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Which Way Wednesday – Will the Wild Ride Continue?

Related imageWheeee!   

Yesterday sure was fun.  The Dow Futures (/YM) blasted up to 26,050 at 10am and then, by 3pm, it was back at 25,700, down 350 points (1.34%) in 5 hours.  But don't worry, we recovered 100 into the close and now we just tested 26,000 again, which is a good shorting line with tight stops above since yesterday's 300-point drop was good for gains of $1,500 per contract for the shorts.

In our Live Member Chat Room, we stuck with the Russell Futures (/TF) shorts at 1,600 and those fell all the way to 1,575 for gains of $1,250 per contract and we added longs on the Dollar (/DX) at 90 and Coffee (/KC) at $120 while, of course, taking the $1,000 gain on /RB and runningthe same short at $1.85 we played all last week in our morning Reports (you're welcome!).  

We still like the Russell for a hedge into earnings and, in the Live Member Chat Room, we chose the following hedge at 11:25, just in time for the massive 100-point drop in the Russell but we're back to 1,585, so you can still make the hedge on the Ultra-Short ETF (TZA) as follows:

  • Sell 30 TZA 2020 $10 puts for $2.50 ($7,500) 
  • Buy 40 TZA July $10 calls for $1.80 ($7,200) 
  • Sell 40 TZA July $15 calls for 0.60 ($2,400) 

That gives you a net credit of $2,700 and a $20,000 upside on the July spread if TZA pops from $11.40 to $15 (31%) and, since it's a 3x short ETF, that would mean the Russell would have to drop about 10%, back to 1,425, which doesn't seem like much of a stretch after yesterday's quick plunge.  If the Russell doesn't fall, then we take the remaining $2,700 and invest it in rolling the long July calls to something lower in January and then cover with short Jan calls and then we have a full year of insurance in exchange for our promise to buy 3,000 shares of TZA for $10.  The idea, of course, is that our longs make much more money than our TZA shares would lose – hedges are all about balance. 

Image result for hedgingWe already have a TZA hedge in our Options Opportunity Portfolio but there we picked up 50 of the April $11/15 bull call spreads for $4,500, which also pays $20,000 back so it's $15,500 of "term insurance", withouth the obligation to buy the ETF.  So far, since 1/5, we've lost $500 on the spread but our portfolio is up $5,000 – which is what I mean by balance – the hedge is simply insurance that protects the longs in case of a tragedy but, if there is no tragedy, then our system of "Being the House" assures us we'll make more than enough money to cover it.

We also sent out a Top Trade Alert at 2:47pm on a bullish trade that was added to the OOP on H&R Block (HRB) as they announced deal with WalMart (WMT) to be their exclusive provider of tax software but the key to the deal is HRB's ability to upsell WalMart shoppers on their services.  We like HRB whenever they are low in the channel and particularly into tax season (when people start thinking about them again) so our play for the Options Opportunity Portfolio was:

  • Sell 5 2020 $25 puts for $4 ($2,000) 
  • Buy 10 2019 $22 calls for $6.20 ($6,200)
  • Sell 10 2019 $27 calls for $3.40 ($3,400) 

That's net $800 on the $5,000 spread that's almost entirely in the money already.  If HRB squeaks up from here, we make $4,200 (525%) but we will still have the open short puts for another year but, again, I'm very happy to own HRB at $25.

Today Ford (F) is selling off and we already put up a trade idea for them last week and we'll look for an opportunity to make a cheap entry in our portfolios if we get a good pullback this week.  F made the Watch List but, at $13+ we were waiting for a chance to come in at a lower price (closer to $12) – especially so we can get a good price selling puts in what is likely to be a covered stock play to capture the lovely 0.60 dividend.  We'll take a close look at this one in this afternoons Live Trading Webinar (1pm, EST).  

With a dividend-payer like F, we have very long-term plans and our allocation blocks in the $100,000 OOP are $20,000 each (10 blocks with 2x margin) so, initially, we wouldn't want to own more than $10,000 worth and maybe double down later so we could buy, for example, 1,000 shares of F at $12.50 ($12,500) and sell 10 of the 2020 $10 calls for $3 ($3,000) and 10 of the 2020 $10 puts for $1 ($1,000) and that nets us into 1,000 shares for $8,500 ($8.50/share) with a promise to buy 1,000 more at $10, which requires a negligible $624 in margin.  

So, cash and margin we're in 1,000 shares of Ford for $9,124, which is $9.124 per share and, assuming the dividend stays at 0.60, we'll pick up another $1.20 in dividends between now and Jan 2020, which will drop our net to $7.924 and either F is under $10 and we're assigned another 1,000 shares – in which case we'd just sell calls again and lower our basis – or it's over $10 and we get called away with a 25% profit or we roll the short calls out 2 years and sell more puts. 

Image result for 6 years at 10% invested chart dividendsStarting with a $12.50 stocks we drop our basis to $7.924 in two years so we can figure in 6 years we can whittle that basis down to zero if all goes well, getting 100% of our cash back to buy other stocks with while still owning 1,000 shares of Ford and still collecting those dividends.  I know it's a dull, tedious strategy but it's very effective over time:

  1. We start the trade by using $9,124 in cash margin for 1,000 shares of F
  2. After 2 years, we've collected $1,200 in dividends, dropping our cost to $7,924.
  3. In Jan 2020, we sell another $3,000 (conservatively) of puts and calls and drop the basis to $4,924
  4. After 2 years, we collect another $1,200 in dividends, dropping our cost to $3,724
  5. In Jan 2022, we sell another $3,000 of puts and calls and drop the basis to $724
  6. After 2 years, we collect another $1,200 in dividends and have a $476 in cash and 1,000 shares of F

That's when it gets interesting because now we have ALL of the original $9,124 in cash and margin back and a margin credit on our unencumbered 1,000 shares of F, hopefully at least $15,000 worth.  We can still sell puts but we don't have to and we can just sell $2,000 worth of calls every 2 years along with $2,000 worth of dividends means now we're collecting $2,000/year back on stock that cost us net $0.

Imagine we did that with just 5 stocks in 2018 for about $50,000 in a $100,000 portfolio and now it's 2024 and we have $60,000 worth of stocks and $100,000 in cash and then we start the cycle again but now we're collecting $10,000/yr from the $60,000 in stocks AND we're working our basis down on the next set so, in 2030, we'll have $120,000 worth of stock and $50,000 in "dividends" (call sales + dividends) and $100,000 in cash = $150,000 in cash with $540,000 worth of buying power (at 2x margin). 

Image result for 6 years at 10% invested chart dividendsAt this point, we are collecting $20,000/yr in "dividends" from our stocks and we can double up on our sales cycle and, in 2036 we'll have our $100,000 back and now we have $240,000 in stocks (and we're not even assuming they gain value) and we're collecting $40,000 a year in dividends and we have $250,000 in cash so now our buying power is $1M and we can go to 4x, buying 20 dividend stocks at a time and still using only 1/2 of our buying power.  

By 2040, we actually have $1M in stocks and cash and our "dividends" are now $80,000 a year.  I'm 55 and in 2040 I'll be 77 so if I have $100,000 to invest now, I'll be getting 80% of that money, EVERY YEAR, in dividends alone while still building on my $1M asset pile in 2040.  That's not boring at all, is it?  Not only that but, historically, dividend-paying stocks tend to keep up with inflation so it will be an inflation-adjusted $80,000/yr to splurge on early-bird specials.  

