2.1 C
New York
Monday, February 6, 2023


I’m Dreaming of a White Christmas – Portfolio

Wow, what a market!

Maybe we closed out our $25,000 Portfolio too early last week, with a virtual gain of $105,000 (420%) for the year, but we still have our Income Portfolio, which was quite bullishly positioned and well ahead of goal as well as positions in our very aggressive September's Dozen List that are winding down, so we decided to set up this new virtual portfolio with the goal of turning $15,000 in to $25,000 between now and Christmas to have a little extra spending cash for the holidays.  

The strategy is the same as the $25,000 Portfolio, which is meant to be the aggressive, "risk" portion of a $250,000 or larger portfolio, utilizing excess margin to our advantage with the goal of making a series of hit and run plays, with the goal of making $1,000 a week for the next 10 weeks.  Also like the $25KP, we take our winners off the table and work out our losers as best we can because, above all else, this is an exercise in adjusting and managing short-term positions.

This virtual portfolio will be available to Voyeur Members but trade ideas during chat will have their usual 1-hour delay. Premium members will get the trades with no delay Basic Members also see WCP-related comments with no delay as well.  New trade ideas and updates will be copied into the comment section of this post or, assuming I write one, the updates of this post.  If you are not a Member yet, now is a good time to join. Check out the subscription page – Our EXAMPLE trade on C closed up 200% and our ENP example returned 137% – not bad for free samples, right?

Our first official trade for the new portfolio was one we discussed on the weekend, GNW, which I added to the main post on Monday (and discussed that afternoon, in part, in my BNN interview).  We're not going to re-hash the logic for every trade here, this is simply a review post to track the trade ideas (and, while we do our best to be as accurate as possible, we do NOT include trading fees, which vary greatly so always take that into account) so we can see how they are doing and discuss how they can be adjusted but, of course, all the live commentary goes on during trading hours in Member Chat:  

It was a very busy first week and we've already closed (and opened) the following positions:

  • 10 SSO 10/28 $45/46 bull call spreads at .40, out at .90 – up $500 
  • 20 FAS 10/28 $13/14 bull call spreads at .60, out at $1 – up $800
  • 5 AGQ Nov $70 calls at $2.10, out at $4.20 – up $1,050
  • 10 DIA Nov $114 puts at $2, out at $2.15 – up $150
  • 4 DECK Jan $115 calls at $6.25, out at $10 – up $1,500
  • 10 DIA Nov $119 puts at $1.85, out at $2 – up $150
  • 10 USO 10/28 $36 puts at .14, out at .15 – up $10 

So, we have 7 closed positions with $4,160 worth of gains in our first week.  That's not too shabby but we have to also see how our open positions are doing and they can get ugly in the early stages of these portfolios as tend to take of our winning positions and let the losers ride – including the losing half of a spread – like the DECK short calls.  These aggressive portfolios are not for the feint of heart, that's for sure!  In fact, here are my comments from Wednesday's Member Chat:  

As I have said early and often, the WCP is not meant to be played by people who only have $15,000.  For one thing, you can’t day-trade $15K without getting flagged.  It’s meant to be the RISK PORTION of a larger portfolio that should be mainly in cash in this disgusting market and that means margin should be a non-issue.  If you do want to make a trade like FAS and you don’t have the margin then A) you probably shouldn’t be making such dangerous trades in the first place and B) you can sell something else for .65 ($1,300) that you can afford and that you REALLY do not mind having assigned to you for the net strike.  

It is not appropriate to sell ANY short puts if you are not in a position to buy the stock – that is how you set yourself up to get forced out of trades at the worst possible prices.  

Keep in mind we try to keep a balance of bullish and bearish plays – if we don't have losers, we are probably doing something wrong.  The worst thing that can happen in a portfolio like this is a break outside of our trading range which catches us off guard because we can get burned as we usually lighten up on the bullish side at the top of the range and lighten up on the bearish side at the bottom of the range (taking our profits off the table and waiting for the losers to bounce back).  That's what led to our decision to just cash out the $25KP last week – we were at the top of our range and, while we THOUGHT we would break through – we were already at goal for the year so it just wasn't worth pushing.  

So we banked our virtual $130K along with the $10K we took off the table earlier in the year which made a total of $140,000 off of last year's $10,000 start.  Then we take about 10% of that virtual cash out of the bank (and the bank can be a more conservative, long-term portfolio because Lord knows actual banks don't pay you any returns!) and use it to gamble into the end of the year.  Always remember – it's not a profit until you take it off the table!  

