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Philstockworld July Portfolio Review – Are We Too Bullish?

$1,519,454 – that's up 153% from our $600,000 start on our paired portfolios and, more importantly, up $69,064 since our April 24th review (11.5% in 5 weeks).  

Our Long-Term Portfolio alone has climbed over the Million Dollar mark, up 100% from our $500,000 buy-in back in November, 2013.  At this point, we're so far ahead of our target (20% per year) that we'll probably start a new portfolio in the fall.  We already purged plenty of short puts from our LTP and we're certainly well-positioned to add new trades as we have plenty of cash on the side!

Meanwhile,  the S&P was at 2,080 on April 24th and it's at 2,102 today so fairly flat after dipping to 1,991 and it's important to note that our hedges did exactly what they are supposed do do – they allowed us to ride out the dip without panicking and, because we are Being the House – NOT the Gambler, we continue to collect our sold premiums – even when the market is essentially flat.  As I said in the last review:

To you day traders out there – I implore you  - please read the December review and look over those positions and check out those same positions 3 months later and CONSIDER – please consider – that day-trading may not be the best way to play the market.  Yes, the LTP goes up and down too but, when it's down, we have cash on the side to buy bigger positions (which is what we did last year) while they are cheap.  Since those positions are INVESTMENTS, we end up with something of great value when the market comes back.

As you can see from the S&P chart, markets are volatile things and, if you want to be a long-term investor, you need to plan on that volatility – not be surprised by it!  I could say the same thing about the S&P since last June as I'm saying about it since April 24th – the market has gone nowhere but has had extreme dips and the best way to play it is to BE THE HOUSE and let other people take the risks for us.

Our Options Opportunity Portfolio (OOP), which is shared over at Seeking Alpha, finished the week at $167,677 (up 67.7%) and that is our youngest portfolio – having been started less than a year ago on August 8th with $100,000.  On April 24th we were at $145,370 so we're up $22,307 (22%) in 5 weeks in our self-balancing portfolio.  As with all our portfolios, the gains tend to snowball over time as our positions begin to mature.  

As you can see, we made very few adjustments since our last review and that's how it should be with a well-balanced portfolio.  Individual positions will always go up and down but, by diversifying them properly, we're able to take full advantage of selling our bullish plays when the market is hot and selling our bearish plays when the market is down – locking in gains on each swing.  

We have plenty of cash on hand and we'll be looking for more opportunities as we head into earnings season but our existing positions are well on track to give us our next year of 60% gains already.

Butterfly Portfolio:  No changes since our 6/13 update but we've gained a very nice $15,220 (15%) to $268,662 (+168.7%) since then though, on the whole, that's flattish from $263,052 back on 4/24 and making $1,100 a week is fine with us in our most conservative, lowest-touch portfolio.  

We're only using $20,000 (7.5%) of our cash, so we have plenty of buying power but that's the way we like it in the Butterfly Portfolio.  This is the sort of portfolio you run for income in a retirement account as it steadily accumulates cash on all the premium we sell each month but we're not making withdrawals – so we simply end up with a bigger and bigger cash pile.

Short-Term Portfolio (STP): Oddly, we're exactly where we were on 6/30, AFTER making a few changes.  That's amazing as the S&P is up 40 points since then and we're supposedly bearish (in fact, we added 30 TZA Oct $37 calls for $15,000) but it turns out that LABU, XON and other bullish plays made up for the losses on our hedges.  $506,007 is up a whopping 406% in 2.5 years in our aggressive portfolio.

That's what we do in the STP – it's primary function is to hedge the Long-Term Portfolio, which we hardly ever adjust.  Since we're generally bearish in this portfolio, we take some bullish pokes to offset our losses when the market is heading higher.  This mitigates the cost of our insurance plays.  

Our timing, however, since we began with $100,000 on 11/26/13 has been incredible as we took profits at each bottom and flipped bullish.  Not coincidentally, we've been using the same Big Chart since 11/26/13 as well and, as long as the indexes stay within our predicted lines, we can keep making over $100,000/yr in our most aggressive portfolio.

