Wonderful Wednesday – And We’re Up 300 Points Since Friday Because?

Image result for stock market rally 1929What a rally!  

I just finished our November Portfolio Reviews and our Long-Term and Short-Term paired portfolios are just shy of their 40% goal for the year but our more aggressive Options Opportunity Portfolio, which we trade over at Seeking Alpha, has gained another 100% in 2017, now up 233.8% in just over two years (we begain on 8/8/15 with $100,000).  If the market keeps going the way it is, we have no doubt we can add another $100,000 over the next 12 months.  This is how, thanks to Trump, the rich are getting much, much richer.

Even more ridiculous is are the gains on our Money Talk Portfolio, which was initiated to track the calls we made live on that show, including our Trade of the Year on Wheaton Prescious Metals (WPM) which started the year as WPM but that didn't stop our net $2,000 entry on the spread from gaining $8,425 and that's only "on track" to our expected $23,000 gain by next January (2019), so it's still good for a new trade from here, with $14,575 left to gain over the next 12 months – that's still 173% up from the current $8,425.

Of course, a mere 173% return is not enough to make it our 2018 Trade of the Year, where we aim to get 300-500% returns on the net cash of our spreads (there are also margin requirements) – and we have NEVER yet missed one of those.  At the moment, contenders for our 2018 Trade of the Year include Macy's (M), Chesapeak Energy (CHK), Cleveland-Cliffs (CLF), Chipotle (CMG) and Hanesbrands (HBI) – all of which we are already in from our recent Portfolio Review but can still make fantastic new trades.  We were going to go with Limited Brands (LB), but they already popped and got away from us (well not us, but before we got a chance to announce the trade though it is, of course, on our OOP, LTP and Money Talk Portfolios). 

The best thing about the Money Talk Portfolio though, is that we haven't touched those trades at all since announcing them on the air – 3 of them on Sept 6th, in fact.  Those 3 trades…
continue reading

Philstockworld November Portfolio Review

Image result for one million dollars animated gif$2,121,342! 

Not bad for the 4th anniversary of our primary portfolios.  We began this lesson on November 26th of 2013 and allocated $500,000 to our Long-Term Portfolio and $100,000 to our Short-Term Portfolio with the intention of demonstrating our balanced, paired portfolio tactics over time.  Now, 4 years later, we're up $1,521,342 (253%), which is right at the top of our 40% annual compounded gains we can expect from this strategy when it goes very well.  

You can't double up in a year playing a hedged strategy like this because we're constantly betting against ourselves but by "Being the House – NOT the Gambler", we are able to CONSISTENTLY make 20-40% returns and, in this non-stop bull market – it's been more like 40%.  Well, a bit under 40% as $600,000 at 40% compounded for 3 years would be $2.3M but that's my fault, not the system's – as we got so close to goal back in October that I put the brakes on and shifted to a more neutral stance and, in our last review, we "only" made $14,565 for the month and, since last month, we've "only" made another $12,867 – it's like it's hardly worth getting up in the morning, right?  

 

 

 

 

 

 

 

Short-Term Portfolio Review (STP) - Submitted on 2017/11/14 at 12:46 pm:  $422,970 is up 323% but that's down 7.7% since our last review on 10/19.  That's mostly because I had forgotten an SCO trade we put in the OOP AND the STP and that's a big loser as oil moved badly against it and it was a November call.  Even with oil dropping another $1.25 this morning – not enough to save it.

Otherwise, the rest of the positions are doing their job but I do want to adjust our hedges.  Keep in mind, most of these adjustments are not urgent, make sure you get a good price above all else.  

FAS – Expensive leftovers from an old spread


continue reading

Temperature Tantrum Tuesday – Planet Earth Attacks Trump’s Properties

Image result for trump climate change20-50 years.  

Not hundreds of years, not even 100 years but "20-50 years" is how long we have before the oceans are 3 feet higher than they are today.  New studies of Pine Island Bay in Antartica have cause climate scientists (the 97% that say Global Warming is real and actually happening) to drastically revise their estimate of how quickly this planet is headint towards catastrophe.  

The glaciers of Pine Island Bay are two of the largest and fastest-melting in Antarctica. Together, they act as a plug holding back enough ice to pour 11 feet of sea-level rise into the world’s oceans — an amount that would submerge every coastal city on the planet.  Minute-by-minute, huge skyscraper-sized shards of ice cliffs crumble into the sea, as tall as the Statue of Liberty and as deep underwater as the height of the Empire State Building.  

“Ice is only so strong, so it will collapse if these cliffs reach a certain height,” explains Kristin Poinar, a glaciologist at NASA’s Goddard Space Flight Center. “We need to know how fast it’s going to happen.”