Our remaining open positions are:  

  • 10 GNW Jan $5/7.50 bull call spreads at $1.10 ($1,100), now $1.43 – up $330
  • 10 GNW Dec $6 puts sold for .85 (-$850), now .50 – up $350 
  • 20 FAS Nov $11 puts sold for .65 (-$1,300), now .15 – up $1,000
  • 12 DXD Nov $16/17 bull call spreads at .50 ($600), now .30 – down $240
  • 2 NFLX Nov $67.50 puts sold for $3 (-$600), now .70 – up $460
  • 5 DECK Nov $105 calls sold for $7.50 (-$3,750), now $14 – down $3,250
  • 5 SCO Nov $45/48 bull call spreads at $1.10 ($1,100), still $1.10 – even 
  • 5 SCO Nov $42 puts sold for $1.60 (-$1,600), now $1.55 – up $25
  • 5 DIA Nov $119 puts at $1.52 ($1,500), now $1.38 – down $70
  • 10 USO 11/4 $35 puts at .33 ($330), still .33 – even  

Not so bad actually, down net $1,395 is not catastrophic for our open positions and, clearly, it's all DECK and we purposely made the very aggressive move (too early, unfortunately) of cashing out our longs with the intention of rolling the short calls up to 8 Dec $115 calls (now $9) as we really don't think DECK will hold $115.  This is one of those trades that you NEED margin ($18,000) to make and one of the great reasons to run these virtual portfolios – it gives Members a chance to experience many types of live trades as they unfold in real time (and I strongly suggest going back through the old $25K Portfolio to get an idea of how we work trades over time) so it can help you identify what kinds of trades are appropriate for your trading style BEFORE you commit to them.  Also, of course, the trade could have been stopped out without dipping into margin, something we discussed earlier in the week, when it was up considerably early on.  

stock photo : Risk Analysis Concept Word Cloud as BackgroundOverall, our WCP is well on track with a net $2,765 profit in week one, not bad for a $15,000 cash allocation (18.4% for the week).  Of course, our closed net $4,160 of winners brings our cash up to $19,160 and we actually SOLD another net $4,130 in our open positions, bringing our cash up to $23,290 – which is practically our goal for the year in our first week so the trick is now simply to close our remaining positions without giving any cash back!  

That's not likely to work out perfectly but already in the first week you can see how this strategy does work:  We take a series of BALANCED trades – SELLING as much premium as we can so that time (theta decay) is always on our side.  We take our profits off the table and, when we have to – we take our losses but generally we try to adjust the losing sides of our positions with the expectation that the markets will remain in a trading range and make the occasional reversals.  

We continue to play that range while the Big Chart is below the +10% lines, which are still 5% higher than here.  That means we will get MORE bearish as we move higher but, as I said, we BALANCE our trades so we WILL be looking for more bullish positions if we are over those +5% lines on Monday.  Our bearish expectations are based on possible Yentervention by the BOJ, negative analysis of the EFSF over the weekend and LACK of additional stimulus by the US, China and Japan to match the strong but Globally inadequate EU contribution.  



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WCP – Sorry if I jumped the gun. I forgot Phil was going to post re WCP – and, again, my to-date results may not be representative (entries, exits, position size, etc.) – but my cursory review of my use of the WCP trades still look pretty white and x-masy. Look forward to PD’s official review.

WCP/Open Positions – I’m not ignoring the import of the opens either. I have some version of most of what PD shows open – some I closed perhaps for lesser profits (NFLX, FAS) and it was only by chance that I missed the DECK play (which I’m sure will play out fine.) Funny aside: in the flurry (work, trades, etc.) I think sold the DIA 119s and at 118. Oh well. Getting in a WCP groove.

This is a superb summary and just what we need. Thanks Phil! (Disney margaritas are a little watery but if you ask the bartender for a strong one he’ll be glad to help…)

Thanks Phil—–that was a great summary–I actually understood every word—did not get all the trades but will watch diligently from now on

Why no stop loss on the DECK calls? I didn’t make the trade, but I may join the party at the roll.

The only reason I did not do the Deck trade is that I have heard it mentioned as a take over candidate—and with my luck……..anyone else heard that?

Savi – was there any deposit leftover?

back in 2008 I told a friend to wait to buy a house until Feb 2011 (in Seattle). 
The exact low according to Case Shiller — Feb 2011!!! (well, the low so far …)

As a long time Charlotte resident with many friends/neighbors at "The Bank" I thought this guy hit the nail on the head re: Moynihan being incensed about OWS.

