Sometimes it pays to be the contrarian turning to the "dark side" of the market short selling heavy into an American company betting on its demise. Anyhow beyond the poetics, I have always searched the "seemingly" quote on quote profitable American oil frackers' for the Big Short . And now we have a very well known hedge fund manager calling out the bluff in these companies, which in my opinion are highly unprofitable. Piling on massive amounts of "cheap debt" while virtually being unable to produce positive cash flow, and as noted by Greenlight Capital's David Einhorn "the 16 top oil frackers have spent more than $300 billion drilling holes since 2006, but none has generated positive cash flow, not even when oil was at $100 a barrel." ..... These companies bring to mind all the experiences Wall Street has had when they start releasing massive amounts of cheap debt to companies / Main St and everybody buys in euphoria (umm MBS? hehe) ... It historically ends badly.
Beyond all the talk I'm looking to enter short with LEAP puts at a higher price and hold until price is below $100 / share. Looking to reduce a very small portion of the position, roughly 5% around $120 / share.
Note: Do keep in mind that this trade is 95% Fundamental and roughly 5% technical for entry. The risk in this trade is time (decay) vs. price movement.
Cheers =)
Beyond all the talk I'm looking to enter short with LEAP puts at a higher price and hold until price is below $100 / share. Looking to reduce a very small portion of the position, roughly 5% around $120 / share.
Note: Do keep in mind that this trade is 95% Fundamental and roughly 5% technical for entry. The risk in this trade is time (decay) vs. price movement.
Cheers =)