In the past few years, scientists have identified marine ice-cliff instability as a feedback loop that could kickstart the disintegration of the entire West Antarctic ice sheet this century — much more quickly than previously thought.

  • Three feet of sea-level rise would be bad, leading to more frequent flooding of U.S. cities such as New Orleans, Houston, New York, and Miami. Pacific Island nations, like the Marshall Islands, would lose most of their territory. Unfortunately, it now seems like three feet is possible only under the rosiest of scenarios.
  • At six feet, though, around 12 million people in the United States would be displaced, and the world’s most vulnerable megacities, like Shanghai, Mumbai, and Ho Chi Minh City, could be wiped off the map.
  • At 11 feet, land currently inhabited by hundreds of millions of people worldwide would wind up underwater. South Florida would be largely uninhabitable; floods on the scale of Hurricane Sandy would strike twice a month in New York and New Jersey, as the tug of the moon alone would be enough to send tidewaters into homes


continue reading

Monday Market Movement – Dead Week Ahead

Why are you here? 

I told you it was going to be a pointless, slow week.  You need to take advantage of these things and take vacations.  Surely you didn't become a trader so you could be chained to a desk all day, right?  Get out there and have some fun, the market will still be here when you come back.  

We took a quick $338 per contract profit off the table already on our oil shorts and that's a nice $3,380 on 10 contracts to fly us down to Florida and have a big old turkey dinner with the family and THAT is why I like being a trader – just a little bit of work for a lot of reward (after putting in years and years of hard work and practice, though).  Still, the point is you have to learn to enjoy yourself, that's why our tag-line is: "High Finance for Real People – Fun and Profits."  If you're not having any fun – what good are the profits? 

Related imageAs I noted in our Portfolio Reviews last week, we're trying to emphasize the LONG-term investing strategies.  Futures trades like the one above are fun but they are a lot more fun when you KNOW you have a good collection of stocks working for you 24/7 to keep new money pouring in.  In the case of our Long-Term Portfolio (LTP), we're collecting $50,000 a year in dividends alone and we just added another dozen big dividend-paying stocks to our Watch List.  

Our Portfolios have been pretty much locked in neutral since October, with only our Buttefly Portfolio putting up big returns because it's already self-hedging and doesn't really care whether the market goes up, down or sideways.  If I had to trade just one strategy the rest of my life – that would be the one I'd pick (though I'd be SO bored!).  Boredom is why we play the Futures.  Good trading is BORING – it's supposed to be boring as you grind out steady, consistent gains.  If your tading is exciting, you are probably doing it wrong…

One of our Memberships at PSW is our Top Trade Alert and we've sent out 6 Alerts in the
continue reading

Fearless Friday – Markets Head into the Holidays at All-Time Highs

Image result for winter vacation cartoonNext week is nonsense

In the US, Thanksgiving is Thursday and the markets are closed and many people take the whole week off and almost everyone is in vacation mode by Wednesday and Friday (a half-day on Wall Street) is a total joke for those who show up – often the lowest volume day of the year.  So we don't expect much action next week and certainly not a move higher and then, after Thanksgiving it's Christmas time and then New Years so let's just meet back here on Jan 2nd and see where things are, OK? 

We've been reviewing our porfolios in our Live Member Chat Room and we're well-locked in neutral already with very little gained in the past month but that's OK, as the market has made very little gains in the past months.  In fact, our last Portfolio Review was October 28th and the S&P closed that Friday at 2,581 and, this morning, we're at 2,585 so – happy holidays – see you in Januray!  

If you do insist on hanging around, you can expect more of the same in December – unless the Trump Tax Plan fails to pass the Senate, then we are likely to break below the range.  At the moment, as we've discussed before, most people are holding their equities (including us) into next year, so we can take our profits when the taxes are lower.  If no one is willing to sell (and take high-tax profits), then the new buyers are forced to offer higher prices and the market does drift higher but the low volumes indicate it may be very hard to find buyers once people do want to cash in their gains. 

There are good strategies for locking in gains and I'll tell you a few.  Apple, for example, is at $171 and let's say you bought 1,000 shares for $120 ($120,000) and you have a $51,000 gain.  If you take that gain now, you will be taxed, for example, 38.5% ($19,635) but if you wait and next year you pay just 25% ($12,750) you are saving almost $7,000.  So your 1,000 shares of AAPL would have to fall more than $7 (4%) for it to be…
continue reading

$450M Thursday – A Least It’s a Nice Frame

Image result for Salvator Mundi.$450,000,000!  