We did the math in our 6/30 review and we're geared up to make at least $100,000 in the STP if the market drops 10%.  As noted above, the market did not drop 10% since 4/24 and the LTP made $69,064 so, as long as we're not losing more than $25,000 (1/3 of our long gains) in our insurance portfolio – all is well.  As it happens, the STP was at $481,727 back on 4/24 so we're actually up $24,280 (24%) in the STP as well.

The STP is where we make our fine-tuning adjustments.  When we don't know what's going to happen (like next week), we aim for neutral in our paired portfolios but, as the week unfolds, we make changes to the STP to steer it more bullish or more bearish – adjusting our course as new information comes to light and the market direction becomes clearer.  

BALANCE is what it's all about folks – if you have balance, you will be happy and your returns will be steady.  There is nothing more important to work on if you want to be an INVESTOR, rather than a trader.  

And that brings us to the Long-Term Portfolio, now at $1,015,101 (up 103%), barely up from $1,013,396 when we moved to much more cash on June 7th but, as noted, and exceptional gain since 4/24 – one we wanted to lock in ahead of the Brexit and Q2 earnings reports so, mission accomplished.  

There was literally not a single thing to adjust into June expirations and we only have one July contract (AAPL short $97.50 calls) in the whole portfolio so, if the AAPL contract expires worthless – we could literally go an entire quarter without touching the portoflio (other than a couple we added) – pretty cool!  

Not touching your portfolio doesn't mean you are neglecting it.  If you plant your garden well, there is a time to work on it and a time to leave it alone.  Ideally, as time goes on, we are able to touch our well-balanced portfolios less and less and that allows us to make money while we are on month-long vacations and such.

I'm 53 now, and, as I've already mentioned in our Chat Room, I intend to elminate Monday's from my work schedule in 2 years and then Fridays as well when I turn 60 – after that, we'll play it by ear but, with these kinds of portfolios – it's a very obtainable goal!  

 


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  1. Phil. LABU

    I only filled 10 of bcs along with 10 puts.  The spread 25/30-  is still at about 2.7  is this still a good entry? Or has this train left the building   ?  Thanks  



  2. Phil when you say we may start a new portfolio in September, are you talking about a new LTP  to replace the old one or an additional completely new portfolio on top of the existing ones? 


  3. LABU/Batman – It's still a great trade and a bit less reward now but, on the other hand, a bit safer-looking as a trade-off.  We do this so often we tend to be greedy because most people would be THRILLED to make just 20% between now and December, right?  You're worried if making 85% in 6 months is worth the bother?  Boy are you guys spoiled!  cheeky

    Johnson/StJ – I don't understand why people are so down on the guy when all he did was promote a position he believed in and then chose not to use the victory to turn it into his personal gain.  Once upon a time, we admired people like that, didn't we?  

    September/Craigs – Did I say September?  I most certainly did not!  Geez, anxious for a new one?  I want to make sure I've made my point about building a LTP and THEN I want to build a new one from scratch and make my point again.  More likely into November (3-year anniversary) we'll wind down the LTP and STP but it depends on the market, of course.  

    PSW Investments is working with an App Developer on a project that will send Top Trade-type Alerts to people AND allow them to push a button and execute the trade through their broker.  If that's ready by the fall, we're likely to set up a new portfolio to track those trades – most likely in the Butterfly Style, for the most part.  

    Oddly enough, making just 20% a year would make us one of the top performing hedge funds in the World so PSWI will also be working on setting up a fund in 2017.  If we're managing $1Bn and make $200M for our clients and get 20% of that – it's a nice bonus as I transition to a 3-day work-week!  


  4. PHIL/ 

    Right now I am trying to figure out TZA.  It was a bull call spread 40/45 with 5 contracts expiring July 16.  I think you commented to roll the $40's to Aug to salvage some money….and I also read July 1 was last time for an order on that and if that's the case I can't still roll it and both sides will expire ???worthless???  Or will I have a much larger loss on the 5  $40 calls than ($750) tos shows me on my position statement.  

