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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: MIRU who wrote (188392)1/28/2015 7:45:49 AM
From: Ed Ajootian  Read Replies (1) of 206326
 
MIRU -- you seem to be looking at this stuff too simplistically IMO. There may be a good reason that a stock is showing better relative strength than another right now, one which could foreshadow further price appreciation for such stock. I can't wait to see what CHK ends up doing with its massive cash hoard. Given that they've had it over a month now without announcing anything about it, they have apparently decided against paying down a material amount of debt with it (and only a small amount of their debt can be paid down right now without incurring significant prepayment penalties anyway). They will certainly need some of it to cover their likely shortfall of cash flow vs. cap ex over the next year or 2, but I doubt that would account for more than a couple of $B at the very most. And then we have the massive short interest in the stock -- about 11% of the float. Lastly, we have a stock whose chart appears to me to have formed a nice double-bottom (although it would have been better if the second bottom was higher than the first). Where's John Haley when I need him the most? <g>

CC -- thanks for your thoughts, very helpful. I always thought the further-dated options would have a sufficient amount of additional time value to make it more preferable to sell those vs. the closer-dated ones but I guess I thought wrong.
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