It's a boring, tedious way to make money but it's also very effective and one of the key tools we like to put in our Members' belts at PSW.  Throughout earnings season, we'll be looking for solid dividend-paying companies that are beaten down and fit our 6-year profile for rolling over because, with that plan, anyone who is 20 years from retirement can put one year's salary into a portfolio and have a very good chance of locking in their salary for life going forward.  That's what intelligent investing is all about! 

Meanwhile, we'll see if the market is going to spring back from yesterday's pullback but it was a low-volume affair and not much of a sign of anything.  BitCoin is crashing down to $10,000 this morning so we're thrilled that we cashed out $10,000 ago and we're not interested in getting back in until it's $1,000 but our GreenCoins (GRE) are holding up very well (surprisingly), still at 0.001370 this morning, though well off the highs but still 5x where we talked about them in early December (the green is the price in Dollars, the yellow is the price in BitCoins).  

Our buy-in for GRE remains 0.00022 but we may never see that again while 0.0036 is still a good spot to take profits.  GreenCoin is a decade behind BitCoin so we have to be patient – we're not going to make 1,000x overnight and we take 10% off the table whenever we make 10x so, like our dividend-payers, we have our original investment back in our pocket to pursue other opportunities while letting 90% of our original money to keep going for as long as it wants to.

chartWith BitCoin, we came in at $600 and sold the last of ours at $18,500 but let's say we began with 10 at $100 and followed that rule of thumb.  We would have spent $1,000 in 10 and then cashed one for $1,000 and another at $10,000 and another at $20,000 and then, hopefully, we would have cashed at least 2 of the 7 left between $20,000 and $10,000 so let's say an average of $15,000.  That would leave us with 5 BitCoins and $61,000 in cash from our $1,000 investment and the 5 coins are worth (for now) $10,000 so $111,000 total is more than 1/2 the most we could have possibly made if we timed it perfectly.

When investing in fads or even in bubble markets – it's not worth it to try to time things perfectly when we can capture so much of the upside with an intelligent scaling strategy of taking profits off the table at set benchmarks.  Don't let greed drive your trading decisions and you will do very well – without all the stress!  

Be careful out there.  

 


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  1. The S&P P/E ratio getting close to Trump's BMI – borderline obese!


  2. Morning All!

    Join us for the weekly webinar today at 1pm, here:

    https://attendee.gotowebinar.com/register/6389658281338975235


  3. Good Morning.


  4. Don't these people study history or are they just simply racists:

    https://talkingpointsmemo.com/livewire/sessions-good-nation-doesnt-admit-illiterate-immigrants

    Attorney General Jeff Sessions preached the administration’s message on merit-based immigration on Fox News Tuesday night, claiming “a good nation” doesn’t admit “illiterate” immigrants.

    I am sure his ancestors didn't have any problems accepting illiterate "immigrants" from sh!thole countries to work in the plantation. What a freakin' hypocrite!


  5. It certainly is :)


  6. The problem is that we are becoming more of a shithole country and soon even the illiterate won't want to come here. MAGA! Let's build a wall and call it infrastructure and jobs.


  7. A simple set of trend following rules to beat buy and hold:

    https://ofdollarsanddata.com/follow-the-money-eb1ae0c9a3bd

    To visualize this, I put together a chart that shows both a buy and hold approach and the trend following rule (“12-month simple moving average (SMA)”) outlined above. I also shaded in green in the background every time the trend model “moved to cash” (i.e. this is inflation-adjusted cash, so it technically moves to TIPS, which I refer to as “cash”). As you can see, the trend following model outperforms over the 1900–2017 period:


  8. hi im a canadian that has used tos(thinkorswim)  play money trading accounts as source for free real time futures index live data for years.

    i currently have a us dollar tos trading account which did provide free real time data for us index futures and usdollar /dx until about 6 months ago but they somehow lost the feed and cant provide it anymore to canadian clientsl

    if anyone on here knows of a free or low cost  solution i would greatly appreciate any help.

    thanks


  9. In the meantime, bitcoin dropping below $10K now!


  10. Funny thing is which side of the wall will have more illiterates?


  11. STJ/Trends-seems like it could be a good approach for a 401K where you have no tax consequences and limited transaction fees if using an index ETF. I toggle in and out of the index in my 401K because the investing options are limited and the fees for the active funds are high while the performance is lackluster.


  12. A collection of comments from CEOs at a recent conference on generic pricing:

    ~~Distributors:
    * Cardinal Health: “And so probably the best indication around stabilization is
      the fact that that's tracking about where we expected it to be, we said it
      would be down mid-single digits, we expect that to be down mid-single digits
      which means to me pricing is tracking about where we expect it to be.”

    * McKesson:  “As it relates to pricing, I think that on both the brand and the
      generics side, things are progressing this year as we had really anticipated
      as we put out the guidance at the beginning of the year.”

    * AmerisourceBergen: “The increased use of generic pharmaceuticals has been
      well-demonstrated. We've been getting a lot of questions around what's the
      rate of deflation going to be. Of course, generics, by definition, is a
      competitive market. Many of them more mature. Oral solid products have got a
      lot of competition. We expect there that competition will continue. I think
      when you look at differentiated categories within generics, you could see
      some products have differentiated deflation rates and potentially even
      inflation rates.
      * Yeah. So, we're very cautious this year. It feels like we should be seeing
      a bit of a bottom of the cycle in generic deflation. I would say we have not
      experienced that yet, quite frankly. We've heard a lot of the pronouncements
      at the meeting, but the market remains fairly competitive particularly in
      those very mature oral solid products. We're at the wholesale acquisition
      level. And generic deflation in the single digits, high single digits, and
      that's very much what we are or carrying on experiencing”

    * Walgreens Boots Alliance:  “So, we've always said this. With generic
      deflation as it is, which is more or less, from our point of view, certainly
      the same levels it was year-on-year. 
      * But I have to tell you that the market has not changed. The trends of the
      market are the same. The deflation will continue to be there. You see that
      there is – the competition is not changing at all because the generic
      manufacturer were pushing that FDA to approve the generics more rapidly,
      which the FDA is doing. But, of course, they are approving all the generics
      more rapidly. So that anytime that consequence of the action of the generic
      manufacturer has been, that there is more competition on the market.
      * And I can tell you that we have – more or less, I believe – around 100
      suppliers in the generics. And the competition is very strong and we have not
      yet seen the Chinese manufacturers on the market. And we know those people
      quite well, relatively well. And I can tell you that while 10 years ago when
      we first entered China, we could not really use their generics because the
      quality was not at the same level than the quality of our normal supply. As
      today, their quality is practically at the same level. And if – when we will
      open the gate to the Chinese manufacturers, they will really have the
      capacity to compensate any shortfall that we could have in the Western world.”
     
    Manufacturers

    * Teva: “So in a way, you could say that we are doing a lot of things at the
      same time. We're also optimizing our portfolio and there has been some
      misunderstandings about what is that we are doing with this optimization of
      the portfolio, why am I talking about some prices will have to go up, because
      they are not sustainable, it's basically a change where you could say Teva
      used to focus on maximizing revenue in the generics business, believing that
      if you just maximize revenue, everything will fall in place and you will get
      great profitability and so on.”

