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Sold Apple Calls, Bought Index Put Spreads, Buffett Buys LMCA

After thinking about it when the stock was approaching $500 and passing, this morning I sold March $530 calls against about 20% of my Apple.  Just a few days ago I was looking at $525s for $8.  Today I sold $530s for almost $13 so delay helped me by$9.  Not sure abut the quick reversal in the last half hour but I would note it is was on a big volume surge.  The argument that Apple has to rest or pullback because it went parabolic is fine.  But keep in mind the company could earn $45 this calendar year and has over $100 in cash earning virtually nothing.  So that is $400 adjusted stock price against $45 or a P-E of just 10x.  The stock should have opened at $525 after the blowout December quarter was reported.  Nothing goes straight up but if Apple hits expectations the rest of they year I think the stock will surely have a $6 first digit at some point in the next 12 months.

A couple other items.  I bought put spreads on IWM and EFA yesterday afternoon before the final half hour surge.  My fund has had a huge month, enough that I wanted to buy some protection.  With vols down, puts are cheap protection.
Warren Buffett’s Berkshire Hathaway took a 1% stake in my long-time largest holding, Liberty Media (LMCA), according the new 13F fillings.  Greenpoint also took a stake.  Worth noting is that Buffett’s new lieutenant probably did the buy as he was into media and the TMT space at his hedge fund before joining BRK.  I timmed a bit of LMCA at $88 and was offering more at $90 and $92 but that would still leave it as my largest holding by more than 50% against #2 (Apple, Qualcomm, Comcast, Liberty Global, and CBS regularly change places in the battle for second).  LMCA owns 40% of SIRI which makes up about half of LMCA’s value.  25% more is Starz and the rest is various public and private assets including the Atlanta Braves, LYV, BKS, and a portfolio of media and telecom stocks.  I think NAV is around $110 with SIRI at $2.15 and John Malone knows how to further build and realize value.
Disclosure:  Positions mentioned above are held in the Entermedia Funds.  Steve Birenberg is co-portfolio manager of Entermedia, owns a stake in the Funds’ investment management company, and has personal monies invested in the Funds.  Apple, Qualcomm, CBS, and Liberty Media are widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg’s personal accounts.  Steve is sole proprietor of Northlake, a registered investment advisor.


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