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Enthusiastic Thursday – Dressing the Windows for the Holidays

Related imagePropaganda! 

That's what you are seeing in the markets this morning.  What do "THEY" want you talking about with your friends and relatives at the weekend barbeque?  They want you to tell everyone how resiliant the markets are and how you "can't lose" on bullish bets and how buying the dips is a brilliant strategy.  Why?  Because every good Ponzi scheme needs a fresh round of suckers to keep things going!  

Since our down days on Aug 17th and 18th, market volume has vanished and our "recovery," such as it is, has been very narrowly based – with just a few of the market-moving stocks taking the indexes higher, which forces the ETF algorithms to BUYBUYBUY – without the need of human intervenetion.

Here's a look at the volume on the S&P 500 ETF (SPY) over the past 10 days:

Date Open High Low Close* Adj Close** Volume
Aug 30, 2017 244.83 246.32 244.62 246.01 246.01 58,757,200
Aug 29, 2017 243.06 245.15 242.93 244.85 244.85 51,135,700
Aug 28, 2017 245.17 245.20 244.09 244.57 244.57 40,565,600
Aug 25, 2017 244.90 245.61 244.39 244.56 244.56 64,445,900
Aug 24, 2017 245.00 245.18 243.75 243.99 243.99 49,730,500
Aug 23, 2017 244.33 245.05 244.16 244.56 244.56 50,203,800
Aug 22, 2017 243.57 245.62 243.55 245.44 245.44 63,140,100
Aug 21, 2017 242.64 243.20 241.83 242.90 242.90 65,469,700
Aug 18, 2017 242.90 244.19 242.20 242.71 242.71 136,748,000
Aug 17, 2017 246.24 246.60 243.09 243.09 243.09 128,490,400

We've had 4 down days where 365M shares were traded, 3 up days where 186M shares were traded and 3 neutral days where 157M shares were traded.  Even yesterday, where we had a strong finish, had advancing volume of just 1.42Bn on the NYSE and declining volume was 1.16Bn while the AMEX has more declines (36.5M) than advances (29.2M) by a wide margin.  This is NOT what a real rally looks like.  

Image result for trading robotAnd, if you think I'm just being paraniod – ask the NYSE, who just this morning have proposed a 5-minute delay for announcements after the market close to combat "sophisticated trading algorithms that scan English-language text in search of signals to buy or sell stocks."  The auctions determine the end-of-day price for thousands of NYSE-listed stocks.  The NYSE is trying to address a problem that has been around for years, but has gotten worse with the rise of algos that read news releases and execute trades if they spot phrases such as “record revenues” or “merger,” said Eric Noll, former chief executive of brokerage Convergex.  They’re building in a buffer so the closing auction isn’t impacted by rapid-fire trades coming into the market.

Don't get me wrong, we love our robot overlords!  The fact that they go crazy when they see certain key words is a key way we make our money trading against them.  Robots, unlike humans, are nice and predictable and my Father, David Davis, wrote some of the early trading programs that were used by investing firms amd banks and understanding the flaws in those trading systems is one of the ways we are able to take advantage and trade against them.

For instance, just yesterday, in our Morning Report, I told you we were going long Oil Futures (/CL) at $46.15 and long Gasoline Futures (/RB) at $1.63 and we CRUSHED IT – with oil shooting up to $46.65 for a $500 per contract gain and gasoline made two trips from $1.63 to $1.67 and, as you can see from the chart of the contract, that was good for gains of $5,388 on just 2 long contracts!  

Trading is becoming more and more like chess, you can't just think about how you are going to trade but you have to think about how, given what's on the board, your opponent (the Algos) will trade and then come up with a strategy to either counter their move or, sometimes, move along with them.  

One trade idea that is not working out yet is our Dow (/YM) shorts.  At the moment, we have worked ourselves up to 8 short contracts (now $40 per point!) at an average of 21,903.25 which are down $630 at 21,919 (they aren't all winners!) and, because we think this low-volume, end-of-month window-dressing rally is BS (and there was even a tax cut thrown in!), we feel pretty confident those Algos are over-reacting to the upside and we'll wait for reality to kick back in.  

I lost money on the Dow yesterday because I violated a cardinal rule of Futures Trading – NEVER LEAVE YOUR DESK!  I was being interviewed over at the Nasdaq and, ahead of the GDP Report (which was a middling 3%).  We initially got exactly the reaction we expected and the Dow dropped from our shorting line at 21,900 all the way to 21,840, which was good for a $1,200 gain on our 4 contracts but I wasn't around to take the profits and they were almost all gone by the time I got back.

Over at the Nasdaq yesterday, we were talking about the reliablity of market data and we didn't get a chance to go over the Nasdaq Portfolio, which only had 3 trades because the Nasdaq changed their policy and does not want us discussing specific trades anymore.  That's a shame because those 3 trades are already up $4,480 (101%) from an initial $4,450 outlay in just 4 months!  We're going to discontinue the Nasdaq Portfolio and initiate a Money Talk Portfolio next week when I do that show next Wednesday – let's see if we can double their money as well!  

That Gilead (GILD) trade was also featured in our April 24th PSW Report, which featured the trade idea we had discussed the morning before over at the Nasdaq.  It's a good link because we also discuss the strategy we used to come up with these trade ideas.  There was no margin at all in the bull call spread – it was a play that could have been done in an IRA.  

One of our Options Opportunity Portfolio Members asked me today if we were done with that trade, now that it's up 66% but I said to him that it's "only" up $2,975 out of an expected $5,525 so we still have $2,550 left to gain, which is 46% of our expected gains and 33% of the current value of the spread.  As I said back in the April interview, now that we're up 70% (yes, I hit it on the button), we have to evaluate the risk/reward as a new trade and, as I said, I still don't have much better, safer ways to make 33% on my money but, when I do – I'll know a good place to get some CASH!!!

Of course, the more aggressive way to play was also suggested in the 4/24 Report and that was to also sell 5 of the GILD 2019 $60 puts for $7 ($3,500) which dropped the net of the spread to $1,200 in exchange for our promise to own 500 shares of GILD at $60, which we thought was a terrific price (it was my favorite all spring).  You still get back the same $10,000 at $70 but the return on cash is now $8,800 (733%) and those puts are now $2.40 ($1,200) and up $2,300 (65%) as well.  

See, not at all complicated.  In fact, in that same report I mentioned we also like Whole Foods (WFM), who have since been bought by Amazon (AMZN) at 20% over the April price and the 2019 $30 puts we sold for $4.50 are now worthless for a 100% gain – very easy money if you can get it!  

