when it announced the split: September 65 calls again.
    3. Oil's going higher again, which could cause another number raise. What happens if Schlumberger (SLB) can't be contained by the strike? How about a September 95 call play.
    4. Boeing's (BA ) on time, according to press reports, which means a September 95 call play might be important.
    5. Caterpillar's (CAT) on the move: natural to go out at $75, there I would buy the September 70 calls.


    OK, the way any reasonable person would read this is he thinks each of these is going out at the directly higher strike. In CAT and PG he actually names that strike, SLB would have been a 105 target at the time, and BA a 100 target.

    In CAT he even says "natural to go out at 75" in the original article, and the stock was in the mid 73's, yet somehow he claims a profit of 5. I suppose we were supposed to just know when he mentions "pinning" and an actual price that we should not take profits when it gets there.

    BA was in the mid 98's and SLB around 100. So realistically you have a 1.5 pt profit in BA and a 5 pt profit in SLB, not the 5 and 7 he claims.

    MO was actually up 2 pts, not sure why he's actually underselling himself here.

    But wait, there's more. He has this claim.

    In reality, they made you a fortune; doubles on three, a 25% gain on one
    and flat on the last.

    He takes profits you didn't actually realize in the options and then looks at them as percentage gains. In other words, you buy a CAT call at $3.50 and it goes to $7 and then calls it a double. Setting aside again that it didn't really go to 7 from your standpoint, that's only a double IF (very big if) you look at it in reverse if it goes down. In other words, let's say CAT stock dropped 2 points, a whopping 2.5% or so. Would have come out and said "oops, you lost half your investment".

    No of course not, he would have said "see, this is why I do these risky plays in options, you are only risking "x" dollars.

    And that is the very line of thinking that gets people in huge trouble in options "investing". You have to be consistent and analyze risk and reward in the same manner.

    So let's summarize a bit. We have one post featuring some good calls amidst a sea of horrible calls that had you either sitting out the move completely, or re-allocating out of names that did great and into names that did relatively poorly. And then we have a misrepresentation about how good that call really was. Followed by a misleading "percentage gained" analysis of how good those less-than-advertised gains really were.

    Posted by Adam at 1:27 PM

    Labels: Voldemort


    gaamblor said...

    great post

    plus none of these went out anywhere near the strike, i assume he explained this in detail somewhere....HA
    1:32 AM
    Adam said...


    yeah, i'm sure he explained it, lol.

    >> I have to say folks I was screaming about the beverage and breakfast buys at the time. Just no one stands up to him and calls out his sh*t. If you follow him you are in CSCO & GOOG and no other tech. His best of breed excuse is just a way to less original research. What a sham. ~ stoney