Mr Al Young Dot Com

In recent days Apple stock(AAPL) has touched upon its 52 weeks high of over $275 a share largely due the huge demand for its new 4G Iphone.  I have been bullish on AAPL for some time now along with many others.  I think it still has fuel to even higher, but buying more AAPL at these levels is a problem for many investors.  First at $270 a share its too expensive for many investors.  When they say too expensive it often means two things.  First, the stock price has gone up too far and too fast meaning it could just as easily fall very quickly to “correct” itself.  The second barrier investors have to buying at these levels is the price of the stock.  Investors often look at the number of shares they can buy rather than the price.  At these levels they cannot buy many shares.  Just a hundred shares would cost an investor $27,000.  But what if you could buy AAPL for $11.50 instead of $270.  Now AAPL is a bargain instead of expensive.  Can you buy AAPL for $11.50?  Yes you can using an option strategy called the LEAP Bull spread.

First some definitions.  An option is a contract to buy but not an obligation to purchase or sell a stock at a certain price within a certain time.  This strategy involves the buying and selling of options contact.  A LEAPS option are just longer term options.  Regular option contracts have a short time frame of a few months but LEAP options can go out over several years giving the investor the advantage of having more time to be right on the trade.  An option spread means you are buying and selling two different call options.  You buy one option at a lower strike price and at the same time sell the other option at a higher strike price to lower your cost.

To illustrate how this trade would work, I will show you a paper trade I made in April on AAPL.  Its a paper trade because I did not actually make the trade with my money, only on paper.  I now wish I did, but once you understand it you can use it on any expensive priced stock that you are bullish on such as AAPL or Google.

In April 2010 AAPL was trading at $242 the 52 week high at the time.  All the buzz was on Ipad sales.  I was bullish on AAPL and thought it could go much higher based upon its existing product sales and the release of the 4G Iphone.  I continue to believe that $300 by the end of the year is possible.

Instead of buying a few shares at $242 I wanted to buy AAPL at a much cheaper price.  I looked to the January options thinking that with strong Iphone sales and holiday sales, the 4th quarter would be particularly strong for AAPL.  If so I believe AAPL stock could go much higher by January 2011.

Based upon that belief here is the trade that I could have made to buy AAPl for $11.50 in April of 2010 when the stock was trading at $242.

• Buy the January call for Apple 2011 $260 calls for $21 per contract.
• Sell the January call For Apple 2011 $300 calls for $9.50 per contract.
• Net Cost: $11.50(excluding commissions)

Each option contract is for 100 shares.  The end result is that you risk much less money upfront than you would have by buying the shares outright.  If the stock continues to rise as I believe you could make three times or more on your investment while risking just 5% of the current share price.

The downside of such a trade is that your option contract could expire worthless if they are out of the money when the contract expires in January 2011.  You could lose your entire $11.50.  LEAP options gives more time than regular options, in this case 9 months, but you do not have the luxury of holding on for several years if AAPL tanks.  In reality you will probably not lose your entire $11.50.  If conditions change for AAPL and it looks like you will not be profitable on this trade you can bail out and sell your contract at any time before the expiration date and cut your losses.  The most you can lose on this trade is $11.50 but likely less than that.

If we were to close our position today(6/25/10) on this trade by selling our January 2011 $260 call here is what our profit would be.

• Sell the January $260 call for $36
• Less cost of $11.50
• Profit = $24.50 or 313% in 3 months

Not a bad profit for 3 months and it could even be more profitable, but as I said it was only a paper trade for me.  AAPL rose from $242 but it is a very volatile stock and it gave me several chance to make this trade over the last 3 months.  Sadly I passed upon it each time.  I am still bullish on AAPL at $270 just as I was at $242.  You can use this strategy to buy AAPL for a fraction of its current stock price.  You just need to create an option spread at different price levels and the time frame you are comfortable with.  I also believe that the stock price will give you an opportunity to enter at a more favorable price.

This post is for educational and entertainment purposes only.  The above information is not to be taken as an actual stock recommendation.

Another one of kids has reached another milestone in their life. My middle child Mia has graduated from Kindergarten. Where has the time gone? Mia has proven to be a achiever as she begins her academic career. Here are some pictures from her big day.

BFFs Mia Y. and Mia V.

Its been quite awhile since I posted on the blog. So many things in my head but not time to put it on the blog. It would be impossible to catch up with everything now but I will do my best with pictures. It can’t cover everything but it will give you an idea of what I have been up to for all these months.

In order to save money dining out, our favorite option is to use discount restaurant gift certificates from restaurant.com. Currently they are running a sale on gift certificates, 90% off. $25 gift certificates are only $1. They run sales from time to time but it does not get any better than this. I am sure you will find a new restaurant to try or even find a old favorite. Here is one of our favorite which is even better at a steep discount, Forbes Mills Steakhouse in Danville.  Follow the banner to purchase your gift certificates thru September 13 and use the discount code: Ninety

Even better than discount food is free food. If you have kids you know how frustrating it is to dine out with kids only to have them not eat their food which you paid good money for. Fortunately you can find free food for you kids almost any day of the week at a variety of restaurants. See the websites below to find free food for your children. On a recent “boys weekend” my son and I found several restaurants where he was able to eat for free. One drawback is that it is not such a good deal if your child is a heavy eater. You can only get free food from the child’s menu which is not enough for my growing seven year old boy, so I have to order him another entree. So instead of a free child’s meal I end up only getting a free child’s appetizer. For most kids it should be enough food for them. FYI: Kids eat free at Hooters on Sunday although we decided against trying it. That’s our story and we are sticking to it.

101 Restaurants Where Kids Eat Free

Kids Meal Deals

Where did the summer go? It seemed like school just ended and now its starting again. With any new school year comes apprehension and excitement. The new school year comes with anticipation of new classmates, teachers, and this year a new principal. This school year is particularly exciting with my daughter Mia entering Kindergarten and my son Marcus entering second grade. I have some observations from the first day of school.

1. Kids are getting smaller: I don’t know if its due to bad diet or poor air quality but kids these days are tiny in size. My kids were big babies and are now only average in height and weight, about the 75 percentile. However compared to their classmates they are giants, particularly in Kindergarten.

2. Some Moms are too involved in their child’s education: In my circle of Mom friends a few Moms are very active in their child’s academic lives.  Nothing wrong with being an involved parent but I think there is a point of being too involved. I know many Moms who push to get their child into certain teachers class or in a class with certain friends in an attempt to make their child’s academic life easier.  I think by doing deprives a child from learning an important life lesson which is how to “deal with it”.  There are always going to be teachers and students you may not get along with and your mother is not always going to be there to fix things.  You just need to learn how to deal with it.

Here are some pictures from the first day of school.

Staycation is a term you may be hearing a lot of lately.  A staycation is a vacation in which you stay at home or close to home instead of going on a long trip.  With the current economy many families are opting to stay close to home instead of a big family vacation.  I have noticed that many of the local attractions are especially busy this summer with more families spending more time locally.

I got to experience not 1 but 2 staycations in the last few weeks.  Not only was it a staycation but the best of staycations.  A staycation without kids.  Thanks to my gracious in laws who took my kids across the country to Florida for a week we got to experience a staycation at home while the kids took a real vacation.  A win-win for everyone…except for my in laws.

Work demands kept us at home during this time but we did get to experience simple pleasures such as sleeping in and having a quiet home.  We also got to see a movie at the theater not once but twice. Christine enjoyed unhurried shopping trips and dinner with the girls.  I was able to read quietly at home and watch my shows on TV.   We enjoyed finding a few new local restaurants and a nice leisurely dinner with old friends.  Even though we did not get to go away during this time, it was very relaxing and the time went by very quickly.

Amazingly after a week in Florida my in laws took the kids for another trip to Yosemite for 5 days.  By now we are getting used to the time alone and the quietness of the house but all things must come to an end.  The kids will soon be back and we are finally starting to miss them.  Staycation 2009 was sweet while it lasted but with baby # 3 on the way I don’t expect another staycation without kids for quite some time.

Have been real busy and have not blogged in awhile.  More to come, but here some pictures from our summer so far.

Tea Party With Grandma and Zoe-Notice the matching outfits

More Pump it Up Parties

Gilroy Gardens

Alameda County Fair

This blog post represents a milestone for this blog.  It is post # 200 since I started blogging in February of 2007.  Thanks to all my loyal readers who have followed my inconsistent blogging over the last few years.  This blog has been inconsistent in both frequency of posting and content.  It is ironic that the things I blog most frequently about such as work and family take up most of my time and prevents me from blogging more frequently.  While I think I am a decent writer I am not good enough of a writer to be able to blog quickly and coherently.  It takes me awhile to get my ideas and thoughts out.  Hopefully with practice I can blog faster as well as write better.  The topics on this blog carries a wide range of areas.  Things I think are interesting vary greatly over the years.  Thanks for putting up with the randomness of my blogging.  Keeping with the tradition of randomness on this blog I will talk about my trip to Children’s Fairlyland in Oakland on this blogging milestone.

Children’s Fairlyland is located on the shores of  Lake Merritt in Oakland.  It is a children’s literature theme park for little kids and ideal for young kids under the age of 5.  There are rides and puppet shows for the kids to enjoy.  Last week I accompanied my daughter Mia’s preschool class to Fairlyland.  It was her preshcool’s end of the year field trip.  Fairlyland has been in Oakland since the 1950’s and I remember going many times when I was young.  Of course it seemed a lot bigger back than.  The rides seemed huge when I went in my youth.  Now the park seems really small.  Even at a slow pace you can cover the entire park in about 45 minutes.

Going back to Fairlyland made me nostalgic for my early years of life.  Not only did it bring back memories for me, it was also fun to see Fairlyland thru the eyes of my daughter.  To her it was a big deal and it was a big deal for her to have me there with her.  Besides bringing back fond memories for me it was a little sad because it would be quite awhile before I would be able to experience Fairlyland again.  You see, Fairlyland is only for very young kids.  I think 2-3 years is about the perfect age.  Even at the age of 5 the kids are a little old for Fairlyland.  Sure, they had fun but they will outgrow Fairlyland real fast.  So with Mia ready to go to Kindergarten I was ready to say goodbye to preschool days and Fairlyand for good.  Or so I thought.

It turns out that there will be more preschool and Fairlyland days for me in the future.  If you have not figured out the point of all this….We are expecting baby # 3. No I’m not kidding.  It is not a publicity stunt to liven up post #200.  I only wish.  While I have known about this for awhile now, it has taken me some time to get over the shock and to be able to write about it.  For awhile I had no thoughts on it, just feeling numb.

I am now getting used to the idea and my other kids are getting excited which is causing me to be more excited.  Thanks to all the other friends who have encouraged me by saying things like “3 is the new 2″ and “Going from 2 to 3 is an easy transition”.  Even though they are well meaning, “3 is the new 2″ makes no sense at all.  I believe the old saying “Misery enjoys company” applies in this case and they are excited to have a new member in their club.  So I will be joining my friend Norm in the expectant father club.

Even though this will be my third child I feel like a first time Dad like Norm. That is because it has been nearly 6 years since my last child.  Everything I knew about babies and young children I had deleted from my memory because I thought I would not have to use that information again.  What I do remember about babies has been filed under “trivia” in my brain in case I am asked baby questions on a game show.  So I have to relearn everything.  I don’t remember how the strollers or car seats work.  I have to find that book on a 1001 baby names.  Maybe I’ll just skip the names and go to a numbering system and just call this one “3″.

So it looks like I will be back in preschool and Fairlyland in a few years.  But before that diapers and potty training all that stuff I don’t quite remember about.  But I will soon.  So that’s my big announcement to mark 200 posts and over 2 years of blogging.  At least I will now have more material to blog about, but will I have the energy or time to do so?  Pray for me us.

This blog is approaching a milestone.  The next post will be number 200.  I started this blog in February of 2007 not knowing if it is something I would continue with.  Despite infrequent posting the blog continues to exist.  It took over 2 years to reach the magic 200 post which means I have not always had time or enough thoughts to share regularly.  Despite that I have a small but dedicated group of readers who have encouraged me to keep blogging and paid me some nice compliments so I am encouraged to keep blogging knowing a few people are reading.

The blog has evolved over the last 200 posts.  In the beginning I shared my thoughts on investments and business, but soon ran out of things to talk about.  So I started sharing more random topics such as family stories and pictures.  Some of you enjoyed that.  Sometimes I ranted about something that was bothering me.  When you have a blog you can use that as an outlet to vent.  Other times I just talked about what I had for dinner.  Some of you enjoyed that, but this blog was never meant to be all things to all people.  Rather it was just a creative outlet for me since I can’t sing, draw or dance.  I think I can write a little and over the years hopefully my writing skills have improved and a few people are entertained.

Thanks for continuing to follow my rather random blog and I appreciate your kind comments.  Not only has my blog evolved the world of blogging has also evolved.  Blogs such as mine are still random thoughts by random people, but blogging has becoming an acceptable media outlet.  Often breaking news are delivered by blogs or on Twitter just as often as they are on the television news or newspaper.  There has never been any breaking news on this blog or even anything that interesting.  However for my 200th post I will be sharing some exciting news, or an announcement I guess to commenerate this blogging milestone.  I will be making post #200 this Friday June 5th.  See if you can guess what my announcement will be.  I may give out a prize to be determined to whoever can guess correctly.  Of course I may disqualify any guesses if I deem it unfair because well its my blog.  Stay tuned for post #200.