    * Mylan:   “And just from outlook perspective, given our base business and the
      launches, what we had assumed and the points that Heather raises, because
      outside of the USA, it's different market types, different product mix. It's
      not predominantly generic. It's maybe 30% generic, 50%, 60% established brand
      and about 20% over-the-counter, the OTC products. Given all that, we have –
      again came back as we look over the next – 2018 from a forecast perspective,
      we have still modeled U.S. at high single-digit just because we – as Heather
      said, we don't see this choppiness going away, but we don't see further
      deteriorating also.”
     
    * Endo:  “So, again, if we took a year – if we took a step back going to
      JPMorgan last year, I think it's where we came here and I think we delivered
      a strong message in terms of talking about what Claris One would mean to the
      generic industry, and I think we got it right in an unfortunate sense. We
      called out that there was going to be some challenges. Folks are looking a
      little bit to us in terms of how we see 2018 materialize. And the reality is
      I don't have a clear feeling in terms of whether we're going to see further
      erosion. I think it's a little bit of a wait-and-see situation. And that's
      probably a good thing for the most part.
      * Yeah. So, at the end of the day, and I'm not trying to avoid the question,
      it's just that we just really don't know.
      * If we don't see a full-line bid, I'm hoping that we can see more stability,
      and a lot of times we use this term, normalization. I'm not sure what
      normalization is anymore.“


  13. GE whoa!


  14. Good morning!  

    Image result for aren't you thankful your childhood happened before technology took over

    BitCoin below $10,000.  Bears are calling for $5,000 already.  

    Big Chart – Wow, the Nasdaq failed the 25% line?  RUT failed 10% and we'll see if SPX holds 2,750 for the week.  

    Immigrants/StJ, Mkucs – Actually Trump is a genius.  He has made America so racist with such gross inequality with 3rd World infrastructure that he won't need a wall to keep people out – no one will want to come!   It's BRILLIANT!!!   

    There's PLENTY of better places to go:

    Image result for american wages vs the world

    Image result for american wages vs the world

    That's interesting because it shows we're not even collecting 20% of the income in taxes already.  These corporate tax cuts (from the $9.76Tn) are going to kill us!

    Futures/Tommy – You mean if you are a TOS customer they won't let you see a live feed?   That's crazy.  What if you open a Canadian account?  

    Literacy/1020 – Already we're losing:

    Image result for literacy rates by country ranking

    Image result for literacy rates by country ranking

    This "new math" thing Bush started is the worst.  I made my kids learn the old-fashioned way and they both kick ass in math compared to the rest of their school now that they are in high school.  

    I mean, WTF?

    Interesting comments Seer.

    GE right back to the bottom:

    2 short /RB at $1.855 at the moment.  Will add 2 more at $1.87 I imagine though back to 1 if I get even, of course. 

    No report until tomorrow


  15. So much for Goldman's earnings beat.


  16. ?Math – We're fortunate the Twins attended a great charter school (started with QCOM's support) and make derivatives look easy…. I still don't get it…. ;)


  17. Comment content omitted because it is too long.


  18. ? – this laptop does not know it's replacement is waiting in the wings….. :)


  19. GS/Albo – That was my theory on going long FAZ, I have to think all the good news is baked into XLF at this point. 

    LOL 1020.  I always feel guilty replacing a faithful laptop or phone.  


  20. Oh crap, I think I lost my news comment.


  21. Having a nice day on JUNO, every five years I have a biotech winner that brings me back even for a string of ten losers, right Pharm? Think SGYP, NWBO, OPK, PGNX, PLX…


  22. it's quite amusing to see how people react that haven't been through a bitcoin bubble/collapse cycle before. This is my 4th.









  23. Phil,

    I have:

    -10 GE 2020 $18 put
    +10 GE 2020 $18 call
    -10 GE 2020 $25 call

    I plan to sit tight if GE price stays > $17. Sound reasonable?









  24. Netflix Earnings Preview




  25. The government doesn't need to regulate Coinbase. They could simply eliminate it with a new US Coin. Exchanges would trade bitcoin/altcoins for US coin and no longer for fiat which is cumbersome and limited. The government can build a 1% transaction fee into every transaction (which includes all peer-to-peer transactions) right into the algo. Corporations and individuals alike stop accounting for income/expense and capital gains and instead pay a VAT-like tax on all transactions. This completely eliminates the need for the IRS and crypto becomes instantly adopted in one fell swoop. 

    At some point they are going to have to do this because crypto is more efficient than fiat, so its adoption is inevitable.


  26. Biotech/MrM – The joy of playing long shorts.  

    BitCoin/BDC – As long as you are enjoying the ride.  

    GE/Dhall – Well, it is 2 years out so the $18 puts are very reasonable.  I don't know where you started by the $18 calls are $2.75 and the $15 calls are $4.25 so $1.50 to roll down $3 seems like a good investment if you are a believer.  I would do that for $1,500 and then sell 5 March $18s for 0.50 ($250) as you have 8 sales like that you can make and that would pay for the roll.  Put a stop on 2 at $1 (for a $100 loss) and the rest (3) can be 2x rolled to the (6) June $20s (now 0.40) so, unless GE blasts 20% higher in a quarter, you should be fine managing it along the way and, of course, you could always buy more longs if the short calls are doing too well. 

    Efficient/BDC – It's not more efficient yet.  How could you use it at a check-out counter?  People complain about 3 seconds now. 

    /KC blasting higher, glad I mentioned it this morning!  cheeky

    Gotta take profits at those red lines – get back in if it moves over and then that's the stop:

    Worked my /RB shorts up to about $1.86 - just 2 now but happy to go back to 4 short at $1.87 though now /CL is moving higher.  


  27. IBM is getting away from us but I'd still buy them for $145 and we can get paid $12 to do it selling 5 of the 2020 $145 puts for $6,000 in the LTP.


  28. Bitcoin having 10% moves in the space of a couple of hours! This is not a currency, just a new daytrading instrument.


  29. Don't forget, if we just do one of those put sales every month for about $4K, that's $50,000 a year, which is 10% of the $500,000 LTP just from put sales.  Since we generally sell 2 years out, we will more or less max out at 24 open ones over time.  

    In the case of the IBM puts, margin is $5,339 so not super-efficient but scores points for relative safety (are you worried about owning 500 shares of IBM at $145 if IBM is at $120?) and, either way, it's a 100% return on margin over 2 years so better than our 40% goal means it's good for an LTP trade.  


  30. Blockchain is not a "payment system" or a "currency." It's a System of Trust. You don't go to the counter at a store and slap 11,000 pages of case law on the counter. That's what fiat currency is. A System of Trust.

     

    When I say its "more efficient" I mean as a System of Trust, not a payment mechanism. These are really really different concepts. I'm a little annoyed by making it over-simplistic to make a point. It's a terrible point. And so is the volatility argument. Stupid.


  31. Gains in utilities lift industrial production in December

    • Dec. Industrial Production: +0.9% vs.. +0.4% consensus, -0.1% prior (revised).
    • Capacity utilization: 77.9% vs. 77.3% consensus, 77.2% prior.
    • Redbook Chain Store Sales+2.6% Y/Y vs. +3.4% last week.
    • Month-to-date chain store sales +3.0% Y/Y.
    • January sales are expected to be up 3.6% Y/Y.
    • MBA Mortgage Applications
    • Composite Index: +4.1% vs. +8.3% last week.
    • Purchase Index: +3.0% vs. +5.0%.
    • Refinance Index: +4.0% vs. +11.0%
    • 30 year mortgage rate at 4.33% vs. 4.23%.