Bdc—-did you not receive the $59 refund? I will check if it came back—what is your pay pal acct e-mail—if it came back will send again

 The Sun News writes: "He was integrity-filled and made it a point to lend to people – like me – who had little income or assets but potential, just because he felt it was the right thing to do, to give back."

Read more: http://www.thesunnews.com/2011/10/29/2468257/issac-bailey-anger-aimed-at-banks.html#ixzz1cEZCiwQg
I believe there is a very serious lack of conceptual clarity on this issue.  I am [or was] a corporate lawyer on Wall Street, and I can assure you that the executives of a public company are charged — by law — with acting in the best interests of the shareholders they purportedly serve.  Lending to people with "little income or assets but potential," if it resulted in unanticipated losses to the bank, would certainly be grounds for dismissal, and potentially a shareholder’s suit against the bank for consciously acting in a manner likely to result in losses to the company with whose management they are entrusted.  I assure you that there is no legal protection for executives who spend company money, or take company risks, based on personal predilections rather than putting the interest of the bank and its shareholders first.
I am not saying this is right, or good, or the way it should be.  I’m saying that it very definitely it what current corporate law provides, and woe is the executive who takes a chance on "boosting the public image of the bank" by spending money on pet social  projects.  Much of what Phil derides — and rightly, from a moral standpoint — is U.S. public companies, particularly the banks, accepting immense public bailouts to save their institutions [and often their jobs] after they turned the public trust of running a bank into a derivatives gambling casino so they could reap astronomical bonuses, orders of magnitude greater than any possible contribution they could have made to bank profitability or the public weal.
But bashing bank executives is just shooting in the wrong direction.  I will argue — and have argued on PSW often — that, instead of mounting ad hominem attacks on the public company executives — venal mediocrities that they may be — the U.S. public needs to understand that, once its Supreme Court has decided that "U.S. based corporations" — that theoretically may have not a single U.S. citizen as a shareholder — are "persons" or "citizens" that can give, directly or indirectly, unlimited and highly targeted cash to U.S. public office seekers, then there is one, essential thing that must be done — to change the law.  The Supreme Court interprets law.  While there is some wiggle room around the edges, if the U.S. Congress writes a law categorically stating that public companies cannot make any contributions to any U.S. public office seeker at any level ever — that will be the end of the story.  The Supreme Court, U.S. Courts of Appeals, District Courts etc. all the way down will be constrained to prohibit and punish the practice.
Oh, yeah, I forgot, it’s exactly those politicians receiving the tanker-loads of corporate cash that would have to vote for such a law. That, Lincoln, in a nutshell, is why public companies can receive massive bailouts and subsidies while throwing thousands of workers into the street and jacking fees and imposing hidden haircuts on depositors with impunity — because the law doesn’t prevent it.  
The point is this: U.S. public company executives are legally obliged to do everything possible to maximize profits and the longer-term value of the company they serve within the laws of the United States of America and it’s States and political subdivisions. That is where the constraint must lie –, not in pining for "nice guy" CEOs that might have survived in kinder, gentler times, but in writing laws that reverse the immense wave of political influence-peddling and legal corruption that allowing Non-Citizen corporate entities gain more financial and political leverage over America’s political class than the voters who elect them.
Since that is about the last thing on the planet our bought-and-paid-for political class will go along with, it just might take The Second American Revolution [copyright reserved, lol]  to bring the needed changes. I’m not holding my breath — Napoleon was very clear about the great majority of battles being settled in favor of the larger army, and we know which army that is.

 And back to making money: http://www.telegraph.co.uk/finance/comment/liamhalligan/8857518/Why-the-latest-eurozone-bail-out-is-destined-to-fail-within-weeks.html
Or, why you should trust bond market rather than stock market reactions [Euro bank shares up 12% on the news, Italian 10-year borrowing costs sent on Friday to an all-time high since it’s entry into the Euro] to the latest European bailout proposal.

I suspect that the laws of all nations charge the management of public companies with acting in the best interests of shareholders, but it seems that companies in the US interpret this in a particularly hardheaded way without reference to community standards and common sense morality. It was once said that what was good for General Motors was good for America. Today one is more likely to say that what is good for the Bank of America is bad for America.
Of course, when you have a court that decides that corporations in a democracy have the same status as individual voters, it is the mental health laws that need to be changed.

