Discussion in 'Trading' started by gr8trader, Mar 16, 2005.

  1. All of the following is opinion and speculation.

    I believe GM longs, who have sold their stock in the last seven weeks or so, have been had. As I explained in the post above, GM seemed to be stage managing the release of bad news. Some of that news had been known for a long time (retirement and medical obligations). In think GM must have had contact with this multi-billionaire auto investor who was beginning to accumulate a stake in the stock. If so, how does GM management treat the existing investor? Stage manage bad news so that existing GM shareholders dump the stock at discounted prices to their new pal. Kerkorian would then be able to finish accumulating his stake with the objective of eventually making today's announcement. GM short sellers, put buyers, bond traders, and others may have also been deceived by management.

    The next relevant thing to watch for is Kerkorian's age. I believe the average life span in this country is 74. Kerkorian turns 88 early next month.
    #31     May 4, 2005
  2. funny how none of the GM bears have posted today...
    #32     May 4, 2005
  3. The post I quoted above was written over a month ago. Those who've recently lost money in GM on the short side, may wish to further explore these topics.
    #33     May 4, 2005

    I really need to get into the reverse conversions game.
    Free money for the taking, putting on reverse conversions here. (Short GM stock, long synthetic).
    #34     May 4, 2005
  5. Reardon,

    If you feel like posting an actual example of the trade -- I haven't done a reverse conversion before though I will look it up in McMillian later on -- that would be cool. Love to understand how it works.

    #35     May 4, 2005
  6. pismo10


    Short stock, long calls, short puts. When and how much is the dividend?
    #36     May 4, 2005
  7. There are many strikes eligible for the reverse conversion play, but I'll provide just one example:

    Short GM at 32.07
    Short GM May 32.50 puts at 1.85
    Long GM May 32.50 calls at 0.65

    Locked in profit is $77 per hundred shares, realized in just 2 1/2 weeks.
    #37     May 4, 2005
  8. Many thanks. Something to think about this afternoon.
    #38     May 4, 2005
  9. "Didn't Chrysler get a big investor just before its products got good, and while everyone was worried about its future viability? I've kept an eye on car magazines for 15 years or so. GM products are finally getting good. Not ad-driven hype like Saturn (which may have been OK), but really better in fit-and-finish, and "sweating the details." "

    gm products are not getting good if my experience is any indication. i bought a new gm truck 6 months ago. so far its been in the shop 4 times and the last time was for 2 full weeks. its still not fixed and needs to go back again.
    i have been a gm man for 30+ years now. this one is my last. i tried a new toyota truck this time and it was very nice but i stuck with gm again. not next time.
    #39     May 4, 2005
  10. pismo10


    50 cent div, record around 5/9 pay around 6/10, got to work that in. That will take $50 of your $77.
    #40     May 4, 2005