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The Buy List – 40 of the World’s Best Stock Values (Members Only)

INDU WEEKLYDon't you just love lists?   

Apparently, most American's do because the posts that get the most clicks are the ones with lists and quizzes.  I don't do lists very often yet, somehow, I still manage to be fairly popular but let's see what happens when I make a list with a catchy headline.

This list is an update of our original 2014 Buy List, which was written on June 6th and originlaly had 20 trade ideas for the 2nd half of the year.  That list quickly grew to 29 and, today, we're adding 11 more to make 40 top stock picks to take us into Q4.  Those first 29 picks are already  82% successful with only HOV, IRBT, RIG, TEX and WEN failing to make gains so far and, on average, we're up 72% on our picks in just 3 months.  

That's about par for the course with our winning percentages on trade ideas but what makes the Buy List special is that these are the ones we are comfortable committing long-term allocation blocks to, not just messing around with short-term trading.  In fact, our 5 "losers" all represent great entry opportunities at lower prices and none are being kicked off the list as our general outlook for these stocks is measured in years, not months!  

The strategy we are following is summed up nicely in this video:

As we did in building our Long-Term Portfolio, we're not going to rush in and buy everything.  We will do exactly what we did in January where, following our Fall Buy List, we simply added stocks from our list whenever they became cheap.  While our Members are able to pick up our trade ideas as they are released, we don't always add them to our virtual portfolios right away.  As with the first half's Long-Term Portfolio, we will track every entry and exit in both our Live Weekly Webcasts, as well as in our Live Member Chat Room and alerts will be sent to our subscribers (you can join here, Basic and Premium Members get full access).  

Our picks were originally grouped by industry sectors but, for reference purposes, I'm going to list them alphabetically below – these are the original trade ideas (the Webinar dates where we discussed our picks are next to the symbol), most are still playable but some have already taken off.  Keep in mind, the purpose of a Buy List is to always have a quick reference to find a good stock when you need to add one – these charts dynamically update for that reason:

ABX (5/28) we featured in our June 3rd post - obviously one I like.  If you don't want to buy the stock for $15.90 (and we NEVER pay retail at PSW!), then you can sell the 2016 $15 puts for $2.05, which obligates you buy the stock for net $12.95, which is 19% below the current price.  

If ABX stays over $15 through Jan 2016, the short puts expire worthless and you simply keep the $2.05 ($205 per 100-unit contract) in exchange for the promise you made – if ABX goes below $15, you may be assigned and own the stock at net $13.  Since the net margin on the short puts is just $2.28, the trade returns 90% on margin in 18 months – not a bad inflation hedge, is it?   

If you want to get more aggressive, you can add the 2016 $15/22 bull call spread for $2 and you still have a nickel credit but now you have an upside of every penny over $15 up to $22 with a potential return of $7.05 on your 0.05 cash outlay (+14,100%) if ABX gets back to $22 by Jan 2016.  Still playable and already in our Income Portfolio. 

AGNC (8/27) – NLY and CIM have gotten away and our 3rd favorite REIT is AGNC.  Same general concept as NLY and you simply have to believe the management will be able to weather the storm of rising rates.  AGNC pays a dividend of $2.60, which is 11.2% of the current price of $23.44.  No need to own the stock, you can just sell the 2016 $22 puts for $3 and you either own the stock for net $19 (19% off) or you essentially pocket the dividend you would have gotten in the first place. 

AKAM (5/20) is very tempting at $50.   Woops, that one is long-gone now but what a great bottom call!  

BRCM (5/20) is one we like to buy whenever they are not expensive.  They had a nice sell-off last year and we grabbed them at $25 but it doesn't look like that will happen again – now $30.23.  They only pay a .48 dividend (1.5%) so forget that and we can sell the 2016 $30 puts for $4.10 for a net $25.90 entry and leave it at that and, if they weren't already in the LTP (we sold the 2016 $25 puts for $3.10 when it was lower) I'd add it now.  (We cashed the LTP since then but those 2016 $25 puts are now 0.85 – up 72% in less than a month)

BTU (8/27) – Like ABX and FCX, they dominate their space and that gives them a lot of power and the ability to ride out dips better than most.  You have to believe that the World won't get off of coal as fast as some think (and that UN Report on Climate Change is now hanging over their heads) but I think $15 is a good floor and you can sell 2016 $15 puts for $2.10 for a net $12.90 entry, about 20% off and the $13/18 bull call spread is just $2.50 so net .40 on the $5 spread that's $3 in the money (650%) to start – not a bad gamble…

CAKE (8/27) – If anyone has ever been to one where there isn't a line, please speak up.  No?  OK then, that means they have pricing power in their pocket should they decide to use it (like CMG) but they are benefiting from falling food prices at the moment and dropping 6% to the bottom line.  

That means a 2.5% increase in prices (who would notice) can drop another 2% to the bottom line, boosting profits by 30%.  Management can do that whenever they need to and, best of all, they only have 184 restaurants, not even 3 per state – plenty of room to expand.  The April $44s are $3.30 and the $49s are $1.30 so a $5 spread that's 0.78 in the money for net $2 is nice enough and you can pair it with the sale of the $40 puts at $1.25 for net 0.75 on the $5 spread and worst case is you own them for net $40.75 (10% off)

CCJ (6/7) is down with uranuium as Japan has been slow to restart their nuclear program (depressing demand).  Over time it will bounce back and CCJ is very nice for a long-term accumulation at $19.21.  

They don't pay a dividend, so there's no reason to own them and you can sell the 2016 $15 puts for $1.30, which nets you in for $13.70, which is 28% off the current price.  Since $15 is 22% off the current price, you can be more aggressive and consider the $1.30 to be free money and add the 2016 $17/22 bull call spread at $2 and that makes the trade net .70 – but it's $2.21 in the money to start!  

CHK (8/29) - is beginning a triangle squeezy thingy between the 200 ($26) and 50 ($27) dmas and I can't see them being below $24 but I can easily see them in the $30s so I figure it's more likely to resolve up than down.  

We've got the Ukraine and nat gas is over $4 again so the time for this one is now, even though they might tick lower should things calm down.  The 2013 $25/32 bull call spread is $2.75 and you can sell the $23 puts for $2 to drop the net to 0.75 on the $7 spread that's $2 in the money to start but I'd just be happy with the bull spread for now and, if all goes well, it pays $4.25 (154%) and, if CHK goes lower, then we can sell the $20 puts (now $1) for $2+ and maybe use that money to roll the $25 calls (now $4.75) to the $20s (now $8).  

CIM (6/7) is a steady play at PSW.  It was one of our top 3 picks for 2013 at $2.86 and now, at $3.30, we still like them – mostly because they pay a juicy 0.36 dividend, which is 11% of the current price but even better after we're done giving ourselves a discount on the entry! 

On the right is my trade idea from last January's TV appearance on BNN and that net $1.96 entry is well on track to get called away next January for $2.50 (up .54) and, so far, we've collected 0.65 in dividends (there was a special bonus dividend in January).  Assuming we collect the June, October and December dividends for .27 before being called away at $2.50, our total return on $1.96 will be $3.42 – a 74.5% return on our investment in just two years.  

Now, perhaps, you can see why we love it so much!  CIM is not cheap at the moment so this one is a real watch and wait item – especially as they have not created 2016 option contracts on them yet.  We can, however, give ourselves a net $2.95 entry while we wait by selling the 2015 $3.30 puts for .35.  Even if we never end up owning the stock (if it stays over $3.30), we're still collecting almost the entire dividend amount against just 0.63 in margin.  That's a 55% return on margin between now and Dec (7 months).  

CLF (6/7) is another perennial favorite at PSW.  I just gave a whole lecture on why I still like them in Thursday's Live Webinar, so we can skip the fundamentals and just say "we like it."  This stock is never short on heartache and you need a cast-iron stomach to ride out the dips but below $18 is where we like them and now they are below $15 so – we like them more!  

That being said, we'd like them even more for $9.85 and we can sell the 2016 $13 puts for $3.15 and use that money to buy the $13/20 bull call spread at $2 for a net $1.15 credit and an $8.15 upside at $20, which would give us an 700% gain on cash if CLF can manage it's way back over $20 - that's good leverage!  ThinkorSwim tells me it needs $1,440 in margin for 10 of these so you get a net $1,150 credit and you start out $1,500 in the money (at $12.50) with the hopes of finishing with $8,150 in Jan 2016. 

