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Friday Market Follies – BitCoin Drops 30% from the Highs, What Bubble?

Bubble, what bubble?

We're not saying BitCoin (GBTC) is dead, just because it fell 30% this week.  That seems to happen to it every few months and it hasn't happend since September, so it was overdue for a correction.  We sold our BitCoins and BitCoinCashes(?) as $18,500 and $3,500 seemed kind of silly to me but we're still accepting GreenCoin until the end of the month as payment for our 2018 Annual Memberships and they are cheap today at 0.000285 while we're converting at 0.00044 so close to a 50% discount on the exchange!  

We bought our 4 BitCoins 2 years ago for $600 each and we traded two for 150M GreenCoins (GRE) and let the other two ride.  Last week, as BitCoin raced up towards $20,000, we managed to get out at $18,500 so a nice 2,983% return on our investment but, even at just 0.000285, our 150M GreenCoins are now $42,750 – so doing better than BitCoins for now!  There are lots of small, alt currencies out there – GreenCoin is simply the one we decided to play with but, keep in mind, we're in them for $1,200 (not even counting the BitCoin profits) – not really a make or break trade!  

The fact that we're trying to get more of them is a sign that we don't think crypto is going away but that doesn't mean we want to buy a BitCoin for $13,000 or $10,000 or $5,000 or $3,000.  Now $1,000 I'll buy 10 or 20 (still with the profits from our first 4) but what makes a BitCoin worth more than a GreenCoin other than BitCoin is more popular at the moment?  Well, I don't think BitCoin is likely to get more popular but the sky is the limit with GreenCoin and, even at a penny, we'll be Millionaires – so it's a much more fun gamble, isn't it?  

Yesterday, the Long Island Iced Tea Corp (LTEA) said they were changing their name to the Long Blockchain Corp or some such nonsense and the stock jumped 346%.  For those of you who remember the pet food seller, Pets.com, this is the kind of nonsense you see at the height of a speculative bubble – people just trying to associate themselves with the mania to cash in on the suckers – AND the suckers actually fall for it!  

LTEA is back at $5.40 this morning and that was an easy short yesterday but $5.40 is still double where they were for absolutely no reason other than a name change.  Meanwhile, there are some serious problems with BitCoin and other BlockChain currencies that are being brought up by Dan Carlson and the most important one to me is one we deal with in our normal trading days – transaction costs.

CNBC reported an example from Kristian Freeman, who sent $25 worth of BitCoin to someone and was charged a $16 fee (64%) for the transaction.  Aside from the wild fluctuations in value, it's going to hard for cryptocurrencies to catch on with the general public if they get taxed 64% every time they buy something.  Of course, the fees vary wildly and, if you are nerdy enough – you can do a wallet to wallet transaction that does not incur a fee but that's simply not likely to catch on with the average consumer

Aside from massive transaction fees, another issue with BitCoin transactions is the 78 MINUTES it takes to clear the average transaction.  On Sunday, due to volume, it was taking an average of 1,188 minutes – imagine being stuck behind that person at the grocery store!  Even the boss of blockchain firm Ripple, whose digital currency XRP is the fourth-largest by market value, is skeptical about the use of bitcoin for payments and transfers.  

"I don't think BitCoin is well-positioned to solve the payments problem," Ripple's CEO Brad Garlinghouse told CNBC.  "Two years ago people thought bitcoin would solve all transactions, and I think what we're seeing is that that's not the way it's going to play out," he said.

So, when we're looking for CryptoCurrencies to invest in, we should be looking for ones that are BETTER than money or credit cards, not worse!  As I said, we're not sour to the whole concept of crypto – we just think it's way too early to crown a king and BitCoin has gotten WAY ahead of itself in valuation and no, we are not buying the dips – unless those dips are 90% or better!  

We feel the same way, though not as strongly, about stocks.  Sure I like Boeing (BA), we used to buy them all the time but, for $300, you can have it!  $300 for BA is a market cap of $180Bn and they "only" make $5Bn a year so that's 36 times earnings and BA has risk.  They do have competition and planes do crash, along with their stocks sometimes.  In fact, the last time we bought Boeing was when they had those battery fires and the stock tanked to $60 – now THAT was a bargian!  Now they are priced beyond perfection so we will wait PATIENTLY for them to get cheaper or we simply won't buy them.

