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Final Friday – Entering the Mayan’s Final Year

It’s fun reading everyone else’s predictions

You would think, coming into what the Mayan’s may have predicted to be the final year for this planet, that people would want to make sure they get things right but no – most people just predict for next year a variation of what they thought would happen this year – no matter how wrong they were in 2011.  

Last January, the Dow was under 12,000 and we had Russell leadership as they tested the 800 line, now the Dow is the leader at 12,287 and the Russell is struggling at 745 but both in such a tight range that we could have pretty much skipped the whole year and we wouldn’t have missed anything.  

Although constantly asked, I do not like to make arbitrary predictions just because the year is winding down on the calendar.  The dirty little secret to my accurate prognostications is I WAIT until I actually see something that’s very likely to happen before I mention it.  This annoys many people who interview me, who are used to getting a prediction on pretty much anything they ask a guest, no matter how clueless that person is. 

That being said, last year, on December 19th, I wrote "It’s Never too Early to Predict the Future" and among other brilliant observations I noted: "I’d be gung-ho bullish now if I wasn’t worried the Euro will collapse as that is the fly in the ointment."  Here we are a year later and we survived that, as well as a nuclear catastrophe in Japan and revolutions in the Middle East and none of that caused the World to end, nor did it push oil over $100 for more than a short while, nor did it ever get gold to that magic $2,000 level.

So what’s it going to take?  What would it finally take to topple the now $60Tn global economy where EVERY Nation on Earth has proved that they are ready, willing and able to create Trillions of new Dollars/Euros/Francs/Yen/Yuan and drop them into the mix – until they find the recipe to make the Global Economy start to rise again.  Will too many cooks spoil the broth or is it just that a watched pot never boils and we are all a bit too impatient as we have to wait for the economic yeast to rise?

Read what I wrote last December 19th of last year – nothing has really changed but also, as I said at the time: "Obviously, I am fairly convinced that Global "leaders" are making all sorts of policy mistakes handling the economy and I do believe it will all end in disaster but that does NOT mean I am market bearish. "  

Think if it this way:  If you come across a fire that is consuming a house from the inside and the firemen show up and spray water on the outside, then I will stand there and tell you that the house will still burn to the ground.  However – I will also tell you that the house is going to be soaked in water.  The two things are not mutually exclusive – just as a slow-moving economic collapse and a booming stock market are not mutually exclusive – especially if that collapse is the result of a transfer of wealth from the working class to the investing class (see the 1920s).    

One prediction I was comfortable making this morning in Member Chat was that the move up in the Futures overnight was BS and our plan is to short the Dow at the open with something like the DIA $123 puts at about .50 but we’ll have to see where it actually opens.  

Oil already dove from $100 back to $99 and we caught the action both ways yesterday as oil fell from $100 to $98.50 and we decided to go long at $98.50 and caught the ride back to $100 but today we have lost interest as it’s a crazy day and anything can happen so we’ll concentrate on the Dow, which has the potential to drop 100 points and give us a nice double or better on the DIA puts – which would be enough to buy those goggles where the eyes shaped like 2012 and that’s all we need to close out 2011, right?

My concern into next week (and we have 3 disaster hedges from Wednesday’s Alert to Members that are still playable this morning) is that we’re still testing our 2,603 line on the Nasdaq (see Wednesday’s post) and we’re only here in the first place on what looks like a very low volume, very manipulated rally so the bullish space we have outlined over the past two weeks on the chart, contains a gigantic air pocket – precisely the kind that gives us a very sharp drop to complete what will look like an M on the charts.  

But those are all things we can worry about next year.  For now, let’s just enjoy the end of 2011 and look forward to 2012.

A very Happy New Year to you and your family,

- Phil


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  1. Final Oil Lines of 2011!

    R3 – 102.44
    R2 – 101.30
    R1 – 100.58
    PP – 99.44
    S1 – 98.72
    S2 – 97.58
    S3 – 95.86

    Yesterday’s high and low – 100.16 / 98.3

    Breakout lines – 103.16 / 93.43

    Oil seems to be bouncing between  100 and S1!

  2. Doesn’t sound like a good investment idea…

    Money invested in hedge funds since 2003 would have generated a return of 18% through November, according to data compiled by Hedge Fund Research. That puts it far behind the Standard & Poor’s 500-stock index, which has generated returns of 29% over that same period, once dividends are factored in, according to Simon Lack of SL Advisors. The hedge fund underperformance is even starker when placed next to a small basket of investment grade corporate bonds, as measured by the Dow Jones Corporate Bond Index. That benchmark has gained 77% since 2003. Factor in hedge fund mangers’ customary 2% management fee and a 20% cut in profits, and the gap widens even more. 

    I think we could do better!

  3. I wonder if we could read signals about gold in this ratio:

    Either gold still have way to go down or platinum could be a good investment! 

  4. Phil/TZA (26.14)
    Jan 6 TZA  $25/27 bcs net 0.90 ($1.14 in the money)  with either a weekly TZA 25p 0.60 for a net 0.30 OR a BTU Feb 28p $0.95  for a net credit of 0.05  — adjust to a 24/26 or 23/25 if we get a pop at the open.  Your thoughts?

  5. Commodities snapshot:

    Some have been murdered lately….


  6. Anybody know a place to track used car sales month to month? Thanks.

  7. Phil / DIS
    Going over my port today with a fine tooth comb, I found that my DIS sold puts are up 70%.  Maybe this is why:
     The Disney (DIS) indicator for the economy points up as Disney World is forced to freeze entries on 3 of its 4 Orlando parks for the 2nd straight day due to overwhelming crowds. The Orlando tourist board estimate 53.5M visitors to the city in 2011, 1M more than 2010, but still not at pre-2008 levels.
    Muchos Gracias Senior!

  8. Happy New Year all!  Last PP for 2011.

  9. A pretty cool prediction of future technologies (interactive chart):

    Kind of makes you want to stick around…




  13. Phil / How to play the BA trade that is on track?
    Back in Sept, you wrote and I entered this exact trade on Boeing.  Now that Boeing is at $73.75, it looks like my puts are up 60%, but the spread which is fully in the money is barely up at all.  The mid of the spread is $4.15, only $0.20 higher than my entry.  Should I just sit tight and let it come to me, or close it down?  It’s fully on track it seems….
    BA $58.32!  This stuff is way too tempting.  BA 2013 $52.50 puts can be sold for $8 for a net $44.50 entry.  Even if you have 50% margin ($22.25 – $8 cash is $14.25), the return on margin is 56% in 15 months and your worst case scenario is owing BA for about 50% lower than they were in April.  It’s almost a shame to turn such a fine trade into something greedy but the 2013 $57.50/67.50 bull call spread is just $4 so you can add that and still have a net $4 credit with $14 of upside at $67.50 but as long as BA is over $52.50, you still get 28% return on margin. 

  14. st-jean/hedge funds:
    there is a huge difference in running 1M and 100M and 10B.  There is no quick in and outs anymore.

  15. Phil
    WFM calls in OPT Trader. What do you think of the Feb $67.5/$75 BCS at $3.50, ($2.50 INM) seliing Feb $62.5 Put for $1.50 for net $2? Thanks Phil for your wisdom. Looking forward to 2012 wth you.