This is how we like to grow our money.  On the downside, if CLF is below $13, we will be assigned 1,000 shares for a net cost of $11,850 ($11.85 per share) and then, since we like them long-term, we can sell long-term calls for another $2 to knock the basis down to $9.85 – but we'd cross that bridge if we come to it.   At the moment, the bears are piling on this one, so we're waiting but likely to step in soon.  

DBA (8/27) – Was a great trade for us early in the year because we caught it low and had the sense to get out when it went crazy.  Now it's back to a reasonable level (we came in around $25 last time) and once again we can go long on the assumption that this is roughly as low as food prices are likely to get.  The 2016 $24 puts can be sold for 0.80 and the $25/29 bull call spread is at $1.60, so net 0.80 on the $4 spread has a 300% upside potential and worst case is you own DBA at $24 (the dead low).

EBAY (5/20) still cheap (got 'em in our Income Portfolio).  As a new entry, we're waiting to see how low they can go.  They are down because Google has changed their search engine rules to de-emphasize the way Ebay (and other companies) list things.   This is our favorite kind of alarmist nonsense as Ebay has teams of very smart people who will adapt and survive and this is unlikely to be more than a blip for them.   

At the moment, I like selling the 2016 $45 puts for $4.10 as an initial net $40.90 entry (18% off the current price) – but I like waiting PATIENTLY even more.  If they cross back over $50 and hold it, that's a good signal to get in, but never underestimate the ability of idiot analysts to extrapolate a short trend into a long one and scare people out of a perfectly good stock!    

ED (6/3) is another boring utility stock near the bottom of it's range at $55.  This one pays a $2.52 dividend but also don't have 2016 contracts yet.  

You can sell their $55 calls for $2 and the $55 puts for $3 for net $50/52.50 with the same boring game plan but it's nice to have a few boring stocks in your portfolio.   This one almost got away but then thought better of it.  

EXC (8/29) - They just did a big dilution with 50M new shares issued, which was about 6% of the float and the dividend is $1.24 and I doubt they sold those shares to give back $60M in dividends so expect those to be lower along with earnings, of course, since the money they raised is for long-term projects.  So, down the road – sure it's a nice stock to be in but, short-term, I think the only reason they PAUSED going down is because they hit the 200 dma at $31 (yesterday).  

From $37 to $29.60 is 20% and 15% would be $31.45 so those are the lines to watch.  They didn't complete the 20% move but blew through 10% and slowed but made 15% and a bit lower so 20% still a good target but, at the moment, held up by the 200 dma.  Figure the $7.40 move would have the 20% bounce and that's $1.50(ish) to $31.10, so that's weak bounce support and another $1.50 is $32.60 and THAT is when they start to look like they are recovering.

EXC pays a nice 4% dividend, so that's worthwhile ($1.24/year) and we can buy the stock for $33.26 and sell the 2016 $32 puts and calls for $6.50 for net $26.76/29.38, which is a nice 13% off if assigned and 19.5% if called away at $32 plus the 4% dividend + 1% this year is 24.5% in exchange for promising to buy 2x of this stock for 13% off – nice work if you can get it!   

FCX (5/28) is right at the 200 dma at $33.75 and the 50 dma is going to move above the 200, which is very bullish if they hold $33.50 (and notice the nice bounce today).  

Long-term, people do use copper, so I like selling the 2016 $30 puts for $3.20 for a net $26.90 entry, which is 20% off the current price.  To me, that's just free money, since I'm happy to own FCX at $30.  So it makes a nice, bullish offset to a hedge.  If you want to be more aggressive, you can add the $30/37 bull call spread at $3.15, that has 122% of upside if FCX moves up just 10% by itself but, combined with the short puts, you net a .05 credit and make $7.05 (14,100% on cash) if FCX is at $37 in Jan 2016. 

They've popped a bit since our pick but only $1 so far.  As with all our picks, we prefer the ones that get cheaper.  

GSK (8/27) – Dividend just $1.04 (3.6%) for PFE vs $2.59 (5.3%) for GSK so GSK would have to be a lot worse than PFE to choose PFE and it's not.  $48.62 is an excellent price and you can lower it further by selling the 2016 $47 calls for $3.80 and the $43 puts for $2.30 for net $42.52/42.76, which is 12% off worst case not counting the expected 5 payments of .65, which is another 7.6% – not bad for 16 months.  Same goes for MRK, by the way – just doesn't make the relative cut. 

GLL (8/27) – I'm starting to like them again (as a short) because gold is back down to $1,285.  I'd rather catch a spike but we may not get another one to play.  

We can play gold to head higher by buying the April $87/77 bear put spread for $4.30 and those can be offset with short ABX 2016 $17 puts at $2 for net $2.30 on the $10 spread.

HK (8/27) –  is a nice, little E&P that we like to play when it's cheap.  Zacks likes them and couldn't even find a reason for them to be underperforming by so much this year.  

Last time we caught them at $3.50 though and that's not coming back but, at $5.62, we can sell the 2016 $5 puts for $1.30 and engineer a net $3.70 entry – it's like we didn't miss a thing!  cheeky

HMY (6/3) is another beaten-down miner (it often is) and it's back to where we liked it last year.  It's a good stock to play if you remember to get out when they go higher and don't let greed overwhelm you and make you forget why you got in (for a quick gain on a bounce).  

People don't like our long-term trades because they think they won't make quick money but, as you can see from our trade reviews, they often make fantastic money in short periods of time AND you have much better downside protection.  Making money with less stress is always a good thing.  The company will make .18 per share this year, not a bad p/e if we knock the price down.

At $2.60, you can just buy the stock and sell the 2016 $2 calls for $1 and the $2 puts for .35 for a net $1.25/1.63 entry and that's $1 off (38%) the current price – nothing wrong with that.  In fact, it's the best play but you COULD be super-aggressive and sell the $2 puts for .35 and buy the Jan $2/3 bull call spread for .45 and you're in for net .10 on the $1 spread that's 0.60 in the money (up 500% if it stays here) to start and your worst case is a reasonable net $2.10 entry (25% off). 

Let's not forget HOV (5/13) at $4.63.  They are a constant buy for us in large part BECAUSE we can sell the 2016 $4 calls for $1.40 and the $4 puts for .75, which drops the net to $2.48/3.24 and that's 30% off the current price as your WORST outcome! 

HPQ (8/25) is not cheap, per se.  At $38 they are fairly priced but we like the $3.73 earnings per $38 share (p/e 10), even if the growth is slow and the trick is that we don't have to pay $38 to benefit from this stock.  We can PLAN on owning the stock for net $29.60 (22% off) by selling the 2016 $32 puts for $2.40.  TOS says the net margin on the trade is $2.20, so it's a very efficient use of margin (setting some aside to bargain-shop).  

That's a fine entry and we can be happy with it or we can be more aggressive by adding the 2016 $32/40 bull call spread at $4 and then we are in the $8 spread for net $1.60 with no additional margin required and now our upside potential goes from 100% (on any finish over $32 with the short puts alone) to a potential 400% ($6.40 profit) if HPQ holds $38 or higher through Jan 2016.  

IBM (5/20) has been holding it's 200 dma at $182.50 and I like them here for a long.  I especially like that you can sell the 2016 $160 puts for $9 to net in at $151, because who doesn't want to own IBM for $151 (the 2011 low)?  So that makes a great bullish offset with a net $16 margin or you can be aggressive and add the 2016 $160/185 bull call spread at $14 for net $5 on the $25 spread that's $24.50 in the money to start.   Definitely one to add to our Buy List should it improve – if I wasn't very bearish at the moment, I'd add it today (probably 5 to own $82,500 of it long-term in one of our $500KPs)

Notice they dipped down to EXACTLY $182.50 and now are bouncing back.  In this particular case, we now look to see if it makes a strong or weak bounce, per our 5% Rule™.  Since the drop was from $200 (and yes, I know we didn't actually hit it, but it's the goal) then we take the $18 drop and call a weak bounce $3.60 to $185 (past it) and a strong bounce $188.50 (not an exact science) and we won't be too impressed until it crosses back over that line.  

IGT (5/13) confuses me.  They just had good earnings yet they are being treated like dirt because they are in the midst of restructuring.  We love it when we can take advantage of a situation by simply being more patient than the current investors!  

