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In my case, I was short ahead of Q4 2010 earnings at about $190 through puts, so I got crushed by expiration. I wonder if I had sold the shares short at $190, would I have had the stones to ride it to $298 and back down. Probably not, although in the scheme of things the amount of time I would have had to hold was not so long (nine months).
Because it's hard to hold a short position, I think the most important thing to have before shorting is a catalyst. In the case of HPQ, as soon as they announced the Hurd firing, the play was short, and you would have made good money in short order.
With NFLX, as soon as they announced the new pricing schemes, that was the time to sell shares.
I failed to consider that although Tilson's analysis was very sound, there was no near-term catalyst. Basically, I "bet" on an earnings disappointment. Whenever I "bet," I almost always guess wrong.
As long as they stay out in front and manage to offer a free account option with advertising at the same time that the competition comes out with it, they'll stay way ahead. Their position in the market makes it really easy for them to stay competitive. Customer momentum is still on their side.
When the depression comes in full swing, netflix will be gaining customers while satellite tv and cable companies go bankrupt.
The past two years I've gotten killed more than once being bearish on NFLX, only to have them keep the frenzy going with yet another miracle quarter.
Looking back, I see now they were a perfect candidate for repeated Put back spreads. I avoid putting on back spreads when volatility is high -- but, I failed to consider that NFLX's volatility was relatively low --before they tanked.
Netflix
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How many people are going to short Netflix? I can see it coming already.
It already came.
Sold to open Puts and bought to open Puts at different times on NFLX. It gapped up above the 20 DMA today then closed down just a little after trending quite a bit lower in between, so it looks like I missed a short entry point today. Not to mention it's already down big after market. Missed the boat already. I'd say it's a risky entry right now, until a small pullback occurs within a general downtrend; quick reversals can make blood shoot out of your eyes - not for me right now.
Sold to open Puts and bought to open Puts at different times on NFLX. It gapped up above the 20 DMA today then closed down just a little after trending quite a bit lower in between, so it looks like I missed a short entry point today. Not to mention it's already down big after market. Missed the boat already. I'd say it's a risky entry right now, until a small pullback occurs within a general downtrend; quick reversals can make blood shoot out of your eyes - not for me right now.
78 premarket. Would you hold or sell a Nov 19 105 put this afternoon?
I am short the 90 put into the earnings. Ouch! At least I am long the 85 put. It hurts but I will survive
As a company, I'm very bullish on Netlix. I've always liked them, but never liked the stock price, and so I never bought any. They're a good recession stock since they provide a very cheap entertainment alternative. I wouldn't hold it or touch it right now given the technicals and recent news, but over the next few weeks...
Whitney Tilson must be hatin' life right now.
If only he'd stuck by his conviction.
If only he'd stuck by his conviction.
Reed Hastings must have set himself up to profit considerably if the company tanks, or he's an idiot. They've been making bad move after bad move for the last couple of months. I understand they're trying to stay ahead of their competition and who knows maybe it pays off in the long run. All I gotta say is I'm glad I got out when I did. I didn't sell at the high but I still made a profit. I may look to get back in at some point but not now and not for as long as I did before. Held it for almost a year....
Too range bound today. Dusts off overbought signals, til just now. Guess a hold it is, see if it floats lower with the SPY.
he is going long - http://blogs.wsj.com/overheard/2011/10/25/tilson-buys-netflix-on-tuesdays-crash/incubus said: Whitney Tilson must be hatin' life right now.
If only he'd stuck by his conviction.
Whitney Tilson's long NFLX now.
I guess it's a value at -75% from it's all time high....I guess.
I guess it's a value at -75% from it's all time high....I guess.
Irrational investor behavior is not the fault of management. Granted, Qwikster was a stupid idea. Their separate service and price increase has cost them 3% of customers - big deal - that's to be expected. The stock dropped because it was ridiculously priced, not because of bad management.Carlton Banks said: Reed Hastings must have set himself up to profit considerably if the company tanks, or he's an idiot. They've been making bad move after bad move for the last couple of months. I understand they're trying to stay ahead of their competition and who knows maybe it pays off in the long run. All I gotta say is I'm glad I got out when I did. I didn't sell at the high but I still made a profit. I may look to get back in at some point but not now and not for as long as I did before. Held it for almost a year....