    Bank of Canada hikes again

    • As expected, the Bank of Canada lifts its benchmark overnight rate by 25 basis points to 1.25%.
    • The statement offers a balance of hawkish and dovish, noting strong recent data, inflation close to target, an economy operating nearly at capacity, but concern over Nafta as clouding the outlook.
    • The loonie (NYSEARCA:FXC) all over the place, but currently down 0.4% vs. the greenback at $0.8009.
    • Eurozone inflation fell further from the ECB's target in December, rising at an annual pace of 1.4%, from 1.5% the previous month.
    • The report from Eurostat confirmed an earlier "flash estimate" and saw the euro drop 0.4% to $1.2215.
    • Meanwhile, Germany's central bank chief said today it would be "appropriate" for ECB to stop its bond buying this year in an interview with Frankfurter Allgemeine Zeitung.
    • No one knows exactly what U.S. corporations like Apple and Microsoft might do as they repatriate hundreds of billions of dollars of profits stashed overseas, but it's safe to say their holdings of U.S. Treasurys and investment-grade corporate debt are about to go far lower.
    • It's estimated that $3.1T is held offshore. While the $14.5T Treasury market seemingly has little to worry about, change does come at the margin, and one might wonder how much of the recent surge in long-term U.S. rates is thanks to the new tax law's eased treatment of repatriated earnings.
    • Corporate bonds could be in for an even more acute impact, write Liz McCormick and Molly Smith at Bloomberg. Apple owns more than $150B in corporate paper, making it one of the globe's largest bond funds. Bank of America figures investment-grade spreads to Treasurys could widen 20 basis points thanks to the new tax law.
    • A minor tweak in bond purchase by BOJ on Jan. 9 cautioned investors about winding off monetary stimulus.
    • Few funds expect yen to appreciate about 10% to 100/dollar, with option traders being the most bullish.
    • Haruhiko Kuroda, BOJ Governor reiterated that the central bank’s resolve to maintain its stimulus program until inflation reaches its 2 percent target.
    • Source: Investing.com

    Bitcoin plunges below $10K

    • The price has recovered to $10.2K at the moment, but Bitcoin earlier this morning was back in four-figure territory as the broad selloff in cryptos deepens.
    • Most in traditional media and asset management are congratulating themselves for spotting and avoiding a bubble of massive proportions, but to cryptocurrency veterans, this plunge is nothing out of the ordinary. Who's correct remains in the cards.
    • Ethereum – which soared to news highs this year even as Bitcoin was languishing – has been hit particularly hard this week. It's down 16% today to $878, and about 40% since topping $1,400 over the weekend.
    • Ripple is down another 10% to $1.04, now off more than 70% in the past 12 days.
    • OTCQX:GBTC -7.2% premarket
    • As bitcoin ETF proposals languish amid a major crypto selloff, funds coming to market today will offer investors access to blockchain ETFs that may benefit from the digital asset's underlying technology.
    • The Amplify Transformational Data Sharing ETF (NYSEARCA:BLOK) and Reality Shares Nasdaq NexGen Economy ETF (NASDAQ:BLCN) will invest in companies betting on blockchain, such as Hitachi (OTCPK:HTHIF), Accenture (NYSE:ACN) and Overstock.com (NASDAQ:OSTK).
    • Bitcoin -5.4% to $10,740.

    Banks lower after Q4 results

    • Bank of America (BAC -2.3%), Goldman Sachs (GS -3.2%), and U.S. Bancorp (USB -2.8%) are all nicely lower after topping earnings estimates for Q4. In BofA's case, one might expect the bulls to take a breather after the stock's major run higher, but Goldman and U.S. Bancorp have been laggards over the past year.
    • KBW's Brian Kleinhanzi takes note of sluggish loan growth at Bank of America, not to mention disappointing mortgage banking fees.
    • The continuing plunge in trading revenue story for Goldman may be getting a bit long in the tooth, but a 50% drop in FICC business in Q4 was still a shock. While the bank's adjusted bottom line beat headline estimates, Nomura's Steven Chubak says Goldman benefitted from a lower tax rate. Adjusting again, he figures, core EPS at $4.97 vs. estimates of $5.01.
    • On U.S. Bancorp, Evercore's John Pancari says the expense outlook was higher than hoped and loan growth headwinds look to continue in the near-term.
    • Source: Bloomberg's Felice Maranz
    • The major averages are in the green, but some bank-related ETFs: (XLF -0.2%), (KRE -0.3%), (KBE -0.4%)
    • Investment Banking Q4 revenue up 44% Y/Y to $2.14B. Underwriting revenue up 76% to $1.37B.
    • Institutional Client Services revenue down 34% Y/Y to $2.37B, with FICC revenue down a whopping 50% to $1B. Full-year FICC revenue fell 30% to $5.3B. Company takes note of a "challenging environment."
    • Investing & Lending revenue up 12% to $1.66B.
    • Investment Management revenue up 4% to $1.66B.
    • Comp and benefits expense in 2017 of $11.85B was up 2% Y/Y; ratio of 37% vs. 38.1% in 2016.
    • Previously: Goldman Sachs beats by $0.76, beats on revenue (Jan. 17)
    • GS -0.5% after hours
    • IBKR 4Q Non-Gaap EPS of $0.43/share beats estimates by $0.03.
    • Net revenue increased to $515M due to strong growth in net income
    • The recent tax reform negatively impacted earnings by $0.45/share or $84M, incl. $22M related to revaluation of deferred tax asset and balance $62M due to one-time repatriation tax.
    • Q4 Customer equity grew 46% Y/Y to $124.8B and customer debits increased 52% Y./Y to $29.5B.
    • Q4 Customer accounts increased 25% Y/Y to 483 thousand.
    • Q4 total DARTs1 increased 14% Y/Y to 730K.
    • Shares -2.9% AH.
    • Prior: Interactive Brokers Group EPS of -$0.02