That's how we're playing most of the market right now.  When you pay 36 times earnings for a company, you are getting a 3% return on your investment and we can get a risk-free 2.5% in bonds – so it's really not worth it.  Sure the company may grow but it also may shrink – that's why we have the term "risk free" for comparison.  Yesterday, we discussed Bed Bath and Beyone (BBBY) and GNC Holding (GNC) as nice bargain stocks and today, in our Live Member Chat Room, we talked about PG&E Corp (PCG), who are down due to the California fires they may have caused:

PCG/Scott – Now those guys I've heard of.  Huge liability if it turns out they were responsible for the fires but, you're right, these are the kind of things we like to take advantage of.  They've lost about $15Bn in market cap with the recent leg because they suspended their dividend, which is forcing funds to sell.  On the one hand, it might be because they know they are at fault and are circling the wagons or it may be just because those fires damaged a lot of their equipment, and they have unusually high costs moving forward.  Either way, there's a legitimate hit on the stock.

From what I've read, the damage from the fires was $9.4Bn and, at most, you could hold PCG partly responsible unless there was gross negligence and, even then, still likely to be less than half.  Also, they have their own insurance which again, unless it's gross, criminal negligence, is going to cover most of their damages so, even if they take a $3Bn hit, they make $1.5Bn a year and MAYBE $300M a year to pay it off for 10 years is a 20% haircut – worst case.  So let's assume they make $1.2Bn and have a 15x p/e and that's $18Bn and their market cap, at $44.50 is $23Bn so another 20% down should max them out ($36) as a floor but that's worst, worst case.  

Apparently, the bots agree with me as they got bought up at $40 and I'm all for selling the 2020 $45 puts for $6+ to net in at $39 and I don't think the 2020 $50 ($5)/$60 ($2.50) bull call spread is very risky at $2.50 and why so out of the money?  Because I'd rather have the cheap spread and roll it lower if PCG goes lower as they'll either recover or they won't.  Meanwhile, let's say we did 10 puts ($6,000) and 15 spreads ($3,750) – that's still a net $2,250 credit for a net $42.75 entry, worst case and then we can sell 5 March $47.50 calls for $1.80 ($800) and 8 sales like that will pay us $6,400 while we wait to collect $15,000 more at $60.  

The other thing to like about this spread is that, if PCG does go down, then not only are you very likely to collect your $6,400 without much trouble but that's only a 1/3 sale so you might be able to double it in a down to flat run by selling 2/3.  Nothing I like more than a flexible trading plan!  

Remember though, we are in CASH!!! and will be starting 4 new portfolios on Jan 2nd with just 1/3 ($800,000) of what we're cashing in after tripling our last set over 4 years.  Trades like the one above and yesterday will be in there and we'll add a few plays each month with emphasis on teaching portfolio stragegies including allocating cash and trade management.  

Meanwhile, have a very Merry Christmas!  

- Phil

 


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  1. Good Morning.


  2. Good morning!  

    Should be quiet today, people busy wrapping and such.  


  3. Phil – looks like you can leave that jacket at home. Vegas will be in the mid sixties all week…. :)


  4. not quiet for bitcoin


  5. FTR under 7… dangit!


  6. Ryan said Congress will push to pass a "clean" short-term continuing resolution funding bill to avert the shutdown.

    As opposed to the normal dirty tricks? They just don't get it, do they.


  7. I hate wrap… lol


  8. Apologies for what is cure to be a redundant question. Where do I buy greencoin? Can I just open an account on coinbase and purchase? Is there another way for me to get started? 


  9. Apologies for what is sure to be a redundant question. Where do I buy greencoin? Can I just open an account on coinbase and purchase? Is there another way for me to get started? 


  10. Lol! And posted twice…sorry all. 


  11. Phil. FTR a buy again under7? Buy some stock and sell some puts. Cutting dividend, worst case, a positive for stock price.


  12. Winston – The Tax Bill Delusion – "This particular delusion is undoubtedly an example what Garety & Freeman described as “a data-gathering bias, a tendency for people with delusions to gather less evidence.”"