And you can get it, because Super Value (SVU) is still down in the doldrums at $19.80 and our trade for our Options Opportunity Portfolio is still playable but maybe a bit aggressive as a new trade so, as a new play, I would take advatage of the $20 line by playing it this way:

  • Sell 10 SVU 2019 $15 puts for $2.15 ($2,150) 
  • Buy 10 SVU 2019 $15 calls for $7.30 ($7,300) 
  • Sell 10 SVU 2019 $22 calls for $4 ($4,000) 

That trade nets you into the $7,500 spread for $1,150 so the upside potential at $22 (10% higher) is $6,350 (552%) and your worst-case scenario is owning 1,000 shares of SVU at net $16.15, which is still 20% off the current price.  When your worst case is owning a stock for 20% off and your best case is making a 552% return on cash – it's probably a good trade!  

SVU has 1,900 stores and sell $13Bn worth of groceries and makes $200M.  At $19.80, their market cap is just $759M – less than they make in 4 years.  Whole Foods (WFM) has 465 stores and sells $15.7Bn worth of groceries and makes $500M (or MADE, as AMZN is cutting their prices).   At $42, their market cap is $13.5Bn.  

So, WFM is valued at almost 18 times what SVU is despite having "only" 2.5x as much profit.  I'm not saying SVU is better than WFM – I'd rather make more money selling less stuff too.  What I am saying though, is SVU seems very underpriced in a sector that may be undergoing additional consolidation because I could buy SVU for $1.5Bn ($40/share) and still have $11Bn to revamp my 1,900 stores ($5.8M per store) rather than spending $13Bn for WFM.  

Make a wish and say "Alibaba!"

 


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  1. Good morning,

    LB – steadily making progress – less negative comps…

    August company comparable sales down 4%, Victoria's secret down 7%

    vs  

    July total company comparable sales came in at -7%.

    July comparable sales for Victoria's Secret were -10% or -5% adjusted for the swimwear and apparel categories exit.


  2. Advill.

    Hi Still in Germany Yolanda visits Fam. im Mexico. Will only be moving south in Oct. Last week of Oct in Madrid.



  3. Phil,

    Are you still expecting a run up in /CL and /RB into the long weekend? What are your targets?


  4. Not all regulations are bad… Rolling back some simply for political reasons has consequences:

    http://talkingpointsmemo.com/news/trump-makes-rebuilding-efforts-difficult-before-harvey

    Two weeks before Harvey’s flood waters engulfed much of Houston, President Donald Trump quietly rolled back an order by his predecessor that would have made it easier for storm-ravaged communities to use federal emergency aid to rebuild bridges, roads and other structures so they can better withstand future disasters.

    Now, with much of the nation’s fourth-largest city underwater, Trump’s move has new resonance. Critics note the president’s order could force Houston and other cities to rebuild hospitals and highways in the same way and in the same flood-prone areas.

    “Rebuilding while ignoring future flood events is like treating someone for lung cancer and then giving him a carton of cigarettes on the way out the door,” said Michael Gerrard, a professor of environmental and climate change law at Columbia University. “If you’re going to rebuild after a bad event, you don’t want to expose yourself to the same thing all over again.”

    Signed by Obama so inherently bad I guess!


  5. Gold is not the safe haven it was!

    https://www.bloomberg.com/view/articles/2017-08-30/why-gold-is-less-of-a-haven-these-days

    Having waited patiently for the “any-minute-now” moment, gold investors are taking comfort from the recent rise in price in response to geopolitical tensions. Yet the responsiveness of gold, as well as the overall price, appears weaker than would have been expected from historically based models — and for understandable reasons. The precious metal’s status as a haven has been eroded by the influence of unconventional monetary policy and the growth of markets for cryptocurrencies.


  6. Can't use the Shiller P/E for short term trading:

    https://www.validea.com/blog/the-pros-and-cons-of-the-shiller-pe/

    Shiller PE

    The main conclusion that can be drawn from the current elevated Shiller P/E ratio is that we can expect lower than average returns on US stocks in the next decade. Research Affiliates has a great interactive tool on their website where they look at projected returns for a variety of asset classes based on current valuations. Using the current S&P 500 Shiller P/E ratio, it projects a nominal return of 2.6% over the next decade. That is well below the average historical market return.[...]

    Despite its value in projecting future returns over long periods of time, the Shiller P/E is often misused when applied to any periods other than very long ones. Market pundits have been in the media regularly in recent months talking about the elevated Shiller P/E as an indication that investors should sell their stocks, but the data in no way supports that conclusion. In reality, the Shiller P/E has almost no predictive value in determining where the market will go in the next year or other shorter term periods.


  7. vanguard chart


  8. Going to be good for solar companies:

    https://arstechnica.com/science/2017/08/florida-power-company-exchanging-nuclear-plans-for-solar-plans-cutting-rates/

    On Tuesday, power provider Duke Energy Florida announced a settlement with the state’s public service commission (PSC) to cease plans to build a nuclear plant in western Florida. The utility instead intends to invest $6 billion in solar panels, grid-tied batteries, grid modernization projects, and electric vehicle charging areas. The new plan involves the installation of 700MW of solar capacity over four years in the western Florida area.


  9. Good Morning.


  10. Phil are you done trading CL and RB since you mentioned stopping out of both or are you still looking for something into the holiday?


  11. CIEN earnings forecast weighing on FNSR, AAOI, etc.


  12. /CL ripping !


  13. Too bad TOS doesn't let you trade the expiring contracts for RB since it popped more than $0.15 in the last 24 hours. Seems like it's moving.05 for every penny of the October contract 


  14. Good morning!  

    Wow, there goes oil and /RB.

    More and longer refinery outages. 

    LB/Learner – Imagine what happens next year when they have easy comps!  

    Big Chart – Well it doesn't matter now – up we go at the open. 

    Run-up/Japar – Yes, I'm still expecting the thing we've been expecting for two weeks to happen now that it's time for it to happen – imagine that!  blush

    Oil/Japar – but, looking ahead, they will have huge builds, so 2-day play only. 

    Submitted on 2017/08/30 at 1:13 pm

    Peak oil/Japar – Well I was hoping for $48.50 but the hurricane has screwed that up, lucky to see $47.50 now.

    Solar/StJ – That is good news.  I like to see the old-school utility companies getting into the game.  

    /CL/Craigs – Got stopped out of /CL at $46.25 at 7am but back in at $46, of course, and now stop is $47.25 (goes up after passing each 0.25).  Just 2 long /RBs left – didn't want to be greedy and I will certainly be done with all on any pullback today – I'm very satisfied with what we caught this week.  

    /RB/Craigs – Yes, well think of the actual shortage of product for the first two weeks of Sept. It's a case where it will actually be nice to have barrels for a change.


  15. CL – I am out with a meager gain of $240 for many days work. At one point I was down $3k, and thought I was winning when I was $500 from breaking even.  What I struggling with is hanging on for the large reward that eventually follows, but I have yet to capture.  Last night I decided to put limits to get me just above BE, when the night before I had them higher – in fact if I kept them I would have hit the $47.25  today.  As it was I was happy at $46.45.  Now I am not happy, even with the small gain, for having worked so hard and missing the reward.  I have learnt alot  -I am better at DD, taking winnings off the table sooner rather than later or never, and I am still in the game – but only barely.  Lots of stress this creates and its okay if there is a commiserate reward.  Waiting on Godot…….