  17. Hedge funds / Lapper – Sorry, I was just joking… I know that these guys can’t be as nimble as we are! But still, buying an index fund would have been better than paying 2/20 to these guys! 

  18. STJ/Hedgies
    2/20 needed to fund the  "job creators"…. OFLMAO

  19. Phil you view on CMG play all Jan 12 Bought 3x 340c @ 4.62 now 9.10 sold 5x 350c @ 2.79 now 4.40 Shall I close now or wait? 

  20. Coal vs Oil
    Yesterday I was talking to a retired Merrill Lynch analyst and trader while waiting at the takeout window of a restaurant here in the Dominican Republic and he said he often traded in coal stocks as they always moved in the same direction as oil, only more so (i.e. with greater volatility.)
    Interesting, then, that this morning on a very slow start coal stocks are fast out of the blocks, but oil is down, so the theory has gone up in smoke, at least for this morning.  How valid is the correlation?

  21. Coal /jmm  Coal has been down all week while Oil has been up pretty hard since contract roll over

  22. Coal
    PCX up 3.8% off yesterday’s low…

  23. Job Creator / Acobra – I would be funny if it was not so sad…. 

  24. Good article about the scenario for Microsoft 2012: 

    Makes a compelling argument that it might be worth a shot… 

  25. Good morning!

    Don’t forget Monday is a holiday so keep that in mind when planning for next week.

    The DIA TODAY $123 puts are down to .45 and I do like them as a speculative short but it’s a risk .25 to make .25 kind of bet.  The $122 puts are .10 and good for a craps roll (very small bet that will win or be lost entirely).     

    The Dollar is being dumped back to 80.50 and you can’t fight that kind of move so we’ll see how high they can take things before trying to bet against the trend.  Oil is down to $98.75 so the Dollar isn’t helping there yet but below 80.50 should be able to get oil back towards $100. 

    The Euro is at 1.2975 and that’s the key line to watch but the Pound is already over 1.55 and the Yen is diving below 77.20 so it’s an all-out push to ditch the Dollar and paint a pretty picture today.  

    Only the CAC is still open with Germany and Europe closing at about 1pm.  The FTSE was stick-saved to barely green while the DAX sold off sharply into the close but it was up so high that it still ended the day up 1.3%.

    Friday’s economic calendar:

    8:30 ISM New York Business Index

    3:00 PM USDA Ag. Prices

    6:00 AM Overseas: Japan +0.7%. Hong Kong +0.2%. China +1.2%. India -0.6%. London -0.2%. Paris +0.2%. Frankfurt flat.

    7:48 AM Stocks close in London for the day and for the year, the FTSE 100 losing 6.6% of its value in 2011. The U.K. ETF: EWU-7.25%. Sterling buys $1.5480, down slightly from January 1. Sterling ETF: FXB -1.8%.

    8:22 AM Stocks close in Germany for the day and the year, the DAX off 15% for 2011. Deutsche Bank (DB-27%. German utilities were slammed by a combination of Europe woes and the rush to abandon nuclear power. E.ON (EONGY.PK-30%, RWE (RWEOY-48%. Presumably, companies still need to run factories and people need to light their homes. Could they be worth a look in 2012?

    At the open: Dow -0.24% to 12258. S&P -0.2% to 1260. Nasdaq -0.14% to 2282.

    Treasurys: 30-year +0.13%. 10-yr +0.14%. 5-yr +0.08%.

    Commodities: Crude -0.75% to $98.91. Gold +1.55% to $1564.75.

    Currencies: Euro -0.02% vs. dollar. Yen -0.48%. Pound -0.67%.

    10:00 AM On the hour: Dow -0.12%. 10-yr +0.11%. Euro +0.12%vs. dollar. Crude -0.45% to $99.2. Gold +2.07% to $1572.75.

    Market preview: Stock futures show little movement leading up to the year’s final trading session. Most foreign exchanges inched higher, despite a drop in China’s purchasing managers index. The most suspense we’re likely to see today is whether the S&P 500, +0.4% YTD as of yesterday’s close, ends the year marginally higher or lower.

    The IMF reports the greenback’s share of global foreign exchange reserves rose to 61.7% at the end of Q3, up from 60.3% one quarter earlier. The euro’s share declined to 25.7% from 26.7%. (pdf)

    China’s manufacturing contracted for a second month in December, with HSBC’s PMI coming in at 48.7 from 47.7 the month before. The weak manufacturing data adds pressure to officials to consider loosening monetary policy.

    IATA reports November air passenger markets softened while air cargo markets remained weak. Passenger traffic rose 4.3% Y/Y, but Nov. 2010 was a particularly weak month; traffic fell 0.5% vs. the previous month. Freight markets fell 3.1% Y/Y but rose 1.1% from October.

    I still love shorting TLT!  The Federal Reserve reports foreign investors selling $23B in Treasurys in the week ended Dec. 28, bringing their holdings down to $2.67T. Looking at the data series which goes back to 2002, it’s the 2nd highest total of weekly sales ever, and brings net sales over the past month to $69B.

    Stock and derivative exchanges had merger fever in 2011, but that’s meant little for their public stockholders: Some $37B in announced deals have failed to go through and more than $21B in equity value vanished. One manager: "The next time any exchange announces any merger whatsoever, I’m selling the stock instantaneously." This year: DBOEY.PK -20.5%NYX -12.5%,ASXFY.PK -14%LDNXF.PK -4.7%. (More time for NYX/DBOEY.PK)

    A key panel of Japan’s ruling Democratic Party of Japan agreed late yesterday on a controversial plan to double the sales taxto 10% by 2015 in order to reduce debt and potentially head off another ratings downgrade. The bill must still be approved by a government panel and then by parliament, where an opposition party is already hinting it may not cooperate. 

    Banks borrowed €17.307B from the ECB overnight, a very sharp jump from the €4.321B borrowed on Wednesday and the highest level since February. Banks deposited €445.683B, still near the €452.034B record set earlier this week.

    Sarkozy is using the holiday break to work on a plan aimed at arresting the country’s sharp rise in unemployment. Taking his cue from Germany in 2009, Sarkozy’s draft plan calls for companies to retain all staff even when business is weak and for employees to accept pay cuts in exchange. Officials are also considering opening a broader debate on work-time flexibility.

    According to sources, the IMF has told Greece what anyone with a calculator has known since the news was announced - the 50% haircut to private bondholders will not be enough to reduce the nation’s debt to sustainable levels. The acknowledgement is likely to reinforce speculation the country is headed to a bit of a harder default.

    Brazil’s surging economy of the past few years owes a least a bit to its citizen’s appetite for debt (and bank willingness to issue it), making bill collecting the latest boom industry there. The volume of credit has doubled to 50% of GDP in less than a decade, with 5.6% of the $1.1T total more than 90 days past due. Some Brazilian banks YTD: BBD -19%BSBR -41%ITUB -24%.

    The Hungarian parliament passes a law stripping its central bank of much of its independence, setting up a showdown with the IMF/EU which has signaled it could walk away from a bailout if the law were enacted. PM Viktor Orban says a rescue package would be nice, but the country will be fine without it. The Hungarian Central Bank: "(The law) seriously undermines our country’s interests."

  26. Coal
    There has probably been a lot of tax loss selling recently, so wondering if today’s sector wide bounce is a good harbinger for the black stuff for the first days of 2012.