IGT does pay a .44 dividend and they have expensive options so perfect for a buy/write where we buy the stock for $12.57 and sell the 2016 $10 calls for $3.40 and the $13 puts for $2.80 for net $6.37/9.19 so our WORST case is owning 2x at $9.19, which is 27% off the current price and that makes the .44 dividend 7% while we wait to see if we get called away at $10 for another $3.63 (57%) and, of course, we need to be over $13 to realize the full profit.  

If IGT were put to us with the stock at $11, for example – we'd still be up $3.63 on the first batch (which still would have been called away at $10) and our new 1x position would be $9.37 less the .88 dividend we collected over 2 years.  Not bad for a bad outcome…

IRBT (5/13) is our Stock of the Century and I can't believe it's back to $33.15.  They don't have Leaps so we just grind the price down by selling Dec $30 calls for $6.60 and 30 puts for $3.45 to drive the net down to $23.10/26.55, which is a very nice, additional 20% discount.  I was right not to believe $33.15, though it did go a bit lower before recovering.  

ISRG (5/20) is one we always like when it's cheap and they're back at $364.40 and one of the best reasons to enter a bullish play is because you have a very obvious line at which to get out.  $350 is an obvious line.  The 200 dma is actually at $400 and the 50 dma, at $415 is going to death cross soon (unless ISRG rockets back over $400), so no hurry on this one but well worth watching.  2016 $300 puts are $28 for a net $272 entry and that's another 25% down from here.   This one is drifting up already – a very likely official play for next week.  

JDSU (5/20) got crushed on earnings but have held up well since.   They missed estimate AND lowered guidance but it's not their fault as the Telcos simply delayed spending on fiber last Q and – THE WEATHER!   This is kind of like when I put my foot down on ALU a couple of years ago – I don't care how bad they look now, these are the guys who wire up the internet and, eventually, there's a Trillion Dollars worth of fiber that needs to be laid around the World.  The 2016 $10 puts can be sold for $1.55 for net $8.45, which is 22% off the current $10.90 – it's a nice way to play them to start.

KBH (5/13) is the first builder I've liked since HOV (which I still love at $4.63).  Earnings were .41 vs -.76 last year's Q1 yet they are not being rewarded for it, probably because their debt/equity ratio is up near 4, but that's mostly because they wrote off most of their inventory, the debt itself is just $2.2Bn and serviceable under current cash flow.  When you buy a builder at this stage in the cycle – you are essentially giving your money to a professional to invest in housing.  

KBH is solid and, because they've taken massive losses in the past 5 years, it will be 5 years before they have to pay any taxes on earnings – that's nice too.  No dividend (.10) means no reason to own the stock and, because they look scary, we can sell the 2016 $13 puts for $1.60 and use that $1.60 to buy the $!5/25 bull call spread for $2.90 for net $1.30.  So we effectively own KBH for $16.30, which is what the stock cost now but, if it drops all the way below $13, we only have a net $14.30 cost if it's put to us.  So $2 of cushion for free and we make 100% of the upside between here and $25.  We can also potentially sell some short calls along the way if they move up a bit more.  

This one is on the move, another top candidate for next week.  

LGF (8/27) – Not cheap at $32.50 but growing really fast and all these companies competing for content and bidding up prices is great for people like LGF, who have 15,000 movies and currently air 30 TV shows including Nurse Jackie, Weeds, Mad Men… so they have their finger on what people like now – and their movies (Hunger Games, Ender's Game, Expendables) are pretty good too.  Movies are, however, a crazy business so it's good to go light and wait for the mistakes to go long.  Still, the volatility is assumed and you can sell 2016 $28 puts for $3 to generate a $25 entry – 23% off.

LULU (8/27) – Another big winner we wisely took off the table and here they are again at $41.50.  Same everything about the company but a lot more competition for yoga-wear but LULU is high-end and shouldn't be compared to other stores that are doing me-too stuff.   GPS is getting a lot of excitement for getting into this space (Athleta) but imagine yourself a yuppie housewife faced with the choice of going into a lovely, peaceful LULU store (only 250 in the World) or elbowing kids out of the way at the Gap and standing in line waiting to try things on – without even a free herbal tea.  Is that really worth saving a few bucks?   The 2016 $37.50/50 bull call spread is $5.40 and you can sell the $32.50 puts for $3 for net $2.40 on the $12.70 spread that's starting out $4 in the money – not bad.  This one is definitely going in.  

MAT (8/29) - Barbie sales down 6% ($1.2Bn) but American Girls is up 11% at $632M and other girl dolls are up 25% at $1.3Bn so more than making up for lost Barbie revenues.  Like AAPL, MAT is cannibalizing their own sales with new products – can't be helped as there's a finite amount of girls and money and, like AAPL, analysts don't bother looking at the broader story and focus on one click-getting headline to back their entire premise.  

MAT does have 2016s and they do pay a 4.3% dividend ($1.52) and they've been buying back 5% of their own stock this year and last so worth owning the actual stock at $34.50 and sell the 2016 $33 calls for $3.70 and the $30 puts for $2.05 for net $28.75/29.38, which is a 15% discount if put to you and a 15% profit if called away plus $1.90 of dividends is another 6.6% for 21.6% at $33 on round one.  

They are on the prowl to merge with NEM (5/28) and the deal is off at the moment but there's an expectation of $1Bn in synergistic savings per year (the idea is they would keep all the low-cost mines and sell off the rest), so it might come back to the table.  NEM is as out of favor as ABX at $22.41 and we can pick up the 2016 $20/25 bull call spread for $2.20 to net in at $22.20 and, if they get bought for $25 – it's a quick double! 

NLY (6/7) is another REIT favorite of ours and pays a lovely $1.20 dividend.  It's certainly not cheap at the moment but not terribly expensive either.  For an entry, we can't argue with selling the 2016 $12 puts for $2.35 to net in at $9.65 (17% off) because it pays more than the dividend (since we missed 2 quarters this year) over an 18-month hold.  

If we do get assigned, we get a cheap entry and, if they crack over $12, we could still buy the stock and sell the 2016 $12 calls (now .50) for perhaps 0.75 and then we'd be in the stock at net $8.90/10.45 and the anticipated $1.80 dividend would drop us to $7.10/9.55 so, either way we net a $9.55(ish) entry – it's just a question of whether we get 1x or 2x and we'd only be in 2x AFTER they break over $12.  Clever, isn't it?

NTAP (5/20) has earnings tomorrow (as we can see, in retrospect, they went well) and expectations have been lowered to the point where they seem a bit silly.  They beat by 3.5% last Q but gave crappy guidance but they've already laid people off and cut costs so, even if they miss this Q, I'll still like them later.  In this case, I'd just sell the 2016 $30 puts for $3.40 for a net $26.60 entry, which is 22% off the current price and, if they do miss and go down (but we think they'll come back) THEN we can add a bull call spread and, if not, then it's just fee money.  Let's sell 5 for $1,700 in the STP and we'll push it to the LTP if they fail.  Those puts are now $2.70 ($1,350) for a very quick $350 (20%) gain – so far.  

That's a very important point to make – we don't have to make short-term plays to make excellent short-term profits.  We were right about NTAP's earnings and made 20% in a few weeks but, since we took a nice, conservative LONG-TERM entry, had we been wrong, we still had plenty of cushion (22%) and a nice, cheap entry down the line.  There's no need to take big risks to make REASONABLE returns (assuming we can agree that 20% in less than a month is reasonable). 

I'm warming up to the NYT (8/29) at $12.  I think it's best to go with the April $11/13 bull callspread at 0.90 and just looking for the $1.10 gain (122%).  If NYT goes lower, then I'd like to sell $11 puts (now .75) for $1 or more and maybe use that money to pay for a roll longer and lower (strikes not yet available past April). 

The New York Times Company Reports 2014 Second-Quarter Results

The Company had an operating profit of $16.5 million in the second quarter of 2014 compared with $46.2 million in the same period of 2013, with the decline mainly resulting from investment spending associated with the Company’s strategic initiatives. Adjusted operating profit (defined below) was $55.7 million in the second quarter of 2014 compared with $70.7 million in the second quarter of 2013.

PFE (5/20) is cheap at $29.42 and they pay a $1.04 dividend but we can blow that off and sell the 2016 $30 puts for $3.80 and use that money to buy the $23/30 bull call spread for $4.40 for net 0.60 on the $7 spread that's $6.39 in the money to start.  