  16. StJ – "rainfall" has a R-squared of 0.06 ….


  17. APPL – No company is worth one trillion. Sell.


  18. Phil, What would you currently recommend as a new hedge?


  19. OMER       2500 lot Feb $20c/$17p bull risk reversals bought by a trader


  20. As long as you learned something, Latch….  cool

    The game is to take those small wins and make sure you keep the losses even smaller and, once in a while, for no reason at all – you catch a good one and make a lot of money.  Keep in mind making $250 a day for 200 days is $50,000 and any big win you get is just a nice bonus along the way but keep plugging away and let the small bets add up and don't swing for the fences – even Ty Cobb accidentally hit a few home runs (mostly inside the park). 

    In Charles C. Alexander's biography of Cobb, he cites a story of Cobb sitting in the dugout before the game and telling a sportswriter, "I'll show you something today. I'm going for home runs for the first time in my career."

    Cobb went 6-for-6 that day in St. Louis, adding a double and two singles. The next day he hit two more home runs. Cobb's power outburst has long been presented as evidence of his desire to show he could hit home runs like Babe Ruth, that he was tired of everyone praising Ruth and dismissing his mere singles.

    $1Tn/1020 – I don't know, most of the people I talk to have been waiting for the 8 to come out for a long time – lots of pent-up demand.   I was in the Apple store Saturday at 7pm and they were packed and no one could see me (for 90 mins) so I went back on Sunday at 10 am and there was a 2.5hr wait and I came back for an appointment (finally wised up) at 1:30 and they were amazingly helpful, fixed everything and charged me nothing.  At no point was the store not packed with people vs the rest of the mall which was sparsely crowded.  I would not bet against AAPL UNDER $1Tn and, even then, it's only 20x earnings.

    Hedge/JMD – Gotta go with TZA back at 1,400 on /TF.  

    It came right back down but you can see the potential in a sell-off.  I'd buy the April $15 calls for $3.40 and sell the Jan $20s for $1.10 for net $2.30 on the $5 spread and if TZA goes higher, you can roll the short calls (the April $25s are $1) but, if it doesn't, you can THEN sell April calls, which will help pay to roll the long $15s out to longer months and down in strike.  As an offset – any of our FU stocks will do:

    • TEVA 2019 $17.50 puts are $4.15 
    • CBI 2019 $10 puts are $2.70 
    • LB 2019 $30 puts are $3.80 (just picked them for Benzinga)
    • M 2019 $20 puts are $4.00 
    • FTR 2019 $13 puts are $4.90

    So let's say you sell 5 LB 2019 $30s for $1,900 and you buy 10 of the spreads for $2.30 ($2,300), that's net $400 on a $5,000 spread that could widen to a $10,000 spread – very cheap insurance!  


  21. I won't be betting against APPL….that's for sure!  :)


  22. AAPL/1020 – company might be, but surely no -phone- is worth $1000!



  23. thank heavens texas lawmakers rushed to protect vulnerable mutli-national insurance companies, because, you know, freedom…


  24. scottmi – that's why it's 'good business' to do business in texas…. :(


  25. TSLA is going up again on the new tax plan that will cut their corporate taxes that they will never have to pay since they don't make money and have enough carry forwards for years.


  26. best business in the world: take money from the minions dutifully making their premiums every month, and don't pay claims


  27. BDC / speaking of 1000;

    Do you have it?


  28. Latch I can attest that going for home runs will lose you lots and lots of money. So will over trading and not managing risk. Listen to Phil, and don't think you can ever out think the pros. Take what they give you and get out when they aren't giving and mostly just be patient and try to only trade the good set ups. Even then it will mostly not work easily. 


  29. Phil, what do you think of RH back down here?


  30. This video is funny, don't know if I'll trust TSLA's autopilot if they are hitting walls in park mode in a garage.

    https://www.youtube.com/watch?v=VOTsawppmT4&feature=youtu.be


  31. OK, everyone is worried about the Fed unwinding its balance sheet.  Hold on….just hold on.  This market has a floor, and the PPT will support it indefinitely.


  32. Oh, and 'hi' everyone.  The market action in Biotechs is heating up.  Money is all over the place, and I am hoping that we are now going to be one of those names.  Not gonna be $12B, but 3% of that would be nice! 8)


  33. I have a friend who owns commercial property in Houston.  When I called him to see how things were going, he was frantic about getting his insurance claims filed by Friday. I asked what's up with that?  He told me about the new law going into effect and could guarantee the average person has no knowledge of the changes made right under their feet.


  34. it's misting in seattle a little. Feels nice. Maybe it's too soon but I gotta say, it hasn't rained in Seattle in 2 months (we;ve broken every weather record on the book this summer). Another week of high 80's coming up (our average high in August is 76).

    +12F norm temps, No rain… in Seattle. 50 inches of rain in Houston. Oh yeah, plus all of this (just this week).

    But apologies for getting "alarmist!" because, you know, sun spots or something. Wouldn't want to upset the snowflakes.


  35. Thanks Phil/craig — need to keep working on my emotional discipline. 


  36. Hey guys I am new here, just signed up last night. I am a newish investor, a small dog but I am ready to build up my own casino!! 

    Few posts up someone mentioned Duke and Solar in Florida. I can confirm! I do contract work for Duke directly (gotta love that dirty contractor money, its fueling my portfolio nicely!) and they are indeed beefing solar. I have even been talked to about possibly doing some QA work for new solar construction which I would jump on in a heartbeat if officially offered. Just wanted to say hello and give my "boots on the ground" perspective. We currently do a bunch of work down here using NG. It powers Siemens/GE turbines that generate clean energy for the most part. I love being around it. Amazing stuff, more to come to. They are building a new plant near where the old Nuke plant was in Crystal River, it will run off NG as well, in fact they are constructing a pipeline over to the plant to fuel it. Anyways, looking forward to learning with you guys and building my portfolio!


  37. stock -insurance — yes I've seen the same thing thru Facebook.. it seems the law it not retroactive for normal insurance claims, but is if you plan to sue the insurer.  Get him to check online 


  38. Phil I would hate to miss any significant additional upside in oil and gasoline so I ask you how much additional upside is there possible before the weekend at 1.7550ish and 47.25ish in your esteemed opinion? I don't want to be greedy and end up losing a part of my hard won gains. 


  39. advil/GBTC – no since I have bitcoin straight up going back 5+ years now, I never saw the need to pay 120% premium for a "stock" that claims to own it on my behalf.

    It amazes me someone would chase this asset. It exposes one example of the sheer stupidity on wall street.