  27. Don’t know how I inserted my comment in Phil’s post. Must try that more often.

  28. Poland’s central bank is rumored to have intervened in the foreign exchange markets to prop up the zloty for the 2nd straight day (the bank has confirmed it intervened on Thursday). Thus far, Poland’s finances have been spared much of the concern hitting the PIIGS and its eastern European neighbors such as HungaryPLND -35% YTD.

    The new Spanish government of Mariano Rajoy approves a €8.9B austerity package of tax hikes, spending cuts, and wage and pension freezes. Also announced is the 2011 deficit, coming in at 8% of GDP against expectations of 6%.

    Ford  announces its domestic vehicle sales for 2011 passing 2M, the first time hitting that milestone for any automaker since 2007. Returns to shareholders haven’t been as robust as sales, F -36%YTD.

    Big Brother on the March:  The 9th U.S. Circuit Court of Appeals yesterday upheld the constitutionality of a law giving telecom companies legal immunity for helping the government with its email and telephone eavesdropping program. The appeal concerned a case that consolidated 33 different lawsuits filed against various telecom companies, including TS  .

  29. FAS Strangle – I don’t see anything compelling today. If they do try to pin XLF in 13, then a 65/65 strangle might be worth a shot, but with the low volume I think it’s too risky.

    I’ll be back later to see if we can try something for the weekend… 

  30.  I meant a FAS 65/66 strangle, sorry…

  31. FAS Strangle – Oh well, jumping in with the FAS 65/66 strangle for sh@t and giggles! That can be rolled nicely to next week if needed! 

  32. Isn’t this about the time the drop the dollar to push through resistance?

  33. Good call on oil StJ!  For sure on the fund thing too…

    Platinum/StJ – I think no way gold should be outperforming platinum.  Gold just has a better PR agent is all. 

    TZA/Canuck – Sounds good to me and I’d sell 1/2 the TZA puts and 1/2 the BTU puts to be a bit less bearish but not too little. 

    Commodities/StJ – Oil, corn and wheat – the things people HAVE to consume are kept higher.  Very nice…

    Car sales/Nicha – I’m sure I have something at home if no one has today. 

    DIS/Bur – You are very welcome. They are a great company and many people who can’t afford to go to Europe consider DIS to be a cheap alternative.  

    Future tech/StJ – I just want my flying car.

    No changes on the money trades, my $13 pin looks secure on XLF and AA will make it or it won’t and I don’t see TNA popping too fast and, even if they do, we are well covered.

  34. Aapl Port Trades: Sell to close all 15 Jan 400s @ 16.00. And sell to close all Jan 395s @. 23.00
    These are trades for today only. Analysis: if aapl goes up today significantly we take advantage. We would buy these back @ eod because I think it will retrace then and pop again on Tuesday. I will be off line until about 3 pm. Goog luck!

  35.  Stj:  Microsoft article comments [over 60] make even more compelling arguments that they won’t.  Ballmer would have to have a serious heart attack for Microsoft to turn around — he is by far the most talent-free head of a major technology corporation, and it only proves to me that Gates is a close second – he made one good deal with a backward-looking IBM, caught up in their big mainframe paradigm ["when all you have is a hammer," etc.] and, not only never had another good idea, but has proven that he hasn’t even a vanishing notion of how to judge talent.
     A permanent fiasco, for all their high-end purchases, because the three essentials of business success are management, management and management, and MSFT makes even Nokia look like geniuses.  Imagine what even a marginally competent CEO could have done with all that cash and near-invulnerable market position.  Hired Steve Jobs when Apple fired him, for example.

  36. That ‘goog’ luck may have been a Freudian slip, as you would be lucky to own some GOOG,as well as AAPL, going into 2012! See you later !

  37. can I overlap the price chart of USO and Oil commodity? Which website provides you this functionality? Thanks

  38. BA/Burr – BA is at $73.75 and you have a call away at $67.50 and you don’t lose money until BA is below $48.50 – what on Earth can you be concerned about?  If you can’t feel like you are successful if your portfolio isn’t wildly swinging up and down month after month, then hedging with bull call spreads is not for you.  If you like to make trades that remain neutral most of the time and are simply on or off track so you don’t have to stare at them all day or worry over them at night – then they are.  It just depends on what kind of trader you want to be…

    Funds/Lapper – Yep, going over $1Bn is a problem.  That’s why I think it’s important to have a good mix of fund/VC/holding company to effectively grow a large-scale operation.  Buffett’s returns can be reasonably matched over the long haul and, through the miracle of compounded returns – that’s all anyone really needs.  

    WFM/Crussell – I don’t have all my stuff in front of me but WFM is a very expensive grocery store and you want to play them for earnings – makes me very nervous.  Feel free to remind me to look over weekend. 

    CMG/Yodi – I would take that money and run – also, food plays into earnings with wheat and corn so high is a dangerous bet.

    Coal/Oil/JMM – I don’t watch coal because it is kind of crazy.  Also, you have all the legislative rumors driving coal and endless speculation re. China.  They both move so crazy that you are bound to see whatever you want to imagine looking at the two charts and, of course, there is SOME demand-based correlation but I would still rather watch the Dollar.  

    MSFT/StJ – Why, is Ballmer stepping down?

    Insert/JMM – That’s from my news comment running over the buffer. 

  39. Good morning—-wishing everyone a very blessed and prosperous New year

  40.  Phil:  What might be the catalyst for recovery of the underperforming U.S. bank sector?  

  41. zeroxzero/MSFT’s Balmer
    Well, what could he do with all that cash if they fired him? Maybe they could appoint Corzine as CEO. The guy is a banker, so he really knows how to use cash wisely. 
    Seriously, though, isn’t the problem for both AAPL and MSFT that their businesses are so profitable that they cannot invest their  cash in other businesses that would be equally profitable. At least MSFT pays a dividend and buys back stock which is more than you can say for AAPL.
    I know the purchase of Skype is mysterious, but it can hardly be the case that Balmer just gets out of bed in the morning and decides to buy Skype to impress his girlfriend. These corporations employ all kinds of consultants, feasibility studies, strategic planning committees, etc., etc. and have to run it by the board of directors before they decide to spend a few dozen billions of spare cash on acquisitions.

  42. A happy and healthy new year to All!
    A not so bold prediction for the 2012 presidential race:  Clobama v. Romstie

  43.  Jmm:  I agree that Microsoft has made some good purchases — not devilishly cheap and creative ones, but Skype was not bad [although EBay tried it first] and Yahoo, well, I guess Jerry Yang might have improved MSFT management, but one wouldn’t think by much.  I agree that the purchase suggestions probably came from consultants.  But if Microsoft’s core competence is hiring consultants — one could be forgiven for thinking so — then we are in the the land of "Dilbert", which I think is a fair characterization of the "Microsoft team."   

  44. DCTH – well, now we know why they were jacked up……takes a hit after registering to sell up to $100M shelf registration with the SEC, and reportedly saying it may sell shares worth as much as $39.8M through Cowen. The sale would represent a significant dilution to its current 40M share float.

  45. Good morning,


    IWM  71.87,  72.15,  72.56,  72.98,  73.24,  73.51,  73.92,  74.30,  74.61,  75.06  and  75.57

    We were riding along that descending trend line resistance now at IWM 74.18, but now it appears to be a floor !!

