Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Thousand Point Thursday – Dow Erases 2 Weeks of Losses in 3 Days!

INDU DAILYAnd we're back!  

Another day, another 250-point rally on the Dow is now business as usual, if by usual we mean since Friday.  Generally, it's considered UNusual for the Dow to go up 1,000 points (6.4%) in a month, let alone 3 days but we just did it in October – so why not again in February?  In October we actually made a 2,000-point move – all the way to 18,000 and now it took us 1,000 just to get back to 16,500 but we went down on stupid sell-offs in Apple (AAPL) and Boeing (BA) that never should have happened in the first place (we're long on both).  

As I noted back on 1/14, when we called 16,000 the fair bottom for the Dow (based on our valuation study of each individual component) and our 10% range for this year should be from there to 17,600 so we're not terribly impressed at 16,500 but at least it's progress.  The spectacular gains we've had in our 4 Member Tracking Portfolios since then have been BECAUSE we stuck to our valuation guns and got more bullish while others were panicking.  

2-17-2016 3-23-59 PMNow we're a little nervous because this is like a date that's starting out really well and we're hoping we can go all the way but we don't want to blow it so a little bit of caution is advised here – at the point where we were harshly rejected last time.  Last time we blew it at 16,500, it was right after the last Fed meeting and we thought the markets (thanks to Hilsenrath) were wrongly interpreting the statement and that caused us to be even more bullish on our second sell-off of the year.  

Frankly, I'd be a lot more confident in this rally if we had taken the same two weeks to come back as we did to fall.  Why?  Because the volume of selling on the way down was about 1.5Bn on SPY on the way down (since 2/1) and 375M on the way up so, in the round-trip, we've had 4 times more sellers than buyers, essentially – it's kind of hard to make a base case on a foundation that weak, right?  

Meanwhile, we're still getting a lot of disturbing macro data like Japan's 13% drop in January exports along with an 18% drop in imports is a strong indication the BOJ hasn't done nearly enough to stimulate that economy.  Part of it is due to a rising Yen (lowering the exports measured in Yen) and part of it is Japan's move to manufacture more goods overseas but 13% in a year is pretty catastrophic.  

We'd like to think we're doing better than that but today's Philly Fed Report came in at -2.8 in another month of contraction.  Most disturbing is the future activity index fell from 24.1 to 19.1 – that's a 20% drop in a month of forward expectations.  On the whole, this is all in-line with our expectations for the year.   The only issue is that we bounced back way too fast this week and the market needs to take its time and settle in gently to the new trading range.  That would be nice!  

Oil is making a nice comeback today and that's going to give us a boost as that sector was in a complete panic.  I was just interviewed by CNBC yesterday and gave them my $35-45 target into the summer and said "I don't see the panic move down below $30 happening again, that's just untenable."  I don't know if I caused the oil rally with that comment but already this morning the April contracts are trading at $34 (we're long on oil, of course but taking profits by $35 as, like the Dow, it's too early).  

We still need to see 1,040 on the Russell to confirm a rally and the Russell is our lagging index with the Dow at 16,500, S&P 1,930 and Nasdaq 4,215 and if they hold, then we can play the Russell Futures (/TF) bullish over 1,010 or, for the Futures-challenged, we can get a nice effect from the Russell Ultra-Long ETF (TNA) at $43.64 with the following options play:

Buy 10 TNA March $41 calls for $3 ($3,000)

Sell 10 TNA March $44 calls for $1 ($1,000)

Sell 1 BA 2018 $80 put for $7 ($700)

That obligates you to buy 100 shares of Boeing (BA) for $80 (now $116) in 2018 if it's below that price and, meanwhile, you have $3,000 worth of TNA spreads for net $1,300 with a potential $1,700 upside (130%) if TNA is above $44 in 30 days.  That's a nice way to take advantage of a further rally and, of course, you can use any stock you REALLY want to own for a discount instead of BA – we just happen to really like that one!  

If those levels break, of course, we're back to looking at hedges like the ones I highlighted back on the 5th – which paid off HUGE last week.  

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!



Comments (reverse order)


    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!



  1. no tease please!!!


  2. Without the Fed comments, where would we be?  And if everything is great again, how long before the Fed is back on that table?


  3. Why stock buy backs are just a waste of money:

    http://www.seattletimes.com/business/big-stock-buybacks-are-losers-for-many-companies/

    If you think your stocks are doing poorly, check out the performance of some of the most sophisticated investors, the ones with more knowledge about what’s going on inside businesses than anyone else: Companies that buy their own shares.

    The companies losing money on these bets are down a collective $126 billion over the past three years, a decline of 15 percent.

    Many corporations would have been better off investing that cash in an index fund instead of their own stock. The overall market rose 39 percent over the same period. The companies could also have distributed that cash as dividends to shareholders, allowing them to spend what is, in the end, their money.

    A lot of these companies also bought at the top which doesn't help and take on debt.


  4. Good Morning!


  5. McClellan is +196, very overbought.  Think it's the 3 highest reading in the last 12 months.


  6. Yep, about time to get short again. Wanted to pull the trigger yesterday, but waiting patiently for the rally to stop. Might be today, but soon. I'm hoping for the S&P to get to 1935.


  7. Hi Everyone, I'm a new member and so I apologize if this has been brought up before but I was looking for Phil's Virtual Portfolio Spreadsheet Files and found mention of them in a few places but all I can find are when he posts Virtual Portfolio jpegs in a Portfolio Review post. Is there a place where I can download an actual spreadsheet of his current portfolio? For someone new to the site like me, it seems difficult to track the positions currently in play by just looking at the jpeg. Again sorry if this has been brought up before.


  8. Good morning! 

    Everything is NOT great if we can't hold 1,925 or 16,500 – be careful.  There's a reason we haven't taken off our hedges yet – we needed another day to see if the rally is real (still in doubt). 

    As noted by Rustle, McClellan is very toppy – doesn't usually end well when it gets this high:

    NYMO  DAILY

    The good news is that the longer-term Summation Index is still very low so we could still spike though and get back to highs on $NYMO.

    NYSI DAILY

    People are still a bit worried:

    VIX WEEKLY

    Big Chart – Don't forget this is all BS if we can't clear the middle legs of those Ws.

    Also, oil isn't really popping, it's just the new contract (April) is more expensive than March by $2 and there's still a ton of March contracts to roll so /CLH6  should still get downward pressure from $32 and that will drag /CLJ6 (April) down with it.  And I know that's counter-intuitive but that's how it trades.  

    Fed/Seer – True, we've had nothing but positive spin from all the CBs this week.  

    Buybacks/StJ – And already $134Bn announced this Q – on pace for a new record though a lot of that is IBM and AAPL and I approve of both of those buybacks at these prices.  

    Yikes, turning red already on the indexes.  Well, it was fun while it lasted…  


  9. I bought DIA puts, QQQ puts and UVXY calls when market was up 40 for next week.  Hoping for the air to come out of market.


  10. Well, after a 5% move up, a 1% pullback is still bullish (weak retrace) so nothing to panic about and of course the strong bounce line on /ES was going to be resistance.  Leading Economic Indicators at 10 and EIA inventoroes at 11 will set the real tone.  


  11. Phil / Fun while it lasted…..

    Haha!  That's funny!  

    What a fabulous closing statement as you head back off to the trenches! 


  12. Buybacks; isn't part of the logic with buybacks at least from the shareholder perspective, that reducing the number of shares outstanding increases EPS, making the company more attractive in that respect? 

    Say you had an EPS of $2 and fair P/E for this type of company was 10 (2 x 10 = $20 stock value)

    Where as a share buyback increases EPS to 2.3, at the same P/E youd get (2.3 x 10 = $23 stock value)

    Not saying it  works out that way in reality, but in theory at least?


  13. NEW YORK (Reuters) – Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, says the next big monetary and fiscal move should include an airdrop of money from helicopters to stimulate the U.S. economy.