  40. Trump under house arrest.  LOL.  Breitbart.  Trump is so F'ed.


  41. So I see a few different possible scenarios, first is we pull back this afternoon on both RB and CL for a run up into tomorrow, second is we keep running into tomorrow and things turn around at some point tomorrow and last and most likely is if I trade any more, price will go opposite of whatever I do. 


  42. BDC,/ GBTC

    that´s why I was asking, I have been buying ETH  petty cash each month since May, in Coinbase, not complain at all. and started with come  LTC  .


  43. advill – nicely done. We're bubblin' right now though, keep that in mind

    https://coinmarketcap.com/charts/

    I had a few litecoin from mining in the winter of 2014/2105. I used it to keep my basement warm (like 75-78 degrees, it was so nice). The power cost $400 and the LTC yielded about half that, so not a bad trade-off at the time — get some heat at half price. However, I just held the LTC in some old wallet and it's gone from 2 to 60! So that worked out!


  44. BDC – I agree on GBTC.

    But it's a great example of the "greater fool theory" actually working well.  So far, that is.


  45. like craig said – when Wall street gives you a free ride, take it and don;t look back. Half the price of GBTC is in the bitcoion they (supposedly) hold, the other half is literally wall street idiocy commoditized


  46. hello christopher and welcome. I own a home solar array in seattle and started this project. Enjoy PSW.


  47. BDC;  I´m buying now about $600 /month  the idea is buying small amounts and just keep it  there for another 5-10 years, at the end will be as saving on a IRA….hopefully

    at the moment since I opened  (reading you)  it´s  over 140%, (don´t salivate is in about $1,200 dls….) but  I know not always will be the same.


  48. Thanks for the information Christopher. I posted that article earlier because it looks interesting.


  49. Wild day, new highs on the NDX, I'd say that end of month push worked well… IWM right at the 50 day avg, will it break through or be rejected? XLF financials unch now, no love for the banks… next downdraft could be HUGE! Really big, the biggest ever! Or not… can't complain it isn't exciting enough! Got my USO calls, looking wonderful… SPWR looking like a buy here, all those new roofs in Texas need solar!


  50. StJean; After the nightmare with the coal ash in NC Duke is certainly trying to turn into a different direction. They have not completely walked away from Coal…. but you can see that they are focused on NG and solar operations. That and they acquired their own gas company last year I believe. I like Duke. And not just because they pay me. 


  51. Biodiesel; Thank you, interesting site, I am fascinated by solar, I will check it out!


  52. /RB – Phil or others, is there a leveraged ETF where we can play gasoline's reversion to the mean in non-futures accounts?  UGA is the only gas fund I know about.


  53. TSLA/phil, well you had said

    "TSLA/Lunar – I wish they were higher, I liked them short around $360.  As it stands ($344), I'd go with the March $380 ($59)/$320 ($28.50) bear puts spread at $30.50 and that's starting off in the money and pays a double if all goes well.  I don't even think I'd sell a call unless they go up but I'd keep an eye on the short Jan $380 calls, that are already $19 and the $350s are $30 so you need a $30 pop to pay for the whole spread (if you still have the balls to sell them while it's popping 10%) but I'd be pleased to get $25+."

    and here we are…close to $360


  54. Phil – "if you think I'm just being paraniod"

    Definition of paranoid: one who is in possession of all the facts. – William S. Burroughs


  55. mis-timed UGA. I held for over a year and sold two days ago at 27.65   :(


  56. Phil, what do you think of buying Oct puts on UGA.  This steep rise in price should be temporary……right? :) .  I know futures play might be quicker, but for those of us who are futures challenged, thought this would be "safer" play.


  57. advill – Bitcoin+IRA  …your BTC is going into a IRA?


  58. Phil – "So, WFM is valued at almost 18 times what SVU is despite having "only" 2.5x as much profit.  I'm not saying SVU is better than WFM – I'd rather make more money selling less stuff too.  What I am saying though, is SVU seems very underpriced in a sector that may be undergoing additional consolidation because I could buy SVU for $1.5Bn ($40/share) and still have $11Bn to revamp my 1,900 stores ($5.8M per store) rather than spending $13Bn for WFM.  "

    Spot on, uber astute and cogent.  Albertson's; Jewel-Osco; Farm Fresh; Shop n Save; Lucky; Bristol; Rainbow, and Unified et al.  Scaling up low end Wal-Mart like retail, distribution and wholesale operations when retail is getting squeezed and about to to get a seriously hard "cup check", one word, smart.

    40M shares at $20 = 800M market cap.  One could acquire the rights for 1B which would buy the 2.7B in debt.  But 16B revenue for 3.7B??? What is there to think about?  Bezos and company were and are out to lunch.

    IMHO, Amazon is going to get torched on WFM much like AOL/Time Warner.  As real tough times are coming, back away slowly and hedge into bargains like SVU amongst others, and Out.


  59. Worth/Scott  - I don't know, I paid $3,500 for an IBM PC Jr back in college (early 80s) and the phone is 1,000 times more powerful, color, 256Gb storage, internet (what's that?), telephone, digital camera, voice recorder – probably would have cost well over $100,000 30 years ago.  As we know, everyone ended up buying a PC by 1999 and another 5 or 6 since then.   The IPhone only came out 10 years ago.  In 1984, IBM was a $25 stock and in 1995 it was a $25 stock but in 1999 it was $125 and it peaked out at $200 in 2013 so I think it's still early innings for Apple.  Tim Cook just got a $96M bonus because he beat all the goals they set for him – and they were aggressive goals.  What do you think he has planned for his next $100M bonus?  

    Insurers/Scott – Now they are saying $80-90Bn in damage.  Huge boost for GDP though.

    LOL BDC.  

    Image result for braveheart freedom gif

    Insurance/BDC – Why do you think Buffett loves it? 

    RH/Jet – Getting attractive but may get more so.  Their costs got out of control and ate their profits and, so far, there hasn't been any indication they've gotten things back on track.  $45 seems great at $1.5Bn but their best year was $91M in profits and you won't see that again until next decade so, unless they get back to $30, where we liked them, I'm not too interested in jumping in.

    WSM at $46.16 ($4.6Bn) is more exciting to me as they have $5Bn in sales and $300M in profits so p/e 15 is already nice and they steadily grow it.  I wish they would spin off Pottery Barn but I guess it serves a purpose (get the college kids on the mailing list and upsell them).  

    We don't have WSM so let's get back in in the LTP:

    • Sell 10 WSM 2019 $42.50 puts for $5.30 ($5,300) 
    • Buy 15 WSM 2019 $40 calls for $9.20 ($13,800) 
    • Sell 15 WSM 2019 $52.50 calls for $4 ($6,000) 

    That's net $2,500 on the $11,250 spread so we have $8,750 (350%) upside potential at $52.50 and our worst case is owning 1,000 shares at net $45, which is about where it is now and that's aggressive but I really like the value down here – especially as a lot of people in Houston need furniture and furniture inventories are usually tight, which means there should be a nice drawdown over the next 6 months.  

