Insurance Securitization and how it might affect cures to any fatal diseases

This post is big time speculation/prediction without any facts to back it up, really. This is, at this point of time, a flight of imagination on how conflicts of interest can develop for investors who invest in life insurance settlement policies etc.

Refer to this article on NY Times and then read comments (italics) below in context:


"Enter life settlement companies. Depending on various factors, they will pay 20 to 200 percent more than the surrender value an insurer would pay."
but this will obviously be much less than the policy benefit value. but the reporter does not even mention that.

Another quote: "That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet."
Using my complex math models, I can predict that investors in this class of assets will be against healthcare advances curing diseases like leukameia, cancer, etc - ie many fatal diseases. I think I will now repeat my comment: Welcome to a new class of private death panels, it used to be just insurers, but now wall st investors also join that group.

Performance Report

(click image to see full size) or link below to see chart on yahoo finance.

PERFORMANCE CHART OF SOME OF MY MAJOR PREDICTIONS FROM MAY 31 to AUG 31.

Except for HEB almost all other small caps have had more than 100% returns (also except of BMY of course)


http://finance.yahoo.com/echarts?s=HEB#chart2:symbol=heb;range=3m;compare=nvax+apt+medx+bcrx+ino+apwr+bmy;indicator=split+ke_it+volume+mfi+rsi;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined


Loss making stocks/bad trades: MENT (got out at wrong time, 3% loss), INO never got in, MEDX - got out too soon.

place only Limit price orders

Here is a good article on why even limit pricing orders does nt guarantee you to fair access to sellers's prices. But at least you will not be screwed over like in a 'market" order.
High Frequency Trading, Impact on 'slow traders'.

BMYcovered

BMY (bristol myers squibb) Covered calls strategy example.
If by some stroke of good luck you had bought BMY when it was trading at 19.21 (hypothetical example), i will explain here how you can make some money on regular basis by selling covered calls for higher strike price alongwith your usual dividend income also. (See wiki link at bottom for basic definition etc.)

All numbers hypothetical
BMY basis price: 19.20
No of shares = 800

Suppose you write covered calls for the $20 strike price (I usually recommend writing calls on a bullish day, early on in the options cycle, ie the first week after OPEX)

When you write a call at $20 you are guaranteeing delivery of the stock at a price of $20 at OPEX or anytime in between if called. In return you get the premium.

If you write 4 covered call contractss = you guarantee delivery of 400 shares (1 contract = 100 shares) at $20. The premium which you get (depending on the day etc.) would be the option price x 100 minus commissions.
The July BMY $20 call BMYGD.X has traded between 0.20 to 1.27. let us say you wrote the call on a day when the price was at 0.65. Then you get 0.65 X 100 X 4 =$260 (minus commission of 28+3) for the calls you write. YOU GET THIS MONEY into your account as cash.

Now if the stock stays at $20.01 or above on the third Friday of the month of July, your 400 BMY shares will be called out at the prevailing price, let us assume it is 20.01, and your 400 shares will be sold at 20.00 (a profit of 0.81 cents/share) minus sell commissions. If the prevailing price were 20.20 then they will still be sold at 20.00 so you "lose" as theoretical profit of 0.20 addl cents. If the stock had gone up to $25 (due to any reason), then you lose the $5.80 profit potential. So covered call is not a great strategy with super volatile stocks, imo.

But remember, you had already enjoyed a rental money of $260 on your 400 shares from the day you sell the calls. however you can still get that gain on your other 400 shares.

if the stock stays below 20, you dont do a thing you keep your stock and your 260 dollars.

RISKS: The risk is that if there is a catastrophic fall in price intra day anytime during the month, you cannot sell the shares UNTIl you close out your covered call by buying back calls (which will be at a lower price).

Anyways you can TEST strategies like these at OPTIONXPRESS using their VIRTUAL TRADING tool. You do need to create an account (no money needed, but only deal with occasional emails), and then you can practice this stuff.
UPDATE: Another free options but slightly complicated options simulator can be found here (courtesy RIGL board)

If you write calls on all 800 you make more rent plus you "lose" less on commissions. Option contract commissions vary, it is $7+ 0.75/contract with Scottrade. It is 4.50 + 0.50 /contract with ZECCO. Optionxpress has its commissions at 14.95 or 19.95. Others vary, but option commissions are kinda pricey.

Other References:
Wiki entry
Options Education
Daily Quotes of option prices (BMY)

HemispherX Annual Shareholder Meeting Update

HEB held its shareholder meeting yesterday in Philadelphia PA, USA. I didn't attend the meeting but followed it via a message board updates and then reviewed the press release today. Two things caught my eye there in the SEC filing...

One was this: As with last year's Annual Meeting of Stockholders, there was an extremely low turnout. The Company believes that this was due to the fact that more than 40% of its outstanding shares are held outside the United States

The other: The Company left the polls opened with regard to voting on the amendment of its certificate of incorporation to increase the number of authorized shares of Common Stock from 200,000,000 to 350,000,000 and adjourned the meeting solely with regard to this proposal until July 28, 2009 at 1:00 p.m. at the Embassy Suites Hotel, 1776 Benjamin Franklin Parkway, Philadelphia Pennsylvania 19103. The Company did this due to the extremely low vote turn out and the requirement that this proposal be approved by the holders of a majority of the outstanding shares, rather than just a majority of the shares present at the meeting. In fact, less than the requisite number of shares for approval of the proposal were present at the meeting. Obviously this is a good requirement and thankfully the BOD cannot wing through this without a full vote by majority shareholders. [SEC Filing] (smaller Press release).
Actually one other thing was this:

Adoption of our 2009 Equity Incentive Plan:

For: 10,688,703            Against: 3,166,098        Abstain: 569,495.
Fairly large no of people against and rightfully so in my personal opinion.
Shareholder rewards are not much yet so management/director rewards seem a
little high.

Anyhow, get ready for some wild action today and tomorrow. Or better yet, do not follow the ticker. Just hold - well that is my opinion anyway.