    Barrick Gold says preliminary 2017 gold production in line with guidance

    • Barrick Gold (NYSE:ABX) reports preliminary FY 2017 gold production of 5.32M oz., in line with the company's adjusted guidance of 5.3M-5.5M oz., and preliminary full year gold sales of 5.3M oz.
    • ABX says preliminary Q4 gold production totaled 1.34M oz., with preliminary gold sales of 1.37M oz., and the average market price for gold in the quarter was $1,275/oz.
    • Preliminary Q4 copper production was 99M lbs., and preliminary copper sales totaled 107M lbs.; the average market price for copper was $3.09/lb.
    • Lithium miners are mixed a day after the group took a pounding on concerns rise that prices for the battery metal may peak; in early trading today, SQM +2.6%ALB -0.6%FMC -0.7%.
    • "You’d be hard pushed to expect that the market will be under-supplied going forward,” Robert Baylis at the Roskill consultancy in London tells Financial Times. “It all points to the market approaching a peak in terms of pricing.”
    • SQM is expected this week to sign an agreement with Chile's regulator to allow it nearly double production to meet demand from electric car batteries, and Australian-listed miner Orocobre announced an investment by Toyota’s trading arm for a 15% stake in the company, which will allow it to add 25K metric tons/year of lithium production capacity.
    • But Baird analysts would be “buyers on weakness” in ALB shares, saying "while investors remain focused on the potential for new lithium resource to come to the market, we continue to believe the market will remain in balance/tight for the next several years."
    • Ford Motor (NYSE:F) shares are quickly slipping postmarket, down 1.5%, after it's issued preliminary 2017 results that fall short of expectations and 2018 guidance on the low side.
    • Speaking at the Deutsche Bank auto conference, the company says preliminary 2017 EPS is $1.78 on an adjusted basis, vs. $1.84 expected by Street analysts. Ford sees unadjusted EPS for 2017 at $1.95.
    • For 2018, it's expecting adjusted EPS of $1.45-$1.70 vs. consensus for $1.59.
    • It's detailing plans to "improve operational fitness, refocus capital allocation and accelerate the introduction of smart vehicles and services.
    • It's announced a regular dividend of $0.15 per share and a $500M supplemental cash dividend ($0.13 per share), for a combined $0.28 per share.
    • Slide presentation
    • Shares of Ford (NYSE:F) are down about 3% in premarket trading after the company posted a guidance update as part of its Detroit Auto Show/Deutsche Bank Auto conference presentation.
    • Beyond the numbers, Ford is doing a pretty big reset that could change how the company looks within five years.
    • Ford plans to expand its EV lineup to 40 vehicles globally. The EV tally will include 22 full electric battery vehicles by 2022.
    • The automaker says it is on track to deliver an all-electric SUV that offers at least a 300-mile range in 2020.
    • The total investment from Ford into its electric program will be $11B over five years.
    • Ford also has its eyes on building a powerful autonomous vehicle business. The AV plan includes building out a purpose-built vehicle, the self-driving technology and the operational infrastructure in parallel to help it scale quickly as it enters production in 2021. On that front, the company has self-driving service collaborations with Dominos, Lyft and Postmates beginning this quarter though a series of pilot programs in a new city to be identified soon.
    • On a broader scale, Ford tips that it's shifting its focus to producing high margin vehicles, instead of scrapping to be a volume leader as is in its DNA.
    • Previously: Ford shares dip as it provides preliminary 2017, 2018 numbers (Jan. 16)

  32. Trian behind push to breakup GE

    • Nelson Peltz's Trian Fund Management, which has seen its investment in GE decline 30% since when he bought into the company in 2015, is pushing the conglomerate to explore possible sales or spinoff of many of its businesses, including those in health and power, sources told the New York Post.
    • Trian founding partner and GE director Ed Garden has been spending much time recently with GE Chief Executive John Flannery, and it's Trian that is behind GE's decision to explore such sales.
    • In other news, GE Transportaion disclosed contracts valued at over $900M to help develop Kazakhstan's railway infrastructure.
    • Previously: GE breakup announcement could come soon – CNBC (Jan. 16 2018)
    • Barclays upgrades IBM (NYSE:IBM) from Underweight to Overweight and raises the price target from $133 to $192, which is 17% above yesterday’s closing price.
    • Analyst Mark Moskowitz says IBM could become the next major cloud vendor alongside Amazon Web Services and Microsoft Azure. 
    • Potential tailwind: The Spectre and Meltdown chip security flaws could help IBM gain market share in the mid-range and high-end server market.
    • The analyst thinks IBM’s revenue could stabilize or grow in the next 12 to 18 months. 
    • IBM reports Q4 results aftermarket on Thursday. Revenues have dropped for the past 22 quarters. 
    • IBM shares are up 1.8% premarket to $166.74.     
    • Previously: IBM, Maersk launch blockchain platform for tracking cargo (Jan. 16)

    Tiffany updates on holiday sales

    • Tiffany & Co. (NYSE:TIF) reports sales increased 8% during the holiday period to $1.05B.
    • Comparable store sales rose 5% during the two-month period ending on December 31.
    • Sales in the Americas increased 7% to $516M, while sales in the Asia-Pacific region were up 16% to $232M.
    • CEO update: "We were pleased with the improvement in sales during the holiday period across regions and categories, both instore and online. While our major Fashion Jewelry collections continued to perform well, customers were equally excited about our Fine Jewelry, our Watches and our new Home and Accessories collection."
    • Tiffany expects 2018 EPS to increase by a double-digit percentage over 2016's mark.
    • TIF -2.86% premarket to $104.5
    • Source: Press Release
    • Citi sees big things for shareholders of Skechers (SKX +4.2%) around the corner.
    • The firm thinks the retailer's holiday season momentum will continue in 2018 and expects tax savings to funnel into share buybacks or a special dividend.
    • The price target on Skechers from Citi is hiked all the way to $45.
    • Last year, Skechers generated a 54% return to smash the 19% average in the footwear & accessories sector.
    • Sources: CNBC and Morningstar

    We cashed out right at the top in Dec:  Pearson -3.9% after warning of drag in North American sales

    • Pearson (NYSE:PSO) is down 3.9% in NYSE trading after warning that 2018 earnings will be pressured by North American results.
    • Sales of U.S. higher education course materials are expected to fall 3% on an underlying basis, it said, at the low end of its guidance.
    • Higher ed courseware is about a quarter of Pearson and the rest is doing well, says CEO John Fallon: "We have said we are running Pearson on the basis that higher ed courseware is going to decline in underlying terms by about 5 or 6 percent per year through to the end of 2019 at which point we expect it to stabilize and start to grow again."
    • It forecast 2018 operating profit of £520M-£560M, which would represent underlying growth after accounting for asset sales and forex.

    Celgene slips 2% premarket on potential Juno takeout

    • Investors appear to be have a neutral view on Celgene (NASDAQ:CELG) (-2% premarket) if it, indeed, follows through and acquires collaboration partner Juno Therapeutics (NASDAQ:JUNO) (+56% premarket).
    • Mizuho Securities says Celgene already has a decent partnership with Juno and, arguably, does not need the deal, especially since accretion won't happen until 2021/22.
    • On the plus side, it believes a tie-up makes good strategic sense and removes/simplifies the firewall between CELG employees working with JUNO and bluebird bio (NASDAQ:BLUE).
    • Leerink's Geoffrey Porges believes Juno won't accept an offer valued below $11.9B that Gilead paid for Kite Pharma, adding that Celgene paid $93/share to acquire its initial stake of ~9.1M shares in 2015.
    • Citigroup sees a $110/share valuation.

    3D Systems +6.4% on Virtual Surgical Planning partnership

    • 3D Systems (NYSE:DDD) and Stryker (NYSE:SYKannounce an exclusive distribution partnership for VSP (Virtual Surgical Planning) and craniomaxillofacial anatomical models.
    • 3D established the VSP technology, which received FDA clearance in 2012 as a service-based personalized surgery approach combining medical imaging, surgical simulation, and 3D printing.
    • Stryker brings its specialized sales force to the partnership.
    • The agreement applies to the U.S., Canada, Europe, and Australia.
    • 3D Systems shares are up 6.4% premarket.
    • Previously: IDC: 3D printing will total $12B in 2018 (Jan. 10)

    Canaccord raises Qualcomm price target to 26% upside

    • Canaccord Genuity raises its Qualcomm (NASDAQ:QCOM) price target by $3 to $86 after the company’s shareholder letter. The price target is 26% higher than yesterday’s closing price.
    • ”Qualcomm’s acquisition of NXP remains on track and will create a company with significant earnings power and cash flow, developing into a clear industry leader in the mobile, IoT, and automotive semiconductor markets backed by the extremely strong combined IP portfolio of Qualcomm, NXP, and Freescale,” writes analyst T. Michael Walkley.
    • The firm also believes Apple and Qualcomm will ultimately settle their legal battles.  
    • Qualcomm shares are up 0.4% to $68.53.  
    • Previously: Macquarie raises Qualcomm price target on Broadcom, price cuts (Jan. 17)

    'Last Jedi' box office drops 92% in China

    • Star Wars: The Last Jedi has suffered one of the worst second-weekend declines the Chinese box office has ever seen.
    • The film's debut of $28.7M was already viewed as disappointing, but its 92% plummet to just $2.4M in week two caused the majority of cinema chains to drop the movie.
    • The Disney (NYSE:DIS) film still boasts a massive worldwide total of $1.27B, but may now finish in China with less than $50M.