    He may not be entirely serious about “helicopter money.” But in a client …


  14. Oil rose towards $35 a barrel on Thursday after Iran welcomed plans by Russia and Saudi Arabia to freeze output and an industry report showed a surprise drop in U.S. inventories.

    The gain added to a more than 7 per cent surge in the previous session, which came even though analysts said the market …


  15. Do click to enlarge, any complaints to UBS, where credit also resides:

    The biggest piece of that map revolves around the question of why EM corporate …


  16. Governments in the U.S., Europe and elsewhere should take “urgent” and “collective” steps to raise their investment spending and deliver a fresh boost to flagging economic growth, the Organization for Economic Growth and Development said on Thursday.

    In its most forceful call to action since the …


  17. Not too long ago, taking the nation’s wild, messy, unreliable system of medical records online seemed like a worthy goal.

    “To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that, within five years, all of America’s medical …


  18. If you were encouraged by stocks’ big rally that began last Friday and had catapulted the Dow Jones Industrial Average almost 800 points by Wednesday’s close, one longtime market bull has some cautionary words for you: Don’t be.

    Jim Stack, president of Stack Financial Management and InvesTech …


  19. Maybe because between the specter of defaulting in under three months, the threat of handing over its gold to Deutsche Bank, or the reality of …


  20. Japan’s stimulus program is simply colossal

    In a world where unconventional monetary policy is quickly becoming the norm, few others who can match the innovation recently displayed the Bank of Japan.

    Its determination to boost the Japanese economy by whatever means necessary is both admirable and alarming at the same time.

    The adoption of a …


  21. A new filing from the Securities and Exchange Commission sheds light on a few uncomfortable aspects with the stock research and trading business.

    The SEC on Wednesday charged a former Deutsche Bank research analyst with publishing a rating on a stock that was inconsistent with his own view.

    Charles …


  22. Americans’ Attitudes About Privacy, Security and Surveillance

    The cascade of reports following the June 2013 government surveillance revelations by NSA contractor Edward Snowden have brought new attention to …


  23. Calls for global cooperation underline challenges faced by Japan’s central bank

    TOKYO—Bank of Japan Gov. Haruhiko Kuroda on Thursday called on finance chiefs from the world’s major economies to find ways to stabilize global financial markets at a planned gathering later this month, highlighting …


  24. The Political War on Cash

    These are strange monetary times, with negative interest rates and central bankers deemed to be masters of the universe. So maybe we shouldn’t be surprised that politicians and central bankers are now waging a war on cash. That’s right, policy makers in Europe and the U.S. want to make it harder …


  25. Walmart is expecting “flat” sales growth in 2016.

    The retail giant reported fourth-quarter earnings before the opening bell on Thursday morning, topping analysts’ forecast for revenues, but missing on profits.

    Revenues totaled $129.7 billion ($131 billion expected according to Bloomberg), and …


  26. Phil/IBM

    You have uncovered IBM 2018 $120 calls in the LTP:

    In the LTP, we have 10 IBM 2018 $135 calls, now $8.20.  Let's roll them down to the $120 calls at $14.30 for net $6ish and buy back the short $160 calls ($2.75) and wait to re-cover.  

    When would you cover these? THX


  27. Gold Veteran Sees Loss of Faith in Central Banks as Prices Soar

    Gold’s rally is being driven as investors start to lose faith in central bankers’ ability to deal with economic challenges, according to Evolution …


  28. Good Morning Everyone!

    The webinar replay is now available on our YouTube channel here:

    https://youtu.be/iWpLqpwrl00


  29. “We already had an election. We had an election in 2012,” said Colbert. “Was I finished?” Kasich snaps back

    Stephen Colbert welcomed 2016 GOP candidate John Kasich to last night’s “Late Show.”

    Citing Rubio’s soaringly positive third-place speech in Iowa and Kasich’s proud second-place finish in New …


  30. The chart below is from our Morning Lineup, which is available to all Bespoke Premium and Bespoke Institutional clients and is sent out each morning …



  31. Welcome Entropy!  The virtual portfolios are run through http://www.poweropt.com/ but they don't allow live access so, about once a month, we review them and, of course, any changes will always come up here in chat (see yesterday's post for examples).  We reviewed the Options Opportunity Portfolio on Friday and I expect to do the others today.  Ideally, this is a site where we teach you how to find your own positions and balance your own portfolios – it's a much better goal to work towards than just following whatever we put up.  The number of trade ideas that actually go in the portfolios is probably less than 1/4 of all our ideas (and none of our Futures trading).  

    Funny/GC – Gallows humor often is.  blush

    Buybacks/CRS – Yes, that's how companies make it LOOK like they are improving earnings when all they are really doing is reducing shares.  That's why I always look at the actual $ value of earnings and not the EPS to see if a company looks healthy or not.  SCTY, for example, is trading at $2Bn and they have $400M in sales and lose money but let's say they made $40M (10%) and they had $100M in the bank.  Would I rather have them spend $40M to buy back 10% of the company's stock so they earn 10% more per share or would I rather have them spend $40M to boost earnings by 10% so I can make more money every year?  What use is the stock to the company?  NONE!!!  We invest in businesses (or we should), not stocks.  Financial engineering is no way to build a future – it's a short-sighted waste of valuable resources and companies that BORROW money to buy back stock should simply be shot!  

    Worst of all, when the market does crash and everything is on sale – the companies that squandered their money on buybacks aren't in a position to go shopping.  That's where there's been so little M&A during this sell-off – the money has all been spend buying their own stocks so they can't afford to buy their competitors – even when they are 50% off.  That's stupid beyond words!  

    Donald Trump bought JebBush.com – ROFL!  

    IBM/LTP, DC – Cover them?  Why, are you making too much money?  Good time not to have an opinion and let it run.  It's our Stock of the Year runner-up, I'm still targeting $200 in 2018 and, had they not popped back to $140 in Dec while UNG hit $7, IBM would have been our Stock of the Year – was only timing that killed them.  

    MS/DC – Wow, it's amazing how long it takes these people to catch on to something we thought was obvious ages ago.  

    Webinar/Greg – Thanks and please make sure the girls do the index, they didn't last week. 

    A lot/Jabob – Well if we assume the 95M we looked at this morning was yesterday's close, then they have to dump about 30M barrels worth of contracts per day, which is a lot but not impossible as that's the pace they've been on but they need more rumors to keep the prices up while they sell.  


  32. Inventories?


  33. Phil/IBM

    Yes, I am making too much money….Thank you!  But, this market doesn't give me a level of confidence to be greedy. 


  34. Phil

     Are you updating the butterfly Portfolio today?

     Thanks


  35. Entropy – I highly suggest, actually, request, that you paper trade for a month or more.  Not worth getting in on all the ideas and then getting confused, frustrated, etc.  Just play along for a few months and see how this group works.  I have been here for 8 yrs, and find it the best service out there.  There are more eyes on the market in this forum than anywhere, and opinions abound.  So, relax, and let the group help you out.

    - Pharm


  36. GLD – looks ready to move again to the up side, Apr 120 Calls, 1/2 covered by next week 120 Calls STO.  $1.97 debit. 


  37. I hope and pray that the inventories don't disappoint in 1 minute!!!!


  38. FU inventories!!!!


  39. Lol! We should have a Jabo feed…just reading your posts is pure entertainment.

    What happened? Another build?  


  40. yep.

    not horrible but still a build and a huge tease from API yesterday…dangit!


  41. OIL – $30.70 Do we go below $30 again???


  42. With today's pop I'm out of USO weeklies. Not going short, probably just wait for $30 again and try the same thing. This chart may have yet to put in a bottom – that means we could see <7.50 by the end of the month!


  43. Build in oil so down they go again and that will drag the markets down too!  

    • EIA Petroleum Inventories:
    • Crude +2.1M barrels vs. +3.9M consensus, -0.8M last week.
    • Gasoline +3M barrels vs. +0.5M consensus, +1.3M last week.
    • Distillates +1.4M barrels vs. -1.5M consensus, +1.3M last week.
    • Futures +1.5% to $31.12

    LOL, silly API!  

