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  1. phil

    Cashing/Tangled – As you may know from previous cash-outs, we take winners off the table (like AAXN) and let losers play out (as long as we still have faith).  The LTP has $1.2M out of $1.6M cash already, there''s no sense in taking a loss if we think we can work a position – that's why we have a $1.1M profit in the first place – sticking to the system over the LONG-TERM.  

    FU CBI!  Wow, people really get killed for missing these days.  Won't be pretty if it spreads.  Now we're back to test the lows:

     And Burr is right, if we do hold the June lows, now would be a great time to establish a more aggressive bull call spread.  Not hurrying into it though, I don't actually like the sound of the noises management is making.  As I said earlier, if those Q1 issues are not "one time" (and they aren't) – we need to take a much closer look at these guys before committing more cash.  Also, it's forgotten that we closed profitable calls on CBI when they ran up last fall – this 2019 position is what's left.

    "Although our second quarter results are disappointing, we are taking decisive actions to improve our operating performance and strengthen the company's financial position," said Patrick K. Mullen, President and Chief Executive Officer of CB&I. "We have initiated a comprehensive cost reduction program and suspended our dividend. We are injecting additional rigor and discipline into our execution and risk management processes, further strengthening the integration between our E&C and Fabrication Services operating groups, and accelerating the implementation of innovative practices and technologies. We remain committed to our integrated self-perform model, which we believe will enable us to generate attractive earnings and cash flows over time.

    "Additionally, we announced today that we are pursuing a sale of our Technology business, which we believe will unlock significant value for stakeholders. We plan to use the proceeds from the sale to significantly enhance CB&I's financial strength and flexibility by eliminating the majority of our debt and reinvesting in our E&C and Fabrication Services businesses. We envision a bright future for CB&I as a highly focused company with tightly integrated EPC and fabrication capabilities serving the LNG, petrochemical, refining and gas power generation markets." 

    Technology Operating Group 
    Technology operating group revenue was $72.8 million, an increase of 13 percent from the year-ago quarter due to increased petrochemical licensing. The Technology group reported operating income of $21.5 million compared to $23.1 million in second quarter of 2016. Operating income margin was 29.5 percent, down from 35.7 percent in the year-ago quarter, due largely to mix. The Technology group's new awards in the second quarter were $148.5 million, up 38 percent from the year-ago quarter. Backlog as of June 30, 2017, was $1.2 billion.

    So a non-issue to revenues if they let Tech Group go but how much would they get for it with just $300M in annual revenues and $80M in profit.  I guess if it were TSLA, the answer would be $4Bn but, sadly, it's not so they'll be lucky to get $1Bn.

    CBI/Learner – I'll want to go over this one very carefully as these numbers are much uglier than we thought.  Remember, this was not totally unexpected:

    http://www.philstockworld.com/2017/06/18/philstockworld-may-portfolio-review-members-only/

    • CBI – Is $15 finally the floor or are they teasing?  Let's roll the 2019 $27.50 calls ($1.50) to the $15 calls ($4.45) for $3(ish) and buy back the short $37.50s (0.70) and see what happens.

     

    CBI/DC – If they are right then CBI will be an $8 stock in short order and it will take several years to work off the debt.  We started with CBI on 9/22/16 by selling $25 puts for $5 so net $20, call that our entry on 1,500 shares and add the $4,500 loss on the spread so net $23 is our entry on 1,500 shares ($34,500).  

    At the moment, CBI is $13.15 and we can sell 15 of the 2019 $12.50 puts for $3.60 so that's our DD and we can sell 15 of the $17.50 calls for $2.60 and now our net drops to $16.80/17.15 and it's 3,000 shares if assigned at $51,450.

    So assuming CBI goes to $8, we DD again by selling $8 puts for $2 (guessing) and $12.50 calls for $2.50 and then our net would be $12.65/12.58 on 6,000 shares (if assigned) for $75,480.  With the stock at $8 we'd have a $25,000 loss, which is one allocation block and by now it's 2023 and we'd want to sell 60 2025 $12.50 calls again (no puts) and, even if we only get $1.50, that's still $9,000 back on our $75,000 (12%), which is a pretty good dividend while we wait for the stock to rebound.  

    So, unless CBI actually goes BK (even $4 is recoverable), as long as they are around until 2035 we have an excellent chance of recovering all of our cash and whatever our 6,000 shares of stock are worth at the time would be a bonus.

