Virtual Portfolio Insurance

This is an article I was saving for the private site but news has forced my hand so I'm going to start picking up some of these next week. Insurance companies are always good in times of trouble and should hold up better than the Dow in a plunge (but will not be immune to it so we sell calls against or get out in a downturn). Currently the IYF insurance ETF is 10% behind the Dow's rally but usually outperform the Dow (move the time-line further out, resting neatly at the 10% rule. I'd like to give a shout out to my man Warren Buffett who took the time over the weekend to pump my beloved BRK.A, saying "you ain't seen nothin' yet" (I may be paraphrasing) while at the same time jumping on our bandwagon and taking a stab at Exxon for sqandering Billions on buybacks and dividends. Berkshire Hathaway was my stock of the year selection for 2006 and, although it was outperformed by some, there were none that made us feel safer through thick and thin! This puts a lot of pressure on my 2007 pick... I think that Warren Buffet taking the time out of his busy day to tell you his company is still a good 30% undervalued at $107,000 a share should tell you something about the markets, especially the insurance sector. AIG comes to mind as a possible play, with 2007 earnings projected at $6.26, up a mere 8% from 2006. "Yawn"you may say, but then you would be sleeping through the story! AIG only earned $3.33 a share in 2005, which was it's best year ever, but still fell from 2004 highs of $77 a share down to $49 during "the scandal." That was then, this is now, AIG is so similar to Berkshire that they co-insured deals and poor Mr. Buffet was even slightly tainted by that nonsense back in '04 but he's moved on and so should we with the AIG Jan '09 $70s for the "I'm Not Kidding Price" of $10.40. You can produce an income against them by selling the Jan $70s for $1.70 AND covering yourself with the Feb $75s for .40 but I would just do half as long as the stock holds $70 because you don't want to miss a nice pop. Now here's a freebie for my hedge fund buddies (as you need a lot of equity and patience to play this one). Buy the Jan '08 $70s for $6.70, sell the Jan '09 $80s for $5.60 AND the Jan $70s for $1.70 AND cover yourself with the Jan $75s for .20. That gives you .60 in cash on a $0 investment. The strategy is very complex but generally, you hope it stays flattish but you are playing to sell for the premium each month but with some protection. If it goes up, you can roll it, if it goes down you don't care once you get past the first month. As a reference, the Jan '08 $80s are just $2.40 so your goal is to make another $1.80 (you made .60 taking the position) to cover your eventual buyout of the '09's but everything else is pure gravy. This allows you to play the insurance game while laughing at natural disasters! If Mr. B's comments boost Berkshire, then there are several other nice companies we can take a look at: Insurance is a game of inches and the whole sector has been very out of favor in the latest rally as sexier stocks have gotten all the attention. Just like an old boyfriend, investors will come running back to these old reliables as soon as they have a fight with their new squeeze. AFL is certainly famous enough and trades right in line with the industry in p/e (14.72) but is growing about 10% faster than most. May $45 are $2.05. If they ever stop spending money on advertising, their cash flow should skyrocket! I meant to write this last week and there's a post-it on my screen with PGR (car insurance) written on it. They got a Bernstein upgrade last week (c'est la vie) and stopped at the 5% rule at $24. These guys are NOT doing a good job of growing but they have been unduly punished for it and have fallen way behind the sector. Jan '08 $25s are $2.05 and I'm not selling against them until they test $25. PRU got away from us last week but CB has made such a mess of their year that they are getting no respect, despite trading at a 20% discount (p/e 10) and, at $20Bn, being a more attractive takeover target. They are buying back 5% of their stock so the Jan '08 $52.50s for $4.50 seem safe(ish) but I won't rest easy until they break the 50 dma at $52.75. I am dumbfounded that GNW is still at $32! They added 13% to the bottom line this year and project another 10% next year on about 8% more sales. They missed last Q and I sometimes wonder if my love of this old GE division clouds my judgment but I have to take the Mar $35s for $.75. They should have a tough time at the 200 dma with a death cross 50 dma at $33.75 but there are 9M shorts who will be in a 5 day "House of Pain" if they break it. According to Yahoo, this stock is 101% held by institutions. Good luck to the retail shorts getting out of those positions if it takes off... I'm in no hurry on this one as I will happily get other $35s once it breaks out! TWGP just came down to where I want it with the Jan $35s at .85 that were $2 just 2 months ago before a 48% increase in earnings caused the stock to drop 20% as the company lowered guidance by a penny (I know, people are idiots!). I'm very sorry I missed it then! ALL is being probed in CT for pulling new policies in CT, NJ and DE as they are looking to get out of the storm business. Don't they have the right not to insure? Well the way they are doing it is sneaky - they are requiring Connecticut homeowners to install hurricane shutters to maintain coverage. That way they get to say you left them, they didn't kick you out! As an insured I say Boo! to the evil corporation but, as a shareholder, I say "why insure people we might have to pay?" If they come down closer to $63 I want the July $65s, hopefully for $1.50.
 