    Fed/Pharm – 2027 and they'll still have $2Tn?   As to Biotechs – LABU baby!  

    • Submitted on 2017/08/15 at 2:22 pm
    • LABU – I love them when they are cheap.  Let's spend $5 to roll the Dec $55 calls ($13.80) to the March $50 calls ($18.50) and DD (10 more) and sell 10 of the March $70 calls for $11.50 so we move from 10 $15 Dec spreads to 20 $20 spreads with 1/2 the short calls expiring in Dec and the rest of the trade in March.  Cost of the change is $5,000 + $7,000 so $12,000 and potential at $70 goes from $15,000 to $40,000 so $12,000 more to make up to $25,000 more is a good deal!  Now we can buy back the short Dec $45 puts for $5 ($2,500) and sell 8 of the March $50 puts for $10.90 ($8,720) so we pocket another $6,200 and now we only spend net $5,800 for $25,000 more upside on essentially the same spread!  
    • What, do you think we make 400% by accident?
    • Jeffl Submitted on 2017/08/15 at 2:55 pm
    • Phil/LABU -

      I don't ask lots of questions – still learning… but

      Why do you consider LABU cheap at $60 when it was $40 in June and $25 in November?  Just curious…

    • LABU/Jeff – It was super cheap because VRX took the whole sector down and crashed LABU, which is the 3x ultra-long Biotech.  That was, hopefully, a one-time thing and very unlikely to be repeated and, moving forward, there's a lot more upside to the sector than down.

    Insurance/Stock – What bastards!  

    Welcome Christo!  Excellent skill set to add to our collection, your input will be much appreciated. cheeky

    What a day for /RBV7!  


  60. I just bought some of the UGA Jan 27/25 bear put spreads for $.50. Max gain $1.50 if gas goes back to where it was a few weeks ago. 


  61. Phil – cup check – smart squirrels always protect their nuts, and Out.


  62. Pharm / Phil,

    Are you still holding SGYP ? and are there any further updates on the trade ? I am not sure if they can now raise money using debt and protect share holder value ?

    Thanks as always

    Pat


  63. 1020 – "APPL – No company is worth one trillion. Sell."

    Just before the new Iphone introduction, their turncoat, tax evading, douche bag CEO just dumped $43M worth. Needs a little of this treatment, in public and Out.


  64. Latchdaddy / IRA

    LOL!!… is my fictional IRA ( I´m not  US citizen), If I buy $5,000 usd now it will become a 1 million in 10 years!  ….something like yours…

    But seriously talking now, the question could be  if you can add some BTC based  ETF´s shares in your account, something like GBTC  or there is another MG…. something which is a basket of CC s.


  65. Upside/Craigs – I'd hate to blow these fantastic gains gambling over the weekend so I'm back to cash on oil and gas and good luck to all if it goes higher.  We got a nice pop in /NG too and I'm taking that money and running as well.  

    If you want a stopping line, try $52.50 on /BZ but I got out on /CL when $47.25 failed and $1.75 on /RB just seemed greedy not to take.  

    Trump/Pharm – LOL, those guys are insane.  

    SPWR/Mkucs – That's a good one (we already have it).  

    /RB/MrM – I don't know of an ultra but options on UGA are leveraged enough.  In yesterday's post I called the UGA Sept $26 calls at $2.15, looking for $3 and today $4.80!  

    That's pretty good leverage!  

    TSLA/Lunar – Chart's still strong, I don't think I'd jump in too soon but this is definitely where we begin looking to make a short. 

    UGA/BDC – Ouch!  

    UGA/Ult – We don't know how deep the /RB shortage will go or how long it will last yet.  The Sept contracts are at $2.08, down from $2.167 earlier.  That's because they KNOW getting gasoline in Sept is going to be tight but the /RBV7s don't deliver for another 45 days and we may be out of the woods by then or gasoline may stay tight as it takes the refineries about a week to restart – even after the clean-up, which hasn't even begun (and then safety inspections by understaffed Government).

    WFM/Naybob – I don't think it was a bad buy for AMZN, that's where the margin is but they're not going head to head with WMT using WFM as their weapon.  

    SGYP/Pat – We spent $0 to roll it out:

    SGYP – Big loss for us as they blew their drug trial.  There's another study coming early next year and we have time to hang on but more of a gamble now.  It would be silly not to roll the 2019 $3.50 calls ($1) down to the $1.50 calls ($1.90) for 0.90 ($3,600) and then recover that money by selling 40 $4 calls for 0.90 ($3,600) so now we're in the money again and we collect $10,000 at $4 if all goes well for a small net net profit.  Hopefully, the spread will protect us from taking too much more damage. 

    Cook/Naybob – What?  He probably sold the stock to pay his taxes on his $96M bonus.  I don't have a problem with that – it certainly doesn't hurt AAPL.  Cook is worth $400M on paper but it's almost all AAPL stock, if he has a taxable event, he has no choice but to sell shares.  


  66. MSFT – New all-time high.  Stock has doubled since Nadella took over in 2014.  Only bad thing about that is how much money he has made for Ballmer.  Don't resent the money he has made for Gates, since most of that will go to charity.


  67. Long lines at gas stations that have supply. Many are out already.


  68. In north Dallas.


  69. Argus

    Login to View

    Upgrades

    Gilead Sciences (GILD)

    Hold -> Buy

     

    High

        

    William Blair

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    Reiterates

    Gilead Sciences (GILD)

    Outperform

    $87.00


  70. Pat SGYP did you or any one see my comments on this one.?


  71. BDC – Speaking of GBTC. 

    It's up $95 today !


  72. Long the car industry:

    https://www.autoblog.com/2017/08/31/automakers-dealers-rushing-cars-houston-harvey/

    Estimates for the number of Harvey-damaged vehicles needing replacement range up to 500,000.

    By Thursday, AutoNation, the largest U.S. auto retail chain, had reopened its 17 Houston stores and is moving cars and trucks from other regions, company spokesman Marc Cannon said.

    That's a lot of cars! Comps will be good in the next quarter!


  73. Phil – Traitor Cook – Its not his taxes, its Apples.  Previously PSW comments here and here.

    Apple actually found a much larger loophole than the famous "Double Irish" sandwich. Apple allocated 65% of revenue, to overseas activities. The foreign tax rate was 6% in fiscal 2015. Apple has about $232B in cash, with $214B of that held overseas.

     

    Placing the US Treasury and IRS in a tax credit bind.  I know Apple are not the only ones, it's everybody and their mother.  However, Apple and turncoat CEO, ne tax weasel Cook, blazed this trail and have refused to pay.

    "We’re not going to bring it back until there’s a fair rate. There’s no debate about it.