    I’m long as of 10:50 but very cautious !!

  46. FTR up over 6% on high volume

  47. JR
    Long also but sell order just over R1
    IWM is stubborn today.

  48.  Happy New Year y’all…may it be one of health, happiness and joy!

  49. Phil / BA
    I think you mis-understood me.  I’m not concerned at all.  I was just asking your opinion since I want to learn to manage my successful trades, as well as trades that are off-track.  I am striving to create a low touch core portfolio.   
    BA is a example of a trade that so far is 100% on track.  I was wondering what you would do in this situation?  Just sit tight and let the trade play out.  Or come up with some roll, or other options majick to increase the profitibility of the trade even more.  Or lessen the risk on the trade.  

  50. Good stuff from Springheel Jack:

    On the last trading day of the year SPX has closed down nine of the last 11 years, and after trend up days following trend down days, 70% have closed down. Both stats from Cobra who has now moved to being a subscription site. We’re just under major resistance and unless we see a new high on SPX over 1269, Pug, Alphahorn, Alex Grant’s ES Forecast and myself are ALL leaning bearish for next week.


  51. Pharmboy, do you have any comments on the latest Nanosphere news (NSPH)?  Thanks in advance.

  52.  Thanks Savi, same to you.

    Catalyst/ZZ – QE3, without that, we’re not going anywhere next year.

    Markets look weak but not super-weak, maybe just flatlining into the close and the Dollar is below 80.50 so, unless you are very adventurous – you may want to admit our early morning premise is blown and cash out the DIA $123 puts at .55 and the $122 puts at .08 and call it a wash.

    I’m heading out for lunch with the girls, back around 1.  

  53.  Phil/AA – I’ve mostly had good fortune selling puts this year, but I have a position on AA from about six months ago where I sold the $11 for .80, now $2.42 and the stock at $8.60.  I should have stopped out, but let it linger.  So before assignment I’m trying to decide whether to take the stock and sell covered calls next year to recoup, or to roll down and out to 2013, or just cut my losses and get out.  It is not a big position, as I only sold 3 contracts.  What do you think of my options?

  54. zeroxzero/MSFT
    You may be right about Balmer. it is just that I have a contrarian streak and when everyone on the blogosphere denounces Steve Balmer as the second coming of Ricky Gervaise in The Office, I have to wonder why the guy continues in his job at all if he is really so incompetent. Clearly he can afford to retire if he wants.

  55. exec / R1

    You are indeed a wise man !!

  56. When does the market close today?  4pm as normal?

  57. Phil/TLT,
    Looking at TLT @ 121.39 and with a view that there will be more panic in the next week which would move TLT to around 125 (their highest), if I look at the Jan TLT 118 Put option now (it is trading at around 0.88) and try to guess their price if TLT actually moves to 125 then would it make sense to look at the 114 Put price now (at 0.22) and assume that the 118s will be close to that price for that movement in TLT.
    This is just for educational purpose…

  58. Dear Phil and Members for the past year I wish to thank all of you for the valued amount of commends and recommendations and advice given. I guess we all got wiser and older!!! For the new year all the best in respect of health and well doing. Thank you Yodi

  59. MSFT / Jmm and Zero – I don’t care that much about Ballmer, but besides Skype which might turn out well, their strategy for the Xbox is really working well. They might actually be in more people’s living room before Apple and Google! You can play, stream and get cable channels in that machine! They are selling millions of these. And it looks like they’ll have a new one in 2012 for more revenues!

  60. For all the NLY traders On 12/23 I sold the Jan 14 15c for 1.93. For the div they called my stock at 16.94 one cent over the call. Now I am scaling in the NLY for 16.01 again. I believe the div was .60c however my profit on the call was .92.

  61. FAS Strangle – Just bought back the 65/66 strangle that I sold this morning as I don’t want to get caught in a late move. That’s another 55% average win for the strategy. That caps the week for me!

    That FAS Strangle Experiment is finishing the year with the following stats:

    33 trades – 31 winners and 2 losers (1 of them rolled for a winner the next week) or  94% success.
    An average of 34% profit per trade (not on margin)
    Total profit of $8280 with about $22K of PM margin needed on average or 37% on margin in 6 weeks. Not quite Phil’s WCP numbers, but not bad for a beginner!

    This went better than I expected. I hope the luck continues next year and I’m thinking of new ways to improve that.

  62. stjeanluc
    Fas well done just the today’s call was a bit close for comfort for me Looking forward to these trades for the next year.

  63. !Feliz año nuevo! -  To Yodi and other Spanish speaking members
    Bonne année to the French speaking members

    And Happy New Year to Phil and the gang – Pharm, JRW, Zero, Nicha, Savi, lflan, JC, Jmm (and I forget many) and the entire PSW family!

    Stay safe Jrom!

    And looking forward to happy returns in 2012 – at least until 12/21….

  64. Thanks Yodi – I guess might be worth a shot on Fridays… We’ll see. 

  65.  Happy 2012!!!

  66. stjean – A very Happy New Year to you as well. Your spreadsheet and postings are greatly appreciated.

  67. The latest smartphone statistics:


  68. stjeanluc

    Bonne année mon amie !!

  69. msb coming off the golf course half drunk right now…buy  xlf…buy xlf….must keep spx positive for year…..msb…msb…msb!!!

  70.  Safe & Healthy New Years to all – once again I learned a great deal this year, from not only Phil, but may members. Many Thanks,

  71. Happy New year Phil, main contributors, staff and PSW members! May everyone enjoy good health, prosperity, happiness and wisdom for the new year and beyond!

  72. Happy New Year to ALL.

  73. I’m back – looks like I missed a little excitement on the Dow, those DIA puts are up to .70 now  so congrats to those who stuck it out.  

    Thanks Hoss, same to you.

    BA/Burr – That’s good but the point is to leave successful trades alone.  Generally, the only time we make an adjustment is when the move is against us and we have the opportunity to make a cheap roll or buy out the caller – that’s it.  If you want to get more bullish then your best investment is to buy another long call and give yourself more upside delta or you can layer your presumed profits with a higher bull call spread.  

    AA/Rev – I like them LONG-term.  In the short run, they can fall to $7 so it depends on what you ultimately are willing to own.  You got paid $240 for agreeing to buy 300 shares for $11 and now it will cost you about $480 NOT to buy 300 shares so do you really hate them that much?  If not, it costs you nothing to change the agreement so you buy 300 for $10 next January (the 2013 $10 puts are $2.50) and it costs you little to change the agreement so you own 600 shares for $7.50 ($4,500) with 6 2013 short $7.50 puts at $1.10.  Since you were originally going to buy 300 shares of AA for net $3,060 and now you have an opportunity to buy 600 shares for roughly net $4,200.  If you are not sure, there’s no harm in rolling out to the short $10s for a year as that way you still get the $240 and you still can always roll to 2x the $7.50 puts.  

    Ballmer/JMM – He just fell into the right place and money isn’t everything.  He is the head of Microsoft, that’s prestige and power and something to be proud of.  He may be criticized on the outside but, on the inside, he gets his ass kissed constantly and that’s not a bubble a guy who really has no particular talent is going to willingly leave.  