    Our natural tendency is to want to be right all of the time.  Said bias gravitates most towards high probability. Bias which feeds the ego, is the fact that few are pleased to hear their beliefs, based upon their knowledge or experience, are possibly outdated or incorrect.  

    Bias is a self induced bubble of deception or delusional thinking, which ultimately leads to a failure in seeking out higher wisdom, insight and advice. Illusory superiority or bias, keeps one from knowing when they are out of their element. 

    This is why TOO MANY people, are quite unwittingly incompetent in the workplace and in life in general.   Unfortunately for the rest of us, their number is legion, the growing majority viz. the global plague of stupidity.  Thus, bias is the bastard brother of ignorance.

    As opposed to those who actually think and believe, they are great at what they do, when in fact they are useless idiots, as I know next to nothing, I myself am a somewhat useful idiot.  For greater success, one must avoid the trap of bias, and in order to do so, one must know their limitations.  Cognito ergo Sum.


  13. Merry Christmas all.  (Belated Happy Hanukkah).  

    I am starting a new job on top of selling my old company.  I will be a the JPM biotech conference in a few weeks and will report back on what I hear.  

    The 'new' company is an 'old' biotech with a very interesting pipeline.  Think weight loss drug that is a single agent (not combined therapy like the other two), and it really does not sell.  I like the pipeline a ton, and a read out is happening in Q1 that should be positive.  "Should".  


  14. FTR, I would expect more tax selling next week and a test at least of the recent lows. Something to keep in mind.


  15. okay, so as a general rule with this new tax scam, we should:

    hold onto any winners until the new year, get rid of any losers we don't want to ride out, make 2018 donations before the end of next week, get any student loans paid off because the interest won't be deductible, get to cash when possible, anything else?


  16. reperi….move.


  17. pharmboy--please say hello to Kare Schultz and tell him to get TEVA back to the mid 20s ASAP!


  18. I did that, just didn't go far enough south to get out of the states, and didn't own l my last place long enough, thereby running into yet another issue with the new tax bill if we weren't closing today.  

    Good luck on the new venture yourself!


  19. My weight loss drug…. :)



  20. I need to learn to post an actual pic….


  21. cheeky


  22. Pharm

     Best of luck on you new position

     What up with CELG ?

    Thanks


  23. …and it's not just weight loss, it's the incredible balance you gain (back)  :)

     

    Hey Pharm!


  24. Yeah, and the 'toughness' you build back in your rump!  What's up 1020? 

    CELG…paying the price for those that are buying up all the cancer companies.  Roche buys LOXO (here in San Diego) for 1.7B.  JNJ inks a deal with a chinese herb company for 325M…oh not herbs, a Car-T company.  Lots of deals before YE.  Now please, someone buy my Co.


  25. JeffDoc…you are in the CV area no?


  26. There is another small biotech/device maker looking to go public….Ra Medical.  Their laser has been around for years in the derm space, but now has expanded into CV (restenosis of stints).  Philips bought Spectranetics this past summer for 1.XB, and I wanted to get the opinion on this company's prospects.  Thanks.


  27. Vegas/1020 – Ah, all according to my plan!  

    FTR/Jabob – Well after you doubled down and lightened back up at $10, now is a great chance to DD again.

    Long-Term Portfolio Review (LTP) Part 1 – Submitted on 2017/11/17 at 11:41 am: 

    FTR – Can't not DD here.  Let's buy 6,000 more at $6.95 ($41,700) and sell 50 of the 2020 $8 calls for $1.10 ($5,500) so we're 1/2 covered with an average cost of $9.56 (and possibly assigned 4,000 more at $10 on the puts side).  If all goes well though, we'll collect $2.16 in dividends so, by the time we get to 2020, our net will be down to $7.40 and then we'll roll the short calls and all will be well (hopefully).  

    by  - December 5th, 2017 7:50 am

    Tempting Tuesday – Stop Buying that Dip and GET OUT!!!

    That one actually could not possibly have worked out more perfectly, FTR traded between $9 and $10 that week, paid an 0.60 dividend on the 14th and still opened at $9.52 so, even if you held on for the dividend, you had a nice exit at net $10.12.