    These corporate scum bags don't want to pay 35%, they want to pay ZERO.  If you or I attempted to pay 6%, all of our assets would be confiscated and we would be imprisoned.  In addition, Cook has brazenly lied to Senate sub committees at hearings regarding his knowledge of all of the above.  He is nothing short of a liar, traitor and tax cheat.  He's lucky to have such a pack of eunuch's running the show, as moi would have him drawn and quartered and Out.


  74. when talking about bitcoin bubbles let's make sure we keep things in context. Sure, it's a bubble, but compared to what!?!

    Also, gold seems undervalued when thinking about articles like these. The fiat/debt bubble makes atomic scarcity look desirable again. MAKE GOLD GREAT AGAIN. I'm making hats, who's in?


  75. Cars/StJ – I agree, F is already popping:

    FCAU was one we loved a while ago:

    So F is still relatively cheap.

    Cook/Naybob – But he makes such a nice phone! 


  76. Better get ready for the next big one! 

    http://mashable.com/2017/08/31/hurricane-irma-intensifying-looms-in-atlantic/#T2E.Lwx7Iaqk

    Hurricane Irma, which was upgraded to a Category 2 storm on Thursday morning — and is likely to become a high-end Category 4 or 5 beast of a storm — is moving west over the open ocean about 500 miles west of the Cabo Verde Islands. On its current track, Irma is forecast to begin affecting the Leeward Islands on Tuesday, with Puerto Rico, the Bahamas, and possibly the mainland U.S. in its sights after that. 

    Might be a bad year for hurricane!


  77. And long cleanup companies:

    https://www.nytimes.com/2017/08/31/us/houston-contaminated-floodwaters.html?mcubz=0

    Officials in Houston are just beginning to grapple with the health and environmental risks that lurk in the waters dumped by Hurricane Harvey, a stew of toxic chemicals, sewage, debris and waste that still floods much of the city.

    Flooded sewers are stoking fears of cholera, typhoid and other infectious diseases. Runoff from the city’s sprawling petroleum and chemicals complex contains any number of hazardous compounds. Lead, arsenic and other toxic and carcinogenic elements may be leaching from some two dozen Superfund sites in the Houston area.

    But hey, who needs environmental regulations!


  78. houston will be a toxic mess for a decade 


  79. The only mining operation of Bitcoin  en the market is  McAfee founder  MGTI here is an analysis of J. Schwartz on the company.

     

    As we look back at the month of August, MGTI led the way as it rose from $1.13 to $4.  After these massive gains we’re seeing the first sign of profit taking today as the stock drops $0.80.  Many have asked for a price target.  Should we follow suit and take some profits?  To begin the discussion with proper context…even after the recent move, MGT’s market cap is valued at only $130 million.  What is this company really worth?  By October MGT will be mining approximately 285 bitcoins per month at a rate of 855 bitcoins a quarter.  Three years from now MGT will have a minimum of 12,000 bitcoins on the balance sheet.  At current pricing of $4,700 per bitcoin the mining business is poised to generate a modest $56 million in revenue over the next three years which is worthy of supporting the current market cap but not too much more.  If bitcoin stays at $4,700 then a bitcoin-related price target of $4 for MGTI is about right.  In order for mining to really add value, the price of bitcoin needs to appreciate.  At $10k per bitcoin the balance sheet is projected to increases to $120 million and if McAfee’s prediction of $500,000 per bitcoin comes to fruition then the balance sheet will balloon to $6 billion. If investors in countries like Venezuela, North Korea, South Korea, Japan, Russia, China, etc… continue the trend of losing faith in domestic currency, bitcoin has a real opportunity to thrive over the next three years.  On the strength of this bitcoin mining business alone, it’s feasible MGT could one day rise to a $1 billion market cap, or $26/share.  If McAfee’s wild prediction comes true, then you’re talking something in excess of $150/share.  MGT is in the early stages of positioning for such possibilities.    

     

    Bitcoin is not the only catalyst supporting the share price of MGT.  Remember that John McAfee is the innovative visionary of cybersecurity in a world under constant threat to governments, corporations and individuals.  His new product, Sentinel, is scheduled to be launched in September.  Sentinel ‘monitors network traffic for suspicious activity using sophisticated algorithms and heuristics, generating an alert and deploying appropriate countermeasures when triggered.  Sentinel mitigates risk by greatly reducing the time a hacker has to operate inside protected networks, upload malware, or steal data’.  McAfee’s prior company produced antivirus software which sold to Intel for $7.6 billion in 2010.  What if lightning strikes twice and McAfee has another hit on his hands?  If Sentinel evolves into another $7.6 billion product then the share price of MGTI will catapult to $200 a share.  

     

    The third leg of MGT’s business is McAfee’s plan for the ‘first truly private smartphone’ set to be released in February 2018. Through the use of physical switches that allow the user to disconnect battery, antenna, bluetooth, camera and the microphone McAfee believes it will be the ‘most hack-proof phone’ on the market.  If the world of tech truly is headed towards blockchain smart contracts and digital currencies then smartphone security will become even more important in the future.  It’s a long shot, but there’s a chance the MGT team could eventually come up with the first decentralized blockchain phone.  This is the kind of innovation that could someday knock Apple’s iPhone from its pedestal.  Anyone who uses bitcoin with digital wallets can attest to the necessity of smartphone privacy. McAfee’s timing might be right.  If this privacy phone can gain any sort of market traction in 2018, 2019, or 2020 then the market cap of MGT will justify a valuation in the tens of billions.  A $20 billion market cap would propel MGTI to $520 a share.  

     

    Assigning price targets is a fickle aspect of Wall Street industry.  Things change too quickly which is why we prefer to utilize momentum points.  Nevertheless, if I’m forced to present best case scenario price targets I would go with MGTI $26 on a $1 billion market cap by the end of 2018 because of bitcoin exposure.  Then I would assign a best case scenario price target of MGTI $200 on a $7 billion market cap by the end of 2019 because of Sentinel.  And finally, MGTI $500 on a $20 billion market cap by the end of 2020 is possible if the privacy smartphone gains traction.  These price targets assume John McAfee is a true visionary in cybersecurity and that the quality and timing of his product releases will flourish as blockchain evolves.  If McAfee is a second iteration of Steve Jobs then MGTI $500 is exactly what will happen. The cool thing about MGTI is that it’s capable of outperforming in a crisis because of bitcoin exposure but it’s also capable of outperforming in a bull market with successful launches of Sentinel and the privacy phone.  Combine these three legs of MGT’s business model and one can intelligently make the case for a price target of $26 by the end of 2018.  

     

    Today’s MGTI selloff after such a strong month does nothing to alter our long term view.  The only move is to raise the momentum sell point from $1.44 to $1.75 after a good month of averaging in.  