    TLT/Pat – Yes, that’s what I do all the time.  Of course there’s some time decay when you deal with options that close to expiration and you can take the VIX into account (as it would jam up premiums on the dip) but it’s a very good way to get a quick idea of the range.  We’ve seen big support at around $118 so we’re playing a very tight range here and yes, it’s better to wait for a good spike up to short. 

    Thanks Yodi, Happy New Year to you and your family as well.  

  74. StJ,
    What’s the strategy of "FAS Strangle Experiment"?  Selling OTM calls and puts?  I’d appreciate it if you explain a bit, as I didn’t follow that one.
    Happy New Year to you too!  Thanks for all the hard work on those "Money" plays.

  75. A vehicle I would find very useful is an ipath equivalent of xiv in terms of liquidity and termination clause.  So it would really be an inverse vxx.  xiv unfortunately is not a true inverse and can degrade over time.  ipath has ivop but they have proven they can terminate an etn wiping you out in one stroke because they have theirs set at a specific value instead of the much less likely to happen required 80% drop in one day of xiv.  Also ivop has no liquidity.   So anyone wanting to help get this send a note to

  76. I want to thank everyone on this board for their valuable comments and trade ideas.
    Thank you to JRW & Iflan as well. 
    A special thanks to Pharm & rainman for their advice and support. I would freak out if I didn’t have your support.
    Thanks to Savi for organizing the PSW Vegas event. It was a pleasure to meet all of you. I would have enjoyed more if I wasn’t sick. Can’t wait for the next one!
    And finally many, many thank you’s to Phil for his genorosity in sharing the wealth of his knowledge. If it wasn’t for you I would never have tasted success in trading. This is my first full year with you and I have a 20% return on my portfolio. Also, I saved a lot of angst by staying in cash in my 401b whenever you thought the markets were toppy. This helped me avoid a 10% loss for the year. Meeting you was the highlight of my year. Thank you.
    Lots of thank you’s but I truly appreciate all of you!

  77. and much happiness of the New Year to all of you – ?? ? ?? ????

  78. hmm, the board seems unhappy with my Korean font. Ah well, the thought was there.

  79.  Phil – Thanks for your solid advice on AA. (and throughout the year as well!)  Happy New Year!  

  80. NLY/Yodi – Good job on that!  See, you are getting the hang of these already. 

    Nice job with FAS, StJ – that’s why we went back to FAS money, it’s the best thing to sell that I know of.   Happy new year to you too – we’ll talk next week.

    And a very happy new year to all – it’s been a fantastic 2011 and I only see it getting better in 2012 as this group gets stronger every day and we seem to get into our trading grooves a lot faster as we all feed off each other’s strengths – a very exciting way to head into a new year filled with fresh challenges – and fresh opportunities!

    We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called Opportunity and its first chapter is New Year’s Day.” – Edith Pierce


    New Year’s Resolution: To tolerate fools more gladly, provided this does not encourage them to take up more of my time.” – James Agate

    New Year’s Day – Now is the accepted time to make your regular annual good intentions.  Next week you can begin paving hell with them as usual.”  - Mark Twain

    New Year’s eve is like every other night; there is no pause in the march of the universe, no breathless moment of silence among created things that the passage of another twelve months may be noted; and yet no man has quite the same thoughts this evening that come with the coming of darkness on other nights” – Hamilton Mabie

  81. JR
    Are you short?

  82. Right on the money there nicha!!
    It really takes a good (and a big) heart to share your knowledge to others so that they can profit from it. Even though my returns are not that impressive (but those are due to my mistakes and fund constraints) the knowledge that I have gained by just reading is immense and is not available anywhere.
    So THANK YOU PHIL for making sure that the PSW members are not feasted upon by the dark army (ibanks, NYMEX boys and others) and giving us your 100% (always)
    Thank you JRW for the perfect market direction tips and Pharm for his view.
    Thank you everyone at PSW and have a safe, healthy and prosperous 2012.

  83. as far as i am concerned when you are worth 8 billion and have no talent and have managed to stIck around for thE entire  don’t need no stinkin’ talent..YOU ARE  SVENGALI/RASPUTIN/MAE WEST

  84. took a short DOW at 12,285, short NASDAQ100 at 2285 and short a modest size position for AUD/USD at 1.0200 right on the dot along with a short AUD/CAD at just over 1.0400
    i want to hold over into next year.
    happy new year/bonne annee

  85. Phil , thanks for all the guidance and patience.  Joining this board is probably one of the best things I ever did.  To you and members:  Happy New Year!

  86.  Phil and the rest of PSW Happy and successful 2012!

  87.  Happy New Year to everyone. Thank you all for a great year.

  88. If you want a short sell going into next week, The Oxen Group got our clients into shorts on Polycom (PLCM) today at 16.32. We think the stock has downside risk into next week. The company has earnings coming up that look weak, and we would expect a retest of their Q3 fiasco levels in the coming weeks. Target 3%.

  89. They couldn’t hold $99 on oil at the nymex close.

    Gold $1,566.

    Volume is gone if anyone does decide to sell into the close, I can’t imagine where they’ll find a buyer.

  90. Looks like they blew the nymex close even smacking down the dollar didn’t save it. I was in cash just watching because they busted my butt last Friday.

  91. NSPH – this is one in many to come.  I am going to DD.  I am in at an original buy of 2.39.

  92. exec / Short

    No, I took my 18 cents and am in cash; there may yet be an opportunity though !!

    It does appear to be a red day though !!


    I expect a red day tomorrow; I’m all in cash now !!

  93.  Joining the well wishes.  I haven’t had much to contribute yet, but thoroughly enjoy this group and appreciate all I have learned from Phil and active members.  Very much looking forward to 2012!

  94. Happy New Year to all members and families, look forward to continuing this discussion in 2012 and making plenty of money, or at least not losing any.

  95.  Phil thank you for all the guidance this year helped me recover a 50% down portfolio to  back to even for the year!
    Hope everyone has a Happy and SAFE New Years celebration

  96. JR,
    Good call on the Red day. 
    I cashed out 12:03 at 46.021 for 78 cents.  It’s too distracting trading while I’m trying to get things done.  That makes six days in a row without a looser which is a record for me.  WhooooHoooo!!!
    I’m outta here…..everyone have a great New Year weekend.  Best of luck in the upcoming year.

  97. Gervais/Jmm – oh my! i can’t even handle this youtube.. i think i would go insane if i was the guy sitting there with him. LOL!

  98. Phil, great call on XLF today. Looks like 13 is the pin… That was the thinking behind the FAS Strangle today and that worked out well. 

  99. Phil / DMND – thanks for the adjustment on this one.  I rolled the June 36 calls to 30 but kept the June 44 caller in place.  The sold puts were 50% against me at the time but now it’s looking good. 

  100. Phil – Happy and safe New Year and thank you for your patience, persistence and coaching thru this turbulent year.
    Thank you also to all those contributors who take their time and effort to post ideas, trade suggestions an explanations (JRW, Pharmboy, D.Ristua, lflan, rustle123, stj, angel, Cap (where r u?) etc  It is much appreciated by those of us still building our expertise and confidence.
    I’ve turned 2 here and still feel like a newbie. Prob. another 8500 hrs to go!
    Patience seems to be the greatest attribute in this market but seems it’s relative to the momentum of the day.
    Tough keeping up with Phil on his quick trade portfo. but easily made enough to continue couple of more years.
    Keep safe everyone and here’s to a very prosperous 2012!