    Submitted on 2017/11/01 at 12:18 pm

    FTR/Jabob – At some point, you have to bite the bullet and DD again if you plan to stay in it.  Hoping it will go back to $20 or whatever is not a good strategy.  Or, if you don't have faith (though I've said this before), just get out and try to make money elsewhere.  In the LTP, we only have 4,000 shares of FTR at $80,000 which is not even 5% of the portfolio, doubling down at $10 would cost us $40,000 more but we already sold 40 of the 2020 $10 puts for $20,000 so net $60,000 and then a DD at $40,000 would be $100,000 for 8,000 shares so $12.50/share and the short puts and then we can sell 40 2020 $8 calls (1/2 cover) for $2 ($8,000) and, if they pay the $2.40 dividend, we'll collect $19,200 x 2 years = $38,400 so our return over 2 years on net $92,000 (still not 10% of the portfolio and not 5% of the buying power)  would be 41.7%.  That's all we ever bought the stock for in the first place – to be a good dividend-payer.  Any gains it makes are going to be a bonus.  

    As long as they don't go BK, in 6 years we'll have collected back 100% of our money and then the value of the stock and any future dividends are just a bonus.  

    GreenCoin/Jeff – The notes are in the link above, which then links to an article by BDC as well.  You generally need BitCoin on Coinbase and then you trade that for GreenCoin but make sure you bit low for GreenCoin or it's not worth it.  

    Now it's definitely redundant!  

    FTR/Den – If you are out, I'd let it fall.  See how the market holds up in Jan and, if we're lucky, they test $5 again.

    Congrats Pharm and Merry Holidays to you too!  What do you think of this fasting to induce ketosis thing?  Is it a fad or a good strategy and, if so, have you thought about designing a drug and a regime instead of just a drug?  For example, I have my Sakara food, which is good but expensive but what if a Pharma co designed a whole program that could be given to people, prescribing the food, drugs, exercise, etc?  I think a program would work better than a pill and have measurably better success (but still sell the pills). 

    LOL on move – good advice!  

    Pictures/1020 – It's not you, it's us, we don't allow non-admins to post pictures or the chat would be full of bikes, cars, cats, etc..


  28. Pharma Cos and every day regime.  That's funny Phi.  Oh wait, CVS (drug seller) is buying Aetna (Insurance) to do just that!  Then they are teaming up with 123me and you can send in your DNA to find out what you are at risk for.  Now if that ain't smart for insurance premiums and selling of drugs.  BOOM!


  29. Thanks Phil. Enjoy Vegas, good luck at the poker tables and have a great New Year.


  30. Pharm/CV

    Yes.  Vascular surgery.  Laser atherectomy has been used for some time now, in peripheral disease the results are not great.  I'm not as familiar with laser atherectomy in the coronary vessels but can look into it. I'm happy to look over anything related to the device/company if you like. 

    Phil/Link – thanks. 


  31. Phil, well done on the BTC trade. Now if only you can parlay that into the Trump crash. Let's hit this one right on the nose! On to 2018…. 


  32. phil, what was the advice on CBI, i had bought stock and sold calls and puts.  down a few hundred.  not looking for specific advice on what to roll to etc…just general, get out or reduce to stock only.  TIA.


  33. CVS/Pharm – It is smart from that perspective.  

    Thanks Den, you too.

    Crash/BDC – We haven't had a Sell List for a long, long time but tempting.  

    CBI/Lunar – I think the merger sets a good floor on them here so, if you are playing a sensible "Be the House" strategy that pays you for neutral or up moves, then I'd stick with that.  


  34. Phil/Vegas – not there now but thanks for the notes on Kabuto (will check out next time!)

    Merry Christmas to all, and good luck to all in the quasi-stomach-churning tax-adjusted 2018 New Year!!!


  35. The world in a barrel







  36. What Is Bitcoin Good For?




  37. Desperate Donald Trump fires off everything he has left – and it turns out he doesn’t have much



  38. Phil/ABX

    I have the 2019 and 2020 portfolio positions in ABX and the only one really hurting is the 2019 $13 call which we paid $5.30 for and is now worth $2.65.  Any thoughts on rolling my entire 2019 into the 2020 position or other adjustment?  Thanks


  39. jeffdoc - thanks, I would be very interested in your take on the company and the technology.  ramed.com is the website.  