 0 X 0: corporations
Point well made!  And sadly, I think you are correct about where this experiment in capitalism and democracy goes next. Indeed history may point to this corporations are persons nonsense as the point of no return.  
What struck me was the much smaller point that a banking CEO still doesn’t get that without understanding your customers it’s hard to see how he can maximize the "future value of the company."  
Joe Martin, the "nice guy" was never CEO ,he was more of the banks goodwill ambassador who suffered with ALS so a very compelling human face back in the day when banks were more interested in depositors than  derivatives.

Well written. You cut to the chase of the most important issue that capitalism and hence democracy faces. A legal construct has no conscience, and yet it is allowed to purchase our fate, imperfectly, perhaps, but relentlessly for certain.

Zero – Here’s to the Second American Revolution!  Beneath all the skirmishes over budgets, taxes and policies, the deeper structural change in the balance of power between citizens and corporations need to be addressed.  Without that change, skirmishes may be one here and there, but the war for representative democracy will be lost.  While there are various groups that would be sympathetic to this point of view, Move to Amend has this single issue focus.  Here are there basic principles from their website:

We, the People of the United States of America, reject the U.S. Supreme Court’s ruling in Citizens United, and move to amend our Constitution to:
* Firmly establish that money is not speech, and that human beings, not corporations, are persons entitled to constitutional rights.
* Guarantee the right to vote and to participate, and to have our vote and participation count.
* Protect local communities, their economies, and democracies against illegitimate "preemption" actions by global, national, and state governments.

 jmm1951 – Since you mentioned that maybe it is the mental health laws that need to be changed, it is interesting to note that the Psychologists for Social Responsibility recently released a statement  challenging the idea that corporations are persons.  There main argument:
Corporations are not people. From a psychological perspective, corporate personhood is a misleading and highly dangerous legal fiction. It provides protection to corporate leaders for activities in which they would otherwise bear personal, lawful responsibility. This legal validation of corporate personhood therefore shields select, powerful corporate officials from the law and liability, encouraging recklessness in the form of unethical, dangerous and, in some instances, illegal behaviors. Operating within these overly expansive legal shields, the prioritization of maximizing profit over human welfare has contributed to a sense of widespread discontent directed toward corporations and the law, and equally toward our government, which is perceived to fall short of a democracy that is "of, by, and for the people."

 Zero – make that, skirmishes may be "won," not "one."  Guess I was in a bit of a hurry to get to the bar for the Giants game today!

Yes, this does not surprise me. Once you take it as gospel (excuse the expression) that shareholder profit is the sole purpose for the existence of a corporation the next question becomes: "How can we maximize ripping  off our customers and screwing over our employees." [Solution: pay your employees partially in stock, then run the company into bankruptcy.]
Before I retired I spent about 35 years working in mental health care in various countries mostly in the public sector. In public sector health care such as the UK NHS or the VA in the US, or a state mental hospital, the question is: "How can we provide the best possible health care to our patients without actually going broke or over budget.?" whereas in the private sector the question would be: "How can we provide as little care as possible so as to make a profit?"
Here is a perfect example of the difference in ethos.
In the government mental hospital in Bermuda some years ago there was (probably still is) a young mentally retarded woman who was big and strong and had terrible behavior problems. She would attack other people (staff and patients) and have temper tantrums and screaming fits that made it necessary to lock her away in a private room almost daily. The hospital psychologists tried all kinds of behavior modification programs. Something like if she was good for 15 minutes she would be given a piece of apple, or if she was bad she was shown a yellow card as a warning, then if she persisted she would be shown a red card and put in the locked room.
After several years of failure, everyone was in despair and decided to see what else was available for her. A private facility in Florida advertised a program that offered state-of-the-art therapies for this kind of patient and it was decided to give it a try. This didn’t come cheap. I don’t remember how much, but maybe $100,000 a year. A government grant was obtained, funds were donated by local charities and foundations, and fundraising event were held to raise the last bit of money necessary, and off she went.
After 2 years, she was visited by a government psychologist from Bermuda who found that her condition was actually worse, and that she was not being assessed by a Ph. D, clinical psychologist, as promised. In Florida she had been assessed one time by a psychologist on arrival, and that was it. In Bermuda she was seen by a psychologist at least once a week, and a psychologist was part of the treatment team that met 2 x weekly to discuss her treatment and formulate strategies.
So she was shipped back to Bermuda, and on arrival her behavior was definitely a lot worse than before. She was also found to have scars of cigarette burns on her back, which photos showed were not there before she went to Florida.
This is the difference between for-profit health care and government health care. In government health care the objective is to serve the patient. In for-profit the objective is to make a profit at all costs.