    Google changing YouTub ad programs, launches new user-friendly AI tool

    • Google (GOOGGOOGL) announces changes to YouTube advertising following two well-publicized cases where ads were running next to inappropriate content and a third case where a YouTube star posted a video featuring a suicide victim.
    • The YouTube Partner Program is changing its monetization threshold from 10K lifetime views to 1K subscribers and 4K hours of watch time within the past 12 months. Those who passed the previous goal but not the current goal will be removed from the Partner Program starting February 20.
    • YouTube says the change will “affect a significant number of channels” but that 99% of those were making less than $100 per year from the program.
    • YouTube will start manually reviewing Google Preferred channels, which refers to its top-tier ad program that contains many of the most popular YouTubers. Ads will only run on a channel once the content has been checked and approved.
    • New AI tool: Google launches Cloud AutoML, a tool meant to simplify deploying AI in business applications starting with image recognition.
    • Customers can drag and drop images into Cloud AutoML, and its Vision can figure out what’s in the image then use that knowledge to understand new images.
    • Amazon Web Services and Microsoft both already have user-friendly AI tools on their cloud platforms. Google held 12% of the public cloud market in Q4, according to Keybanc, which put it in third place. 
    • Previously: YouTube deletes 150K videos that led to ad boycott (Nov. 28, 2017)
    • Previously: WSJ: YouTube lures back some advertisers after content concerns (June 20, 2017)
    • Previously: Advertisers leaving YouTube due to ad placements (Nov. 24, 2017)

    BofAML raises Apple's price target to $1.1T valuation

    • Bank of America Merrill Lynch raises its Apple (NASDAQ:AAPL) price target from $180 to $220 while reiterating a Buy rating. The price target is 25% above yesterday’s closing price and would represent a $1.1T market valuation.
    • ”We remain bullish on potential for cash repatriation, lower tax rates, and the potential for positive estimate revisions heading into 2019. A smoother iPhone cycle (no boom-bust) should drive increased stability in earnings, commanding a higher multiple,” writes analyst Wamsi Mohan.
    • Mohan expects Apple to repatriate $236B of its $253B in overseas cash under the 15.5% tax rate in the tax reform bill and notes that cash could go towards buybacks, dividends, or M&A.
    • Apple shares are down 0.2%.
    • Longbow Research downgrades Apple (NASDAQ:AAPL) from Buy to Neutral.
    • Analyst Shawn Harrison reduces FY18 iPhone unit shipment forecast to 233M (was: 248M) compared to the 239M consensus estimate.
    • ”Apple found iPhone price elasticity with the introduction of the X blunting some demand. Reception of the iPhone 8/8Plus was lukewarm with Apple shifting production back toward the iPhone 7 as a result,” writes Harrison in a note to clients.
    • Apple shares are down 0.3% premarket.  
    • Previously: Nomura downgrades Apple, lowers price target (Dec. 19, 2017)

  33. Stupid/BDC – So it's stupid to say it's not realistic to adopt crypto which you say is "more efficient than fiat" when clearly it can't be used to make retail transactions in a timely fashion and it can't be used as a store of wealth because someone who got paid 1 $20,000 Bitcoin a month ago now has $10,000 in buying power?  Maybe it's me and I don't understand what currency is supposed to be for.  I thought it was to be a commonly accepted means for facilitating barter and we have always used things that were rare enough and hard enough to counterfeit to make them a logical means of exchange. 

    The basis of using a backed currency is there's a base measure in the amount of work units required to create it that gives it a base value.  Shells, for example, needed to be collected in the ocean – things that grew on trees made very bad currencies.  The effort required to get a shell was the effort that could be substituted, for example, in milking a cow and that effort could be substituted for getting 12 eggs or making 6 arrows and so, after a time (a long time) the people agree on a value to the "currency".  

    Gold was hard to get and required effort but was hard to fake and easy to verify – that's what made it a good currency and then fiats grew around it and they were backed (in theory) by gold.  After 200 years, people decided the US Government was trustworthy enough to use their currency as a means of exchange without being backed by gold but the amount of Dollars is strictly controlled and there's a massive legal force in place to prevent counterfeiting and many, many systems in place to assure the quick and simple transfer of electronic currency, which is done to the tune of $4Tn/day with virtually no errors or theft in a very stable system.

    How can you even imagine that BitCoin, or any crypto, is a challenger to that?  Why would we need a crypto currency?  We have Dollars, they don't have to be paper – I can go weeks without touching paper money – I just wave my phone at most things.  Why would I switch to BitCoin or anything else when the system I use now is universally accepted, fee free (to me) and painless?  

    Will the Bank give me interest for my BitCoin deposits?  If we're not putting our currency in the bank – how do people get loans?  It took most of a decade to get people to transition to Euros and the UK still hasn't done it – how long will it take to establish a universally accepted crypto-currency and WHY would anyone go to the effort to do it?


  34. /YM testing 26,000 again. /ES 2,795, /NQ 6,788 and /TF 1,585.  I have none of them at the moment.

    /RB back in the black!  

    /KC moving over $123 – big day.

    /DX still weak at 90.33



  35. Yes, it is a more efficient system of trust, just as fiat is a more efficient system of trust than gold and seashells. I suppose by even bringing up seashells you were making this exact point.

    - The current fiat system does not take more work to create more supply, so that's a head scratcher. 

    - If someone got paid "1 bitcoin a month ago," they have 1 bitcoin now. What you are referencing is an exchange rate to something else.

    - Adoption is inevitable on a global sense, and when incorporating everyone in the world at  a macro level analysis. It doesn't mean it makes sense to you. My expectation is people would be "oh there's that crazy crypto guy hahaha," and nothing more. But it's so much more than that. There's this intense, ignorant and indignant fear. It's palpable and ugly and unbeocming. OK, the current system works great for you, great! But who cares. I'm not talking about you. Im talking about 7.5B people that wake up every day and do exactly what's in their best interest. The combined effect of this is the adoption I am referencing. If a new system of trust is more efficient it will become adopted and is inevitable even if it's only 0.00001% more efficient. 

    - The massive legal force in place has a huge cost and is therefore one of the inefficiencies, the main one really.

    It's so tiring how stupid thee arguments are. I just re-read your post and everything you said works AGAINST your stupid position.

    I think it's interesting. I thought bitcoin was interesting at $10 and Ethereum at $0.30. I really don;t give a fuck what people think. I'm just so fucking tired of talking about. SINCE THEN YOU'VE WATCHED THE VERY ADOPTION I'M REFERENCING IN FRONT OF YOUR OWN FACE OVER THE LAST 6 YEARS, MOSTLY THANKS TO ME BRINGING IT UP. I'm seriously just in mind-blown what-the-fuck land now. It's mind boggling.


  36. Phil – America so racist with such gross inequality with 3rd World infrastructure that he won't need a wall to keep people out – no one will want to come!

    Who the fuck would want to come here for vacation? Overall tourism has dropped 4% and we are now the #3 destination behind France and Spain. The Trump Slump has already cost us billions and is costing us $200M per week, maybe the travel cartel or AAA will take action? 