    The problem I have with options is I am only seeing part of the picture which is my positions statement in TOS showing profit and loss and margin.  I don't know understand the large figures you state as profits when you present trade ideas.  I don't know how you come up with your possible wins or buy out amounts if it gets assigned.  I'm really missing the main part here I know.   It scares me.

    And I know the way I have presented my problem will make you say "what the hell are you doing".

    I am not able to set up a proper spread sheet because I don't know what I am missing.  Probably the 100 shares per contract factor.  This is why I like futures.  I don't understand the options calculations. AND I HAVE TRIED TO FIND THE ANSWERS.

    Sorry I need so much help and sorry so many people get to read this…jeez!


  5. happy 4h of July to all at PSW


  6. Why do all hedge fund managers automatically choose 20% as what they get for managing a fund? Do they have some huge risk I do not know about?



  7. Johnson / Phil – Most people don't see it that way. They see someone who worked very hard to create a possibly difficult situation and chose not work on the solution. In the next 2 or so years, there will be very little to gain by being Prime Minister in Britain so he is not seeing as avoiding personal gains, but more like avoiding hard work. I want to see what happens when things turn bad and what Johnson's reaction will be toward the PM then! 


  8. Phil/Team

    I am very bullish gold over the next few years. I'd like to be the house. So here is my first attempt and would appreciate feedback. I like the junior miners. So, GDXJ is my choice. It has the potential for x3. The trade is:

    Sell Jan 17 $36 Puts net credit 2.15  & BCS 40($9) / 45($6.35) net debit = 2.65

    So net net debit = 0.50.  

    Where I have trouble is determining what iteration of the above is most effective for risk/reward.  For the case above the online calculator said this;

    Maximum risk: $265 at a price of $40 at expiry

    Maximum return: $235 at a price of $45 at expiry

    Breakevens at expiry: $42.65

    I do see that I can be assigned the stock at $36 (net 33.85) 

    Perhaps I should go out to Jan 18? 

    ??


  9. Latch /  a small point of clarification

    Its true you could be assigned GDXJ at $36 but your cost will actually be $36.50 because you should include what you lost of the BCS


  10. Europe’s got a fever, and the only prescription is…more referendums.<p>Eurasia Group, a geopolitical risk consultancy, shared this map today after analyzing EU countries for the potential of further Brexit-like events:<p>Courtesy of: Visual Capitalist<p>It’s not the type of quantitative data we usually …


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  19. Hong Kong’s financial secretary John Tsang Chun-wah warned recently that the city’s economy is facing its “worst time in 20 years”. In the past half …


  20. SINGAPORE (Reuters) – Crude prices dipped in early trading on Tuesday, with Brent falling back below $50 per barrel as economic concerns took center stage with many analysts saying oil demand will stall later this year.<p>International benchmark Brent crude oil futures were trading at $49.95 per …


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  22. Image source: Cheniere Energy.<p><b>What:</b> Shares of <b>Cheniere Energy</b> ended June up more than 16% after a month that would make even the most adamant roller coaster fan a little queasy. What makes Cheniere Energy’s ups and downs even more puzzling is that its subsidiaries — <b>Cheniere Energy Partners</b> and</b> …


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  27. Phil/REITS . It looks like we will not have a rate increase for awhile now. My take is they will still be strong but not all of them depending on what their portfolio looks like, some are more hedged or in better shape than others. I have ARR, CIM, and NLY but well hedged but love the dividends. What is your opinion on the sector and those in particular. Thanks


  28. I am glad I stayed with my hedges on SDS. September's BCS's – 16/22 and 17/20's. Your calls on the mkt the past month or so have been unreal and helped me alot. Thanks again for that and keeping us all grounded.


  29. Good morning!  

    Bit of a sell-off as more and more holes appear in the global economic story.   We were down more about 4:30 and recovering since so no judgement but our Futures down less than half a point have a long way to catch up to Europe if they turn down again (more likely than not).  

    1,150 is a good shorting line on /TF, lined up with 17,800, 2,085 and 4,415.