Corps As People – I’ve always thought that repealing or changing this interpretation – esp as it affects civil and criminal liability, is the one thing the 1% will kill you/us for. Really. On this issue they will get to the guns (figuratively if not eventually literally) long before we do. What’s that mean in practical terms? Don’t know.

 Thanks for the encouragement, guys.  U.S. politics is usually cast in terms of liberals and conservatives.  I come from a conservative tradition – W.F. Buckley Jr. was my godfather, fer crissakes — and what that tradition means to me is favoring the power of the individual over the state.  In that sense, I am indeed a conservative, believing that maintaining individual liberties in the face of the always-overweening "will to power" of the state — any state, of any ideological stripe — is worth fighting for.
This is different.  This is like the goddamned "Matrix" — a fight to maintain individual liberties against the power of faceless corporate machines that have been legally designated as "citizens" despite quite evidently being alien in a very real sense.  Phil’s "liberalism" and my "conservatism" refer to a certain balance among people — humans.  But I do not hesitate to make common cause with all of my fellow flesh & blood citizens against the waxing power of a corporate state — Galbraith’s "New Industrial State" [he was a liberal, by the way].
 But this is no movie — there will be no "Neo" to vanquish the corporate goliaths.  We, as free citizens of a representative democracy, are going to have to do it ourselves.  All very romantic, but in the real world, it’s hard to see how this is going to happen, since our political class is on the side of the machines that feed them.   It just might require taking to the streets, and revolutions are brutal, messy things, whatever form they take, so I still nourish some hope that it might be accomplished through the electoral process, with a few Molotov cocktails for punctuation. 

Ever since Roman times when guys were hanging around in togas they’ve lamented the toxic brew of money in politics. Here’s a little-known quote from Albert Einstein from 1949, geez that guy was smart:

“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of the smaller ones.
The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organised political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature.
The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education).
It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.”

 As an example how difficult the struggle will be against the Citizens United ruling, Obama is taking heat for issuing an executive order mandating that any company that wants a government contract must disclose political donations.  This is being met with cries of an assault against democracy and free speech by the Heritage Foundation and Mitch McConnell.  Its a long road ahead for real democracy.  So if I understand correctly, McConnell and Heritage think government is the problem, things should be turned over to the private sector, and yet there should not be any disclosure or oversight of companies receiving tax dollars for services to the common good.  So while decrying that government spending is wasteful, they also are making it more likely that spending will be wasteful because it will help keep crony contracts in the shadows.  
Let me ask, is it partisan politics to make this point?  It seems like accountability and disclosure of lobbying practices and of companies receiving public money should be American values, not just party values.  I know I have to be accountable for the government money my program gets.  Each quarter I have to show that we actually produce what we get paid to do.  

One of the problems with corporatism is that it actually destroys the quality of life. For example here in Florida it is almost impossible to find  a decent restaurant meal, sandwich or cup of coffee. This is because nearly all the restaurants are run by chains or franchises that operate on the idea that you buy as cheap as possible and sell as expensive as possible, without any thought to the quality of the product in any kind of objective terms. I should say that I am a fairly good cook, can make breads, cakes,  apple pies, mayonnaise, pizza etc. from scratch, so my criterion for a decent restaurant meal is that the food is good enough to be worth paying extra instead of fixing it myself, or is better that what I could have fixed myself.
For example in my favorite breakfast restaurant in the Dominican Republic, you start with a fresh fruit salad composed of slices of orange, and chunks of mango, pineapple, and papaya, followed by bacon, eggs, and homefries that come with a croissant, and a couple of other toasted breads that are excellent and also a glass of orange juice (canned, I think) and a cup of coffee, all for $5.
Now I COULD prepare the same b’fast myself, but is it worth the trouble of buying four types of fresh fruit and peeling and preparing them, and three types of bread to toast? No, it is time consuming and not cost effective, so eating out for breakfast is great value. However here in Florida, you probably have to pay $10 for the average breakfast, which is OK as wages are much higher, but it is AWFUL, the bread is awful, the coffee is awful, the bacon is burned, everything is awful,  and the average ten-year-old could do better, so you are paying $10 for a $1.50 breakfast. And this is how corporatism imperceptibly destroys the quality of life.
i actually regard myself as conservative. I stopped going to church when they got rid of the wonderful seventeenth century prayerbook and replaced it with "modern" language, which I am sure God, if he existed, would find really tacky, but I don’t think opposition to corporatism is a left/right issue, it is more of a quality of life issue.