  37. GBTC – for those following my postings, Chris Kimble posted a chart showing that if Bitcoin can't hold 10K it goes to 6K. I'm just watching but if Bitcoin drops below 7K I will likely load up on GBTC expecting a sizable rebound.


  38. Phil/BDC – Bitcoin, System of Trust – Now, now, as Aunt Bee would say lets not be so harsh on the boy Andy. Like we splained in Bitcoin: The Thing?, Money has specific purchasing power properties viz., medium of exchange, unit of account, sometimes, a store of value.

    The value of money is the utility it serves, viz. generalized purchasing power, and its price is measured in FX pairs and various price indices.

    The most common yardstick of value is the accepted FORM it takes or "THING" viz. credit, debt (debenture, equity, bond), instrument (ABCP, repo, MMMF, synthetic derivative, etc.), asset (RE, commodities), and legal tender (bills and specie).

    So, if the most accepted form is a dollar or fiat, then until I can transact transparently, as in go to the store and buy Ripple with Bitcoin, then everything else, is just a thing.


  39. StJL - "bitcoin dropping below $10K now!"  Phil - "taking profits off the table at set benchmarks."

    Phi has the key to not being greedy. I just cleared all of my Ripple and similar stock off the table. Time for my IV indeed and Out.


  40. JUNO – funny how 'someone' dropped the price from 50 to 45 yesterday so they could load up before today's news…  No arrests will be made.


  41. Scary day to start out short /RB, I sure hope the 4:30 report gets me back where I was…


  42. MrM – FWIW, I played GBTC for almost 100 points today.  But only 20 shares.  Starting to get my feet wet.  I haven't traded any cryptos, but a trader I know does.  He picked up some Bitcoin this morning, so I followed him in GBTC. 


  43. Bitcoin / Albo - So your friend thinks 10K is the bounce line?


  44. Slump / Naybob – One of my best friends was talking to the CTO of one of the largest telco companies in the US and he said that they have so many job vacancies in their software division that they can't fill because programmers that used to come from Asia don't want to come to the US anymore especially from predominantly Muslim countries. These people have skills if we are talking about a skill based immigration. But they are not white and Christian so I guess there's that!


  45. Tourism / Naybob - the 4% drop reflects politically religious people that give a hoot, most others won't care. I have multiple European families as friends (UK, Belgium, and Switzerland) that come to the U.S. for almost every summer vacation, it's a great place to bring the kids, get car, go camping, see the history. Safe and easy to travel. They haven't cared who's in the White House for the last 20 years and aren't starting now, they find the American people of all persuasions to be decent and helpful and just avoid politics. But your experience may vary.


  46. MrM – I don't actually talk to him.  I follow his trading service.  He bought it at 10:47 AM, and I got into GBTC at 1482.


  47. Phil - what am I missing today in the news? /CL up only .5 percent but /RB up 1.25 percent, yet /CL had a much better report than /RB last week, right? Who's buying gas and why?


  48. Best way to compensate for an error – Phil I am holding short WYNN 2019 $160 calls which burned up all their value and do not seem to be slowing.   I am thinking of selling some 2019 $160 puts as protection?


  49. Good question on /RB…..Need a good 5/6 cent dump in the next few days on it…………Hoping there is a big build in inventory.


  50. MrM – Trump Slump – "they find the American people of all persuasions to be decent and helpful and just avoid politics. But your experience may vary."

    Yes, that would be nice and indeed YMMV. Not just tourism, but Smith & Wesson are suffering also.


  51. StJL – "But they are not white and Christian so I guess there's that!

    Tell that CTO to quit lying his ass off, hiding behind the Xeonphobe card, and hire some qualified Americans that are already here. The H1B scam to lower wages should have been dealt with decades ago.  I have been fighting that battle since you were making mustard in your diapers. 

    I have known too many "over qualifed" individuals who could not buy a job from those Sillycon Valley douche bags viz. turncoats and traitors who want slave labor and to pay no taxes either. Fuck em all.

    Anyone who says there are not enough qualified Americans for any kind of job is so full of shit, they need to be fed to starving feral pigs, live on PPV. Out.


  52. Wow, people loved the Beige Book!  

    Currency/BDC – I want to get back to this discussion later.  You need to relax, it's just a silly currency – as silly as Dollars or Euros or Yen but BitCoins have no track record, are not widely accepted, and fluctuate wildly.  When they get past those hurdles, then we can talk about them replacing Dollars.  It's not fear – as I said, I wave my phone at stuff to pay for things and I get pissed when I can't and I have to pull out a credit card.  It took me all of a couple of days to adopt that superior system of transaction.  If BitCoin were as easy and dependable I'd be thrilled to use it – but it's not.  

    And, as I've long said, the biggest barrier to BitCoin is the Governments that own the currencies you want to put out of business.  Until the BitCoin Foundation joins up with Little Kim and goes nuclear – I'm not sure I'd back them in the fight to come.  This is certainly not something that will be settled by arguing.  Only time (years) will tell what actually ends up happening.  It's all speculation otherwise but, if you want people to stop having stupid arguments – perhaps don't make wild, sweeping statements that BitCoin (or crypto whatever) will replace Dollars as the US Government finally sees the light, which kind of forces me to comment back lest people feel it's a good idea to run out and spend $10,000 on a BitCoin.

    Image result for john belushi i see the light animated gif

    Travel/Naybob – How can we be behind France and Spain – they are 1/10th our size?  That seems crazy.

    /RB/MrM – I added one short in the Webinar so now 3 short at about $1.86 and I'll hold those through inventory unless we hit $1.85, in which case I'd take profits on one.  As to what you are missing – I see nothing to justify the /RB move – which is why I'm shorting.  

    WYNN/Tangled – This too shall pass.  If you are naked short, that sucks but how do puts protect you if you were bearish?  In a logical World (not that this is one), the 2019 $160 calls are $31 and the $195 calls are $15 so you can do a 2x roll there unless you think WYNN has another 10% in it or you can roll to the 2020 $185 calls about even or the 2020 $210 calls at $21 and sell the 2020 $120 puts for $10 and, if you think WYNN will be over $210 in 2 years – WHY THE HELL ARE YOU SHORT?

    Otherwise, rather than pay $31 to buy back the calls, you can buy 2x the 2020 $170 ($35)/$200 ($24) bull call spread at $11 ($22) and then you have $60 of upside protection while you see what happens and you can still sell the 2020 $120 puts for $10 and roll the short 2019 $160s to the June $170s ($15) for net $6 and then hope to collect that $6 on the net sale and the only way you pay the June caller back a penny is if you are 2x in the money on your longs.  

    Dow up 330!  Trump say maybe a trade ware with China.  So what?

    Qualified Americans/Naybob – It is very, very hard to find top-level programmers in the US.  I have bought entire companies to get good programmers.  


  53. WYNN – I am still holding the short call leg from the closed Butterfly Portfolio.  I wanted to let the time decay recover some intrinsic loss.  You can see how well that worked out.  I prefer not to create a longer term or complex position (my definition of complex is much lower than yours).  So selling puts is not really protection but mitigation.   Maybe just roll to 2019 $170 calls to pay $5 to gain $10.


  54. GBTC – you know I need to trade this one too, albo. Let me know when you get in and out.

    Phil/sorry – I wish I could delete posts. I do indeed need to relax. haha!

    GreenCoin – OK, I did some thinking after venting above. It was a thought good session and I have some important things to present. Here's the deal. The GreenCoin Foundation was an entity that had the responsibility of:

    1: Running a centralized website of low-carbon producers (e.g., home solar guys) that self-reported periodic meter readings.