    And that's on a stock that dropped 66% on us!  That's the key to long-term value investing – if you start at a good price with stocks that will ultimately stay in business (and the ones making actual money tend to do that), then you'll eventually get your money back – even on the dogs.  

    Submitted on 2017/08/04 at 2:45 pm

    CBI/Batman – I agree but they may want to kitchen sink this quarter while they can blame it on the old CEO.  It's always a good time to take the write-downs.

    So good example of a play that's in progress during a down quarter.  We have a plan to roll with it but FIRST we verify whether or not our original investing premise is still intact.  That will not be until next week, when we see what else happens to them.





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Zero Hedge

Gold Up 74% Since Last Market Peak 10 Years Ago

Courtesy of ZeroHedge. View original post here.

Gold Up 74% Since Last Market Peak 10 Years Ago

 - 10 year anniversary of pre-Global Financial Crisis market peak in S&P 500 on October 9th

- Gold up 74% since the last market peak a decade ago; 11% pa in USD, 9.4% pa in EUR and 12.4% pa in GBP

- Precious metal has climbed $736/oz on Oct 9th 2007 to $1278.75 ten-years later

- S&P 500's 102% climb is thanks to asset-pumping policies by central banks, rather than value
...



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Phil's Favorites

The difference between cybersecurity and cybercrime, and why it matters

 

The difference between cybersecurity and cybercrime, and why it matters

Courtesy of Roderick S. GrahamOld Dominion University

Confidence scams carried out online are still rampant. R. Stevens/CREST Research, CC BY-NC-SA

A Texas woman in her 50s, let’s call her “Amy,” met a man online calling himself “Charlie.” Amy, who lived in Texas, was in a bad marriage. Charlie said he was a businessman and a Christian, and wooed her. “He was saying all the right things,” Amy l...



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Economic Data Scheduled For Friday

Courtesy of Benzinga.

  • Data on existing home sales for September will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is schedule for release at 1:00 p.m. ET.
  • Cleveland Federal Reserve Bank President Loretta Mester is set to speak in New York City at 2:00 p.m. ET.
  • Federal Reserve Chair Janet Yellen will speak in Washington at 7:30 p.m. ET.

Posted-In: Economic DataNews Economics Pre-Market Outlook ...



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All Day Recovery

Courtesy of Declan.

It had looked bleak for markets at the open following a big gap down. However, this was just a temporary hit as markets came back right from the open.  It's also good news for bulls or long holders. The S&P shows this best.


The Dow Jones actually went as far as to test former upper channel resistance, now turned support.  Volume climbed in accumulation.

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The World's Largest ICO Is Imploding After Just 3 Months

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FBN TOPS CNBC ACROSS ALL BUSINESS DAY PROGRAMMING AS DOW HITS HISTORIC 23,000 MILESTONE

By VWArticles. Originally published at ValueWalk.

FOX Business Network (FBN) topped CNBC in Business Day and Total Day viewers as the Dow hit the historic 23,000 mark on Tuesday, October 17th, according to Nielsen Media Research. FBN’s Business Day coverage saw a 33 percent advantage over rival CNBC with 226,000 total viewers compared to CNBC’s 170,000. Additionally, FBN’s Total Day coverage saw a 22 percent advantage with 199,000 total viewers compared to CNBC’s 163,000.

]]> Get The Timeless Reading eBook in PDF

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FBN had the four top rated news programs of the day,...



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Puts things in perspective

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Puts things in perspective:

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

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Circadian rhythm Nobel: what they discovered and why it matters

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Circadian rhythm Nobel: what they discovered and why it matters

Courtesy of Sally Ferguson, CQUniversity Australia

Today, the “beautiful mechanism” of the body clock, and the group of cells in our brain where it all happens, have shot to prominence. The 2017 Nobel Prize in Physiology or Medicine has been awarded to Jeffrey C. Hall, Michael Rosbash and Michael W. Young for their work on describing the molecular cogs and wheels inside our biological clock.

In the 18th century an astronomer by the name of Jean Jacques d'Ortuous de Ma...



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Members' Corner

Day of Last Dances

News today has been relentlessly terrible. A horrific mass murder happened last night in Las Vegas. (Our politician's abject failure to address gun control is beyond sickening.) And today, reports that Tom Petty died of a heart attack, followed by reports that Tom Petty is not dead, and now reports confirming that Tom Petty has passed away. 

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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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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!

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

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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???

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Mid-Day Update

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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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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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