BY ANDREW GIOVINAZZI
September 17, 2024
Yo Pit Crazies,
If you want a new angle on investing with options, give this a try on Thursday right before football.
Did you know before Nvidia Corp (Ticker: NVDA) went on its historic run that it was down 60% for the year? NVDA was trading $35 pre-split and bottomed around $!4 in 2022. Yes, it was a terrible year. The outlook for tech was horrible but NVDA kept chugging along. Then like a phoenix from the ashes, and with the help of AI pixie dust, NVDA rallied over the next 2 years to 10x the 2022 lows. 1000% in 2 years it is almost impossible to believe. But it happens.
NVDA 4 Year chart with daily candles.
What changed? Market sentiment and market potential changed as every big tech firm gobbled up what NVDA was selling and they are still doing it. NVDA was still profitable even during the downswing but profitability did slow down some. The market just reacted to the earnings it saw.
There are good lessons here.
Here is one.
SATS is on a moonshot
One idea for investing is to find stocks that are good companies and buy them when no one wants them in the early days of a turnaround. Ecostar Corp (Ticker: SATS) is the old Echostar/DISH merger company run by Charlie Ergen and they have been the loser in the cord cutting game with revenues declining. They also own a lot of cellular spectrum. Uncle Sam is 3 years into getting high speed internet to rural communities when of course the market has already solved this with satellites.
They also deliver satellite cable and internet that is a competitor to Elon Musk’s, Starlink. With the FCC coming down hard on Starlink for some hard to fathom reason, SATS is looking better. So is Verizon Inc (Ticker; VZ) and ATT Inc (Ticker: T). I liked SATS in the mid teens but there is so much volatility in the stock the opportunity might go by as stock keeps ripping.
Note below that the option volatilities are riding with the stock price, which is usually more of a sign the stock is nearer the end of the rally then the beginning as folks jump on the speculative fervor.
2 year SATS 30 and 60 day IV.
The reality is SATS doubled in 9 months from the lows.
There is more to the story and I will talk about it Thursday. In the meantime, telecom is having a day.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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