  40. WOW!!!  Trump just said (really): "We're going to bring back $4Tn from overseas.  Nobody knows what it is really, it will be over $3Tn, maybe $5Tn so $5Tn can be brought back from overseas.  So we think at least $4Tn will be bought back."  Aside from being a massive liar/exaggerator – he clearly has no concept of what a Trillion Dollars is or how that money works.  He seems to think there's some big piggy bank "overseas" that companies will bust open and shower on America as soon as he signs this bill.  Even he has to know that making statements like that can lead to nothing but disappointment now, even if $2Tn is bought back (which would be HUGE). 

    You would think that, being President for a year, some actual facts and figures would sink in but either he pays no attention or his advisers are idiots too.

    /KC down to $119.50 so I'm adding 2 more for 4 at $120.65

    ABX/Baron – Well there is no more portfolio, so you'll have to be more specific.  I'd roll the long calls to better 2020s while it's cheap and probably leave the short 2019s depending on where they are.  

    Good note for all, with BitCoin collapsing gold and silver might make their move (/SI already blasting back to $16.50) so good time to add ABX and WPM if you don't have them.  


  41. jeffdoc…probably easier to shoot me an email pharmboy123 at gmail







  42. I'm not sure if BitCoin has stabilized at $13,000 or if it's been halted.  Volume died.  I almost feel bad for the people who went long last week but Darwin demands they be removed from the trading pool….


  43. Coinbase temporarily shut of trades due to overload.


  44. CTAS – heck of a candle. perhaps makes sense with all the store closings.. less malls et al to maintain?


  45. What is the symbol for bitcoin on think or Swim?


  46. /BTC in the Futures.   Resuming their downtrend now at 12,500.  Wish I had the balls to short them the other day – $6,000 per contract is a good move!  


  47. /XBT


  48. Thanks Phil Have a Wonderful Holiday


  49. To All of you, Phil and members have some blessed and healthy holidays.


  50. yodi 

     

    HERE  HERE


  51. I wish I could short /BTC!!!!

    no account or trading ability in futures but BTC at 4000 is practically assured. Next run up will be to 50k-100k in 2 years. Plenty of time to accumulate later on for that. We've seen this EXACT chart in 2013/4 (13 up to 1000 then a long tail down to 200). Just multiple everything by 20 for the current one. This is too easy sometimes. 

    I just like how bitcoin will be out of the news cycle for 18 months. It was getting tiring.


  52. Have safe holidays everyone. Looks like we can Ho Ho HO all the way to the new? old year with the same baloney going on. Yesterday was food bank day. Very sobering to see so many people with so many debilitating and over whelming problems. No working stoves, cars and even electricity turned off. Hard not to feel very angry at the billionaires who could just expend some of their riches to help these people get a little help. I know, I'm just a bleeding heart liberal, but as sad as it is, it gives me focus to try to do something, anything to lighten their load. I donated baking goods so they could maybe make some cookies. Thanks to all of you for your wisdom this year and especially to you PHil . Very much appreciated.


  53. Phil, I am thinking that the housing market looks good at this point. Is there a builder that you would favor for a starting position?  I'm thinking of TOL because of their focus on the high end.  Thanks.


  54. Phil and everyone have a happy and safe holiday 


  55. Pharm, 

    Do you think SGYP is still on track in the wake of recent management changes ?

    Thanks 

    Pat


  56. Thanks Pirate and thanks so much for helping.  Check Out for Hunger is actually doing well this year, we were just going over the numbers the other day.  We just opened a new pantry in the Bronx for ACS families – that's been a huge help as the Government let SNAP benefits run out earlier than usual.

    TOL/Jet – They are up about 30% and HOV is up about 30% but HOV has way better premiums to sell so, for that reason, I still like HOV better.  You can buy HOV Aug $2 ($1.05)/$3 (0.45) bull call spreads for 0.60 and sell $3 puts for 0.60 so net $0 is not a bad way to start.  With TOL at $47.50, you can sell 2020 $40 puts for $3.50 and pick up the $43 ($10)/$55 ($4.70) bull call spread for $5.30 and that's net $1.80 on the $12 spread so, to make $10,200 on TOL, you need to do 10 spreads for $1,800 and HOV costs $0 but let's say we take the same assignment risk ($40,000) and put it into 100 of the spreads ($30,000 risk).  Those pay $10,000 at $3 in 8 months vs $10,200 in 2 years at $55 on TOL.  