If all goes well, it's a 1,066% profit in 18 months on the cash and TOS says the margin on the put side is just $6, so margin-efficient too!  If you REALLY want to own 500 shares of PFE at $30.60 in 2016 ($15,300), then 5 of these spread contracts cost just $300 in cash, $3,000 in margin and pays $3,500 if PFE is over $30 in Jan 2016.  That one is worth putting 10 in the Income Portfolio.  

PNW (6/3) is a nice 4% dividend pays ($2.27) and, if they had 2016 options, I'd like them for the butterfly portfolio because they are so boring.  

Interestingly though, you can buy the stock for $55 and sell the Jan $55 calls for $2.75 and the $55 puts for $3.20 for a net $49.05/52.03 entry.  It's nothing too exciting but it's a nice stock to whittle away the basis of for a long-term hold in your portfolio. 

RIG (5/20) is still cheap at $41.47, off the lows at $38.  The 2016 $35 puts can be sold for $3.55 for a net $31.45 entry and that's nice by itself and makes a nice offset to a bear trade.  Net margin on the short puts is $3.50 so it's a 100% return on margin – very efficient.  It can be paired with the $40/50 bull call spread at $3.20 for a net .35 credit and your worst case is owning RIG for net $35.35 (15% off) while the upside is up to $10.35 at $40 for a 2,957% return on your cash.  These guys are moving up fast, if they go over $43 it might be a good idea to jump in.  

RRD (5/13) pays a fat $1.04 dividend and the stock is down to $15.85 so you know I like a buy/write for this one.  We can buy the stock and sell the 2016 $15 calls for $2.35 and the $15 puts for $2.70 and that's net $10.80/12.90 and that makes the $1.04 dividend 9.6% while we wait to get called away with another 38% profit.  Worst case is owning 2x at $12.90, which is 19% off the current price.  As you can see, this one bucks like a bronco but I'm comfortable with the bottom call we made on the 13th. 

SHLD (5/28) – is still good for at least $5Bn net of debt, possibly higher depending on how well their break-up sales go.  It seems to me that Eddie tanked the books and the CC for the Q - of course they had lower sales, they spun off Land's End and we got $10 a share for them – why the stock didn't drop $10 when it happened is the interesting thing.  With LE, last year's average was $40, without LE, we're at $35 and those who had SHLD last year, have 30 shares of LE AND $2.36 in cash for each 100 shares of old SHLD.  LE is now $35 too!

So I do like SHLD long down here on the same breakup value and land value story we've always had.  With the recent panic, you can sell the 2016 $25 puts for $5 and that buys the 2016 $30/45 bull call spread at $6 for net $1 on the $15 spread that's $6 in the money to start.  I'd stop out of the short puts below $32 (around $6) and reload at a lower strike when it settles down.   

TASR (5/13) is shorter-term, since it's our Stock of the Decade and they've dropped off 1/3 from their $20 high so we like them again at $13.62.  

They do have Leaps so we can sell the 2016 $13 puts for $2.50 and the $15 calls for $3.20 for net $7.92/10.46, which gives us another 22% discount on this one. 

TEX (5/20) is one we used to like in the teens but they'll never see the teens again, now $39.80.  It's a building and infrastructure play and I know from trying to raise capital for a real estate venture last year that NO ONE is going to be breathing down their necks for a long time.  

In fact, they've been able to buy up a lot of their competition and pick up equipment from failed competitors for pennies on the Dollar in the down market.   Last earnings indicated they were backlogged on orders and the 200 dma is $38 and I doubt they go lower than this.  

They don't pay a dividend (0.20), so no reason to own them but you can sell the 2016 $35 puts for a very nice $5.30 for a net $29.70 entry and leave it at that or add the $30/40 bull call spread at $5.50 for net .20 on the $10 spread that's almost 100% in the money.  This one is too good – gotta pull the trigger on 5 in the Income Portfolio!  Another well-timed, quick winner!  

UBNT (5/28) was Wombat's idea from yesterday and we'll add them as a Tech pick.  We like the 2016 $45/55 bull call spreads at $2 and they aren't going to get any cheaper (relatively) so we may as well get 10 of those in the Income Portfolio for $2,000 so we can keep an eye on them.  

IF the stock goes lower, AND we still like them, THEN we might sell the 2016 $20 puts, which are currently $2.50 – maybe for $3+.   Wow, the ones we already added are all doing quite nicely…

WEN (5/13) has taken a nice dip but they just put in solid earnings and $8.37 is a nice discount off the $10.22 high.  I think $10 was a bit silly but so is $8 and we can be conservative with these guys and skip the .20 dividend and just sell the 2016 $10 puts for $2.80, which is net $7.20 so another 20% off from the current price and TOS says the net margin is just $1.60 so super-efficient return of 175% on margin if you're willing to own WEN for net $7.20 and they get back over $10 in 20 months.  The nice thing about this is that anything over $7.20 is still a profit. 

WFM (5/13) I have not liked for ages but $39.43 finally gets their p/e into the low $20s and they are moving into the UK and, as we've discussed before, they are merely getting squeezed by rising food costs they haven't passed on to customers yet.  

This one is easiest played by just selling puts and you can get $3 for selling the 2016 $33 puts and that gives you a net $30 entry, another 25% down from here.  TOS says net margin is $3.30 so almost 100% return on margin for promising to buy WFM for 25% less than it's trading for now – not too shabby (added at $3.45 to our Income Portfolio along with the 2016 $35/45 bull call spread at $3.65 for net 0.20 and already $2.40 – up 1,100% on cash!)

So that's actually 44 stocks we can choose from for our Long-Term Portfolios!  It's going to be a very exciting end to the year and we'll kick things off on Tuesday, when we'll look to add our first few official entries.  

Ideally, you can always refer to this list and see what's on sale on any given day – giving us quick ideas of places we can take advante of when there's a nice dip.

 


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  1. Here's an interesting trade idea:  ARIA is at $6.22 and you can buy the 2016 $7/5 bear put spread for $1.20 and you can buy the $4/7 bull call spread for $1.20 so it's a bullish bet that you net $3 back on $2.40 (+.60) but the risk is only 0.40 and that only happens below $5 – so anything over $5 (25% off) is a 25% profit and max loss is 16.6% – a good risk/reward trade but, obviously, you can't compromise on the fills!  

    And don't forget – in a margin account, you are only risking 0.40 so that's all the effect should be and, if you end up gaining your 0.60 – that's 150% return on margin!  


  2. Numbers out of Asia and Europe not so positive:


  3. Yodi, thanks for the discussions re BCS. Like some of the other subscribers, I am also interested in when to adjust a position and would like some suggested guidelines. It seems that you favor selling monthly puts and calls against a longer term (2016 ) BCS more than Phil. Do you have any rules about when to roll if a call or a put is in the money? Do you wait until expiration or do it early before a contract looses too much value? How much do you use the Greeks here?

    Phil, how do you approach this? For example can you think out load 3 steps ahead about a position such as the FAS example?

    Yodi and Phil, also in a LEAP BCS without consideration for monthlies, do you ever roll the short call? If the position does well early and you think the stock will continue advance, how do you approach adjustments? What are the advantages and risks of rolling the short call vs rolling the BCS vs adding on another spread?

    Thanks in advance. Looking for all the education I can get so that I can create some rules for myself.


  4. sorry – think out loud…


  5. Phil / 40´s    Which is your criteria to choose the stock?, some of them as IRBT  or TASR  has been suffering in the upmarket why should they rebound in a down one?.

    There are some which could look  fine  as UN, RDS, SAN, JSAIY ……just asking.


  6. jmd__

    BCS As a general role I do not mess much with the leap. The long call should, as based on the delta, always be ahead of the short call. Once you open your position you have fixed your max. profit in relation to the spread. Should your play go deep in the money, close to your max. profit you can always close the BCS before time, provided you do not have sold the 1/2 monthly short caller, by closing the BCS the later would be a naked call! The situation was earlier explained with the UNH stock. on question should I close early? Sell an other BCS needs to be valued carefully as the stock might have reached it's prime and is due for a fall. So patience is the word here. 