    Greed kills, DC – keep that in mind and you'll be fine.  

    Butterfly/QC – Assuming there's time, it's 11 already! 

    Good advice, Pharm.  

    Gold/Pharm – Moving quickly already.


  44. $30/Bulls – It has to hold – I said so on CNBC yesterday… wink


  45. WMT miss – would've liked to have seen them surprise given gas being down enough to affect people's budgets (which they spend at WMT). So not a good sign we haven't seen this, and also at SVU.


  46. Pharm/GLD

    what is the advantage of half covered by selling the calls? I got in @2.05

    regards


  47. Nkd/Phil – do you like them here?


  48. Long-Term Portfolio Review (LTP):  You know I hate it when we make too much money as there's no substitute for cash.  45% in 25 months is nicely ahead of our 20% per year goals.  Also, of course, these prices are the worst-case bid/ask so worth a bit more if we cash them out.  

    My general objection to not cashing out at the top is that it's easy to get good prices for longs (and these are all longs) when there's a rally but, if the market turns lower, then you get much worse prices very quickly and you end up "trapped" in the positions.  Nonetheless – we're not going to debate going to cash again – I just want it noted that we will now have to spend a bit of money in the STP to lock in these ridiculous gains as best we can!  

    I'm not going to go over the short puts – they are all stocks we like and no reason to make changes.  

    • GTATQ is a semi-dead stock and hopefully out of BK soon so let's spend $560 to buy 8,000 more shares at 0.07 which drops our basis to 0.24, which is at least within the realm of possibility on a good run.  Just a fun gamble.  
    • SDRL depends on oil over the long run but we may as well spend $1 to roll the $4s (0.60) to the 0.50s ($1.60) and that way we're in the money a bit.  The $10s are too expensive to buy back so we'll just leave them.  
    • ARR, CIM, CM and STWD are all REITs we like and pay us a lovely dividend so no changes and we're happy to DD on any of them if they get very cheap.

    There's nothing here that expires in Feb or even March so there's no need to go over these now.  We'll take another look after earnings season is over. 

    Short-Term Portfolio Review (STP): Up 360% is just crazy.  Combined with the LTP, our paired portfolios are now at $1,191,848, almost a double from our $600,000 start 25 months ago.  Clearly this is way too much and I'd feel so much better just cashing it all in and starting with $600,000 again BUT we intended to demonstrate the value of sticking with the Balanced Portfolio Program for at least 3 years so only 2/3 there, actually.  

    I am very pleased with the fact that our STP has $395,957 in cash (about 85%) and is only using $157,000 in margin (17%) so, essentially, we are in cash here.  The LTP, on the other hand, has $900,442 in cash (more than the $721,475 balance because of all the short puts) but is margin-heavy at $860,250 (because of all the short puts).  In a pinch, we'd transfer $200K cash from the STP to the LTP but we've got $1.4M of ordinary margin in the LTP and we're not planning any major moves.  

    Remember, the STP is an opportunistic portfolio but it's primary function is to PROTECT the generally bullish LTP so we look for bearish opportunities when possible and, of course, we keep our primary hedges in the STP.  With all these recent gains, we'll have to spend a bit of money now to lock them in on additional insurance plays.  

    • SQQQ – Huge comeback on this one, which was down $33,000 last week!   At the time my comment was: "As with the OOP, we got in trouble on this one and we haven't rolled it yet and we might not have to if we have a good week next week."  And here we are!  All good for the moment as I still like our target – we were fortunate that we were in a better position here to risk a loss than we were in the OOP.    
    • TZA – Oops, those should be gone (per last week's notes)
    • AAPL – That paid for the SDS spread.  Obviously I'm not at all worried.  
    • CMG – PROFIT!!!  Now we'll see if they can make us the full $74,500.  Trade #2 is, sadly, dead so subtract that $15,000 and our upside is only $69,500 on the main trade unless CMG plows higher in 30 days.  frown
    • SDS – We paid net 0.85 for the spread and we can still sell the March $22 calls for $1 so let's salvage our investment and spend another $2 to roll out to the June $20 calls ($3) and that's the cost of another 3 months' worth of insurance!   Notice we're also locking in $2 worth of progress so we don't give up our gains.  
    • XON – Lost their luster a bit but it's timed for the Olympics and Zika isn't going away.  
    • IMAX – Was closed last week (ok, I'm behind) and needs to be a new play in the LTP.
    • SLW - Back in business!  

    Wow, that was easy.  We could use more hedges but we have $35,000 to collect on SDS and $9,000 to collect on SQQQ if things go badly so that's $44,000 of downside protection and we'll double up SDS if 1,900 doesn't hold (or 1,000 on /TF).  


  49. 1/2 cover on GLD….so we can roll up. I am expecting a pop to 120, just depends upon how fast it gets there, and at this rate, it may be sooner than I think.  


  50. /NG giving us the usual wild ride.  

    WMT/BDC – The problem they have is that, when people are feeling richer, they trade up to TGT or mall stores.  SVU has a similar problem as the low-cost provider.  COST is low-cost and high quality, WMT and SVU are low-cost, low quality – people shop there because they have to, not because they want to. 

    /NKD/Raviis – Not with those trade numbers and a weakening Dollar.  

    Europe's close was not too impressive but they held most of the gains – which is all we asked for. 


  51. Phil – Censorship – I don't f-ing believe it, they actually allowed me to quote you, without saying it was "blatant advertising" for PSW and requiring a redact.  I am shocked, shocked…


  52. Well you linked back to SA – they like that.  


  53. Phil

    Starwood Property Trust, Inc. (STWD) 

    On new trade   buy stock sell June 17.5 call and puts /

    Or go out to Sept same plan?

     Thanks


  54. Naybob / SA Article -

    Great article.  I recommend it to everyone.  Also liked the link to Phil via the quote. 


  55. Dalio calling for helicopter money? That is kind of disturbing.


  56. Phil, what do you think about a poke long /TF at 1000? 


  57. Butterfly Portfolio Update:  96.7% is very good for this portfolio but it is supposed to accelerate gains as it matures because we add more and more positions and our older positions end up having such a low basis that any cash coming in is pure profit.  We built this portfolio adding one position per quarter and now we have 10 so, in a good month, we make LOTS of money.  

    This is our self-hedged portfolio and hasn't given us any real trouble since it was started and we've pretty much stuck to our rule of only touching it once a month (ahead of options expirations), so it's a great portfolio for people who don't like to watch the markets every day.  It's not that it's not volatile, we were only up 79.2% at $179,185 a week ago on the 11th but, WISELY, we did NOTHING!  The whole point of this portfolio is to teach you to have faith in BEING THE HOUSE and just keep selling that monthly premium – see how it adds up over time? 

    • VLO –  5 legged trades get messed up but first we have the long put leg and I'm ready to cash these out and flip more bullish so let's sell our 10 Jan $65 puts for $15.20.  There's no rule that says we can't take a 100% gain off the table, is there?  

    • WMT – The short puts we're certainly happy with as I'd love to own WMT for net $49.40.
    • TXN – This one got messed up as the 4 legs should be together.  We're still lined up bullish on these but going well so no changes.  
    • AAPL – On track
    • DIS – Nice progress.  Around $100 we might want to cover with a short call.

    • GLD – Well over our target and this is a 100% bullish bet on GLD being over $110 where we collect the full $15,000, now $9,347 so we just need to wait for the next $5,653.
    • LNC – I'm good with our July target ($45) on the short puts and the April calls are dead with a $4 loss but we can make it up by buying 20 of the July $35 ($3.65)/$40 ($1.60) bull call spreads at $2.05 BUT that's not a butterfly play – more like an STP play so we're not going to do it.  We'll just hope we collect our July money and be happy. 

