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  1. phil

    Long-Term Portfolio Review (LTP) Part 1:  $1.4 MILLION!  That's up $900,000 (180%) from our $500,000 start back on 11/26/13 so a bit over 3 years to get that far but the main point I want to make is this is getting easier, not harder, as time goes on because our mature positions, like the Butterfly Portfolio, simply crank out gains from premiums we sell and dividends we collect.  They've long ago been paid for as we're back to $1,073,540 in CASH!!!, which is twice as much as we started with.  

    If you are new at PSW, I would strongly encourage you to go back to our first cash-out review (which summarized all of our trades at the time, after 6 months) and then go forward a year to see how slowly we add things.  Generally we'd sell one or two puts a month and, if the position got cheaper – we'd set up a bullish spread to go with them (assuming we still liked them).  

    At the time we had AAPL, ABX, BRCM, BTU, CAKE, CAT, CLF, DBA, DE, EBAY, EGLE, FCX, GLL, HK, HOV, INTC, IRBT, LGF, LULU, MSFT, NLY, RIG, RRD, SHLD, SLW, SPY, T, TASR and TWTR and we were up 19% in 6 months and were worried about a correction (as usual).  Not too different than what we do now with a lot of the same stocks – it's the discipline that's important to develop, not the positions.  The Man Who Planted Trees tells you everything you need to know about running a long-term portfolio!  

    Step one in building a portfolio is, of course, identifying stocks you want to buy (and once you buy your first one, all the rest need to balance with it!).  Step 2 is NOT BUYING THE STOCK.  That's one people seem to have trouble with.  Why would you buy the stock when you can sell a put and give yourself a discount?  60% of the time, that's how we initiate a position in the LTP.   Even when we we do start with a spread, we keep it small so we can easily double down – TWICE – if the stock gets 20% or 40% cheaper.

    If you start with a 20% discount ($100 becomes $80) and then you don't add more unless it's down at least 20% ($80 + $64)/2  = $72 avg on 2x = $144) and then you don't add more unless it's down at least another 20% ($72 + 50)/2 = $61 avg on 4x = $244) you end up with 4x at close to 1/2 of what you would have paid ($400) if you jumped right in at full price.  That's why we're THRILLED when a stock we like gets cheaper – even if we're already "stuck" with shares.  

    • ABX – Loose leg of spread below, we will deal with it later. 
    • AGNC – On track.
    • ATVI – On track. 
    • BBBY – Here's one that got cheaper but still $36.27 and our net is $35.50 so we're still good but I do like BBBY and, rather than commit to more puts, let's just add a bull call spread while they are cheap like 10 2019 $30 ($8.50)/$40 ($3.85) bull call spreads at $4.65 ($4,650) and those pay $10,000 if all goes well and we already collected $4,500 from the short calls so our net cash outlay is now $150 with $9,850 upside potential and we're already $6,270 in the money.  See why I like it when things get cheaper?  Great for a new trade, of course.

    • BRK.B – I WISH these would lose money so we could buy more cheaply!   On track.  
    • CMG – On track.
    • DIN – New, good for a new trade.  
    • DNKN – On track.
    • ESRX – Good for a new trade.  
    • GOGO – We cashed GOGO on 5/31, I forgot it was in the LTP too – will be fixed.  

    • INFN – On track. 
    • KATE – No point in these anymore, let's buy them back and clear a slot.  
    • M – I still like them, good for a new trade.  (not enough to add a spread, though).  
    • MON – On track.  China starting to buy from them – huge.  
    • NLY – We were hoping they'd get cheaper but they didn't.  Our consolation prize is $8,250 for not owning them.  On track. 
    • RH – On track 
    • SBUX – On track. 
    • SEE – On track
    • SKT – Good for a new trade
    • SKX – On track
    • SPWR – On track.
    • TGT – On track
    • TLRD – Good for a new trade
    • TWX – On track
    • VZ – Good for a new trade
    • WATT – Good for a new trade.  

    We have 25 short puts and, if they all expire worthless, we'll keep/profit about $90,000 – NOT including the profits we've already made (maybe $40,000).  This is that tree-planting part, every month we find something to sell for about $4,000 and some will become positions and most will simply end up turning into cash, which we use to buy more positions.  After 2 years, we have 24-36 in progress at any given time and it's $50,000+ in bonus profits each year, which is 10% of our original principle.  

    It's a totally passive way to make money, very low-maintenance and your worst case is owning good stocks at great discounts, which then drops them down to one of the trades below…

    • ARR – It went up and up and up and we never had a chance to sell the puts.  We'll end up getting called away at $22.50 but, until then, we get the monthly dividends.  