 Phil: rolling
If you don’t mind a quick review of how I should be planning for eventual rolls on some short calls or puts.  for example I’ll sell 5 HOG Dec 40 calls with the intention of going to 2X and then 2X again if it goes against me. Dec’s are at $2.15 what might I be estimating my roll to price would be in Jan and then Feb assuming just rolling out even, although I likely would be more aggressive and be looking for some additional premium on each roll.

 Phil / DXD
1)  Phil, you stated that we were to close "the lower half" of the DXD bull call spread earlier this week, so we should just be left with the short 17 call.  I think I’m correct on this
2) It’s amazing how a portfolio review can turn into ranting on corporate politics.  Can’t we have a "Politics" tab up top where the ppl who care about this stuff can post and rant to their hearts content??  

So what have they actually done? How are they capping it?

Japanese intervention, and Azumi promises more if needed.  U.S. stock futures selling off in Japan.  The Euro appears to be falling slowly but steadily.  And the European bond market already called Merkozy’s bluff by falling on Friday, sending the Italy’s sovereign yield to a post-Euro entry high. We might get some very nice entries on the White Christmas portfolio this week if the Euro tanks 3% or more.

MOF, they burned through a billion in 2 hours.

 Burrben:  As the most verbose of the corporate political ranters, while I firmly agree that generalized political or economic discussions should not take place during trading hours, I disagree that the topic discussed bear no possible relevance to the performance of investment portfolios.
The trajectory of large corporations in an environment of reduced consumption and reduced competition will be to suck even harder on their consumer base, which requires political support. If, as a consequence, a political backlash takes on coherent and large-scale form in Europe and the U.S., then I cannot imagine an event that would have more relevance to where and how I invest my capital.   Having said said, I invite you to utilize the "ignore" button for the worst offenders.

burbs..you are asking the ranter in chief( RIC) for a dispensation that cuts off ranting…ranting is good..i mean you place your bets and then…rant…’you rant always get want you want…’ 

Wiki – Holy crap. I am a dumb a**. I just dug in on the Wiki – which is gonna be so great as it grows – and realize after 15 years of regular investing; I don’t know dick. I am resolving to spend the next few weeks only following, reading and learning here. Maybe a question or three during chat. But no opinions on anything from me. I know nada. I’ll have something to say when I’ve earned it.

re politics.
I think discussion of geopolitical factors and social change is very relevant to the long term future of corporations in determining which ones have a healthy future (growth) and which are likely to decline. For example if there is a major move towards credit unions and cooperative banks and away from the major profit-making banks, this will be significant for banking stocks. Likewise if home ownership declines in favor of renting. Or if oil prices escalate, there may be a move towards more public transportation, which could affect fast food businesses that rely on customers driving up in personal transportation. Employment numbers may affect what percentage of the population own smart phones. Factors like these certainly affect which companies form the backbone of my portfolio. (My preference is for commodities and utilties.)

Good luck Phil.
( wouldn’t that be good time to discuss if it wouldn’t have been better to use the money printed by uncle Ben to pay workers to improve the US infrastructure. I live in the alps lots of snow sometimes but hardly any overland lines and hardly any outages… – sorry, actually I do know it’s NOT the perfect time to discuss this )

But in another sense it IS the perfect time to discuss this. After Hurricane Emily blew through Bermuda in 1986 and many people were without power for several weeks, The Government and Belco (Bermuda Electric Light Co.) decided that the cables  needed to be put underground, and so that expensive and time consuming projected was started and took about 20 years to complete–, much to the annoyance of motorists at points where the road was dug up/
Fast forward twenty years to Florida in 2006 when Hurricane Charley came calling. Same old story. Electric cables on poles threaded through trees in residential areas created havoc. 2011. No change. The interesting point about Belco is that it is a publicly traded company but their top management were not scared of a shareholder revolt if they put the cables underground, because everyone could see that it made sense to do this, even if it cost money or led to an increase in charges for consumers. (Fortunately due to the climate and other factors, few people in Bermuda need domestic heating, air conditioning, or have domestic washing machines.)
Of course the US is a much bigger country, so a project of this kind is no small deal, but hurricanes and snowstorms are not exactly black swans in many parts of the nation.

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