    • OIH – Some progress but not much but still too low to sell calls against.  Silly not to roll the 2018 $30 calls ($2.45) down to the $25s ($4) for $1.65 because that will make us more comfortable selling short calls later on – so that money will certainly come back to us!  The short put target is good and I'd like to sell 10 more 2018 $25 puts for $5.75 while we still can
    • PG – Above our target but not really breaking out of the range yet so we'll let it play out.

    • UNG – Another bullish trade and tempting to roll down but it's fine.
    • VLO (part 2) – Well we just sold our puts (above) so no downside protection but we're taking a stand.  The short calls will expire worthless but the short puts are $10 in the money so let's roll them along to 13 short June $60 puts for a little more exposure but a $5 lower strike and we'll hold off on selling more short calls for now as we're coming into refinery maintenance season, when gasoline supply comes off line.  

    • WMT – Right back on target!  Depending on how the next few days go, we might want to buy back the short caller.  Let's say we'll have a stop at $3 now.

    A nice bunch of positions and it's time to add one.  Does anyone remember one we liked?  Let me know as I'll go through some over the weekend.  We already have some risky long plays so I want something we can absolutely sell monthly calls against for more income while we wait. 


  58. Phil / IM.  Thoughts on this merger.  All cash. Do you think it's worth selling some puts on this.  Perhaps the sep 35 puts for 1.7?


  59. That True Romance is seen is fantastic.


  60. The Nattering Naybob

     Great Article second GClay


  61. STWD/QC – If the VIX is high, you want to take full advantage.  At $17.75 don't forget REITs spit out all their profits so there's not a lot of upside, generally. You can sell the $15s for $3 and the $17.50 puts for $1.50 so net $13.25/15.375 and you get $1.75 if called away + March and June dividends of 0.48 is $2.71 or 20% between now and Sept – not bad.

     

    More Free Money/Scott – Everyone wants whatever they can get.  

    /TF/Jeff – I find the fact that they are back at 1,000 very disturbing.  It's worth a poke for a small bounce with super-tight stops if you are inclined to day trade like that but not a trade I'd make a general call on given the current conditions.

    Speaking of current conditions – look at the panic into gold! 

    IM/Batman – Not a merger, they are getting $38.90 in CASH!!!  Keep in mind they were $27 so that's kind of the risk if the deal falls through so if you sell the Sept $35 puts for $1.65 and net $33.35, you risk $6.35 to make $1.35 so you'd better be more than 80% certain because you need to be right 4 times to make up for being wrong once on plays like this.  I'd say no to it because 211 days is a long time to wait for $1.35 – even in a PM account and I certainly don't REALLY want to own IM with a p/e of 30 and, of course, I know nothing about Tianjin Tianhai Investments (do you?) and their ability or lack of ability to follow through on the transaction that I would be risking a huge loss over.  


  62. Phil – Thanks for yesterday's advisory on potential gold/silver play. Your right, my targets are aggressive and I'm currently weighing the potential for more or less panic. My spider senses are tingling as if there has been a disturbance  TBD. Shruggin Shoulders and Shakin Head Emoticon.

    GClay/QCMike - Thank You both.

    Stockbern – HYG, LQD – Thanks for yesterdays heads up on the bond bets, FYI, that potentially "unhealthy stimulus" that I mentioned the other day is finally explained here, be warned, its a bit squirrelly and contrarian.  Out.


  63. Not day trading, just watching. Thx Phil. 


  64. GT Advanced Technologies Inc. (GTATQ) , a New Hampshire manufacturer that had a disastrous run-in with smartphone giant Apple Inc. (AAPL), is starting the balloting on a bankruptcy plan that pays most creditors a fraction of a penny for each dollar they are owed.

    Voting materials approved by a bankruptcy judge detail GT's plan to stay in operation and transform much of its debt into equity. Once creditors cast their ballots, GT will return to the U.S. Bankruptcy Court in New Hampshire on March 3 to seek confirmation of the chapter 11 plan.

    Big lenders and creditors, including Citigroup Financial Products Inc. and Caspian Capital LP, will infuse $80 million to fund GT's emergence from bankruptcy, court papers say. Current shareholders will lose all in chapter 11 as equity is used to extinguish GT's debts.


  65. edro00 /  GTATQ

    Wow.  That's a haircut for everyone.


  66. All seems well in the markets as the moment as we survive a minor pullback.  

    You're welcome Naybob, Jeff.  

    GTATQ/Edro – That's the plan but sometimes the judge doesn't allow the shareholders to get zero'd out or there's a white knight.  Worth $500 to see if they pop up and we can get out even. 


  67. WSM – I still have the short Feb 55 calls from the OOP that I sold for 1.05 (now 3.20) that I wanted to expire worthless but didn't receive much cooperation from the past few days. Assuming it doesn't come back tomorrow, I want to roll these to Mar 57.5 for 3.05 which is net credit of 0.90 overall. Is this how I should handle a scenario like this?


  68. quiet day

    $30 — hope Phil is right


  69. ABX   now its sooo in fashion!     

    22,400 Jan17  $17 calls bought for around $1.48-$1.50


  70. TWTR   two notable insider buys today

    the CFO 15,500 shares

    Chairman 122,250 shares

    Thank you very much


  71. Phil just wondering if you are sticking with your call of $30 being the floor on oil after the inventory?


  72. Guess it is a bit late but I bought some stk of WMT when they were at 63 Have to get them when every one else is jumping overboard. After they recover I will sell some calls against them. Here again they have a 3% yield plus the option play will give you a good monthly return. I still hold a good amount of short puts otherwise I would have sold the put 2018 as well


  73. Yodi- You posted a covered call on CSCO stock/Mar!/16 23.50 short calls. This has run up since then. Will you just roll out the calls for more premium (say out to April; beyond the ex-div date) ?


  74. Phil can you tell me again the catalyst for the UNG trade.  I know you mentioned some events taking place in the coming weeks/months?


  75. ABX     wow, another block of 21,300 calls trade on the Jan17 $17 calls,     45,700 today


  76. SUNE 2018 $1/5 BCS can be purchased for $0.58, and then offset by selling the $1 puts for $0.65 for a 0.07 credit..  A fun gamble.  Should be considered extremely risky, but if they don't go BK, this will be a huge winner.  I'm only putting a tiny amount of money in this.


  77. WSJ was just asking me about decay on oil ETFs.  I'll be interested to see what spin that article has.   

    WSM/Cordoor – What?  We only have the short Jan $60 puts in the OOP.  We bought back the short calls on 1/14, when we flipped more bullish. I'm not a fan of rolling because we think it's going much higher so, especially if they are naked short calls – I'm not keen on the position.  At the time, we simply took the loss and went with the short puts (doubling down) and then we added more short puts but never more short calls.  

    Submitted on 2016/01/14 at 1:42 pm

    WSM – Straight to Hell since we jumped in!  Fortunately, we made a small entry and, overall, it's down net $1,500 so let's just kill the long spread and double down on the 3 short 2017 $60 puts ($12.40) as we KNOW we want to own these guys at net $47.60

    Submitted on 2016/01/22 at 1:06 pm

    Our plan in the OOP was to sell 4 more WSM 2017 $60 puts, now $12.70 and that gives us $5,080 to play with. We'll use that to buy 30 of the SQQQ March $23 ($2.60)/28 ($1.50) bull call spreads for $1.10 ($3,300) and now we have $5 ($15,000) of upside protection against a catastrophe over the weekend but our plan is to take a small loss on this spread once we get comfortable that the markets are going to hold up.

    Oil/Craigs – Sure, a single inventory doesn't change the macro picture.  I said we'd bottom out a $30 in Feb or a panic spike to $25 when oil was $60 last summer.  This is nothing we didn't expect based on the macro fundamentals we've been tracking all year INCLUDING OPEC finally getting around to talking about production cuts in Q1 (this is Q1) as the price issues begin to cause S&P ratings cuts on the OPEC nations.  This stuff is just math really…

    WMT/Yodi – As a long-term hold to sell puts and calls against, they are a fantastic stock.  