     


  80. SGYP…I am buying stock in small amounts to average down.  Superior product.  Just going to take some time.


  81. Speaking of taxes:

    http://washingtonmonthly.com/2017/08/31/what-trump-doesnt-want-you-to-know-about-corporate-taxes/

    The reason I say that has no meaning is because that chart represents the “statutory corporate tax rate,” or the one that is on the books. It has nothing to do with what corporations actually pay in taxes. To answer that question we have to look at “effective corporate tax rates”—what they pay once all of the loopholes are factored in. Here is how the U.S. compares to the other G7 countries on that score.

    Not the highest tax rate once lobbyist are done with loopholes!


  82. Energy/Phil – did you put out a long play on XLE the other day? Are you bullish energy from this point? Does that include the majors like XOM, CVX, BP, TOT?


  83. Phil thanks for  reminding me not to be greedy. So my next question is whether the hurricane drastically changes your outlook for oil post holiday ?  I would think it must change it at least somewhat  since there will be some increased demand to make up for the lost production in the interim.


  84. Does anybody here use (or have you heard anything) about "goldmoney", i believe it used to be called bitgold? 

    Apparently it is a new service in which you buy physical gold, and they store the gold for you (fully audited) and will issue you a debit card which you can use for everyday purchases. So basically the balance of your money sits in physical gold, you can load up your debit card with cash at whatever the current value of gold is and use as needed?

    Seems like an interesting concepts, Ive got to look into it more to see what kinda fee's / other costs there are but it seems pretty lean. 

    Another cool benefit it apparently you can get a real gold debit card (which you obviously must pay for) but kind of cool nonetheless! 

    if anybody is familiar with them would be interested to hear more about it


  85. GE/Phil – sold off their money making financial arm. engine troubles now. At what level would you see a value floor for them? Currently at 14.5x 2018 earnings estimates…if it is reasonable to look that far out.


  86. Hurricanes/StJ – Well that's been my premise all year.

    /NG/Aquila –  my theory on that remains that more exports will eventually chew into US inventories. That will make it much easier for a hurricane to cause a major disruption that gooses prices.   The Qatar thing is dampening  my  enthusiasm a bit as they are possibly going to add more production to stick it to the other OPEC members. That's something we will need to keep an eye on.  

    Submitted on 2017/08/03 at 12:34 pm

    /NG/Jeff – We're still hanging at the lows but I think $2.80 on the front-month will hold up.  Last year we bottomed out in Aug a bit below $2.60 and again in Nov and Feb so holding $2.80 now would be nice progress and, of course, it's hurricane season so possible bonus rounds for the next few months.

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

    I am going to personally patrol the Caribbean next week and see what the Hurricane looks like.  That should give us an idea of what is to come and also make my vacation tax deductible! 

    Submitted on 2017/08/08 at 1:18 pm

    Storms/Latch – My experience from skiing 35 years out West and having parents in Florida (so commuting around) is that lots of snow out west leads to hurricanes in the gulf the following fall.  Just want to be there if it happens.

    Good old long-term, Fundamental investing!  

    Clean-up/StJ, BDC – Hopefully I'll have time this weekend to research that.  That's true as you can feel yourself getting cancer when you drive past the circle of refineries around Houston – must be all kinds of nasty chemicals breaking out of containment.

    MGTI/Advill – It's funny as it's all just speculative math games.  And don't they cash in those BitCoins to pay for the operations?  If so, then how do they appreciate with the price of BitCoin?  That would be like valuing ABX as if they never sold the gold and put it all in vaults forever and ever.

    Too bad there's no options, calls would be fun.  

    Corporate taxes/StJ – Very good point.  

    XLE/Scott – Not that I remember.  I think I mentioned OIH might do well as there have been two years of underinvestment and, ultimately, it doesn't matter what the price is – oil has to come out of the ground and be sold and that's how OIH (their holdings) make money.  

    As we may have oil shorts, OIH will make a nice hedge against oil popping too so, in the LTP:

    • Sell 20 OIH 2019 $20 puts for $2 ($4,000) 
    • Buy 20 OIH 2019 $20 calls for $3.65 ($7,300) 
    • Sell 20 OIH 2019 $27 calls for $1.00 ($2,000)

    That's net $1,300 on the $14,000 spread with $12,700 (967%) upside potential at $27.  Worst case is being long 2,000 shares at $20.65, about 10% off the current price but look how encouraging the 20-year chart is:

    Hurricane/Craigs – Yes, it changes my outlook in that I don't want to be an idiot and try to predict something with still so many unknown variables.  

    GE/Scott – We just added them to the LTP and OOP in June and the adjustment last week was:

    • GE – When did they get toxic?  Right when we bought them, it looks like!  Anyway, it's GE, so let's take advantage of the dip to roll the 5 short 2019 $30 puts ($5.95) to 10 short 2019 $25 puts at $2.40 ($4,800) and that will cost us $1,950 of the $2,175 we originally collected so net about $0 and our break-even on the puts is now about $25.  We can also spend $1 to roll the 15 2019 $25 calls ($2.10) to 20 of the $23 calls ($3.20) for $1.10 (+ the extra 5 calls).    The new 5 are uncovered with more room to run.

  87. TEVA FTR IMAX JO GE LB GNC all green today..

    am I dreaming?


  88. Don't Jinx it Jabo………:)


  89. GE/Phil – thank you.

    Energy – so OIH play is a hedge, for an unexpected-but-possible recovery in oil pricing?


  90. Taxes / Phil – I am sure US corporations would love to have the same rate as Germany but the CEOs would probably not like the individual rates. The conservatives dream is to have our individual rate and the corporate rate from the lowest country forgetting for a moment that the money to pay for our shiny planes and tanks has to come from somewhere. Oh, poor people of course… Silly me.


  91. Cleanup/Phil – somebody made a good point about old-time endemic disease outbreaks, something I'd worry more about than carcinogenic toxins. I'm a bit doubtful about typhoid as I don't recall where it lives in the wild, but cholera bugs like to form films on shellfish in shallow waters. There was some pretty good research into the Haiti outbreak concluding that cholera was brought there by a UN team after the earthquake, but I'm thinking there could easily be some of the bugs just living their normal life cycle hanging out with the clams and snails off the shores of Texas…..


  92. nattering – corps are people. They can;t have their cake and eat it too! If you wanna be a "person" you should get taxes as an individual.

    Same repo's, same prison for them as it is for the rest of us.

    Couldn't agree more.


  93. Hurricane- So that is a yes and we need to look for more information and not count on the post holiday drop in price you had been expecting prior to hurricane. I know it seems obvious but wanted to make sure. Thanks as always for throwing some sarcasm my way. 