    Will input our Shopping blog this evening with observations from the Boston area.
    Something good happening here – smallest amount of snowfall for Dec. since 1972!!!   April 1 only 90 days away

  101. lflan, please let me know if any trade went through today! Thanks… 

    That’s all for me today! Portfolio recaps this weekend. See you next year!

  102. Looks like we’re going to paint the first annual doji candle on the SP500 since 1987.    Lots of Ups and Downs this year, but riding along with Phil and the others on this forum made it thrilling, profitable and educational as opposed to terrifying and stomach-churning had it been just by myself.     Just a couple of shaolin monks enjoying an amusement park ride.
    Happy New Year!  Can’t wait to hop on to 2012!

  103. Happy new year to all!

  104. Happy new year too all! Have a good weekend, recharge your batteries for another year and start fresh on Tuesday! — Cheers!

  105. Shorting below the trend line now at IWM 74.17 !!   (If we get there in time)

    5 of the last 6 years started with a green day, fwiw !!

  106.  All – Have watched quietly and learned much during my first three months with PSW and am thankful for finding this community. Enjoy the varied and often conflicting opinions that lead us all to better decision making. Appreciate all that you do Phil and a big shout out to all the regular contributors for the wealth of experience they bring and specific direction they share freely. Time here is an investment that pays dividends in exponential terms. Can’t say that about too many things these days.
    Looking forward to continued fun and mutual prosperity in 2012. Best to all. Now let’s start that New Year celebration a little early!

  107. Happy new year everyone! See you in 2012.

  108. Congrats Exec!

    Gervais/Scott – He’s doing his character from the original UK version of The Office. This is dull for him – he’s really funny. 

    WFC/StJ – And what a coincidence, that’s the one Buffett owns! 

    DMND/Terra – Your welcome, that one is coming along nicely.

    Boston/Ban – I love that town.  Been to several first nights up there as well as July 4th at the shell for the Pops.  

    Monks/Kinki – That’s the way to go.  Zen and the art of stock market trading. 

    Getting a little stick action into the close – very appropriate way to wind up the year.

  109.  Phil-- thank you for helping us not become one of them….. ;-)

  110. Vietnam/ jomptun, pahurik, & escohen5,  Thanks for the info yesterday.  I’ll email you with a couple of questions escohen,  I appreciate your willingness to share your info and time. 
      A huge thanks to Phil and the rest of you for sharing your wealth of knowledge, and especially to Phil for the endless jokes and digs at the "opposition". Happy new year and a prospero ano nuevo to all.  See you in 2012.

  111. 12:38 PM With trading desks barely staffed, someone has decided to run some stops in the currency market. The greenback takes a plunge over the past couple of hours against nearly every major currency, but particularly vs. the yen, the aussie, and the kiwi. The yen has now regained nearly all the ground lost when Japanintervened in late October to weaken it.

    3:00 PM On the hour: Dow -0.39%. 10-yr -0.53%. Euro +0.22% vs. dollar. Crude -0.73% to $98.92. Gold +1.54% to $1564.70. 

    Not even amidst the panic of late 2008 have 10-year Treasury yields closed the year below 2%, but – barring a big move – that will change today. The 10-year is off another 4 basis points to 1.86%, not far from the 1.70% of late September when fear in equity-land was palpable. Treasurys have handily beat stocks this year, the 10-year returning 9.7% (as of Thursday), the 30-year returning more than 30%.

    The ECRI’s gauge of future economic activity in the U.S. falls to 120.9 for the week ended Dec. 23 from 121.3 previously. The index’s annualized growth rate improves a bit to -7.6% from -7.7%. The growth rate had dipped at low as -10% in mid-October. (full data set in Excel) 

    Here we go again!  Pres. Obama agrees to delay submitting a request to Congress for an increase in the debt ceiling to allow lawmakers the opportunity to hold a vote on the measure when they return from their holiday break. The Treasury Department is enacting accounting measures to keep the U.S. from hitting the debt ceiling and defaulting on its debt, a WH official says. 

    Anybody who thinks Greece can easily raise €50B through the sale of state assets, should consider the fate of the country’s 2004 Olympic facilities. Most sit idle and unused after failed attempts by private investors to make something of them. "When I hear ‘fast-track’ mentioned in Greece, and the Olympic venue as an example … I tremble inside," says one who was involved. "Who would buy here," asks an unnamed EU official. 

    We’re looking at a trapdoor in the euro under €1.28, warns Art Cashin. "That level is critical" and we’re near it right now, Cashin says. If it breaks through, it’s going to have a big effect on the global markets. (video)

    A hat tip to Eddy Elfenbein for digging up the NYT reportage of the crash of December 1899. "The certainty that the government will come to the rescue as announced last night in a dispatch from Washington is another important encouraging factor," says theTimes, a reminder moral hazard didn’t begin with Alan Greenspan (though he may have perfected it).

    As noted in our shopping survey:  Restaurants in November turned in their best performance in five months and look to solid sales and a better economy in 2012, according to the National Restaurant Association. More customers visited eateries during the month, leading to the strongest net sales in more than four years at establishments open more than a year.

    Investing legend George Soros believes that gold is on the verge of a bear market. The billionaire investor, who two years ago called the yellow metal the “ultimate asset bubble,” cut 99% of his holdings in the first quarter, according to SEC filings. (video)

    As natural gas prices dip below $3/MMBtu for the first time since 2009, the profits of producers are getting squeezed, raising the need for wells to be shut, staff to be cut, or mergers to be sought out in the New Year. EXCO (XCO) and Quicksilver (KWK) are both off about 50% in a matter of months, far worse than better-hedged and more deep-pocketed peers in the group. (XCO yesterday)

    Told you I don’t like these things:  Fertilizer companies end the year deep in the red, reversinglast winter’s big gains made amidst QE2, booming grain prices, and seemingly insatiable foreign demand. Cargill’s unloading of its stake in Mosaic in January for $24.3B did indeed ring a bell for the sector. YTD: MOS -34%POT -20%AGU -27%. Introduced in May, the fertilizer ETF: SOIL -20%

    But this one we like!  Shares of Frontier Communications (FTR +4.5%) are trading higher this morning after Piper Jaffray initiates coverage with a Neutral. Piper notes the company has a very high dividend, which is sustainable today by a lower cash tax rate derived from current bonus depreciation rules.

    Google (GOOG +0.3%) sets a new 52-week high before pulling back, as Baird raises its price target to $760 from $700 and increases estimates following positive channel checks. "We expect that Google site revenue continued to grow in excess of 30% and network revenues close to 20%, driven in particular by strength in click volume," Baird says.

    Barron’s Teresa Rivas comes down on the side of those who believe Amazon (AMZN) is on track to beat Q4 revenue estimates. She also notes Gene Munster’s research showing  the vast majority of Kindle Fire users are happy with the product. Despite selling for 85X forward earnings, Amazon might be worth a look at current "sale" prices. Shares are off 30% the last 10 weeks, and -4.4% for the year.

    Three lunchtime reads:

    1) What really caused the recession?