Maybe he's not satisfied with the size of his NFLX tax write-off. Following Whitney cost me a few $$ back in February. I can't see going long here when they will have negative earnings the next few quarters.incubus said: Whitney Tilson's long NFLX now.
I guess it's a value at -75% from it's all time high....I guess.
MP, it was Hastings who psyched Whitney out of the short.
I find a bit of ironic solace to learn Whitney's human, if only I had a dime for every time I was psyched out of a trade I was sure about...all to look back in angry disgust.
As for NFLX right now, the only question to gauge a rebound, what does NFLX offer that no one else can come to market with?
The answer, I suspect, means Tilson might get burned the other way around.
I find a bit of ironic solace to learn Whitney's human, if only I had a dime for every time I was psyched out of a trade I was sure about...all to look back in angry disgust.
As for NFLX right now, the only question to gauge a rebound, what does NFLX offer that no one else can come to market with?
The answer, I suspect, means Tilson might get burned the other way around.
I would agree. While his argument for being short was fundamentally sound, any argument for being long seems iffy after the last few months. Could he simply be trying to get some of his money back, like a burned gambler? Amazing how intelligent people can make dumb decisions.incubus said: The answer, I suspect, means Tilson might get burned the other way around.
In my case, I was short ahead of Q4 2010 earnings at about $190 through puts, so I got crushed by expiration. I wonder if I had sold the shares short at $190, would I have had the stones to ride it to $298 and back down. Probably not, although in the scheme of things the amount of time I would have had to hold was not so long (nine months).
Because it's hard to hold a short position, I think the most important thing to have before shorting is a catalyst. In the case of HPQ, as soon as they announced the Hurd firing, the play was short, and you would have made good money in short order.
With NFLX, as soon as they announced the new pricing schemes, that was the time to sell shares.
I failed to consider that although Tilson's analysis was very sound, there was no near-term catalyst. Basically, I "bet" on an earnings disappointment. Whenever I "bet," I almost always guess wrong.
25 million accounts that contain a massive amount of market data about people's likes and dislikes. My netflix account knows what I've seen and haven't seen, as well as how much I liked them. I don't even remember that, but it's nice to have the reference so that I don't waste time watching what I've already seen, or decided not to watch long ago.incubus said:
As for NFLX right now, the only question to gauge a rebound, what does NFLX offer that no one else can come to market with?
As long as they stay out in front and manage to offer a free account option with advertising at the same time that the competition comes out with it, they'll stay way ahead. Their position in the market makes it really easy for them to stay competitive. Customer momentum is still on their side.
When the depression comes in full swing, netflix will be gaining customers while satellite tv and cable companies go bankrupt.
Agreed , ill be buying a lot of netflex soon as well , streaming is the future and netflex is simply guilty of being ahead of its time , they will report a poor first quarter in which after their move to the European market is in place , i am a buyer around that time .stoicathos said: As a company, I'm very bullish on Netlix. I've always liked them, but never liked the stock price, and so I never bought any. They're a good recession stock since they provide a very cheap entertainment alternative. I wouldn't hold it or touch it right now given the technicals and recent news, but over the next few weeks...
The past two years I've gotten killed more than once being bearish on NFLX, only to have them keep the frenzy going with yet another miracle quarter.
Looking back, I see now they were a perfect candidate for repeated Put back spreads. I avoid putting on back spreads when volatility is high -- but, I failed to consider that NFLX's volatility was relatively low --before they tanked.
I am not going to try forecast the future for NFLX. All I know is that volatility was really high yesterday, and I expected that to drop, so I put on some Iron Condors. My only regret today is that I didn't put on anymore than I did.
B&H - i had similar thoughts and the market expected $18 - 19 move. Options were mispriced and it blew through my short 90/85 put spreads
Ouch, OF. I didn't place any trades until after the carnage, fortunately.
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