    Nikkei tested 15,500 again on lack of action by BOJ (none expected by me until meeting):

    PBOC Panel Says Don’t Underestimate Complexity of Economic Risks. China’s central bank said it’s closely monitoring domestic and external risks to the economy and that the complexity of the situation shouldn’t be underestimated. The People’s Bank of China cited market volatility spurred by the U.K.’s decision to leave the European Union, according to a statement released late Monday after a quarterly monetary policy committee meeting. Domestic economic and financial performance remains stable overall, the advisory panel led by PBOC Governor Zhou Xiaochuan said. The central bank, which has kept its main interest rate at a record low since October, was more upbeat on the U.S. economy, which it said is "recovering moderately." The PBOC repeated that risks in global financial markets have risen and that it will maintain prudent monetary policy and keep the yuan stable at a reasonable level.

    Japan firms pare inflation forecasts

    • Japanese companies cut their forecasts for inflation for five years' time, dimming prospects the Bank of Japan will meet its 2% inflation target during the next fiscal year.
    • Firms expect 1.1% of inflation in five years, the lowest estimate since the survey began in 2014, according to a new report by the central bank.
    • Japan's inflation has fallen back to where it was when BOJ Governor Haruhiko Kuroda began his stimulus program in 2013, with recent economic data offering little signs of improvement before the next policy meeting on July 28-29.

     

    Japan firms' price expectations slide, keep BOJ under pressureJapanese companies' inflation expectations fell slightly in June from three months ago, the Bank of Japan's tankan survey showed, adding to growing doubts over its argument that aggressive money printing will accelerate price growth to its 2 percent goal. The data on inflation expectations came after Friday's tankan sentiment survey showed business confidence was subdued in the second quarter, heightening pressure on the BOJ to roll out yet more stimulus to ease the pain from a strong yen. Companies expect consumer prices to rise an average 0.7 percent a year from now, down 0.1 percentage point from three months ago and some way off the BOJ's 2 percent target, the tankan survey on price expectations showed on Monday.

    Yen Advances on Fresh Concerns Over U.K. Politics, Italian Banks. The yen rose, approaching its strongest level in more than two years against the dollar, as focus turned back to political uncertainty in the U.K. and worries over the health of Italian banks. Japan’s currency advanced against all 16 of its major peers as a gauge of Asian equities fell for the first time in five days, adding to demand for haven assets. One of the leading proponents for Brexit, Nigel Farage, quit on Monday as the leader of the U.K. Independence Party. Regulators are pressing Italian banks to clean up their balance sheets and build up buffers against losses after the British vote to leave the European Union exacerbated a selloff in the lenders. “Markets are concerned about what’s going on in the U.K. and there’s more uncertainty about Italian banks,” said Vishnu Varathan, a senior economist at Mizuho Bank Ltd. “Those who wanted to exit don’t have a game plan and they’re leaving the stage. It just highlights the parlous state of political affairs that the U.K. risks descending into. There’s a check on the market rally we saw last week.” ?

    Something Huge Is Coming From Japan

    China Is Headed For A 1929-Style Depression

    There's a parasite in China sucking up money faster than the country can print it

     

    China's service sector seen supporting overall economy

    • A fresh reading on China's services sector for June showed the mainland's rebalancing away from the manufacturing sector was continuing apace.
    • The Caixin/Markit services PMI climbed to 52.7 from 51.2 in May, marking the fastest increase in 11 months.
    • "Service sector growth is now supporting the overall economy," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
    • Australia's AAA rating could be at risk

      • While Australia's triple-A rating is not under immediate threat from the weekend'suncertain election result, Moody's, S&P and Fitch say it could be if the new parliament finds it harder to wind the budget deficit back.
      • A downgrade would be a political nightmare for whichever party is in power, after successive governments brandished the rating as a badge of honor. Only 10 nations have the top grade from all three major credit agencies.