    WMT
    20 WMT 2018 19-JAN 65.00 CALL SC $ 12,600.00 12/22/2015 $ 7,800.00   58
    $ -4,800.00 -61.5 %
    20 WMT 2018 19-JAN 52.50 CALL LC $ 19,400.00 12/18/2015 $ 23,800.00   62
    $ 4,400.00 22.7 %
    10 WMT 2018 19-JAN 55.00 PUT SP $ 4,550.00 12/17/2015 $ 5,600.00   63
    $ 1,050.00 18.8 %
    20 WMT 2017 20-JAN 77.50 CALL SC $ 800.00 9/17/2015 $ 3,000.00 12/23/2015 97
    $ 2,200.00 73.3 %
    20 WMT 2017 20-JAN 65.00 CALL LC $ 10,100.00 9/16/2015 $ 5,200.00 12/14/2015 89
    $ -4,900.00 -48.5 %
    10 WMT 2015 18-SEP 70.00 PUT SP $ 6,000.00 8/20/2015 $ 2,000.00 9/17/2015 28
    $ -4,000.00 -200.0 %
    10 WMT 2015 18-SEP 70.00 CALL SC $ 10.00 8/20/2015 $ 900.00 9/18/2015 29
    $ 890.00 98.9 %
    10 WMT 2015 21-AUG 72.50 PUT SP $ 4,500.00 7/15/2015 $ 1,250.00 8/20/2015 36
    $ -3,250.00 -260.0 %
    10 WMT 2015 21-AUG 72.50 CALL SC $ 0.00 7/15/2015 $ 2,100.00 8/22/2015 38
    $ 2,100.00 100 %
    10 WMT 2015 17-JUL 72.50 PUT SP $ 0.00 6/15/2015 $ 1,600.00 7/17/2015 32
    $ 1,600.00 100 %
    10 WMT 2015 17-JUL 72.50 CALL SC $ 900.00 6/16/2015 $ 1,400.00 7/17/2015 31
    $ 500.00 35.7 %
    10 WMT 2015 19-JUN 77.50 PUT SP $ 0.00 5/15/2015 $ 900.00 6/19/2015 35
    $ 900.00 100 %
    10 WMT 2015 19-JUN 77.50 CALL SC $ 0.00 5/15/2015 $ 2,500.00 6/19/2015 35
    $ 2,500.00 100 %
    10 WMT 2015 15-MAY 80.00 CALL SC $ 0.00 4/17/2015 $ 550.00 5/15/2015 28
    $ 550.00 100 %
    10 WMT 2015 15-MAY 80.00 PUT SP $ 800.00 4/17/2015 $ 3,000.00 5/15/2015 28
    $ 2,200.00 73.3 %
    10 WMT 2015 17-APR 82.50 PUT SP $ 3,250.00 3/19/2015 $ 1,900.00 4/17/2015 29
    $ -1,350.00 -71.1 %
    10 WMT 2015 17-APR 80.00 CALL SC $ 0.00 3/19/2015 $ 2,300.00 4/17/2015 29
    $ 2,300.00 100 %
    10 WMT 2015 20-MAR 80.00 CALL SC $ 1,600.00 2/20/2015 $ 4,500.00 3/19/2015 27
    $ 2,900.00 64.4 %
    10 WMT 2015 20-MAR 82.50 PUT SP $ 0.00 2/19/2015 $ 1,150.00 3/20/2015 29
    $ 1,150.00 100 %
    10 WMT 2015 20-FEB 85.00 PUT SP $ 700.00 1/30/2015 $ 1,400.00 2/20/2015 21
    $ 700.00 50.0 %
    10 WMT 2015 20-FEB 82.50 CALL SC $ 1,600.00 1/15/2015 $ 5,250.00 2/19/2015 35
    $ 3,650.00 69.5 %
    10 WMT 2015 17-JAN 86.00 PUT SP $ 0.00 12/22/2014 $ 1,300.00 1/16/2015 25
    $ 1,300.00 100 %
    10 WMT 2015 17-JAN 86.00 CALL SC $ 500.00 12/22/2014 $ 1,400.00 1/16/2015 25
    $ 900.00 64.3 %
    10 WMT 2015 17-JAN 80.00 CALL SC $ 0.00 11/13/2014 $ 3,500.00 2/2/2015 81
    $ 3,500.00 100 %
    10 WMT 2016 15-JAN 87.50 CALL LC $ 2,200.00 11/13/2014 $ 70.00 9/15/2015 306
    $ -2,130.00 -96.8 %
    10 WMT 2016 15-JAN 70.00 PUT LP $ 4,250.00 8/11/2014 $ 7,000.00 9/16/2015 401
    $ 2,750.00 64.7 %
    Total Gain/Loss for WMT
    $ 17,610.00 23.9 %

    That's from the Butterfly Portfolio.

    UNG/RS – We're counting on LNG exports (by the company LNG) to kick off by April and the buzz will drive /NG to $2.50 or $3 by June.

    SUNE/Palotay – Still in business?  


  78. ABX/Stock – Did you see the numbers I posted this morning.  They are THE BEST!!!

    • Barrick Gold (NYSE:ABX) -2.4% AH despite reporting better than expected Q4 earningsand revenues, and saying it plans to reduce net debt by at least $2B this year through the sale of additional non-core assets and creation of new joint ventures and partnerships.
    • ABX's unadjusted Q4 loss totaled $2.62B, including $3.1B in impairments mainly related to an adjustment in the company’s gold price assumptions; ABX had warned last month that it would record the charges.
    • In FY 2015, ABX says it recorded positive free cash flow for the first time in four years despite lower gold prices, generating $471M in free cash flow, including $387M in Q4; the company's total debt was reduced by $3.1B, or 24%.
    • ABX guides 2016 production of 5M-5.5M oz. of gold at all-in sustaining costs of $775-$825/oz. and 2017 production of 5M-5.5M oz. at all-in sustaining costs of $740-$790/oz.
    • ABX says its "over-arching objective is to generate, and ideally grow, free cash flow in any foreseeable gold price environment," and will seek to achieve all-in sustaining costs below $700/oz. by 2019.

    It's so funny because all they are doing is executing on the plan that had me banging the table for them last Summer but people simply have no patience to let fundamental trades play out over time.  

    Grey film/Options – Did that get better?  

    Webinar test went perfectly, looking good for next week and future.  

    ABX/Gbase – Well, look at it logically.  ABX keeps buying more minable gold so their costs keep climbing, plus they have interest on the loans they take out and the overhead of the main company and the cost of running the mines so, if gold is flat to down, ABX will lose compared to gold.  HOWEVER, when gold is going up, ABX goes from making $100 per ounce to $200 and $300 and $400 and their profits double, triple, etc and they will outperform gold.  

    Similarly though, when gold goes down, ABX's profits go from $2Bn to $1Bn to $500M to break-even.  I like to buy them when they're breaking even and undervalued in anticipation of the time when they are making money but they are called cyclical stocks for a reason – if you are looking for an immediate reward and/or don't have the money or patience to ride out a move even lower – don't mess around with it.  

    Meanwhile, as I said in our Webinar session, it's time to add 25 ABX 2017 $10/15 bull call spreads at $1.75 for the LTP.  We already sold 20 of the $15 puts (now $4.65) that more than cover the expense.  

    Submitted on 2015/07/15 at 12:21 pm

    ABX/Rustle – Because, over the long haul, ABX makes money each year (maybe not at these prices) but gold just sits there so ABX's earnings are like a dividend paid on the gold.  Also, there's a lot of leverage to gold baked into the stock and, finally, they sometimes hedge to avoid nasty downturns.  