    And, of course, sensibly, since you can make so much so quickly with HOV, you can risk way less by doing just 50 contracts and then do it again if this goes well.  So much lower downside risk with the same or better upside (and quicker).

    $50,000/BDC – OK, I'm convinced.  Jackie has 2 years until college and $270,000 in her 529 so I'll put it all in BitCoin and, by the time she needs it, she'll have at least $1.5M, right?  That's great, thanks!  Everyone should do it.  We should sell our homes, cash in retirement accounts because, sure, getting 5x back on your money is "normal" these days….

    CTAS/Scott – I thought they just do uniforms?  

    Have a happy, healthy, holidays people who are leaving early!  


  57. SLB  They have bounced off the Jan 2016 lows and are now in a little up trend.  Seems like a good entry point here, Phil. One for the buy list next year?


  58. HOV  Thanks PHil, that does look better.  To make $4,000 in an IRA with HOV takes $12K in margin and with TOL  the same profit potential takes $45K in margin.  And the payout  is much faster.  What is HOV's debt situation…I don't want any more high debt guys that get in trouble like GNC and FTR!


  59. SLB/Jet – Yes, I like them in general but more likely to spread the risk with OIH.  

    They took my BHI away – that was my favorite!  

    HOV/Jet – Well builders are always juggling debt so yes, it's one of those.  HOV has $1.7Bn in debt on $2.7Bn in sales and TOL has $3.8Bn in debt on $5.2Bn in sales so choose your poison.  Find me a builder who's out of debt and that would be a builder who isn't building.

    /KC came back nicely.  

    Oops, they stopped trading already.  I would have gotten back to 2 even at $120.65.


  60. Phil and PSW – wishing everyone a happy and healthy holidays!  


  61. Wow, we're going extinct faster than I thought:

    This semester, a robot named BINA48 successfully passed a class on the philosophy of love at Notre Dame de Namur University (NDNU), making her the first advanced robot to complete a college course.

    Before she was a student, BINA48 appeared as a guest speaker for many of Barry's classes. During one of her visits, she expressed an interest in going to college herself. Barry supported her idea and suggested she take his Philosophy of Love course.

    Meanwhile, Watson is evolving:


  62. Maybe a little low volume Santa stick into the close? 


  63. Well the volume sure is low.  Still I wouldn't bet on it.  


  64. Merry Christmas ( &  Happy Holidays ) to Phil and to everyone at PSW. 


  65. Happy holidays Phil and fellow PSW members.  Be safe, and take a little break.  I think we are going to need it for next year!


  66. Wishing a Merry Christmas to all PSWers!

    https://www.youtube.com/watch?v=5IxIPITpU0k


  67. Could not resist – bot another 200 FTRPR, averaging down..


  68. Phil and fellow PSWers:

    Happy Holidays!  

    Wishing all safe travels and a Happy New Year 2018!


  69. Phil – The one exception to your comment about builders and debt might be NVR, which I think is the best builder in the country.  They hold some long term debt, but have more cash than debt.  It's a great company, and has been a great stock.  They do 6 billion in revenue and have less than 4 million shares outstanding.

    Phil & everyone have a great holiday, and best wishes for a healthy and prosperous 2018 !


  70. Nice range on GBTC today from a low of 1155 to the current price of 2000. 


  71. NVR/Albo – Remind me in Jan, I'd like to check them out.  

    BitCoin coming back to $14,000.


  72. Have a very Merry Christmas, folks!   

    Monday's a day off and I'll be in Vegas on Tuesday – expecting a slow week, of course.  

    Try to enjoy yourselves as much as I will….


  73. SGYP….I need to dig a bit deeper on them.  implementing their plan should have been easier than the way they did it, being best in class.  IRWD, though, is still in search of an identity.  So, in short, I don't know.  My guess is that they do a reverse split to be able to raise capital.


  74. I don't know about anyone else, but I'll never forget this, or this, not to mention all the Rose Bowl's he called. Dick Enberg was one of my favorites and a class act.  RIP


  75. NVR, no options but they would be fun to play with the stock sound $3400!


  76. Merry Christmas and Happy holidays to all. 


  77. Ok, gotta post this! My hands-dow favorite missive of the year, the must read Dave Collum Annual Review.. and here in time for Christmas. Yay!  Enjoy:

    https://www.peakprosperity.com/blog/113568/2017-year-review


  78. Phil – Accompaniment for the SNL Video… Kyle is lonely too.

    Happy and Healthy Holidays to all. 