 
 

Zero Hedge

Germany Working On Deutsche Bank Rescue Plan As Lender Sells Unit To Shore Up Liquidity

Courtesy of ZeroHedge. View original post here.

Update: In an emailed statement, the German finance ministry told Bloomberg that the report on Deutsche Bank by German weekly Die Zeit “is incorrect" adding that "the federal government isn’t preparing any rescue plans. There are no grounds for such speculation.

  • GERMAN FINANCE MINISTRY DENIES DIE ZEIT REPORT ON DEUTSCHE BANK
  • GERMAN GOVERNMENT ISN'T WORKING ON BANK RESCUE PLAN: MINISTRY

Only two more denials until it is unof...



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Phil's Favorites

Robots Will Soon Take Over Building London Skyscrapers Says CEO of Large UK Construction Firm

Courtesy of Mish.

Alison Carnwath, chairman of one of the UK’s largest construction firms says the Era of Robots is at hand.

Thousands of builders will lose jobs as machines take over building London skyscrapers.

Skyscrapers in the City of London could soon be built by robots rather than by people, according to the boss of one of the UK’s biggest construction firms.

The result would be huge productivity gains as more work could be done by fewer people – but also mass layoffs as traditionally labour-intensive construction projects hire fewer and fe...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Japan Shares Drop as More Than Half the Topix Trades Ex-Dividend (Bloomberg)

Japanese shares fell as more than half the companies on the benchmark Topix index traded without the right to the next dividend payment.

The Story of Post-Brexit Britain, In Charts (Bloomberg)

The surprise vote in favor of the U.K. leaving the European Union on June 23 unleashed shockwaves across the global economy, wiping trillions off the value of global assets. The referendum reshaped the British political landscape, and genera...



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ValueWalk

Choosing Your Candidate: There's an App for That

By Knowledge Wharton. Originally published at ValueWalk.

Voter App

While most of people have already decided whom to vote for in the presidential election, there are still quite a few undecideds. A new app, called ‘Voter,’ promises to help bring more clarity about candidates based on their stances on issues and one’s own beliefs. The app developers say it also automates what could otherwise be a laborious process of determining candidates’ credentials and positions, and reduces human bias in the selection process.

Hunter Scarborough, the creator of the Voter app, says plans call for extending the app beyond the November presidential elections to candidates in races for Senate, House of Representatives and governors’ seats. Next, he plans to take it further to local elections such as for city councils, and may also go international. He discusses th...



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Kimble Charting Solutions

Silver facing "bunch" of resistance, sentiment lofty

Courtesy of Chris Kimble.

Below looks at a chart on Silver, dating back to the early 1970’s. Silver created an important top at $50 in 1980, did it create another important top at the same price in 2011?

CLICK ON CHART TO ENLARGE

Silver hit $50 in 2011, which was the highs back in 1980 and since then, has created a series of lower highs and lower lows.

Silver is now testing a bunch of resistance lines and its Fibonacci 61% retracement level at (1), wi...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.



Date Found: Saturday, 26 March 2016, 02:36:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: ZH: Its a BULLARD market, the FED jaw boning is keeping the market up!



Date Found: Sunday, 27 March 2016, 02:31:30 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: RTT: World trade near 2008/09 lows. SP500 near all time highs. PLACE YOUR BETS! Roll up! Roll up!



Date Found: Tuesday, 29 March 2016, 02:42:11 PM

Click for popup. Clear your browser cach...



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OpTrader

Swing trading portfolio - week of September 26th, 2016

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

 

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

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

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

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



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Members' Corner

Market Liquidity and Macroeconomic Bullshit

 

Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...



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Mapping The Market

Here's a Cautionary Tale of Pension Privatization From Chile

Via Jean-Luc:

"When you let the free market take over, the little people get screwed and bankers get rich. Chile tried privatizing retirement plans and surprise, surprise, fund manager ate the profits… Pretty sure the results would be the same here..."  ~ Jean-Luc

Here's a Cautionary Tale of Pension Privatization From Chile

By KEVIN DRUM, Mother Jones

Among free-market fans, Chile's privatized pension plan has long been held up as a model for us to follow. The problem, as the Financial Times notes today, is ...



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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.

...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

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

Click here for the full report.




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

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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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