    Submitted on 2015/07/17 at 11:54 am

    Gold/Albo – Actually, what I said was:

    Gold/Albo – Well, let's see.  Gold is at $1,169 and it costs about $1,050 to pull it out of the ground so I guess it depends on the definition of "major breakdown".  I guess the squiggly lines look like gold can go back to $800, where mining companies will borrow money and spend $250 an ounce so they can get the gold out of the ground and sell it for massive losses — makes perfect sense to a "technician", I suppose…

    I went on to explain that gold was not down in other currencies, only in the Dollar and that even if there was a panic low, I have confidence that $1,050 will hold and ABX has already shown they can remain profitable even when gold is at fire-sale prices:

    Also, as I said at the time, what is "major"?  If you had told me you were going to do a victory dance when gold falls $40 (3.5%), then I would have told you of course that can happen.  To me, a major breakdown in gold would be 10-20% and that would be sub-$1,000 and to that I continue to say pooh and pooh!  That means the logical thing to do is buy stocks like ABX when they are priced for sub-$1,000 gold by people who follow market technicians who ignore the broader fundamentals.  

     

    ABX/Kevin – Those are way in the money and I don't know what you sold them for (because you didn't tell me) but I'll assume $2 and that means you are down about $7 on the $17s and $2.50 on the $13s.  So call it down $15,400 on the $17 puts and down another $1,250 on the $13s is down $17,000 (ish).  Yes, it would have been nice to sell calls at higher prices but now all you do is lock in your losses.  

    The key now is how do you use ABX (if you still like them) to make $17,000?  I'd sell 20 of the 2017 $10 puts for $2.50 ($5,000) and buy 40 of the $8/13 bull call spreads for $1.50 ($6,000) for net $1,000 on 40 longs that can return $20,000 ($19,000 in profit) if ABX is back at $13 in Jan 2017.  While you wait, you can sell 20 Jan $9s for $1 with a stop on 1/2 at $1.50 and the rest at $1.  Worst case there is you'd be taking $1,500 out of pocket to buy back the calls you sold for $2,000 but then ABX would be over $9 and you'd be $4,000 in the money and ready to sell June $10 calls for another $2,000.  If, on the other hand, ABX went lower, you have $2,000 in your pocket to pay for rolls.

    Submitted on 2015/07/21 at 10:09 am

    ABX/Albo – But, even at $250, ABX still has $8.3Bn worth of gold and each year they would have to sell $600M of it to service the debt – that's not BK unless the lenders call it in, which would be foolish of them.  Even CZR got refi'd today (up 20%). 

    Submitted on 2015/07/24 at 7:37 am

    ABX/Jabob – Wow, that one was a fire sale for $550M as the mine produced 250,000 ounces a year so $2,200 an ounce / 10 years life (avg) is about $220/ounce they sold the gold for.  Still, goes to my premise that their 100M ounces of gold (10M/10 years) is worth a lot more than their $8Bn market cap – even in the ground – $22Bn if sold at the same price as Cowal, which is considered a huge bargain for the buyer and ABX only selling because they are focusing geographically to cut costs.  This is the 6th Aussie mine they've dumped in 3 years, they only have one 50% partnership left and they are already closing all Aussie offices.  

    Submitted on 2015/07/28 at 6:54 am

    ABX/Jeff – Every time I look and see $7 I'm still surprised.  2017 is a long way off.  Keep in mind you sold the puts to pay for the spread, so doubling down on the short puts doesn't really serve a purpose as much as rolling down to a better strike.  If you roll to 15 of the $10 puts at $4 ($6,000), that pays of almost all of the $6,750 you need to buy back the $13 puts and you still have the $2,860 you collected for the short $13s, so net $2,110/15 = $1.40 per $10 put nets $8.60 on 1,500 ($12,900) vs your prior commitment at $10,140 – essentially no change but a much better break-even. 

    So, now that that's sorted out, we can turn our attention to the bull call spread and the 2017 $10s are now $1 and the short $20s are 0.25.  I'd roll down to the $5s ($2.75) for $1.75 and buy back the $20s, so now you spent $2 = $4,000 but you originally had $2,080 in on the trade plus net $750 you just spent on the put roll is now net $6,830 means you are in 20 naked 2017 $5 puts for $3.415 or $8.415 with ABX at $7 – that's not so bad.  If they fail to hold $6 and you still have faith, you can sell the $8s (now $1.50) to some other sucker and roll your $5s down to the $3s (now $4.40) close to even and then you'd be in the $3/8 spread for net still around $3.40.  

    At the point at which the $3/8 spread begins to look like it won't work, I'd probably rather switch to a GLD spread that pays 2:1.  Currently the 2017 $100s are $12.50 and the $105s are $10 with GLD at $104.86 so gold over $1,100 in 2017 gives you a 100% return without even selling puts (and the $80 puts can be sold for $2.50 if you believe in $800 gold).  That's the final escape roll if it looks like ABX is going BK and you still want to bet on the metal recovering.  

    Earnings are 8/5 and expectations are pretty low:

     

    Submitted on 2015/08/05 at 2:51 pm

    ABX/Jbur – The funny thing is they are expected to earn .05/share – that's more than NFLX!  Revenues of $2.23Bn would be double NFLX.   Mainly this CC will be about debt reduction and how that's going though they may also cut production back with gold prices so low and that would freak people out.

    Submitted on 2015/08/13 at 1:23 pm

    ABX/Jeddah – I don't believe they are going BK but you never know.  We've been holding on in the LTP with 20 short 2017 $15 puts and 25 long $5 calls.  With the stock at $8, it's not too promising – looking but it is 18 months away and I don't see the point to doing anything until we can see the 2018 options.  If I had the 2016 $15 puts ($7.30) I could roll them to 2x the 2017 $10 puts ($3.50) and sell the 2017 $8 calls ($2.05) and roll my 2016 $5s ($3.20) to the 2017 $3s ($5) without taking any money out of my pocket.  Since that sounds kind of attractive – I'd rather wait for the 2018s to come out than take a loss just because I'm impatient or don't like staring at a red entry in my portfolio

     

    Gold is down $600 an ounce but if gold costs ABX, HMY, etc $1,000 to pull out of the ground, then gold is down 6/7ths (85%) of their operating profits.  Of course their stock looks like crap!  If you believe gold will keep falling below the cost of pulling it out of the ground, then get out.  

    It actually can because part of that cost is the cost of acquiring the mines at $250/oz and if gold companies go BK and people can buy mines for $25/oz, they can then undersell ABX by $225/oz, which can then force ABX to go BK and then their gold goes on the market at $25/oz and so on…  It's not happening yet, of course, but that's the worst-case for the miners.  

     

    Submitted on 2015/09/15 at 3:37 pm

    ABX/Rookie – Just talked about them in the Webinar but what's the actual question?  ABX is so low I wouldn't want to sell calls against them at all but I also wouldn't feel the need to own the stock.  ABX is at $6.24 and, if I were willing to buy $6,240 worth of the stock, I'd sell 5 of the 2018 $7 puts for $2.60 and collect $1,300 and I'd buy 10 of the 2018 $4 calls for $3.25 ($3,250) and sell 10 of the $7 calls for $2 ($2,000) and then my net is a $50 credit on 10 2018 $4 calls that are $2,240 in the money.  At $7 or higher, I make $1,500, which is 24% of my entire (unused) allocation.  

    Worst downside case is I own 500 shares at net $3,550 ($7.10/share) and I still have $2,690 to buy more shares.  At $6 (for example), the 500 shares that were assigned at $7 would be down $1.10 x 500 = $550.  You can take that loss or sell 5 2020 $6 calls for $2 ($1,000) and the $5 puts for $2 ($1,000) and then your net is $1,550 on 500 shares = $3.10/share and, if assigned again at $5, another $2,500 brings the average to $4.05.

    At $4, the 500 shares assigned at net $7.10 each are down $1,550 and still that's only 20% of your $6,240 allocation and still you can sell those $5 puts and calls for $2,000 and still your new net is $3.10/4.05.  At $3, your loss is $2,050 and, if you decide to stick with it, then maybe you want to DD ($1,500) to average in for $5.05 and then sell 10 $3 puts and calls for $3,000(ish) and your net is $2.05/2.55.