    Abu Dhabi records largest bank merger since 2008

    • Two of Abu Dhabi's top lenders have agreed on a merger plan that will create a Middle East banking giant with $175B in assets.
    • The boards of National Bank of Abu Dhabi and First Gulf Bank recommended joining the two lenders via a share-swap transaction, which is expected to close in the first quarter of 2017.
    • Combined, the new entity will have a market value of about $29B, marking the biggest banking merger since the 2008 financial crisis.
    • ETFs: UAE

    Eurozone business growth steady in June

    • Eurozone business growth held steady in June, as a solid expansion in Germany offset a contraction in France.
    • Markit's final composite Purchasing Managers' Index for the bloc was 53.1, beating a flash estimate of 52.8, but unchanged from May.
    • "The survey is signaling GDP growth of just 0.3%, similar to the sluggish trend recorded over the past year," said Chris Williamson, chief economist at Markit.

     

    Italian banks drop as bailout report shot down

    • Italy has no plans to defy EU rules by pumping billions of euros of public money into its lenders, and intends to fully respect EU rules, denying an FT report that stated it was ready to bail out its banking system if it came under pressure.
    • "Italy has no intention of defying Brussels on the banks. We respect the rules and prefer market solutions for our banks," said a spokesman for Prime Minister Matteo Renzi.

    Italy could be on a collision course for two key reasons

    War Of Words Erupts As Italy's PM Slams Mario Draghi: "You Could Have Done More To Help Italian Banks"

    Italian Banks Tumble, Monte Paschi Plunges To Record Low After ECB Letter

    ECB asks Monte dei Paschi to slash bad loans

    • The ECB has asked Italy's third-largest lender, Banca Monte dei Paschi di Siena (OTCPK:BMDPY), to slash its bad debts by 40% over three years, heaping more pressure on Rome and Brussels to stabilize the country's banking system.
    • In Italy, 17% of lenders' loans are sour. That is nearly 10x the level in the U.S., where, even at the worst of the 2008-09 financial crisis, it was only 5%.

     

    Precious Metals Surge Continues, As Does Italian Bank Pain, In Holiday-Shortened Session

     

    Thiam: Credit Suisse won't be dismantled or sold

    • "The Group will stay intact," Credit Suisse (NYSE:CS) CEO Tidjane Thiam told Swiss newspaper SonntagsBlick. "A takeover is not a subject."
    • Investors are doubting his ability to turn around the struggling investment bank as share prices hover close to record lows.

     

    Taking the money and running:  Credit Suisse is tripling its bonuses

    • Credit Suisse's (NYSE:CS) special bonus payments rose to $228M last year to retain staff as it goes through restructuring, FT says.
    • Other banks (Deutsche Bank, UBS, Barclays) did not introduce significant increases to bonus pools.

    Bear Stearns 2.0? UK's Largest Property Fund Halts Redemptions, Fears "Vicious Circle"

     

    U.K. sale of RBS delayed by at least two years

    • "This will be a setback, let's be quite honest, I think at least a couple of years we'll be pushed back because of it," Royal Bank of Scotland (NYSE:RBS) CEO Ross McEwantold LBC radio.
    • A Brexit-induced economic slump is the latest headache for Chancellor of the Exchequer George Osborne, who has planned to raise about £25B by disposing of Britain's stake in RBS by 2020

    Bank of England slashes banks' capital requirements

    • The Bank of England has taken steps to shore up the U.K. economy following Britons' decision to exit the EU, warning that the outlook for the stability of the financial system has become "challenging."
    • The decision to reduce the so-called countercyclical capital buffer to zero will allow British banks to lend an extra £150B to U.K. businesses and households, keeping the economy flush with credit.

     

    U.K.'s Osborne floats 15% corporate tax rate

    • As part of his new five-point plan to energize the economy, U.K. Chancellor George Osborne has proposed slashing the corporate tax to less than 15% (down from 20% now) in an effort to woo business deterred from investing in a post-Brexit Britain.
    • While refusing to backtrack on his warning that leaving the EU could push the country into recession, he told the FT: "We must focus on the horizon and the journey ahead and make the most of the hand we've been dealt."
    • According to the OECD, however, the U.K. is unlikely to try to lure international investment by becoming a tax haven after it leaves the EU.
    • Such a sharp cut in business taxes would also take Britain close to the 12.5% tax rate in Ireland and would likely anger EU finance ministers who fear a race to the bottom.