    I do not recall selling short month puts with a Leap BCS. I personally like to roll the short month caller when it has as little premium as possible and that is with me down to .10 and .05 cents. I like to see, when rolling the same to the next position (weekly, monthly or even up to 3 month) depending, that I see the combined outcome of the roll showing still a net profit, also explained before. Only if I can not see a net profit I might chip in selling a put. However short monthly puts are generally high in margin, so to get a better ratio margin/premium you need to go further out in time. But as discussed with Winston earlier I prefer to handle puts very gently. They can be like nitroglicerine. 

    Just remember if the short month caller goes ITM (against you) you find the BCS and leap putter will go in your direction, so you not losing overall. Further more it was explained by Phil to even sell when setting up to sell a short monthly caller to look for a ITM position, yes in the end you will have to give back the intrinsic value but to me the applies more in a down market, given you downside protection, so if the stock goes down some what you find the originally ITM sale will be at or even OTM.


  7. jmd__

    Geeks They are Important to me when setting up the BCS also explaine before, but not on monthlies ore weeklies.


  8. Phil the CAKE play OK I get a cost of 2.13 for the BCS and 1.25 for the sale of the putter leaves you with a net debit of .88 in your case .75 but not .05 cents Or I am understanding this wrong.


  9. CAKE/Yodi – It's actually net $2 on the spread less $1.25 for the short puts is 0.75, which makes the net if assigned $40.75.  Fixed now, thanks.  


  10. Phil

    If this is true, about the euro going down compared to the US Dollar.

    Is this a good time to sell Europe stock?

    Look for a new point to enter when euro drops?

    Thanks

     

    http://www.bloomberg.com/news/2014-08-29/goldman-sachs-says-euro-to-sink-to-parity-by-the-end-of-2017.html


  11. qcmike 

    € must be just an other rumor changed some $ the other day could not get better than 1.38$ /€  from a bank even that official it was 1.305


  12. Spreads/JMD – Well, in the case of the LTP, we're looking for undervalued stocks, those are not the kind of stocks that you should be selling short-term calls against.  10 of our 29 original stocks had monthly stocks that popped 10% or more and moves like that can blow out your short-term calls and erase a year's worth of profits overnight – especially in a hot M&A environment like we have now:

    That would have sucked to get caught short on, right?  And you never get a chance to get even because they've been bought.  In the Butterfly Portfolio, we pick stocks that we feel this is NOT likely to happen to and we sell puts and calls on both sides to lessen the damage when there is a move against us.  With FAS, we have already dealt with a bunch of moves – some work, some don't but the key is we sell SO MUCH premium – that it tends to work out for the best:

    FAS
    10 FAS 2014 20-SEP 100.00 CALL SC $ 7,750.00 8/14/2014 $ 4,420.00   18
    $ -3,330.00 -75.3 %
    10 FAS 2014 16-AUG 100.00 CALL SC $ 320.00 7/18/2014 $ 4,400.00 8/5/2014 18
    $ 4,080.00 92.7 %
    10 FAS 2014 19-JUL 95.00 CALL SC $ 6,900.00 6/5/2014 $ 5,600.00 7/18/2014 43
    $ -1,300.00 -23.2 %
    10 FAS 2014 21-JUN 90.00 CALL SC $ 7,600.00 5/22/2014 $ 3,100.00 6/5/2014 14
    $ -4,500.00 -145.2 %
    10 FAS 2014 17-MAY 90.00 CALL SC $ 0.00 4/17/2014 $ 3,000.00 5/16/2014 29
    $ 3,000.00 100 %
    5 FAS 2014 19-APR 96.00 CALL SC $ 160.00 4/2/2014 $ 1,500.00 4/8/2014 6
    $ 1,340.00 89.3 %
    10 FAS 2014 19-APR 90.00 CALL SC $ 3,850.00 3/20/2014 $ 6,900.00 3/27/2014 7
    $ 3,050.00 44.2 %
    10 FAS 2014 22-MAR 85.00 CALL SC $ 6,700.00 2/6/2014 $ 3,580.00 3/19/2014 41
    $ -3,120.00 -87.2 %
    5 FAS 2014 07-FEB 90.00 CALL SC $ 90.00 1/13/2014 $ 2,650.00 2/4/2014 22
    $ 2,560.00 96.6 %
    10 FAS 2016 15-JAN 62.00 PUT SP $ 5,600.00 1/13/2014 $ 9,300.00   231
    $ 3,700.00 39.8 %
    10 FAS 2016 15-JAN 105.00 CALL SC $ 20,850.00 1/13/2014 $ 16,200.00   231
    $ -4,650.00 -28.7 %
    10 FAS 2016 15-JAN 85.00 CALL LC $ 24,300.00 1/13/2014 $ 27,900.00   231
    $ 3,600.00 14.8 %
    Total Gain/Loss for FAS
    $ 4,430.00 5.3 %

    So $4,430 doesn't sound like a big deal but it's just 10 2016 $85/105 bull call spreads at $8.10 and 10 short 2016 $62 puts at $9.30 for a $1.20 credit ($1,200) that we've already made net $4.43 ($4,430) against and, if FAS holds $105 through Jan 2016 – we'll have a bonus $20,000 as well!  So we don't really care what happens along the way as long as the bullish long-term spread makes money. 

    What will we do 3 steps ahead on FAS?  If it's up, we'll sell more premium.  If it's down, we'll sell more premium and, if it's flat, we'll sell more premium.  Since we sell it every month, we have 16 more months to sell and, if we sell just $2 per month, that's $32 of buffer we'll have ($32,000) to ultimately pay back the short positions with – in addition to our net $21,200 gain on the long spread.  If all goes well, the short calls (and short puts, if sold) will eventually expire worthless and then we'll be left with just the spread gains.  

    Criteria/Advill – #1 criteria for picking stocks is "would I be happy to double down on the stock if it dropped 50%?"  Then I look to see if I want to own it for 10 years and then to see if it has good options to ultimately sell (once we work the basis down, maybe 5 years down the road).  Not sure about your time-frame as we picked IRBT on 5/13 at $33 and it popped to $42 in early July, so up 27% in 2 months is a pick I kind of stand behind.  It's back down now so feel free to avoid it but, when it's back at $42 – don't blame me…

    TASR was also from 5/13 at $13.62 and now it's $16 for 18% but look at the trade – it was selling the 2016 $13 puts for $2.50 and the $15 calls for $3.20 for net $7.92/10.46 and the goal of this trade is to make $7.08 (89%) in 18 months if TASR can take and hold $15.  My confidence in that play was very high and the gain profile I expect made it a good fit for the LTP (where we're trying to make 20% a year).

    If you like other stocks better that you have more confidence in based on things you know (or think you know) about UN, RDS, SAN, JSAIY – that's great – my goal here isn't to convince you that my stocks are the best stocks – it's to show you how to select stocks and how to trade them over time profitably.  There are 9,000 other stocks you can apply this to and I'm sure there are hundreds you could make the same value argument for.  Of course, in the last 3 months/1 month – TASR has outperformed all of them surprise:

    Euro/QC – It's an opinion, neither true nor untrue.  The gap is still 30%, it would be pretty catastrophic for that gap to close in anything but a few years.  Keep in mind the PRICE of a currency has nothing to do with the VALUE of a stock.  In Japan, for instance, it's fantastic for the exporters when Yen/USD rises (weaker Yen to the Dollar).  The Yen ($XJY) has fallen from 130 in late 2012 to under 100 this year, the same as the Euro dropping 30% and NKD went from 9,000 to 15,000 – up 66%.  

    Speaking of Rumors – AAPL hacking was partially true.  Some celebs had photos which led to rumors of almost every celebrity having photos hacked.   AAPL has already fixed the bug.

    The Next Web has contacted the author of ibrute, asking if it could have been used to obtain the leaked images. The response: "I've not seen any evidence yet, but I admit that someone could use this tool."


  13. Phil / stock selection :   Thank you for the long explanation ( believe it or not i appreciate it a lot), I´m not pretending to outsmart nobody just to understand the way you choose a company, It call my attention that you don´t select ADR´s, perhaps options are not available or some pinks ( for the same reason). What you say in your 7 steps is very clear however some or your choices don´t cover a classic analysis is a intuitive feeling?, surely but that is more in experience, however your selection is right.

    My impression  ( living from this side of the ocean ( not your side) is that european stocks " could" have more breathing that U.S that has been running for to long now, Credit Suisse is pushing for example Sainsbury JSAIY  ( the british Wal Mart)  that is 5% yield and 8 P/E or Deutch telecomm..

    Obviously many of this  don´t allow covered calls.