    See – it depends but, if you have that plan going in and you stick to it, you'll be THRILLED if ABX goes down to $2 for some reason but doesn't look like it's going BK because you get a chance to load up cheaply for the long haul.  If not and it just goes higher – then you're stuck with your 40+% return on the original amount you laid out.  

    Submitted on 2015/09/16 at 11:14 am

    ABX/ZZ – Didn't we just talk about them in the Webinar?  You know I love them and you can do a long-term inflation hedge by selling the 2018 $4 puts for 0.85 and buying the 2018 $4 calls for $3.45 and selling the Jan $7 calls for $0.75.  That's net $1.85 on the $3 spread that's $2.50 in the money to start and you have 2 years to roll the short calls if all goes well and you're already paying half price for the long calls if it doesn't. 

    So let's say you have $500,000 in cash.  You can promise to buy $40,000 of ABX by selling 100 of the puts and 100 of the spread give you at least $11,500 of upside which is a 2.5% hedge against a sliding Dollar.  If gold stays low, the Dollar stays strong and your cash is safe and if gold goes lower because the Dollar goes up 5% (to 100), then your buying power is up $25,000 on the cash and you can afford to own a little ABX betting on the recovery.  As with many of these plays – you can win both ways!  

    Submitted on 2015/10/29 at 12:14 pm

    ABX/Pat – I agree with the MS guys:

    Morgan Stanley’s Brad Humphrey and Thomas Halton explain why investors have taken a shine to Barrick Gold…

      Barrick reported adj. EPS of $0.11vs MSe and consensus of $0.06. We calculate Adj. CFPS of $0.55 above consensus at $0.52 and MSe at $0.51. Adj. EBITDA was 942mn 8% above MSe. The beat on the quarter was largely driven by stronger results from Cortez and Goldstrike (both reporting higher grades than our estimates), combined with results from the copper segment (beating on production and costs)…

    With its debt reduction target now all but achieved, focus turns to plans beyond this transition year. With its total debt load still high, we expect further longer term strategic goals to be unveiled towards year end or early in 2016. In the meantime, Barrick has a number of catalysts in Q4 including studies at Cortez, Goldrush, Lagunas Norte, Pueblo Viejo and Spring Valley, as well as the potential for further divestitures of its smaller non-core assets in Nevada.

    They have divested out all their high-cost mines and left themselves just the winners and they've driven their costs down to $771, which means they make great money at $1,150.  

    verage realized price of gold decreased 12.5% year over year to $1,125 per ounce. All-in costs decreased 16.4% to $815 per ounce, and all-in sustaining costs (AISC) fell roughly 7.6% to $771 per ounce in the reported quarter.

    Gold production rose to 1.66 million ounces from 1.65 million ounces a year ago. Copper production rose to 140 million pounds from 131 million pounds in the prior-year quarter.

     

     

    Barrick Gold Corp. (ABX) – Earnings Surprise | FindTheCompany

     

    The company reduced its total debt by 15% from $13.1 billion to $11.2 billion, till the end of third-quarter 2015, thereby considerably reducing its near-term debt repayment obligations. Currently, the company has less than $250 million in debt due before 2018 and roughly $5 billion of its $11.2 billion outstanding debt will mature after 2032.

    Building on $1.9 billion in repayments already completed in 2015, the company plans to use about $1 billion in proceeds from the sale of 50% of Zaldívar to cut debt. The sale is expected to complete in the fourth quarter. This would bring total debt repayments to about $2.9 billion.

    Barrick has announced or completed asset sales, joint ventures and partnership worth $24.6 billion. The company also remains committed to achieve its debt reduction target of $3 billion for 2015. Barrick plans to use the free cash flow to reach this target.

    The company trimmed its gold production guidance for 2015 from the range of 6.1-6.4 million ounces to 6.1-6.3 million ounces, reflecting lower expected gold production from Acacia Mining plc.

    All-in sustaining cost guidance for the year has been cut to $830-$870 per ounce from the earlier guidance range of $840-$880 per ounce. Average all-in sustaining costs for its five core mines are expected to be $700-$725 per ounce in 2015, down from $725-$775 per ounce. These mines are expected to represent around 75% of free cash flow from operations and 60-65% of production in 2015.

    So, the company is pulling 6M ounces out of the ground during the year and are making 0.44 per $8 shares (p/e = 20) BUT if gold goes up $100 next year, they make $600M more (because costs are essentially fixed) and there's about $1.2Bn shares so 0.50 more per share doubles their income if gold goes up just $100 ($1,250).  See why I like these guys?  

     

    Submitted on 2015/11/06 at 12:15 pm

    ABX/Pirate – Gold is going to explode at some point, don't know when.  ABX has 100M ounces in proven reserves and you can buy the whole company for $8.2Bn at $7.07 – that's about $82 an ounce for the gold + $12Bn ($120/ounce) to assume the debt but, without the debt – they'd be nice and profitable!  

    Submitted on 2015/11/10 at 10:48 am

    ABX/Pat – If the Fed is raising rates, it's not likely gold will go up much (or ABX) for quite some time.  There's no "salvaging" a Jan $10 call – it's 0.10, you lose 0.50 – end of story.  The question is, after losing $2,000 on ABX, do you want to make another bet on it.  Also, STOP BUYING NAKED CALLS – that's the worst thing you can do.  

    If you want to spend another $2,000, how about 10 of the the 2018 $5 ($3.25)/10 ($1.50) bull call spread at $1.75 ($1,750) which pay back $5,000 if ABX hits $10 by Jan 2018?  That spread is already $2,150 in the money so you make 1,000 x every penny ABX goes up from here.  Isn't that enough leverage for you without putting yourself in the position of being the sucker who pays the premium?  

     

    Submitted on 2015/11/12 at 10:04 am

    ABX/Albo – They just sold off about $1Bn in mines (weak ones) on track to paying down $3Bn in debt – people love that.  

    Submitted on 2015/12/05 at 5:29 am

    GDX/StJ – So many oversold miners but still I think ABX is a better bet than just picking the index along with its bad apples.  NEM, HMY, and NAK are still my more speculative faves. 

    Meanwhile, the ABX 2018 $7/10 bull call spread is $1.10 and you can sell the $5 puts for 0.80 and that's net 0.30 on the $3 spread but I'd just buy the spread and sell puts only if ABX goes below $7, where you should be able to get almost $1 for the $4 puts.  If it doesn't go down, it's almost 200% back with no margin anyway.  

    That's what I mean when I say I was pounding the table on a stock!  

     


  79. Pstas CSCO The play has reached the max profit. You can close the play or yes you can roll say to Apr. 25 call for a debit of 1.05. Remember the stock has gained 2.00 plus the .80 cents by selling the original call. So your net will be still 1.75


  80. Pstas I personally do nothing and wait as with today's ups and downs you never know what will be in 7 days 


  81. Where does IBM need to get to start thinking about selling some more calls?


  82. Tang  IBM I think to early


  83. IBM/Tangled – I give up, where? cheeky


  84. WSM/Phil – Ah, I see. I sold the losing long calls but didn't buy back the short calls hoping they would just expire worthless. I'll buy them back tomorrow at a loss and move on. I do have the short puts, so all is well there. Thanks for the help.


  85. IBM – in the LTP.  You mentioned when it was at $127 it was too soon to sell more calls so I was wondering at what price you started to consider it?


  86. WSM/Cordoor – It's fine to take a chance like that but also important to set a reasonable stop on the leftover leg.  

    IBM/Tangled – Well, I think the day it gaps up at the open and finishes at about the high of the day is not the day to sell calls, right?  Sometimes, it's good not to try to guess everything and just sit and watch.  $140 was our bottom call on IBM and we're not even back there yet.  Back in Sept, we sold the 2018 $105 puts for $7.22 – that's where we put our foot down and then, in Jan, when IBM got worse, we bought the 2018 $120 calls in the LTP for $14.29, now $21 but my goal is $200 so at what point should I give up on that and start selling calls to cover.  It's up 50% in a month but that's only "on track" to my 2 YEAR GOAL of $80 per contract.  