     

    Bank of America may yank its sale of MBNA following Brexit vote – FT

    • Bidders have been notified that Bank of America (NYSE:BAC) may call off its planned sale of £7B UK credit-card operations unit MBNA following the country's Brexit vote, sources say.
    • Some private equity bidders were said to be having difficulty raising funds after U.K. residents voted in favor of leaving the EU.
    • The price bidders were prepared to pay for the credit-card unit declined by as much as a third following the Brexit vote.

    Barclays is already warning investors to take cover for the coming recession

    Meanwhile At The Most Systemically Dangerous Bank In The World..

    U.K. Business Expectations Fall ‘Off a Cliff’ After Brexit VoteU.K. business confidence dropped and pessimism about the economic outlook almost doubled in the week after Britain voted to leave the European Union, according to a survey. An index published by YouGov Plc and the Centre for Economics and Business Research on Tuesday tumbled to 105 from 112.6 in the three days ended June 23, the referendum date. The survey, which was carried out between June 28 and July 1, also found the proportion of businesses that are pessimistic about the economic outlook climbed to 49 percent from 25 percent. “These figures show what is happening on the ground and they suggest a significant shock reaction,” said Cebr Director Scott Corfe. “Not only are businesses feeling much more pessimistic in general about the state of the economy, but their own expectations for domestic sales, exports and investments over the next 12 months have gone off a cliff.”

    Nigel Farage Steps Down As UKIP Leader, Adding To Post-Brexit Political Turmoil

    Remain calm, all is well:  Brexit not systemic risk, U.S. assets are safe haven: Morgan Stanley

    • via Morgan Stanley:
    • "The bottom line is that Brexit is ultimately a political crisis and one that is not likely to be resolved in a hurry. There will be many twists and turns in the path to ultimate resolution.
    • "There may yet be circumstances that give rise to bigger systemically risky events. For now, we don't think we are quite there and we feel that the current architecture of the global financial system is more resilient than it used to be when the last big storm hit us.
    • "That said, caution is clearly warranted. The global economy was not in great shape pre-Brexit and is now worse. There is likely to be more downside to come, particularly in European equities and in GBP.
    • "We see US assets across the spectrum – stocks, FX, credit and government bonds – as relative safe havens, and parts of securitized products, particularly US resi credit and broad exposure to US housing, as being relatively insulated."

     

    Puerto Rico missed $911M in debt payments

    • Puerto Rico skipped a record $911M of bond payments due Friday in the culmination of a more than year-long effort to force creditors into restructuring its "crushing debt burden."
    • Governor Alejandro Garcia Padilla said during a press conference in San Juan that the biggest missed payment was for $780M of general obligation bonds – debt that was supposed to be guaranteed under the island's constitution.

    Tuesday's economic calendar

    Treasury yields falls to record lows

    • Treasuries began a holiday-shortened week right where they left off, with 30-year yields sliding to an unprecedented 2.15% and the 10-year falling to a record 1.378%.
    • "It's quite difficult to judge how low is too low for yields amid a slower outlook for global growth," said Tomohisa Fujiki, strategist at BNP Paribas. "Prior to the U.K. referendum, this [Friday's] payrolls report was considered one of the most important events to watch."
    • According to fed fund futures data, the probability of a U.S. rate hike by year-end now stands at 12%, from 59% a month ago.

    Brent Oil Falls Below $50 After Nigeria Boosts Crude ProductionBrent crude sunk below $50 a barrel as estimates showed Nigerian production rose last month following repairs to infrastructure that had been damaged by militant attacks.Futures in London dropped as much as 1 percent after slipping 0.5 percent Monday. Nigeria pumped an average of 1.53 million barrels a day last month, an increase of about 90,000 a day from May, according to a Bloomberg survey. U.S. East Coast gasoline supplies rose to a record as the Energy Information Administration said consumption of the fuel in April was less than estimated in weekly reports. Crude has risen this year, with Brent gaining more than 75 percent from a 12-year low in January, amid supply disruptions and falling U.S. output. American shale drillers have brought back the most oil rigs of any week this year amid expectations of a stabilizing market.