That's a lot of money to spend on a painting and yet another justification for my daughter to go to art school!  It just goes to show you how rich the rich are gettin as the previous record for a painting at auction was $300M for Kooning's "Interchange" 2 years ago and this painting was previously purchased in 2013 for "only" $127.5M – how's that for inflation?  So, on this trajectory, we're only a few years away from the first Billion-Dollar painting – just in time for Madeline to graduate with her art degree!  

The buyer is mystery but look for a guy with a 26" space on his wall – that's probably him.  That's right, this is a pretty small painting but it is cool that it was painted by DaVinci 500 years ago though how they prove that, I can't say.  There was a VanGough that went for "only" $81.3M that I liked better – and it's more in my price range.

This is an indicator of how drastic income inequality is becomming in the US.  There was a roomful of people yesterday, bidding hundreds of Millions of Dollars on a painting while their pet Congresspeople are screaming to the cameras that these art lovers need massive tax breaks in order to "create jobs".  In order to give the art lovers these tax breaks, we have to give up our nacent universal health insurance, we have to cut Medicare, cut Student Loan Funding and cut Farm Subsides – all while taking on $1,500,000,000,000 in additional debt (minimum), which is enough money to buy 3,000 more paintings!  

Going long Sothebey's (BID) might be the best way to play along at home because all this money we, The People are scrificing is going to just 3M of our fellow citizens in the Top 1% and this chart is old as they now control 50% of the wealth in this country – and guess where they took the other 10% from?

wealth3

That extra blob of green on the chart is what was cut off from the top of the top 90% and it belongs to the Top 97, 98 and 99th percentiles and yes, a
continue reading

Will We Hold It Wednesday – NYSE 12,250 Edition

Aren't you glad we're hedged? 

Just yesterday, in our Morning Report, we gave you an example of our Members' Portfolio Hedges we use at PhilStockWorld.  Later in the day, in our Live Member Chat Room, we made some aggressive adjustments to our main hedges in the Short-Term Portfolio Review and tightened up some covers in our Butterfly Portfolio Review.  I don't know if this week's pullback is the sign of things to come – I just know I sleep a lot better knowing we are well-hedged if things do turn sharply south.  

The big line to watch at the moment is 12,250 on the NYSE and we finished the Day just 30 points above that 50-day moving average.  Looking at the position of the MACD line (lower part of the chart) compared to the last time we crossed under the 50 dma (Aug 9th), it would now be surprising if the Senior Index doesn't drop 100 points below that line – at least.  Already this morning we're seeing some early weakness, but perhaps that's just because North Korea has declared that Trump deservs the death penalty and is calling Trump a coward for cancelling a visit to the inter-Korean border.

Or perhaps the markets are down this morning because the GOP Senate has, for some insane reason, decided to wrap up the Trump Tax Plan in a Bill to Kill Obamacare – now putting two very unpopular measures on the same bill.  We fought hard to stop this insanity back in July and here we go again (see: "Trump Orders GOP to Kill Over 4,000 People Per Month").   I know Trump's Asia trip was a disaster, but he doesn't have to come home and take it out on the poor, does he?

If they fail (and God help us all if they don't), Republicans will enter the midterm election year with their message muddled, without a victory on tax reform, and having spent a year's worth of time trying and repeatedly failing to dismantle Obamacare with nothing to show for it but bad headlines. 

The Republicans want to use the $338Bn it costs to cover the uninsured ($33Bn/yr) to hand out bigger tax breaks to Billionairs – like Trump!  4M people will lose health
continue reading

Triple Toppy Tuesday – Nasdaq Finally Finds a Level it can’t Break Over

6,325.  

Who'd have thought THAT was going to be where the Nasdaq finally had enough?  Actually, the Nasdaq (QQQ) did hit 6,350 on Nov 8th but, before that and since that, it's been getting stuck at 6,325.  6,345 would make more sense, as that's our 17.5% line on the Big Chart off our base of 5,400 we consolidated at last Spring. 

The initial run topped out at 5,800, which was up 7.5%, so another 10% run since then with a pause at 6,000 makes 6,300 the 5% Rule™ and watch that line because, below that, there's really no suport until 6,000.

Apple (AAPL) of course often distorts moves in the Nasdaq as that one stock is over 15% of the index and AAPL has ramped up 10% in two weeks which, by itself, adds 1.5% (94.5 points) to the Nasdaq.  So, without AAPL's strong support, the Nasdaq would already be on the way down and, of course, what Apple giveth, Apple can taketh away – so watch out for any negative signs on that stock.

AAPL busted out of its channel and, deservedly so, as they made more money than the entire Automotive Industry combined.  Or Airlines or Retail, for that matter.  Apple may be part of the Retail Sector but they are nothing like a retailer with their 35% sales margins, constant crowds and absolutely no discounting.  Make your own high-quality stuff, offer great service and people will come is something 1,000 other retailers can't seem to figure out.  

Something traders can's seem to figure out is how easy it is to make money playing Apple bullishly.  Apple is the biggest position in our Options Opportunity Portfolio and our trade will pay us $180,000 if AAPL is over $170 next January, so we're well ahead of schedule.  What's the current price?  $49,350.  

At the moment, we're "in trouble" with our short Nov $145 calls but we can roll them along to 30 of the the Jan $155 calls at $20.40 ($61,200) and it's still only a 1/2 cover and we can kill the short 2019 $130 puts at $3.63 ($7,260) and sell 20 of the 2020 $150 puts for $13 ($26,000) so there's another $22,140 in…
continue reading

Monday Market Melt-Down Continues With GE’s 50% Dividend Cut

Related imageGE is restructuring.  

We knew that already and discussed GE in depth (we're still bullish) in this weekend's 2018 Watch List Update, where we identified (so far) a dozen dividend-paying stocks we consider good buys at the current levels, which will become compelling buys if they pull back a bit more with the market.

And the market is pulling back with the Nikkei giving up 1.4% and Europe down almost a full point as Brexit Talks seem like they are failing and our Futures are, so far, down about a quarter point and indicating lower but it's Monday – so anything can happen and it won't mean anything if it does.  I've only got 16 Mondays left until I quit in March (Mondays, not the whole week) so I'm enjoying my last ones before my 20% retirement party. 

Over in Asia, despite still being 40% below their 2007 bubble highs, Chinese stocks are not doing the heavy-lifting required to catch up to the rest of the World, which is right back at the bubble highs.  There was the strong rally of 2015 but that ended in disaster but China has spent many Trillions of Dollars on various stimulus packages over the past two years, and that hasn't helped either.  China has now switched strategies and is ENCOURAGING foreign investors to buy Chinese stocks – that might not end well…  

Polish nationalists light flares during an independence-day march organized by a nationalist youth league, the National Radical Camp, in Warsaw on Saturday. Speaking of things that aren't ending well:  In addtion to Brexit Talks once again breaking down, Europe is a little concerned with "tens of thousands" of White Nationalists marching on Warsaw for the Independence Day Celebration.  While the thousands of torches may have had a festive look and while "Fatherland" is certainly a catchy tune, the new battle cry of the Polish Fascists comes from Donald Trump's July Speech in Warsaw: "We want God," while calling for the extermination of Jews and Muslims


continue reading

PhilStockWorld 2017 Watch List Update – Rolling into 2018

Related imageIt's very important to have a Watch List.

I like to have about 24 stocks I keep a close eye on so that, when something happens and they go on sale, I'm ready, willing and able to pull the trigger in an instant.  We just did that this week when Macy's (M) announced their earnings and we thought they were just what we wanted yet the market sold them off after the opening pop.  That gave us a window to act and, because we follow M closely – we KNEW it was time to act and I issued a Top Trade Alert, identifying it as our top contender for Stock of the Year for 2018 (replacing LB, another retailer who has already flown higher).  

We issued our 2017 Watch List back in March and in May we picked 13 out of 24 for action, including M as well as BMY, ESRX (still cheap), FCX, GE (cheaper), GILD, LB, PSA (still cheap), QCOM, TGT, GCI, FMCC and SEE (still cheap).  So, out of 13 picks we had been watching and pulled the trigger on, 10 are winners, 2 are flat and one (GE) is down and the one that's down is the one we like most at the moment.  Our "too early" entry on GE was:

GE (3/5) – Forever $30 but talk about a safe place to park your money!  They even pay a 3.2% dividend (0.89) while you wait for something to happen – and it won't.  GE is a $262Bn company that pays no taxes ($464M refund last year on $9Bn in earnings!) and has tons of money overseas – what's not to love?  Even better, you can sell the 2019 $28 puts for $2.50 and use that free money to buy the $25 ($6.10)/30 ($3.05) bull call spread for $3.05 and that's net 0.55 on the $5 spread for a near 10-bagger if GE simply holds $30.  There's anothe interesting way to play this one and that's to effecively buy it by selling the 2019 $32 calls for $4.40 for a net $27.60 entry and then buy the $28 calls ($4.20) for a net 0.20 credit and then just sell 1/2 of the April $30s (0.75).  That way, you are collecting 0.375 per long and each time you collect $1.70 (4-5 quarters)


continue reading