  79. Happy holidays and best wishes for a prosperous and healthy new year to all.  "A Merry Christmas to us all; God bless us, every one!" 



  80. Hope you all have a good time. Here some week end praxis.

    PZZA is having a bit of a rough time, CEO has stepped down, but I do think people are going to still eat pizzas. You can buy the Dec. 18 BCS 45/55 for 6.25 and sell the Dec. 18 45 put for 2.85. The breakeven point is 51.15. So your cash outlay by only purchasing 2 BCS options and selling 2 Dec 18 puts is 680.00 for a potential gain of 1320.00 minus the 680.00 equals 640.00.  Further sell 1/2 the Feb. 60 call for 2.00, you reduce the cash outlay to 480.00. You may possible sell another two cherry calls Apr. and Jul. 18 for another 2.00 each month, reducing your cash to 80.00. A possible gain of 640.00 with a final reduced cash out lay of .80.00!!!

    Just an example of what you can do with a fallen down stock.


  81. Trump takes note of who’s naughty and nice at Christmas


  82. Scot-Collum- a good read. thx for posting the link.


  83. Good morning!

    I woke up and looked at my little IPad (I have 2) and it said 5:50 and I was like "Holy cow, 2 alarms and a wake up call all failed AND I slept 8 hours?!?"   Turns out the little IPad is still on NY time as I never logged it into anything and the cell is off so it's still on NY time.  Turns out I naturally woke up at 2:50, so I guess I'm properly adjusted to Vegas time already…

    I hope everyone had a great holiday and is still having one, for that matter because this week is total BS market-wise.

    Ate some really creative sushi last night at Kumi (Mandalay Bay) and saw the Michael Jackson show, which was one of the best Vegas shows I've ever seen (and I've seen hundreds over the years) – super-recommended!  

    Turns out this is the guy (Akira Back) from Yellowtail at Bellagio (also very good) and he has a Michelin star.  The funny thing in Vegas is you can have a restaurant this good and just be walking by and decide to grab a bite and, due to the size and massive amount of competition (a dozen good restaurants in Mandalay Bay), you can just walk in and sit right down and then it's half the cost of a similar restaurant in NY (which is not exactly a low-ball comparison but, to me – cheap!). 

    Also, you've gotta love a guy who puts pop rocks in his sushi rolls (felt like pop rocks, anyway)!  

    Anyway, 6:30 already in NYC, so time to get to work!  I could live out here if it wasn't for already being rushed when I get up at 3am – I prefer having a nice, relaxing morning with plenty of time to read.  

    Markets kind of flat at the moment, I don't even think Europe is open today. 

    Great pop on /NG – that's a good way to start the week.  Tight stop on 1/2 under $2.75 now, which is $2.72 on /NGV8 (it's lagging the gain due to length of contract).

    Gold and silver flying too.

    /KC with yet another chance to buy at $120!

    Tuesday economic calendar

    Asian markets mixed following the Christmas holiday

    • Japan -0.20%.
    • Hong Kong Closed.
    • China +0.78%.
    • India +0.21%.
    • London Closed.
    • Paris Closed.
    • Frankfurt Closed.

    We are the only Western market open today – what idiots! 

    Stocks flat as markets reopen

    • Following similar trends in Asia and Europe overnight, U.S. stock index futures are largely unchanged as some of the world's major financial markets reopened following a long holiday weekend.
    • Although trading is expected to be thin this week – as many traders are still away for the Christmas break – some are saying the Dow Jones industrial average could still hit 25,000 before the end of the year.

    CEBR: China economy to become No.1

    • India looks set to leapfrog Britain and France next year to become the world's fifth-largest economy in dollar terms, according to a report by the Center for Economics and Business Research.
    • India's ascent is part of a trend that will see Asian economies increasingly dominate the top 10 largest economies over the next 15 years.
    • CEBR also predicted that China will overtake the U.S. as the world's No.1 economy in 2032.

    China needs Detroit-style bankruptcy?