    U.S. surpasses Saudi Arabia in oil reserves

    • The U.S. holds more oil reserves (264B barrels) than Saudi Arabia (212B) and Russia (256B), the first time it has surpassed those held by the world's biggest exporting nations, according to a new study by Rystad Energy.
    • The analysis of 60K fields worldwide, conducted over a three-year period, shows total global oil reserves at 2.1T barrels. That is 70x the current production rate of about 30B barrels of crude per year.
    • Crude futures -2% to $47.99/bbl.

    Tesla's recent production miss underscores risks – Deutsche Bank

    • via Deutsche Bank:
    • Tesla (NASDAQ:TSLAdelivered 14,370 vehicles in Q2, missing its forecast of 17K.
    • Half of the 18,345 vehicles produced during Q2 occurred during the last 4 weeks of Q2, underscoring the steep production ramp-up.
    • TSLA indicated that it exited Q2 producing nearly 2,000/week, and believes it can hit 2,200/week during Q3 and 2,400 in Q4. This would support the company’s H2 forecast.
    • "That said, suppliers continue to suggest Tesla has had difficulty maintaining steady production of Model X, with some estimating “up time” is as low as 50%. This is highly unusual for an automaker… so we are not sure whether Tesla has overcome production challenges.
    • "We are adjusting our 2016 estimate to a loss of $0.42 from a profit of $0.09 to reflect the adjustment to Tesla’s Q2 delivery forecast.
    • "At a high level, while we are modestly disappointed by the number, we are not shocked. This is not the first time Tesla has missed an aggressive target. Tesla has admitted to over-reaching on the complex design of Model X, and they are paying the price. Aggressive plans (for expansion, production, vertical integration, new markets, and features such as Autopilot) are part of Tesla’s DNA.
    • "Somewhat encouragingly, there are reasons to believe execution of the next phase of automotive growth should be achievable.
    • "We currently see at least 3 significant drivers for the stock: 1) Increasing visibility into TSLA’s business plan; 2) Re-focusing Tesla’s strategy on execution of this plan (most investors, and we suspect most Tesla customers, have not yet signed up to all aspects of management’s plans for a broadly defined sustainable energy company); and 3) Achieving execution milestones (i.e. production, cash flow)."
    • Firm rates TSLA Hold with a price-target of $290 (implied upside 44%).

    Tesla misses Q2 delivery forecast, blames "extreme production ramp"

    • Tesla (NASDAQ:TSLAdelivered 14,370 vehicles in Q2, missing its forecast of 17,000 units.
    • "Due to the extreme production ramp in Q2 and the high mix of customer-ordered vehicles still on trucks and ships at the end of the quarter, Tesla Q2 deliveries were lower than anticipated at 14,370 vehicles, consisting of 9,745 Model S and 4,625 Model X."
    • "In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3. That amount was higher than expected (there were 2,615 vehicles in transit to customers at the end of Q1) and is more than a third of the number of cars that completed delivery in Q2."
    • In Q1, Tesla delivered 14,820 vehicles, missing its Q1 forecast of 16,000 units.
    • Tesla releases global sales figures quarterly. Most automakers announce results monthly.

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    'Dory' leads box office for third straight weekend

    • Finding Dory (NYSE:DISdominated a trio of new releases at the Independence Day weekend box office, including The Legend of Tarzan (NYSE:TWX), The Purge: Election Year (NASDAQ:CMCSA) and Steven Spielberg's The BFG.
    • The movie picked up $41.9M, bringing its domestic total to $372.2M, and should end the four-day holiday with another $50.5M.
    • That would allow it to surpass Toy Story 3 and its $415M haul as the highest-grossing Pixar film in history on a domestic basis.

    Will iPhone Sales Decline in 2016?


  30. Running behind so please bring comments forward to morning post.

    It's going to be a fun week/month!  


  31. Updated snapshot of OOP ahead of review: