The hits just keep on coming.
When we left off in June, our Top Trades had 70 winners out of 91 trade ideas but 5 of those trade ideas were for Lumber Liquidators (yes, I liked them that much) and they are all winners now so our winning percentage has jumped to 75 of 91 (82%) – not bad! Of course, a few of the other losers have turned around too but LL was one I simply pounded the table on (which is why I picked them 5 times) so I will move those to the win column. For the rest – wherever we are when we do our review (usually 2 or 3 months later) is where we mark it.
Our June review took us to the end of April, for example, where we had 16 winners and only two losers but one of those losers was a Chevron (CVX) short, who subsequently took a nice dive and the other was SuperValue, which was a 2018 $3/5 bull call spread with short $5 puts and we bought 20 for $880 on March 3rd and, as of our June 5th review, they were $670, down $210 for our other loss of the period.
Now SVU is back at $5.36 and the spread is $1.25 and the short puts are $1 so net $25 x 20 contracts is $500 – still a loser (worse, actually) but what a great trade as all SVU has to do is hold $5 through Jan 2018 and the trade returns $4,000 – that would be a $3,500 gain from here (700%), so still great as a new trade!
That's why it pays to read our Portfolio Review section over at Philstockworld – many hidden gems there – especially in our "losing" trades – rare though they may be! That's because we're FUNDAMENTAL investors and, while the charts may go against us for some period of time, if we get the fundamentals right we know that, at some point, the market usually catches on to what we're seeing.