    • CM – They have finally come back down and we can sell 5 of the Dec $80 puts for $5 to net in for $75 because we REALLY would like to own more of this stock (especially since we're losing ARR) and their 0.95 quarterly dividend.  
    • FCX – Very simply, if we have a bull call spread in the LTP is probably because we're waiting for a pullback to sell puts.  We have one here so let's sell 15 of the 2019 $12 puts for $2.25 as we'd be happy to double down on those if FCX tests $9 again.

    • IBM – Let's sell 5 of the 2019 $135 puts for $9.50.  Thrilled to own that stock at net $125.50!  
    • OIH – Not confident in these enough to sell puts.  If oil doesn't recover next month, we may have to take a loss on the spread and get out.  
    • CG – On track
    • CLNS – On track
    • FNF – On track
    • GCI – On track
    • GME – Good for a new trade
    • GNC – Good for a new trade.  
    • HOV – On track.

    HOV doesn't pay a dividend but, when it was $1.47, it made more sense to buy the stock than pay a premium for a long call in a bull call spread.  The rest of the ones above pay lovely, lovely dividends of about $6,000/qtr and there's another $24,000/yr (5%) that just rains into our pockets and will rain into the pockets of your children and your grandchildren and your great grandchildren.   Dividend stocks should become more and more of your portfolio as it matures (and as you do) – you should always be looking for good ones to add.  

    Think about what we're accomplishing.  In 3 years we have 6 positions throwing off $24,000 and in 6 years we'll be getting $48,000 and in 12 years $96,000 and in 24 years $192,000 – all from our $500,000 initial investment and dividends tend to grow with inflation so $192,000 a year then is the same buying power you wish you had now.  

    Slow, consistent investing with clear goals in mind – that's all it takes to build wealth sensibly and reliably! 





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Zero Hedge

Visualizing The Massive Rise In UK MP Security Costs Since Jo Cox' Murder

Courtesy of ZeroHedge. View original post here.

Since the murder of MP Jo Cox last June as she was campaigning in her Batley and Spen constituency, the total expenses claimed by MPs for security assistance have increased on a massive scale.

You will find more statistics at ...



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Phil's Favorites

Rogue State

 

Rogue State

How the guardians of nationhood conspire in its destruction.

By George Monbiot, published in the Guardian 18th November 2017 (Brexiters, beware: if the ties that bind us unravel, tyranny may soon follow)

What is this country we are asked to love? This might once have been an easy question to answer. National identity was built around a range of institutions, considered to represent the national interest. Rebellion against them was characterised as treason. But one by one, these institutions have been subverted from within. Look to the top to see treacher...



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Digital Currencies

As Bitcoin Tops $8,200, Only 39% Of Survey Respondents Say It's A Bubble

Courtesy of ZeroHedge. View original post here.

Having first surged above $8000 overnight amid Zimbabwe's chaos, it appears uncertainty in the core of Europe has driven further demand for cryptocurrencu protection, sending Bitcoin to a new record high of $8247 - up 50% from the 'Bitcoin Cash' crash weekend lows.

...



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Insider Scoop

Earnings Scheduled For November 20, 2017

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Bitauto Hldg Ltd (ADR) (NYSE: BITA) is expected to report quarterly earnings at $0.29 per share on revenue of $335.93 million.
  • Star Bulk Carriers Corp. (NASDAQ: SBLK) is estimated to report a quarterly loss at $0.04 per share on revenue of $66.32 million.
  • Northern Tech...


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Chart School

Weekly Market Recap Nov 19, 2017

Courtesy of Blain.

Monday, Tuesday, and Friday saw the now usual “no volatility” days – while bears finally saw some action on Wednesday, bulls came right back Thursday with even bigger gains.  So while we have been cautious on the market for 3 weeks now all that has meant is consolidation in the market (granted the Russell 2000 has taken some hits).  For the week the S&P 500 fell 0.3% while the NASDAQ gained 0.5%. Economic news was light (we cover retail sales below), and earnings are coming to their tail end so we are in a bit of a news vacuum as negotiations about the tax reform bills will take the reigns.

Retail sales slowed in October, rising...



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Biotech

The two obstacles that are holding back Alzheimer's research

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/Shutterstock.com

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...



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ValueWalk

Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

Following numerous reports on social media late Thursday night about the increased military presence in Harare, the capital of Zimbabwe, the country’s military took...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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