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When The Luck of The Irish Needs a Tune-Up (ORLY)

Posted on July 12, 2021

A quick word on our profit calculations, about which we’ve caught some guff on a couple of occasions of late.

The Problem:

When you open a trade for a credit, how do you measure your return?

That is, if I give you $100 on Monday morning (when you open the trade), and an additional $100 on Friday morning (when you close it) – you’ve made $200 without risking a thing.

But what’s your return?

That is, what’s your percentage gain on the trade?

Normally, your return is the calculated by figuring the total earned, less the cost of the trade, all divided by the cost of the trade.  Like this –

Total Earned – Amount Spent

Amount Spent

That gives you a percentage figure for any investment.

But what to do when there’s no ‘Amount Spent’?

The Solution:

We at A Jew and His Money, being lovers of the Holy One Blessed be He (and the chosen geniuses that we are), figured the following to be the most honest means of solving the conundrum –

We simply add a minimum commission of $15 to all such trades to give us an ‘Amount Spent’ figure.

That’s it.

And in many cases that will be a lot more than what’s charged to online traders with accounts at Robinhood (and numerous other platforms), where account-holders are given FREE options trades with no minimums.

But we had to come up with some figure.

We hope that helps those who were unhappy that we added $15 into the mix.

We simply couldn’t figure a better way of doing it.

But if you can, by all means, throw us a comment on the website, or write us at hughlohaynew@ajewandhismoney.com.

We’re always keen for your feedback.

Why Be Sad?

And now, on to today’s trade – may the Al-mighty be with us.

We’re bumper-to-bumper this morning with O’Reilly Automotive Inc. (NASDAQ:ORLY), purveyors of car parts for the 21st century vehicle that’s built to break down, rust, crack and just fizzle into dust after… what, maybe half a decade?

The business is a good one, and even better during periods when people have to hold on to their clunkers.

And that’s a good part of why ORLY stock has flown of late.

We’ll get to the chart in a moment, but first consider what Wall Street calls the company’s ‘fundamentals’ –

  • P/E is a reasonable 22.21, but
  • There is NO Dividend, and
  • There is NO P/B (because there’s NO book value, i.e., if the outfit was liquidated it would be worth bupkus), and
  • Insiders have sold 45.26% of their shares (!) over the last half year.

That last point is potentially important, because if all the O’Reilly’s (a number of whom are close friends from County Kilkenny, dontcha know…) are so keen to off their holdings – to the tune of some $80 million! – then who are we to be buyers?!

Hmm?

Now have a look at the chart –

Looks fine!

Ha Kadosh Baruch Hu Yachlit!

With kind regards,

Hugh L. O’Haynew

 

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