  14. Phil/Naked puts: thanks for the consideration and comments. Not sure how I reconcile your comments on COST short puts with an IBM trade you recommended at the end of June, here. You 'risk' to end up owning 1,500 shares of IBM @$150 – which would seem a pretty big allocation on a $500K portfolio. I don't want to be too Cartesian, but just trying to connect the dots.


  15. ADRs/Advill – I wasn't putting them down, sorry if I gave that impression – I was just saying they don't have as much appeal to me as the others but, then again, I'm on the wrong side of the pond to be a good judge of what JSAIY is doing.  Of course, even if I liked them, lack of options means I wouldn't be interested because – how are we going to be the house if we can't sell premium?  Same goes for DTEGY – do you have options for those in Europe?  

    IBM/Winston – That's valid and of course I meant to go from 5 to 10, not 15 and 10 @ $150 would be $150,000, using $75,000 out of $1M in buying power, so a bit heavy for sure but let's consider the factors.  IBM was at $178 at the time and my comment on 6/30 was:

    CNBC featuring Barbeque sauce designed by Watson.  Let's see how many humans that thing can put out of work….  You guys forget this stuff because it takes a long time to play out but Watson will leap IBM past AAPL, GOOG, MSFT, etc to be the #1 company in a few years.  Figure there are 50M Customer Service Reps in the World and figure they make an average of $10,000 a year (assuming most in Asia) and figure Watson can replace half of them for $250 a month (saving money, office space, insurance, etc).  That's 25M x $250 x 12 for IBM = $75Bn on that function alone!  

    IBM is on our Buy List but not in our Portfolio yet as I was hoping they'd have a weak Q2 and go down a bit but I'm nervous my theory on Watson will gain traction and send IBM back up so let's add 5 short 2016 $160 puts at $9.40 to the LTP and, if IBM goes lower, we'll be happy to sell 10 more and add a bull call spread.  

    So IBM was a stock I felt VERY strongly about and I felt that the news that was going around would make it our last chance to sell those $160 puts for $9.40 to net a $150 (ish) entry.  So, SOMETIMES, we have to go with our gut and strike while the iron is hot.  In this case, my gut was pretty good and IBM flew higher soon after.   IBM at $150, like AAPL at $450 last year, is a value I was willing to put my foot down on and risk an over-allocation but let's examine the downside.

    Since I KNOW that IBM is worth more than $150, what if IBM plunged to $120.  Then the short $150 puts would have been $40 and we'd be down $15,000 and change on 5 of them.  That's not a crushing blow to a $500,000 portfolio and, obviously (I hope), given those circumstances, we'd evaluate the situation very carefully.  Now, had that happened over these last 2 months, then those puts would be about the same as the $230 puts are now ($70 over the $160s) at $44.   That would be net $22,000 – still something we could deal with.

    The $230 puts can be rolled even to 2x the $200 puts so call it the $130 puts had we rolled down from those $160s and that's net $125 on 10 for $125,000 worth of IBM stock – just a bit over 10% of the portfolio's buying power if assigned.  And, of course, we're not even taking into consideration the fact that we could just wait and roll down to lower 2017 or 2018 puts.  

    So the real question is – with IBM at $175 at the time, would we want to make it 10% of our portfolio at $125 (28% off the price at the time)?  It's an easy yes for me, there are few other stocks I expect to hand off to my Grandchildren but IBM is certainly one of them.  This is why I try to encourage understanding trading, rather than following a rule book – rules are fine but ultimately constraining and great investors have to know how to seize an opportunity when it presents itself.  If you can't take action because you trap yourself in "rules" all sorts of great opportunities will pass you by.  


  16. And by the way folks, this is WHY we have Watch Lists and Buy Lists – IBM is one of my perma-list stocks – anytime it's cheap, I want to buy it so my ears perk up whenever there is news on them.  In that case, I heard something on CNBC, looked to see where IBM was in the channel and made a buy call.  There's nothing miraculous about my timing – it all comes from just paying attention.  

    Submitted on 2014/02/14 at 2:20 pm

    Cores/Scott – Well my value list changes depending on what's cheap but, when they are low in the channel, I also like SHLD, RIG, VLO, F, GE, T, CHL, GLW, SPWR, IBM, BA, BRK.B, COST, DIS, INTC, MCD, PFE, X, CLF, HMY, DBA, XLF, FCX, CAT, BRCM, BTU, NLY, AGNC, FTR, RRD, BAC, JPM, ISRG…  I'm sure there's a few more, but that's a good start.  


  17. yodi

     

    Thanks for the info


  18. From Bloomberg, Sep 1, 2014, 12:00:01 PM


    Sept. 1 (Bloomberg) — Martin Lee, founding chairman of the Democratic Party in Hong Kong, talks about China’s approval of a plan that would require candidates for the city’s 2017 leadership election to be screened by a 1,200-member committee before voters get to cast their ballots.
    Lee speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    President Xi Jinping’s
    uncompromising stance on limiting democratic reforms in Hong
    Kong
    marks a public show of strength that signals to the world -
    - and China’s own citizens — that the ruling Communist Party
    won’t tolerate any challenges to its authority.

    To read the entire article, go to http://bloom.bg/1pjdNdN

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  19. From Bloomberg, Sep 1, 2014, 12:00:01 PM


    Sept. 1 (Bloomberg) –- Bloomberg’s Isabel Reynolds reports on India looking to Japan to help boost growth as the leaders of the two countries meet to strengthen ties. She speaks to Angie Lau on “First Up.” (Source: Bloomberg)

    Prime Minister Shinzo Abe pledged a
    sweeping upgrade of economic and security ties with India,
    saying Japan would double investment and expand defense
    cooperation amid concerns about China’s expanding influence in
    the region.

    To read the entire article, go to http://bloom.bg/1wZzZni

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  20. From Bloomberg, Sep 1, 2014, 5:00:01 PM

    Chinese stocks are decoupling from steel prices by the most in three years as equity investors bet Asia’s largest economy will withstand a property slowdown.

    To read the entire article, go to http://bloom.bg/1A0x7TC

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  21. From Bloomberg, Sep 1, 2014, 9:57:42 AM


    Russian Direct Investment Fund has invested in Russia’s biggest bourse, OAO Moscow Exchange. Photographer: Andrey Rudakov/Bloomberg

    Russia is preparing to transfer the ownership of a $10 billion sovereign wealth fund to the central bank from a sanctioned state-development lender, according to two people with knowledge of the plan.

    To read the entire article, go to http://bloom.bg/1r3kgyQ

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  22. From Bloomberg, Sep 1, 2014, 7:00:15 PM


    Jack Ma founded Alibaba 15 years ago from his one-bedroom apartment in Hangzhou, China. Photographer: Kiyoshi Ota/Bloomberg

    Jack Ma knows how to time an initial
    public offering.

    To read the entire article, go to http://bloom.bg/W3n42W

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  23. From Bloomberg, Sep 1, 2014, 9:29:38 AM


    Sentiment across Europe has been hit by the conflict between Ukraine and Russia, undermining spending and company investment and keeping central banks on alert about risks to their economies. Photographer: Martin Leissl/Bloomberg

    U.K. factory growth slowed more than forecast last month and Italian manufacturing shrank as Europe suffered the fallout from weakening demand and mounting geopolitical risks.

    To read the entire article, go to http://bloom.bg/1piqDZZ

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  24. From Bloomberg, Sep 1, 2014, 8:35:51 AM


    Sept. 1 (Bloomberg) — The time is coming for the European Central Bank “to do still more,” according to David Nowakowski, senior director of research at Roubini Global Economics.
    He speaks with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Between Mario Draghi and quantitative easing lies an obstacle course.

    To read the entire article, go to http://bloom.bg/1qhsgMu

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  25. From Bloomberg, Sep 1, 2014, 6:00:00 PM

    Gaming workers protest in Macau, China, on Monday, Aug. 25, 2014. Photographer: Brent Lewin/Bloomberg

    Cloee Chao remembers when she first
    decided to challenge the billionaires of the world’s largest
    gambling hub. The 34-year-old single mother of two was working
    in a Macau casino in 2012 and the second-hand smoke was so thick
    she started hacking up black phlegm.

    To read the entire article, go to http://bloom.bg/W4kOrQ

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  26. From Bloomberg, Sep 1, 2014, 6:56:12 PM

    Fast-food workers in 150 U.S. cities
    plan to protest this week in what could be the largest strike
    since the demonstrations began in late 2012.

    To read the entire article, go to http://bloom.bg/1q4uDTk

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  27. From Bloomberg, Sep 1, 2014, 7:09:45 PM

    Asian index futures were mixed while
    the euro held near a one-year low versus the dollar with Japan
    to update on its monetary base today and Australia to kick off a
    week of central-bank reporting. Crude oil dropped.

    To read the entire article, go to http://bloom.bg/W3ppuQ

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  28. From Bloomberg, Sep 1, 2014, 7:00:00 PM

    The Standard & Poor’s 500 Index (SPX), one
    of the most diverse benchmarks for stocks in America, is
    starting to resemble a collection of clones.

    To read the entire article, go to http://bloom.bg/W3ppLb

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  29. From Bloomberg, Sep 1, 2014, 11:01:00 AM


    A man looks at Mitsubishi Motors Corp. vehicles displayed outside the company’s showroom in Tokyo. Most automakers reported declines for the month, with Mitsubishi Motors Corp. seeing the steepest decline at 37 percent. Photographer: Kiyoshi Ota/Bloomberg

    Japan’s lowest auto sales in three
    years are reviving concerns that manufacturing will hollow out in
    Asia’s second-largest economy.

    To read the entire article, go to http://bloom.bg/1Cjhk66

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  30. From Bloomberg, Sep 1, 2014, 2:30:00 PM

    India proposed canceling 172 unused
    permits to mine coal while allowing 46 operational mines to
    keep working to address a Supreme Court ruling that struck down
    all coal-mine allocations made since 1993.

    To read the entire article, go to http://bloom.bg/1oxRnFC

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  31. From Bloomberg, Sep 1, 2014, 8:54:27 AM


    Cesar Alierta, chief executive officer of Telefonica SA, right, reacts while greeting Vittorio Colao, chief executive officer of Vodafone Group Plc, after attending a panel at the 28th Telecommunications and Digital Economy conference in Santander, Spain, on Monday, Sept. 1, 2014. Photographer: Antonio Heredia/Bloomberg

    Vodafone Group Plc (VOD) and Telefonica SA (TEF)
    used a technology conference in Spain today to call for the
    European Union to focus less on new rules for phone companies
    and more on Facebook Inc. and Google Inc. (GOOG) to reduce their
    dominance.

    To read the entire article, go to http://bloom.bg/1uhGH2L

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  32. Watch this video at http://bloom.bg/1tnmifB

    Putin’s `Ad-Hoc’ Actions Seen Dangerous for Ukraine

    Sept. 1 (Bloomberg) — Andrew Wood, associate fellow of the Russia and Eurasia program at Chatham House and former British Ambassador to Russia, discusses President Vladimir Putin’s actions over the conflict in Ukraine.
    He speaks with Mark Barton, Ryan Chilcote and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  33. Watch this video at http://bloom.bg/1tgU2v5

    Ukraine Payments Seen Putting EU Gas Supply at Risk

    Aug. 29: Jonathan Robinson, an energy consultant at Frost & Sullivan, talks about the consequences for European gas supply in the event of Ukraine defaulting on payments to Russia.

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  34. From Bloomberg, Sep 1, 2014, 5:15:26 AM


    Euro-area manufacturing output expanded less than initially estimated in August. Photographer: Martin Leissl/Bloomberg

    Euro-area manufacturing activity
    slowed more than initially estimated in August as Italian output
    contracted, adding to signs that the region’s economic recovery
    may need another boost of European Central Bank stimulus.

    To read the entire article, go to http://bloom.bg/1pioU6K

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  35. From Bloomberg, Sep 1, 2014, 5:58:53 AM


    President of the Swiss National Bank Thomas Jordan has repeatedly said he will exclude no measures to shield the cap, with the introduction of negative interest rates a “possible option.” Photographer: Philipp Schmidli/Bloomberg

    Swiss National Bank President Thomas Jordan pledged to maintain the cap on the appreciating franc
    amid increasing global economic risks.

    To read the entire article, go to http://bloom.bg/1vzciAB

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  36. From Bloomberg, Sep 1, 2014, 8:23:46 AM


    Made in Britain tag leaves no room for complacency.

    With figures today confirming that the German economy contracted by 0.2 percent in the second quarter, the U.K. looks splendidly isolated from the economic malaise gripping its euro neighbors. A slowdown in manufacturing last month, however, illustrates that the U.K.’s recovery is immune neither to the euro area’s stagnation, nor to the geopolitical risks to business and consumer confidence.

    To read the entire article, go to http://bv.ms/Z4rpoq

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  37. From Bloomberg, Sep 1, 2014, 12:36:19 AM


    Sept. 1 (Bloomberg) — Jean Medecin, member of the investment committee at Carmignac Gestion, talks about the slowing of Chinese manufacturing, opportunities in Russia and strategy.
    He speaks with Manus Cranny on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    China’s manufacturing slowed more than estimated last month, joining weaker-than-anticipated credit, production and investment data in suggesting the economy is losing momentum.

    To read the entire article, go to http://bloom.bg/1qhyqwe

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  38. From Bloomberg, Sep 1, 2014, 4:58:44 AM


    Sept. 1 (Bloomberg) — The time is coming for the European Central Bank “to do still more,” according to David Nowakowski, senior director of research at Roubini Global Economics.
    He speaks with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Cracks are emerging in Germany’s once rock-solid economy as companies’ reluctance to invest bears out Mario Draghi’s warning that the euro-area recovery is in danger.

    To read the entire article, go to http://bloom.bg/1ujFc45

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  39. From Bloomberg, Sep 1, 2014, 8:17:16 AM

    Enjoy the final day of your three-day weekend. No worries, we have you covered with these Labor Day reads:

    To read the entire article, go to http://bv.ms/Z4r3hw

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  40. From Bloomberg, Aug 30, 2014, 7:30:24 AM

    The weather outside looks delightful: perfect for the beach, boat or barbecue. Before you head off for some fun in the sun, check out our longer-form weekend reads:

    To read the entire article, go to http://bv.ms/1pt4oX3

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  41. From Bloomberg, Aug 31, 2014, 6:03:27 PM

    What are you going to do, Mario Draghi?

    Until recently it was debatable whether Europe’s economy was recovering. No longer. Its recovery has stopped. The question now is whether the stagnation will tip over into something worse.

    To read the entire article, go to http://bv.ms/1rHW8US

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  42. From Bloomberg, Sep 1, 2014, 6:54:52 AM


    Aug. 29 (Bloomberg) — European Central Bank monetary policy “can only buy time” and Europe is in need of structural reform, according to German Finance Minister Wolfgang Schaeuble.
    He spoke with Bloomberg’s Caroline Connan yesterday at the Medef business leaders’s conference near Paris. (Source: Bloomberg)

    German Finance Minister Wolfgang Schaeuble said deficit-fueled growth leads to economic decline, signaling discord with Italy and France as euro-area policy makers seek ways to avoid deflation and spur growth.

    To read the entire article, go to http://bloom.bg/1pwTj7o

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  43. IBM/Phil – thanks for dissecting with your additional analysis. 


  44. Phil – FYI, search is totally broken.  I've tried a few days in a row now.  I wanted to try and find a comment I made on IBM a long time ago.  


  45. WIki Comment Search is also down.  It just say's Loading forever…

    http://www.philstockworld.com/wiki/index.php?title=Main_Page


  46. From Bloomberg, Sep 2, 2014, 3:08:09 AM


    Since taking over in November of 2011, European Central Bank President Mario Draghi, has pledged to hold borrowing costs low and said in July 2012 he would do “whatever it takes” to save the euro. Photographer: Martin Leissl/Bloomberg

    European stocks advanced a third day
    amid speculation that slower growth will prompt policy makers to
    accelerate stimulus. U.S. index futures and Asian stocks were
    little changed.

    To read the entire article, go to http://bloom.bg/1B9uBNi

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  47. From Bloomberg, Sep 1, 2014, 2:00:34 PM


    Sept. 1 (Bloomberg) — Andrew Wood, associate fellow of the Russia and Eurasia program at Chatham House and former British Ambassador to Russia, discusses President Vladimir Putin’s actions over the conflict in Ukraine.
    He speaks with Mark Barton, Ryan Chilcote and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Ukraine warned of an escalating conflict in its easternmost regions as a rebel leader said talks this week may include negotiations for a truce.