    2) Start saving or get ready for a U.S. decline

    3) The letter that got Mark Hurd fired 

  112. Happy and prosperous new year for everybody and family!
    Phil thank you for all nice things you provide us!

  113. You’re welcome Jabob!

    Well, I’d love to stick around for the last 15 mins but I have to go get the kids as we’re all going tubing this afternoon.  

    Have a happy and healthy and, of course, wealthy New Year – be safe this weekend and I’ll see you all on Tuesday!

  114.  Phil,
    Its been a year of learning and practicing the art of the trade. Some gains and some huge investment losses.
    Hopefully, I look forward to your help in recouping some investment losses in the next year.
    Wish you and your family, the PSW crew and all the site members:    A HAPPY AND PROSPEROUS NEW YEAR
    Thanks for everything.
    Jal Surti

  115. Happy New Year everyone!

  116. Happy New Year toa ll.
    JRW- thanks for the last minute call on the trend line. Took home $.21 for my last trade of the year.

  117.  JRW,
    Your calls are bloody unreal. Great call. Will follow you more closely in 2012.
    Have a Wonderful New Year.

  118. Broken stick at the end.
    Happy New Year’s to all,
    hoping to one day "give" more than i "receive" from everyone at PSW.
    Best wishes and success to all.

  119. Anyone/DMND
    what was Phils take on DMND – good for a buy/write at these levels or not?

  120. Happy New year Phil!
    And a DD on the sentiments expressed by others. This board is an amazing place to learn and I’m really grateful to be a member. Thanks to JRW, Pharm, StJean, IfLan and every body for your insights and talent.
    Bring on 2012!

  121. No AAPL trades today. Holding longs for next week’s pop! Thanks to all for an enjoyable and educational year. I hope for all of you for next year a triple of this year’s portfolio performance. But better yet, health and happiness. See you in 2012!

  122. Happy Happy New Year……..

  123.  Canuck – last 30 days of comments on DMND . Note the links are being fixed as soon as people return from the holiday season. In the meantime, you can copy the link remove ‘&cpage=1′ from the link text and that will take you to the page the comment was originally posted on.

  124. Everyone – I’ve made the first ‘Chapter’ of what will evolve into a book available on Google Docs! The fist prize goes to Peter D, as all of the content in that document was posted by him on his short strangles.
    Filtering was done by generally using comments that were 200 words or longer. Each section/idea posted by Peter is proceeded with the time it was posted and a link to the original comment for additional context. Right now the document contains about a years worth of content that matches the above criteria (27 posts). I’ll be adding back to Jan 13th, 2010 soon because this was when the first major discussion happened on short strangles. 
    There’s a link on the wiki towards the top of the page for the chapters available, which will grow as I filter the content. If anyone has Devonthink2 (and a Mac, sorry PC users) and you want to contribute to the filtering let’s discuss it and I will look into making the database available.
    Please suggest topics! I can’t come up with all of them on my own… What’s needed now are editors, so feel free to get in there and clean the content up. And merry new year! :)

  125. VZ – wow, that didn’t take long. Verizon’s already reversed course on their $2 convenience fee that they were supposed to begin charging for in the middle of Jan.

  126. And a link to the second part of Peter D’s aggregated and filtered content.

  127. Hey, Peter D,
    if you are around, Happy New Year to You!  Many thanks for your teachings of Strangling the SPY!  You should be happy that Kwan just made you famous!
    Now I am really wondering if Kwan is my twin sibling?? :)
    Many more thanks to Phil and All PSW members.  Happy New Year!

  128. Happy New Year and thanks to everyone who put up with my questions and comments!
    I have not had this good of a feeling about my portfolio since…….well ever.  
    My goals for next year are
    - to continue building my core "low-touch" portfolio (a la Income Port)
    - to learn what the hell JRW’s system is, and what all those numbers mean everyday…and how he can wake up at 10.30am..
    - to continue to suffocate FAS with my mighty strangles…and not get strangled with my strangle…
    - to short Oil once at 3am and pay for my damn mcmuff’s like phil does!
    - to survive after the Mayan calendar ends

  129. Happy New Year to you Phil !

    Thank goodness 2011 is done. I called a flat eoy paint job a week or 2 ago, what silliness.

    iowa – Mitt I would think. He is gonna run the primary table with or without Iowa.

  130. Happy new year everyone, I finally feel that I am on the right track as far as my trading goes thanks to Phil and the others on this site. I am somewhat hampered living in a different time zone but still worth the price of admission to hear all you smart guys with trading ideas and help when needed. I still can’t figure out how Phil juggles all he does and still finds a little time for sleep but he is indeed a master of the craft.

  131. Good morning Phil,
    I’ve decided that I’m going to bolster up my portfolio with some dividend stocks.  Haven’t decided whether to sell puts or buy/write, but I definitely need to engage in a more long term strategy.  The only thing that has prevented me from doing it sooner is my bearish nature, and the reoccurring chart that JR frequently post which depicts the bottom falling out sometime in the near future. 
    Never the less, I need to add some dividend stocks and combined with selling premium, I’d have to do better than staying mostly in cash and screwing around day trading.
    I’ve been searching the internet for, best dividend stocks, safest dividend stocks, favorite dividend stocks, and as you can imagine, nobody is short of opinions, and everybody has a different one.  In any case, I value your opinion as well as many of the other members on your site, (so members please chime in) and was hoping you’d look over this list I’ve compiled and give me your two cents.  I’m thinking about investing 200k and will most likely do a combination of selling puts and buy sells.
    These are the stocks are the result of my search’s.  If you have anything that you would add to the list, or see anything that you would definitely stay away from please let me know.





























  132. Sorry about that, the spreadsheet posted funky.

  133. exec/dividend stocks
    I like your list and it seems to have most of the distinguished dividend champions. I have MSFT, CHL, and VOD.
    I am also quite bullish on BP. The ADR is currently trading around $42 with a dividend of 3.9%. The absolute bottom for the stock is probably around $28 which was the price that was kissed for a few days after the Macondo disaster when the dividend was suspended, there was some possibility of bankruptcy, and all the dividend funds and ETFs were forced to liquidate the stock, so it can’t get much worse than that. Leaving aside an absolute disaster of that kind, the bottom with lots of support looks to be around $34.

  134. div/exec:  Phil has written alot on them, but HCBK is paying over 5%.  They have no Europe exposure, had little subprime exposure and recently paid off 4.3billion in debt which cleans up their balance sheet.   Then there are two more Phil recommendations of MT and SVU which are both cheap with divvies over 4%.

  135. A good dividend play is DPO- pays 8.5% currently and is a fund which holds the Dow 30 stocks and writes covered calls against them. I have been accumulating this over the past couple of years and started in the mid 6′s.

  136. Phil and all the contributors I wish you a Happy New Year. Special thanks to Amatta for all the learning this year.

  137. Kwan & Cwan,
    Kwan, what a nice and pleasant surprise!  I haven’t read PSW for 2 days (busy with all the year end parties), and this is a fabulous news to end 2011.  Good job, Kwan and thank you!  Thanks to Phil for recognizing the potential of short strangles and gave it a colored box early in the process!  And thanks to everyone else (chaps, barfinger, judah, pstas, cwan, ssdirk, balancenv, tcha, yodi, Pharm, robert and many more) who helped to make this topic exciting.
    Yes, there is not much difference between Cwan and Kwan, is there?
    Have a fabulous, happy and safe New Year!!

