Buying VMI on Weakness

Buying VMI on Weakness

By Dr. Paul Price of Market Shadows 

We took advantage of a five-day pullback and added 28 shares of Valmont Industries (VMI) to our Virtual Value Portfolio late today.

Our cash reserves and open positions now reflect this new addition to our portfolio. See full details here. 

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Here are comments that were previously made, added to this new post:

To Paul from Brian:

Why would you choose not to add to the March 14 135 PUT for $7 (bid price. Mark is $8.4 if we could get that) at this point? With the current PUT you have, in the worst case scenario the basis could be lowered to $128.40.

Or do you mainly want to take advantage of the dip?

Thanks,
Brian M

To Brian from Paul:

This portfolio is strictly a [virtual] long-only, stock and cash account.
I missed getting shares of VMI in this portfolio when it came down about a month ago. I did not want to miss a second chance to own the shares outright.

Market Shadows’ Put Selling portfolio already is short one contract for the VMI March expiration date. Exposure to two contracts would make us too unbalanced versus our other put positions due to VMI’s high absolute share price.

 

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