    To read the entire article, go to http://bloom.bg/1qhdLIP

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  48. From Bloomberg, Sep 2, 2014, 4:31:32 AM


    Balconies are seen on completed residential apartments at the Wembley Park retail and residential complex in the Wembley district of London. Measures taken by the BOE include limits on mortgages worth more than 4.5 times a borrower’s annual income starting next month. Photographer: Simon Dawson/Bloomberg

    More Britons are pulling the plug on
    home purchases amid signs that the market’s 16-month rally is
    coming to an end after banks tightened mortgage standards.

    To read the entire article, go to http://bloom.bg/1oz6qig

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  49. From Bloomberg, Sep 2, 2014, 2:43:20 AM


    Sept. 2 (Bloomberg) — Benny Tai Yiu-ting, co-founder of pro-democracy activist group Occupy Central, talks about China’s decision to effectively select the leadership candidates for which Hong Kong people could vote and his group’s push for greater electoral reform.
    He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    A leader of the pro-democracy group that threatened to occupy Hong Kong’s financial district said its strategy to win concessions from China on election reform had failed and that support for the sit-in was waning.

    To read the entire article, go to http://bloom.bg/1sW54lJ

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  50. From Bloomberg, Sep 2, 2014, 2:03:17 AM

    With an election less than two weeks
    away, traders and investors are bracing themselves for something
    rarely associated with Sweden: political risk.

    To read the entire article, go to http://bloom.bg/W4lldp

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  51. From Bloomberg, Sep 2, 2014, 3:53:48 AM

    Uber Technologies Inc., maker of the
    ride-hailing application that’s being challenged by cab drivers
    around the globe, faces a Germanywide ban as a taxi organization
    won an emergency ruling in a Frankfurt court.

    To read the entire article, go to http://bloom.bg/W4RcLi

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  52. From Bloomberg, Sep 2, 2014, 4:13:10 AM


    A ‘YES’ pro-independence campaign poster is displayed in the window of a shop in Selkirk, U.K. Photographer: Simon Dawson/Bloomberg

    Support for Scottish independence
    rose before this month’s referendum, with a YouGov Plc poll
    showing the lead for the No campaign down to six percentage
    points as nationalists said the momentum is behind them.

    To read the entire article, go to http://bloom.bg/1q4sZRp

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  53. From Bloomberg, Sep 2, 2014, 12:01:00 AM


    People walk past an Hennes & Mauritz AB (H&M) store under construction above City Target on Figueroa Boulevard in downtown Los Angeles, California, U.S.. Photographer: Patrick T. Fallon/Bloomberg

    Los Angeles, the second-largest U.S. city by population, would boost its minimum wage to $13.25 an hour by 2017, almost twice the current federal regulation, under a proposal by Mayor Eric Garcetti.

    To read the entire article, go to http://bloom.bg/Z4Tb4c

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  54. From Bloomberg, Sep 2, 2014, 2:25:33 AM

    The Reserve Bank of Australia said
    an overvalued currency is hampering the economy’s transition to
    domestic growth drivers from mining investment as it extended
    the longest pause in interest-rate adjustments since 2006.

    To read the entire article, go to http://bloom.bg/1nq6aTv

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  55. From Bloomberg, Sep 2, 2014, 12:00:07 AM

    Jamie Dimon, Chief Executive Officer of JPMorgan Chase & Co. Photographer: Andrew Harrer/Bloomberg

    JPMorgan Chase & Co. (JPM) Chief Executive
    Officer Jamie Dimon has pledged billions of dollars to improve
    compliance and cybersecurity. That’s not stopping regulators
    from treating the bank as if it were riskier than ever.

    To read the entire article, go to http://bloom.bg/Y7mdjl

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  56. From Bloomberg, Sep 1, 2014, 11:50:21 PM


    Sept. 2 (Bloomberg) — Stephen Cohen, BlackRock Inc.’s chief investment strategist for international fixed income, talks about the search for yield in Europe amid changes in monetary policy.
    He speaks with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    The world’s most-influential bond
    market might just be in Frankfurt.

    To read the entire article, go to http://bloom.bg/W3pnD3

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  57. From Bloomberg, Sep 2, 2014, 4:13:56 AM


    Thomas Jordan, president of the Swiss National Bank, said the SNB currently forecasts growth of 2 percent for this year. Considering a worsening of the economic environment due to geopolitical conflicts, the cap remains “key.” Photographer: Philipp Schmidli/Bloomberg

    The Swiss economy unexpectedly
    stalled in the second quarter as stagnating growth in the euro
    area hurt exports.

    To read the entire article, go to http://bloom.bg/1lFt5iw

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  58. Watch this video at http://bloom.bg/1w1VK1Q

    Apple Probes Report iCloud Was Hacked

    Sept. 2 (Bloomberg) –- Bloomberg’s Anna Edwards reports on the latest company news making headlines on “Countdown.” (Source: Bloomberg)

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  59. From Bloomberg, Sep 2, 2014, 2:34:22 AM

    Fumihide Tomizawa, president of Softbank Robotics a unit of SoftBank Corp., poses with the company’s humanoid robot Pepper following an interview in Tokyo, on Sept. 1, 2014. Photographer: Akio Kon/Bloomberg

    Billionaire Masayoshi Son will start selling his humanoid robots named “Pepper” at Sprint Corp. (S) stores in the U.S. by next summer, part of SoftBank Corp.’s push to take the technology beyond factory floors.

    To read the entire article, go to http://bloom.bg/1nqbGWm

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  60. From Bloomberg, Sep 1, 2014, 11:23:51 PM


    Vocational school students arrive for a rally to start off job-hunting in Tokyo, Japan. Photographer: Yuriko Nakao/Bloomberg

    Japanese wages rose in July by the most since 1997, helping consumers cope with increasing living costs as Prime Minister Shinzo Abe tries to reflate the world’s third-biggest economy.

    To read the entire article, go to http://bloom.bg/1pCh0v2

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  61. From Bloomberg, Sep 2, 2014, 3:00:43 AM


    Elvira Nabiullina, Chairman of Russia’s central bank. Photographer: Andrey Rudakov/Bloomberg

    The ruble’s slide to records and
    derivatives showing more losses are in store are spurring wagers
    the Bank of Russia will raise interest rates again this year.

    To read the entire article, go to http://bloom.bg/1oxT5XG

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  62. Good morning! 

    Futures are pumped up about 0.25% this morning despite a strong Dollar (82.995!) driven by Draghi Fever over in Europe (ECB Meeting on Thurs).  As usual, the news is not generally good and that's got everyone excited that there will be MORE FREE MONEY coming. 

    Oil not happy, power-diving to $95.25 from almost $96.   Gasoline also gave up the weekend sham and has dove to $2.59, Nat Gas $4.01, Gold $1,278, Silver $19.41 and Copper $3.15.  Of the group, I like /SI over $19.40 as long as the Dollar stays under 83 but Dollar could really pop this week so super-dangerous.  

    The Pound is getting pounded at $1.65, down 1% since Friday.  Euro $1.31 and almost 105 Yen to the Dollar is pumping the Nikkei up to 15,800, where I do like shorting /NKD but also on the premise of Dollar staying under 83 – which is far from certain (and Yen under 105, of course).  

    We expect a move up early in the week, that was the point of last week's pump job – to convince the Retail Traders they were missing out.  

    This was an interesting read in Barron's this weekend:

    The Decline of Work

    By Gene Epstein

    The unemployment rate may be falling, but with more people than ever out of the workforce, the news is bad and getting worse.

    At the moment we have /YM 17,120, /ES 2,005, /NQ 4,093 and /TF 1,179.50 – All strong indicators so we can't really get short – tempting though it may be – unless we begin to see some breakdowns.  The thing about bubbles is that they can expand very rapidly just before they burst.  

    If ECB Does QE, It’s Another Sign of Western Governments’ FailuresThe European Central Bank this week is expected to announce a bond-buying campaign. Recent weeks have brought a pronounced shift by the often-hawkish institution, a reversal that has been greeted enthusiastically by investors around the globe scrambling to buy government bonds.

    Without buybacks – things would look drastically different:

     


  63. Phil / option Europe JSAIY:

    Not in my account, what i handle here is less sophisticated , my advance learning is with my U.S account and you.

    Perhaps StJ. can answer that better than myself,