I sold one January 2013 strike 90 TLT put. It paid 364 dollars after commissions. It is covered by some of the TLT shorts that I have, equivalent to 300 shares. I therefore limit, for 100 shares, my short gain down to a TLT value of 90. I think that it is quite probable that before that date interest rates will increase, specially the 30 year treasury rates, making the TLT ETF fall from current levels. I still leave the door open to short a couple of puts more, so in case TLT falls enough, I will either close the shorts or sell more puts, possibly at lower strikes.
Most of the week I have been reading Human Action, Ludwig Von Mises main work on economics. It’s one of the deepest thinkers I have read about, much deeper than Keynes. My understanding on economics has been substantially increased, specially on subjects such as: private property, investments, the power of capitalism and division of labor, sovereign debt, the effects of credit expansion or contraction, booms and depressions, international trade, monetary policy, gold standard and the lack of it, interventionism, banking, and interest rates.
I now feel much more confident on macro economic issues and realize how generalized is the ignorance on that subject. One of the reasons I am studying Von Mises is precisely to understand monetary policy, sovereign debt, banking, and its effects on growth or depression inflation and interest rates. It gives me much more confidence and a workable knowledge base to take actions such as shorting treasury bonds or how to better time the buying and selling of stocks taking into account the macro scenario.
I was quite pleased to see the resilience of Google’s business model and its amazing internal growth and sales due to multiple growth drivers such as emerging markets, continuous shift to online advertising, you tube, new formats such as target interest ads, mobile (Android), google+, chrome and display advertising.
I am a slightly disappointed that the market recovered since I have not deployed as much cash into new investments or increased my current positions as much as I would have liked to, but on the other hand I would not be surprised if the volatility remains and the market takes more and bigger hits in which case I have quite a clear idea of what stocks I should buy. But if the market does not fall it would not be bad anyways :), at least I am more invested now than a few months ago.