    • China needs to let local governments take responsibility for their finances, including allowing bankruptcies, as part of an effort to defuse their debt risks, said Xu Zhong, head of the research bureau at the PBOC.
    • "A case like the bankruptcy of Detroit would convince investors that the central government is really determined to dispel beliefs of an implicit guarantee for regional authorities."
    • In a report published on Saturday, China's National Audit Office said the country should also dispel the "illusion" that the central government will pick up the bill for local government debt.

    Japan's consumer prices on the rise

    • The Japanese economy is moving closer toward the central bank’s 2% inflation target, though only gradually, offering some hope that a steady economic recovery will gradually drive up prices.
    • Core consumer prices rose for the eleventh straight month in November, climbing 0.9% from a year earlier.
    • Japan's unemployment rate also fell further and household spending rose faster than expected.

    The Grinch who shorted the euro

    • The euro suffered a sudden Christmas Day plunge on Monday in a drop attributed by analysts to "machines taking major advantage of the low liquidity," according to ZeroHedge.
    • Further supporting the algo-related theory, prices proceeded to bounce back within a few hours.
    • The single currency dropped almost 3% in minutes, sliding as low as $1.1558, but ended the day almost where it started at $1.1870.

    N.Korea: U.N. sanctions an act of war

    • "We define this 'sanctions resolution' rigged up by the U.S. and its followers as a grave infringement upon the sovereignty of our Republic, as an act of war violating peace and stability in the Korean peninsula," Pyongyang's foreign ministry said on Sunday.
    • The U.N. resolution seeks to ban nearly 90% of refined petroleum exports to North Korea by capping them at 500K barrels per year and demands the repatriation of North Koreans working abroad within 24 months.

    Israel latest to crack down on bitcoin

    • Israel has become the latest nation to crack down on cryptocurrencies, proposing regulation to ban companies trading in bitcoin from operating on the Tel Aviv stock exchange.
    • "I think it looks like a bubble, smells like a bubble, acts like a bubble and feels like a bubble," said Israel Securities Agency Chairman Shmuel Hauser.
    • The move follows last week's warnings by FINRA against firms that "tout the potential of high returns associated with cryptocurrency-related activities," as well as China's decision to shutter bitcoin exchanges and ban ICOs in September.
    • Bitcoin -1.5% to $13,765.

    Bitcoin, cryptos back in recovery mode

    • Drawing a line under its five-day slump, bitcoin rallied over 10% past $15,000 overnight, while rivals litecoin and ethereum are up 3.4% and 3.6%, respectively.
    • "The most important question facing it is whether the recent price correction will prove to be what market participants refer to as 'healthy'," said Mohammed El-Erian.
    • In other words, one that shakes out "excessive irrational exuberance, provides for the entry of institutional investors, encourages the development of market-deepening products, and widens and balances out the investor base and the product offering."

    Iraqi oil minister sees crude price rise

    • Iraqi Oil Minister Jabbar Al-Luaibi is confident crude prices will rise in 2018, with global stockpiles falling and demand on the rise in China and India.
    • "I am very optimistic that in the first quarter, oil markets will witness balance," he toldreporters in Baghdad.
    • OPEC, of which Iraq is the second-biggest producer, agreed with allies this year to cut output amid efforts to reduce global inventories.

    What could possibly go wrong?  Scaling back offshore drilling safety?

    • The Bureau of Safety and Environmental Enforcement has proposed rolling back safety measures put in place after BP's Deepwater Horizon oil spill in 2010, WSJ reports.
    • The revision, submitted to the White House budget office on Dec. 8, would reduce the role of government in offshore oil production and return more responsibility to private companies.
    • It's estimated that the changes could save the industry more than $900M over the next decade.

    Force still strong with 'Last Jedi'

    • Star Wars: The Last Jedi (NYSE:DIS) is showing plenty of force at mulitplexes worldwide with $745.4M globally as of Sunday.
    • The North American take has hit $365M in its first 10 days, with the studio projecting another $32M on Christmas Day – making it the third highest domestic release in 2017 following Beauty and the Beast with $504M and Wonder Woman at $412M.
    • Ahead of the weekend, the new Star Wars film was running over $120M behind the last one - The Force Awakens - on a day to day comparison.