Well what fun it’s been. After my new position catapulted 5%+ on the first day of entry, BAS has spent the time since grinding lower, making me feel like a fool.
It culminated in today’s movement, as a report that BAS has a large position of put options that would absolutely love nothing more than to see lower prices resulted in people sending BAS to lower prices.
Why is it that “people buying put options” can be a big flashy negative title, when we all know “people writing call options” would never fly??
At any rate, BAS, with its 20% short position and extreme cheapness, is heading lower.
I have thought long and hard about whether or not I should hear the warnings of one “Po Pimp”. I generally think his assessment, as written inside The PPT – that BAS is heading for lower margins and volumes of business – is completely accurate.
However, where I stand my ground is that, even after impairing the company’s revenues, and accounting for impact of leverage, and fixed expenses, and all that hoopla, …the firm is still pretty cheap.
Very bad outcomes seem to result in BAS being fairly priced where it is right now.
Anything less would suggest a value buy here.
So, it looks like I’m going to hold out (ugh, I didn’t want this to turn into another CCJ).
I will be looking, should a correction continue, to crush shorts or buy up cheap call options.
Holdings: 25% (and rising percentage…) cash, AEC, CLP, CCJ, BAS, and physical silver