  94. That is just insane… 

    http://imgur.com/7AE0Exg


  95. We already live in a VR world:

    https://www.theatlantic.com/magazine/archive/2017/09/has-the-smartphone-destroyed-a-generation/534198/

    The number of teens who get together with their friends nearly every day dropped by more than 40 percent from 2000 to 2015; the decline has been especially steep recently. It’s not only a matter of fewer kids partying; fewer kids are spending time simply hanging out. That’s something most teens used to do: nerds and jocks, poor kids and rich kids, C students and A students. The roller rink, the basketball court, the town pool, the local necking spot—they’ve all been replaced by virtual spaces accessed through apps and the web.

    On the bright side, phones can't get you pregnant:

    The teen birth rate hit an all-time low in 2016, down 67 percent since its modern peak, in 1991.

    Better than the stupid abstinence classes – technology always has an answer LOL!


  96. Something looks funny in that tax form proposal that is floating around Congress. The idea is to simplify tax filing but….

    https://www.vox.com/policy-and-politics/2017/8/30/16219906/paul-ryans-postcard-tax-return

    Line 2 doesn't look like it helps the middle class too much. But sure would help someone like say… Donald Trump.

    It looks like they would count only 1/2 of your investment income as taxable income basically cutting the tax rate for investment in half. So making money working is really for suckers! The old excuse is that it helps retiree who collect dividends and such. But a $10K dividend exemption would probably cover 90% of retirees. In any case, nothing final but looks another middle finger to the working middle class.


  97. Houston – toxic….lets get a grip.  I just drive thru Baytown – Texas x2 /week and yes today it has new funny smells, but they are only because they had to shut the plants down. All the releases were reported – as per regulations.  Cancer rates in Houston are no higher than 'normal' and different cancers are spread around, although mainly in the east side of town which is industrial.  Let me know if you see something growing out of my head, won't you.


  98. for people with wage income and (and maybe a few stocks) filing is already basically exactly this postcard. The 1040-EZ already is very simple. And the feds require Tubro Tax and those guys to offer the 1040-EZ for free so you it's not like you need to sharpen pencils either.

    The investment income being 1/2 of income is already basically the case: long term capital gains maxes at 20%.

    But you can already see some pretty insidious shit going on here, like in the "standard deduction" versus "mortgage interest + charity." So no more real estate tax deduction, no more unreimbursed business, or medical (over 7.5%) or miscellaneous (over 2%) deductions huh? That's a massive tax hike for the middle class, and really the middle class, which the Schedule A (deductions) favors the most, those are the ones who broach the MFJ 12,700 standard deduction and often have 20k in mortgage interest, real estate tax and charity and are in the 25 and 28% brackets. So cutting these is a huge tax burden for the middle class.

    But really, simple is as simple does, who doesn't want a simple tax (VAT comes to mind), but how realistic is this beyond pandering for votes. What about LLC's and pass thru's, is that income you'll get a W-2 for?, or the Schedule E (rental income), Schedule C (personal business), partnerships and non-equity investments like publically partnerships (UGA comes to mind, that's not purely a capital asset). Bond interest is what? Wage income? Like kind exchanges? 1256 contracts? Income? Brokerages send W-2's now?  This is where Turbo Tax and those guys make their real money because this is where the code gets complex.

    For those that have none of those things filing already is a postcard. And the "tax rate tables" is what I really want to see, where the 0% 10% and 15% brackets are reduced or worse, removed, and jacked up to 17-22% "flat tax" that immediately bankrupts 30M people, many of whom would vote for this proposal thinking it would favor them somehow (but I'm sure democrats would figure out how to take all the blame in any event).


  99. Latch – I;m thinking more of the chems and turds floating in the mega-tidy-bowl that Houston is now, water now, not as much what was going on before Harvey though living near superfund sites does increase cancer risk substantially, just FYI.


  100. BDC – LLC – everybody and their mother would become a "pass through" and taxed at 15%. 70% of pass-through income comes from banks, hedge funds and holding companies. A boon for financial services, SPV/SPE's, the rich and Trump himself.  Faking America Great Again and Out.


  101. Good morning!  

    Same old, same old as we're jacked up to Nas 6,000 for the Holidays.  

    Last time we were here we dropped 250 points, not quite 5%.  Still, we can't discount the move as the dip was only a strong retrace off the run from 5,600 (-180 would be the strong) and the other indexes look good too so it's really a volume issue that's keeping me in the bear camp (that and the fact that Q2 earnings were lower than Q1).

    The Interior Department has ordered a halt to a study begun under Obama of the public health risks of coal mining

    Great wonky paper on "The Rise of Market Power and the Macroeconomic Implications

    OIH/Scott – It's a hedge but I think OIH is a good value play down here but I also know I intend to short oil so having something that will clearly do well if oil snaps higher means I have a $12,000 buffer against futures losses, which then let's me short with a bit more long-term conviction as I know I have a backstop.  

    Disease/Snow – They had the same worries in New Orleans but the CDC is good at their jobs.  Anyway, all the oil in the water tends to kill that stuff off!  I'm not kidding, we took the kids to the beach in Texas and it was so disgusting.  Sand is black and the water is rainbow color (you can see the rigs from the shore).  

    Image result for texas beach oil rigs

    Related image

    Image result for texas beach oil rigs

    What we need is less regulations – drill baby, drill!  

    Sarcasm/Craigs – No problem, I have plenty to spare!  cheeky

    Insane/Christo – Check out our latest Portfolio Review, I was saying it's unsustainable and it is – it's just hard to say how crazy things can get before the bubble finally pops:

    Kind of makes the 1999 run-up look cute by comparison….

    Phones/StJ – My kids would argue that they are constantly with their friends, they just define "with" differently than we do.  Actually, physically being with people is inefficient for people who are used to carrying on conversations with 12 people at a time pretty much from the minute they wake up until they fall asleep.  I notice my daughters and their friends tend to merge their chat groups so that it's very unlikely an RL (real life) friend will not be somewhat included in their Chat Group – which are the most real friends.  I took a dozen kids out to dinner with another Dad and all 12 kids were chatting on the phone to their groups and to each other and I was contemplating that there were about 144 people at the dinner table.  

    They are having a very different life than we did but I remember my Mom getting on my case about not writing letters to people and I would say to her "who writes letters anymore" but that was how she communicated when she grew up.  Maddie just "met" one of her best friends for the first time when we went to England – they've been friends for more than 5 years but have never physically met yet I know her and her family and as much about them as I do about my neighbors and I've seen them all and chatted with all of them on face time.  Strange new ways….

    I also agree on the abstinence – these kids are such prudes compared to us!   When my daughters were born I was worried about them bringing home boys and having sex, now that Maddie is 17, I'm more worried she's missing all the fun!  

    Line 2/StJ – Wow, add 1/2 of investment income?  These guys are too much!   And if you save your investment income you get to deduct it.  Or if you donate to the charity you are the President of…

    Cancer/Latch – I wouldn't worry about it, the Dept of Health says your are fine.  


  102. bitcoin 5500

    crypto $179B

    when does the music stop? I think we've got one chair and 100 butts….