  138. Happy new year to all at PSW. My greatest thanks to those on here who have been so generous with both their time and patience. Most of all, thank you Phil. You have an exceptional gift which you are very gracious to share with all of us. Have a safe and very prosperous 2012.

  139. Music for the new year – Angelcur! for some reason, you are very much in my mind as i am listening to this tonight on my end of year music mix..! ;-)    David Lindley’s cover of Warren Zevon’s Seminole Bingo which David played here locally a couple years ago. I hope no offense, and to all: Enjoy! :-)

  140. Where did amatta go?

  141. Happy New Year 2012 to all.

  142.  Happy new year Phil and to all fellow stockahollics.
    Cant wait to ride the wall street rollercoster 2012 edition!
    Bring it on!!!

  143. Happy New Year to ya’ll. I’m celebrating mostly because yesterday I finally got the internet connection at my new place – apparently one of the known side effects of scheduling Comcast service in Florida is near apoplectic rage. Here’s an interesting and slyly humorous piece on the mysterious McRib sandwich as a possible arbitrage on hog prices. Interesting too for its insight on McD’s enormous influence on food commodities although maybe not news to most here.

  144. A Grim Forecast for Corporate Earnings
    When earnings season begins in earnest during the second week of January, we may be looking for the grinch who stole fourth-quarter profits.
    The number of companies in the Standard & Poor’s 500 index that have made downward profit revisions is at a level not seen since the 2001 economic recession, making sell-side analyst projections look rosy. There were 96 instances where companies revised their fourth-quarter earnings estimates downward, while there were 27 upward revisions. (Here is the list of companies that issued guidance.)

  145.  Dividends – Happy New Year!  I’m focusing on dividends more this year than in the past.  I’m currently looking at adding holdings with NUE, ITW, MSFT, INTC, ABT and possibly AFL, though it is the weakest on my list.  I am about 70% in cash in the moment with 2013 buy-writes on BRK.B, F and XLF.  I have Jan 2012 covered calls on HITK, MSFT, INTC, VLO and SNDK.  Everything but VLO is near ATM.  My plan for the year is to get a good core of stocks that grow their dividends consistently over the long-term, entering positions through OTM sold puts and adding buy-writes or covered calls as assigned.  I will enter some buy-writes straight out if the stock value seems good.  
    About 20 percent of my portfolio is set aside for downside hedges and debit spreads (BCS type spreads) on things I like (usually what Phil likes) or good board ideas like the OXY spread last week (only one I hold right now.)  I’m in no hurry to fill up my portfolio right now.  Just watching for opportunities.
    Last year I think I added a few hundred hours towards the necessary 10,000 hours it takes to master a skill (as Gladwell calculates.)  Thanks to a fantastic October, I did at least beat the market this year, but not really by much.  As I look back at my trades for the past year, my strength was using OTM sold puts, covered calls and discount buy-writes.  I had an over 90% success rate with these trades, and would have easily made 20 % last year if that was all the trading I did.  Unfortunately greed undid me.  About four speculative trades ate up a great deal of my gains.  My biggest mistake was holding positions through an earnings announcement, speculating it would go well or just not being aware earnings were on the way.  I am not a very good short-term trader, nor do I want to be at this point in my life.  I’m keeping it simple this year and focusing on the long-term, with solid risk analysis on every position.
    Best wishes to everyone at PSW for a happy, prosperous  New Year!  May peace and greater social harmony prevail, and remember that we all live on hope, but hope is not a strategy.  The prize is to those who persevere.  

  146. Happy New Year: Need some help figuring out whether I trade too much. I pay $1.25/contract at TOS and have paid 10% of my starting portfolio value on commissions. The return on the portfolio is 20% for the year. 

  147. Nicha,
    I’d be happy with 20% return.
    Happy New Year.

  148. As we all noticed, 2011 was pretty volatile, but not the most.. even in the 21st century:

    In absolute number of points, it was still quite large which I guess is good for day trading! But still far from the crazy 2008.

  149. Quote of the day from Barry’s site:

    "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria." —Sir John Templeton 

  150. Good morning!  

    I hope everyone had a nice New Year’s celebration.  

    We had a great time and there’s still football on today (Giants won yesterday!), so it ain’t over yet!  

    Today’s going to be a catching-up reading day for me so I may as well make a new post out of it.  

    Every once in a while I like to go web-free and the Sunday Times had a good article explaining why.  

    It’s very interesting as I’ve always felt a need to do this (and skiing really fits the bill as it’s something that occupies my whole day where I’m away from all electronics and get to really clear my head) and this article neatly clarifies why it’s a very good thing to do – for me and the kids.  

    Nicholas Carr  (“The Shallows”)  points out, that after spending time in quiet rural settings, subjects “exhibit greater attentiveness, stronger memory and generally improved cognition. Their brains become both calmer and sharper.” More than that, empathy, as well as deep thought, depends (as neuroscientists like Antonio Damasio have found) on neural processes that are “inherently slow.” The very ones our high-speed lives have little time for.

  151. Yeah, that would go a long way toward explaining why so much ADD, etc, these days.  For similar reasons, It would be a good idea to limit television watching at home, or even to eliminate it entirely. I’ve been living well without it for years.  I even managed to watch yesterdays New England/ Buffalo football game over internet, tho I admit to spending too much time on the internet (much of it on PSW, by the way!)

  152. Sabbaticals/Phil: I agree wholeheartedly with this assessment.  I find that I tend to experience a kind of "time dilation" when I disconnect and take sabbaticals out in the country-side.  I am not sure why this happens, possibly because the passage of time feels longer when you remove extraneous mental stimulation from your life.  I feel like my brain — which is like a multi-threaded CPU that has been attuned processing to a fast-paced pipeline of information and data on a daily basis suddenly has nothing to do.  In these situations, I find my brains starts using the free processor time to delve deeper into my long-term memory and run calculations, analyze and run tangential connections between thoughts previously placed on the back-burner.  Its an amazing feeling and I always end up incredibly refreshed afterwards.
    The legend goes that Bodhidharma (the guy who invented Kung-fu at the Shaolin monastery) once spent nine years of his life just sitting in a cave staring at a wall.  When I was younger with a constant thirst for mental and physical stimulation, I used to think doing something like that must have been torturous.  But as I start more and more that nine years isn’t that long a time to "meditate" on more transcendental ideas.   Many times its in the those moments of incredible boredom where I let my mind roam free of fetters that I come to enlightened reasoning about my life and its meaning.

  153. Phil – question:  A couple days ago I asked about a play on BTU, and you suggested to sell the 2014 $30 puts and buy in the money BCS (2013 30/45).  Maya asked a similar question on AAPL and you suggested to "play aggressively" and buy the July $410/460 BCS, possibly waiting for a dip before selling Jan 2013 $290 puts.  My question is; why not also play AAPL more bullish and sell the 2014 puts, buying for example the 2013 $400/500 BCS?   Is it because AAPL is more predictably cyclical, generally diving after earnings and therefore more opportunity to "rewash, recycle" and play another spread during the course of the year, or is there some other reasoning?  Thanks in advance, trying to dig behind the reasoning…