MIAMI HERALD ENDORSES KERRY
Last night, electoral-vote.com had it 253-247 Kerry, with Florida up for grabs and New Mexico going to Bush. But we are going to win Florida, so it becomes 280-247 (you need 270 to win). And we are going to win New Mexico. (The poll shows it 47-46-3 Bush-Kerry-Nader. I believe the good people of New Mexico who support Nader will ultimately vote to avoid a repeat of 2000. And, as with the rest of the swing states, I don’t think the polling adequately reflects the new registrations, or the turn-out of ‘unlikely’ Democratic voters.) So that makes 285-242 for Kerry, with Iowa and New Hampshire exactly tied and several other states well within striking distance.
TUITION OR RETIREMENT
Presumably, one would save for one’s kids educations before saving for retirement, because, well, ‘first things first’ (and because we love our kids more than anything). But the estimable Less Antman has better advice. From his latest newsletter, which anyone interested in personal finance should subscribe to, free:
You come first. Make sure your retirement accounts are funded to the extent possible before saving for college. Not only do you not do your kids any favors if they have to worry about you during your later years, but college loans are virtually always available at very low rates (retirement loans are harder to come by: when were you planning to pay them back?).
I first plugged Google in this space four years ago and last year wrote a column saying that Google is everything. Google rules. Google wins! And it is and it does. I could not live without it. It has made my life better and our world more productive.
But what is it worth? It came public August 19 at $85 a share and jumped by the end of the day to $100 (which was a truer reflection of supply and demand, because Google had purposely picked a price at which only 74% of the orders were fulfilled, leaving demand for more and the likelihood of a nice first-day bounce). It closed trading Friday at $144, giving the entire enterprise a valuation of $39 billion.
What has happened to make the company 44% more valuable than it was at the close of trading 60 days earlier? It’s not as if this was a little-noticed public offering people are only now discovering. I don’t think any public offering has ever attracted more attention.
One might actually argue that it was all that attention, and a certain backlash – especially from traditional Wall Street, that had been shut out of the normal underwriting fees – that had talked the initial price down from where it might have been had Goldman Sachs, say, brought it to market.
But here’s my point. Whatever Google is worth, there might be some employees and insiders wanting to sell shares to buy a Porsche or a house or a plane. According to Yahoo, 38.5 million shares will be freed from lockup 90 days from the day of the offering – November 19, by my rough calculation – and another 177 million shares 90 days after that (February 19 or so) . . . with some more in between . . . which is why, not meaning to be a Googapuss, and perfectly prepared to lose my entire bet, which one so often does when one speculates with options, I bought some March 155 Google puts Friday afternoon.
I paid $2,270 for each one, giving me the right to sell 100 shares of Google at 155 any time between now and March and then, if I have a profit on the deal, split it with Uncle Sam as a short term gain. If the stock is above $155 by then (or even just $155), my puts will expire worthless. (What value is there in the right to sell something for $155 that anybody can sell for $155?) If Google is unchanged at $144, the right to sell 100 shares at $155 will be worth $1,100, or about half my $2,270 bet. And if it’s $132, I break even. But if it’s $95, each of my $2,270 puts is worth $6,000 (before tax).
Not a way to get rich by any means. And there are two reasons for you not to do it:
- You could lose.
- You could win.
Either outcome is bad, the first for obvious reasons, the second because it might well whet your interest and get you playing with puts and calls on a regular basis. Over the long run, if you do that, you are almost sure to lose, because options are a less-than-zero-sum game. Meaning that for each dollar won there is a dollar lost . . . but there are also commissions and taxes, so for each dollar won there is more than a dollar lost. With stocks, by contrast, everyone can, in theory, win, as profits are earned, dividends paid, and values grow.
Suggested here last November 25 at around $4 when the stock was just above 20, Apple’s long-term calls (known as LEAPS) are now $25, with the stock at 45. Stupidly, foolishly, and reprehensibly, I suggested selling half at the end of March, for little more than a double, suggesting that you would be then be playing “with the house’s money” with the rest. And later, when the LEAPS had tripled, I suggested perhaps selling a like number of out-of-the-money calls to make for what would have been a likely quadruple while you waited for the LEAPS to go long-term. So you may not have enjoyed any profit from AAPL’s latest jump. But if you do still hold some of the LEAPS, you again face a choice: grab your sextuple here and pay short-term capital gains tax thereon . . . or hang on a few more weeks until your LEAPS go long term. I think I’d do that but then sell – not because I doubt Apple has bright future, but because I think the “easy money” has been made, and that at 45, Apple’s exciting prospects may be reasonably well factored into the price. (That is to say: I have no clue where the stock is going, but I wouldn’t want to press my luck.)
From Earl Smith to the Southwest Florida News-Press: The debate that is currently being waged over John Kerry’s reference to Vice President Cheney’s daughter as a lesbian brings sadness to my heart. Mary Cheney is a hard working young lady who is openly gay. She had worked for the Coors Brewing Company for many years as the liaison to the gay and lesbian community. It was her father who first made reference to having a gay daughter on the campaign trail. I am sad because it appears that Mary’s mother and father are still embarrassed that their daughter is gay. And I understand that, since a huge contingency of Republicans demonize gay Americans calling them evil, sinners and deviants.
These misguided and mean-spirited feelings result in thousands of young gay men and women taking their lives every year. I know firsthand the pain that coming to terms with ones sexuality can bring. In 1967 I married. In 1969 I attempted suicide because of my inner conflict. I knew I was gay, but I didn’t know how to live with it.
I am compelled at this time to share this private part of my life. For over 30 years I have been a steadfast Republican, and I have never voted for a Democrat at the National level. This year I can not support my president for many reasons. not the least of which is his pandering to those who demonize me and other gay Americans. Shame on you, Mr. President. ###
From the estimable Alan Light to the Washington Times: Your editorial “Kerry’s Cheap Shot” was off the mark. Look, Mary Cheney is in her thirties. She’s public about her sexuality. It was brought up in the vice-presidential debate. Mary has made a career of doing gay outreach, first as a gay community liaison for Coors Brewing Company and then for Republicans in various capacities. She served on the board of the Republican Unity Coalition, a gay-straight alliance to increase tolerance within the party for gays and lesbians. She currently makes over $100,000 a year as the head of her father’s campaign team.
All John Kerry said to President Bush was “I think if you were to talk to Dick Cheney’s daughter, who is a lesbian, she would tell you that she’s being who she was, she’s being who she was born as.” This made the point that sexual orientation crosses political lines, and should not be made into a cultural wedge issue.
Lynne Cheney is some parent. She’s silent when Republicans attack gays and lesbians, but outraged when a Democrat speaks of her daughter respectfully. This strikes me as political grandstanding – fake outrage to deflect attention away from the failures of George W. Bush, something Republicans constantly try to do. ###
(The Washington Times will not print the word ‘gay’, so in each instance it was replaced with ‘homosexual’ . . . and ‘Mary” was changed to ‘Miss Cheney’ . . . and it was sterilized in a couple of other ways, but the essence of it remained).
Tomorrow: Orwell, Orwell, Orwell
Quote of the Day
That I'm their competition.~Famed hedge fund manager Michael Steinhardt, when asked the most important thing an investor could learn from him.
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