    2: calculating the relative benefit in carbon reduction for renewable types (wind, solar, growing trees or whatever else the community agrees to etc etc etc) and,

    3: Owning the Central address where half of the staked (newly generated coins went), and then paying them out subsequently to (1) based on pro rata production carbon savings calculated in (2).

    It is very simple, both conceptually and operationally. Setting up the Foundation was done by a legal team to comply with US law. The new entity was a non-profit that offered the above 3 services for free. This is bar none the best way to run a crypto because you aren't a money transmitter (operations) because you aren't exchanging anything, and ultimately the value stays with the coin holders (value add) not a corporate person (better system, less friction). As long as everyone is treated the same and no one receives special treatment the system is fair.

    I personally believe this is absolutely the best mechanism to fight climate change. Once emitted, CO2 has no value so it is difficult to make it into a commodity like oil, corn or gold. And it's spatially a global problem – everyone's emissions affects everyone else regardless of invisible lines drawn on maps. So who enforces the carbon market, the UN? The "carbon credit market" has spent 20 years going nowhere. This is low hanging fruit in how to out-innovate using crypto where no one saw it coming. Instead, the social value of the production is captured via a crypto which values knowledge (social groups) and not physical commodities and capital work (stocks and bonds). However, running a foundation means raising some money. The lawyers didn't see the forest for the trees and called in the payable so the foundation had to be closed because it couldn't pay it. The key to the central address was published in the open, which is now owned by everyone and anyone and the experiment is over. The coins still exists of course, as this is how these things work, but the project around it does not. Anyone can start a project around it and generate consensus to establish the movement at hand. You could do this with Bitcoin too BTW, for example if you convince 50% of the miners to join your movement the coin goes where your movement goes (say, triple the amount of outstanding coins, as an example). People fail to understand this way too often: a blockchain is a consensus mechanism – it can always be changed if the consensus is to change it! As another example, Phil could take over GreenCoin and make it a PSW project – whatever he wanted it to be used for or represent used for (like paying the annual fees). Having no formal project in place, this is probably the best way to explain what GreenCoin actually is right now – a group of guys at PSW that sort of care about it. If you think about it, that's what GreenCoin actually is as a Social Group. And oddly, it has some real value because of this; about 0.00000004 BTC (5 satoshi) each or $1.5 or $2M market cap maybe. That's kind of interesting to think about, because it's YOU that represents this value.

    That is indeed where we are now.

    As for the future, I would indeed start over on the original project concept if others had the imperative and we teamed up. This is done by announcing the project intent in the forum, fielding feedback, and ultimately getting 50% consensus (simple for a coin with no on-going project). Then the foundation re-emerges and begins operations: building a producer website and begins the process of onboarding users, doing the customer service, etc and all of the requisite tasks of buildng a network of users. For me I would do all of that for free (as a coinholder I have upside, and so do you. See how the system works, it's kinda great!). There would be 3rd party coin programmer and developer costs and other such ad nauseum costs, but for my part I need nothing for the work. So from the 1-2-3 above, I would do 1 and 2. But I won't do 3 without legal. And that legal spend starts at $250k. 

    When I talk about these rather small costs people pushed it down, oh it should $10-20k. Ok, so here's the deal. I'll do 1 and 2 above. All day long. For free. There'll be web dev costs and such as I said and I'll push those down because I know how to do that. But I won't do 3 without legal. I know you won't either and here's why: let's say I do 1 and 2, that is, I run the website, get the users pro rata carbon data all packaged up, and generate the payout file. But, the actual file goes to you. You're the one who holds the central address key. You're the one who puts the file into the wallet and presses "send." You're the one responsible for making thousands to millions of micro-cryptocurrency payments around the world every day. That's on you. Do you want to do that without legal? If anyone here wants to do that then I will oblige and off we go. No legal costs necessary. 

    Otherwise, it's $250k and I wouldn't bother lifting a finger to restart this project again without a commitment in this range. And that's not a big amount. Now back when crypto was <$20B (before Jan 2017), may be it's a lot. But how big can a coin get now? It used to be 1 or 2 coins over $1-B now it's 20-30 or more. If someone else wants to run it I will happily do the work and answer to the CEO, or executive director or whatever it is, and they can decide how much is the minimum amount, but the responsibility is on them and not me.


  55. BDC – I'll let you know on GBTC.  I'd appreciate your input too.  It's obviously ridiculously priced, but a good day trading vehicle.


  56. BDC – Chill-ax and don't worry, chit is chit and chit happens, and at least I won't feed you to the pigs.


  57. Qualified / Naybob -  Kids go to law school, not programming schools here! I agree that the H1-B visa is messed up as it's basically slavery under a different name. But there is really a shortage of people for some jobs.


  58. Phil/Programmers – no kidding. I re-released my tab at a twitter-clone:

    https://www.coinquacker.com   (come join!!!)

    At least I can do something out there in this world internet-tubed world, but man would it be great to be a full-stack developer wizard in this day and age. 


  59. also – GBTC very hard to predict BTC ups and downs but I'd be real interested in GBTC if BTC goes under $5k.


  60. GreenCoin/BDC – Not sure what you think "legal" is or would do.  We need to discuss that.  No law firm is going to be able to protect you or promise you can't be prosecuted for whatever you do in the foundation since it's all uncharted territory.  Call me when you can and we'll discuss it.


  61. To outline the misinformation going around, one of my Russian colleagues told me that the reports there are that Trump took an "intelligence" test during his health checkup and that he scored 30 out of 30! I had to explain that in fact it was a low level cognitive assessment test… 


  62. I guess we can expect a special dividend as well:

    https://arstechnica.com/tech-policy/2018/01/apple-plans-to-pay-38-billion-in-us-taxes-to-bring-overseas-cash-home/

    Apple announced on Wednesday that it would pay $38 billion in taxes to the federal government as it brings cash earned overseas into the United States. The big payment is the result of President Donald Trump's tax cut bill, passed last month, which created a new, special tax rate for repatriated earnings.

    Although they talk about some large investments as well! But none of that happened last time they had that repatriation program. Most of that money went to investors AKA to top 1%.


  63. Oil - I don't think I've ever seen an inventory report where /CL did absolutely nothing like today…


  64. Inventory is tomorrow due to holiday.   



  65. The Apple Cash FAQ





  66. Good morning!

    We're flat into the open for a change.  Europe is flat, Asia was flat – no momentum from our rally.  

    I think the Government shut-down BS is worrying people but they always say it's going to shut down until the last second and then it doesn't.  Not only that but the time it did – who cared?  We were shut down for 2 weeks in Oct 2013 and it was a 100% GOP move – I don't see the Dems shutting down the Government unless the Reps try to do something truly horrific in the budget.

    They say the 2013 shutdown cost the economy $24Bn but AAPL is about to pay $38Bn in tax so we can afford a 3-week shut-down easy. 

    Dollar back to 90.30 and I had my finger on the sell button at 90.75 (for 1/2) last night but I was greedy and now I am suffering again.  

    I still have my 4 /RB shorts at $1.86, I ignored the spike up last night.

    API say s 5.2M draw in Oil, but a build in /RB of 1.8Mb and a Distillate build of 600K.


  67. Anyone else having a problem connecting  with TOS??


  68. I'm on it now.


  69. Thanks, it was a problem with my VPN.  Tech is getting too compilcated!