(This may be an advanced topic.)
Most of the time, the Black-Scholes model will come very close to the “correct” price of an option (whatever it is). Fundamentally, how the Black-Scholes model works is this:
Advertisements
My investing shortcuts/heuristics
A list of shortcuts I use when screening/sifting through stocks and stock ideas.
Advant-E (ADVC) quick update
It looks like the arbitrage trade discussed previously is off the table.
DAYTON, Ohio, Dec. 13, 2012 /PRNewswire/ – Advant-e Corporation (OTCQB: ADVC) today announced that its Board of Directors has determined that it is in the best interest of the Company and its shareholders to abandon its reverse and forward stock splits announced on November 5, 2012.
This action is being taken due to the timing of the special dividend announced on December 12, 2012, delays in obtaining regulatory review and approval, and other factors. The Company remains committed to the voluntary suspension of its public reporting obligations, which it intends to achieve as soon as practical.
Walter Isaacson’s biography of Steve Jobs
Some key points are:
- Steve Jobs is a real asshole (e.g. he would unnecessarily insult and put down his employees)… it doesn’t seem to have hurt his success too much.
- Jobs is obsessed with great design and making amazing products that are the intersection of great design and technology.
- He worked hard to attract A players and to weed out the “bozos”.
- Jobs would push people to do the unimaginable. Sometimes they would do things that they wouldn’t think were possible. Of course, this doesn’t work all the time.
- He is obsessed with perfection… even for details that consumers wouldn’t see. The robots making Apple/Next computers had to be beautiful… along with the interior of the case and how the circuit boards are laid out.
Portfolio Update Nov. 30 2012
Queenston Mining (QMI.TO) – closed at a profit
Sold Queenston Mining at $5.27ish for a nice profit. Osisko announced a takeover of Queenston (0.611 Osisko shares for every Queenston share). I sold because it seemed to me that Queenston was close to fair value. At this point in time, a competing bid seems unlikely to me. One reason is that Osisko’s bid has a non-solicitation clause that Queenston management agreed to. Agnico Eagle Mines, which has a strategic investment in Queenston, will not be bidding on Queenston as it struck a deal with Osisko.
Sam Walton: Made in America (Walmart)
Walmart is one of the best performing stocks of all time. Sam Walton’s stake in the company made him the world’s richest person. I enjoyed his book as it gives a good historical perspective on the sector and has some useful business insights.
Books from Starbucks’ CEO
Howard Schultz (Starbucks’ CEO) has written two books: Pour Your Heart Into It and Onward.
From reading/skimming through the books, here’s my take on why Starbucks is successful.
Starbucks’ competitive advantage
It is clear that Schultz is downright obsessive about quality. Schultz has traveled the world and knew that other countries were doing coffee far better than the US when he got into the business.
- The product. Schultz has always insisted on using the highest quality beans and never sacrificing quality by using slightly inferior beans. Starbucks invests a lot of money into figuring out how to deliver the best product. They have in-house employees to source the best beans from around the world, develop the best roasting methods, and to develop the best blends.
- Theatre. Preparing the coffee is like a sacred ritual. The care and craftsmanship in producing each cup of coffee adds to the experience.
- People. Starbucks pays attention to the human interaction between the barista and the customer. Schultz hated espresso machines that were too tall since the barista couldn’t make eye contact with the customer while preparing the drink. He also works towards having baristas that know their customers.