    What has IBM done wrong that's made you change your mind?  Why is the target in jeopardy?  Is $140 too high?  IBM had record earnings and projects 2016 EPS of "at least" $13.50 to $15 per share for 2016 (they made $4.84 in Q4).  At a p/e of 10, that would be $135-$150 but we have 2018 calls and $13.50 at a multiple of 15 would be $202 so, if I'm rushing to cover at $132 – there must be something terribly wrong with the stock that I'm missing.  What is it that you see?  


  87. JWN clobbered on earnings. 

    • Nordstrom (NYSE:JWN): Q4 EPS of $1.17 misses by $0.05.
    • Revenue of $4.2B (+4.0% Y/Y) misses by $20M.
    • Press Release
    • Nordstrom (NYSE:JWN) tilts lower in AH trading after coming up short with Q4 results.
    • The company's gross profit rate fell 180 bps to 34.9% of sales, due chiefly to a higher level of promotions.
    • Comparable-store sales were up 0.2% for full-line stores. The off-price comp was +3.6%.
    • Sales off of Nordstrom.com improved 11% Y/Y.
    • Nordstrom sees sales increasing in a range of 3.5% to 5.5% this year. The outlook for full-year EPS is $3.10 to $3.35 vs. $3.53 consensus. A higher mix of online and Rack sales may be a factor.
    • Previously: Nordstrom misses by $0.05, misses on revenue (Feb. 18)
    • JWN -6.3% AH to $49.40.
     
    • Stocks snapped their three-day winning streak, led by losses in energy stocks as crude oil gave up big gains after a Saudi official reportedly said the world’s swing producer was not prepared to cut oil production, and weekly crude inventories rose by 2.1M barrels.
    • U.S. crude oil futures settled $0.11 higher at $30.77/bbl after trading as high as $31.98 earlier in the day, and the energy (-0.9%) and financial (-0.6%) sectors were among the day's biggest decliners.
    • "We've had a really, really powerful three-day runup," says Peter Coleman, head trader at Convergex, adding that the market had been due for some profit-taking.
    • Risk-off assets returned to favor, with the Treasury complex, gold and the yen rallying to end the day; the yield on the 10-year Treasury note ended 7 bps lower at 1.74%.
    • Investor participation was near recent averages, with 1.05B shares changing hands at the NYSE floor.
     
    • Moody's Liquidity Stress Index rises to 8.1% as of mid-February from 7.9% a month earlier. Energy, of course, is behind the move, with the oil & gas LSI rising to 24.4% – just under the record 24.5% hit in March 2009.
    • The LSI measures the number of companies carrying the agency's lowest liquidity rating, SGL-4.
    • "While contagion from the commodity rout is not widespread at this point, with most sector LSIs not pointing to dangerous conditions in 2016, 16 of the 21 sector LSIs we track increased over the last year,” says the report.
    • Moody's expects junk defaults to rise to a six-year high of 4.7% by next January from the current 3.1%. The average since 1990 is 4.7%.
    • ARMOUR Residential REIT (NYSE:ARR): Q4 EPS of $1.10 beats by $0.11.
    • Press Release
    • Q4 core income of $47.7M or $1.10 per share vs. $52.4M and $1.11 in Q3. Dividend is $0.99.
    • Book value per share of $28 falls from $29.05 a quarter ago. Today's close of $18.98 is a 32% discount to book.
    • The dividend minus the drop in book value yields a negative economic return of $0.06 (less than 1% annualized).
    • 5.3M shares repurchased during quarter at cost of $113.4M, boosting BVPS of $0.99.
    • NIM of 1.58% up 14 basis points from Q3. CPR of 7.82% down from 9.23%.
    • Earnings call tomorrow at 9 ET
    • Previously: ARMOUR Residential REIT beats by $0.11 (Feb. 18)
    • ARR flat after hours
    • The downside of being a hedge fund hotel comes when the hedge funds face redemptions and need to sell. That just might be behind major slumps in a number of REITs, write Heather Perlberg and Katia Porzecanski at Bloomberg.
    • NorthStar Realty Finance (NRF -4.6%) has made regular appearances on lists of top holdings of hedge funds and it's one of the worst REIT performers this year with a decline of 39%. Others include iStar Financial (STAR -1.1%), Colony Capital (CLNY -0.3%), and New Residential (NRZ -2.3%).
    • "The selloff is quick," says JMP Securities' Trevor Cranston. "So it takes some time for a transition in ownership to happen and for the valuation to stabilize.”
    • Previously one of iStar's largest owners, Gem Realty Capital unloaded its entire stake between April and December. Hoping to return most client money by mid-January, SAB Capital sold its entire Colony and New Residential stakes.

     

     
    • Up near $32 per barrel earlier in the session, black gold has returned to about flat at $30.70. At work is a jump in inventories reported by the EIA, along with a story just hitting the wire that the Saudis say they won't cut production.
    • Of course any initial agreement between OPEC and Russia was going to be about a freeze in production, not a cut, so a bull could interpret the Saudi comments as nothing to worry about.

    • Ultra Petroleum (UPL -37.1%) is trying to avoid filing for bankruptcy after reporting a $3.2BQ4 net loss and $3.39B in debt.
    • President/CEO Mike Watford says he is trying to restructure UPL’s debt – “so far unsuccessfully" – in order to avoid filing in bankruptcy court, but admits the company needs external assistance.
    • UPL says it is reducing its capital spending for 2016 by nearly 50% to $260M from $500M, as the CEO says the hope is to survive current low natural gas prices and start profiting again next winter.
    • This year’s relatively warm winter likely was the “last nail in the coffin" for UPL with reduced natural gas demand, says Stifel analyst Michael Scialla.

     

    • Transocean's (RIG -2.3%) stock price target is cut to $2 from $6 by Citigroup analyst Scott Gruber, who keeps a Sell rating on the shares.
    • RIG's latest fleet status report confirmed contracts for six rigs while listing eight additional rigs as stacked and another three as idled/warm stacked, and Gruber writes that the retirement of more fifth-generation rigs pushes RIG's discounted cash flow fair value to negative territory.
    • The analyst believes the present value of the cash generation of the fleet is insufficient to cover the debt burden, but adds that a liquidity crunch is not imminent.
    • Wells Fargo cuts its rating on all upstream MLPs in its coverage to Underperform, the firm's equivalent to a Sell rating, and downgrades its sector rating to Underweight, citing the MLPs' high default risk and its belief that many "could have zero equity value" when their hedges expire over the next 1-2 years.
    • The upstream MLP's could have "very high" debt-to-EBITDA ratios over the next 12-24 months, and all could default on their debt payments during that time frame, according to Wells analyst Praneeth Satish.
    • Satish says Mid-Con Energy (MCEP -1.9%), Linn Energy (LINE -14.9%) and Atlas Resource Partners (ARP -2.6%) have the greatest risk of default in the near-term, while Breitburn Energy (BBEP +2.4%), EV Energy (EVEP -6.9%), Legacy Reserves (LGCY-7.9%), Memorial Production Partners (MEMP -6.4%), LINE and MCEP have the greatest risk of default in the medium term.
    • The analyst cuts his rating on all the above companies, plus LinnCo (LNCO -10.7%), to Underperform from Market Perform
    • Peabody Energy (BTU -7.2%) is lower again after Barclays cuts it price target on BTU to $1 from $7 while reiterating its Underweight rating, saying the company's recent Q4 results were "discouraging" for the U.S. coal market and prospects for the stock.
    • Barclays says BTU posted just half the quarterly EBITDA the firm had expected as costs rose and the outlook for 2016 "appears bleak even when compared to a FY 2015 that left Alpha, Arch, Patriot, and Walter all bankrupt."
    • The firm says BTU has hustled over the past year to make use of every available vehicle for cost and cash savings, but management has not been able to outrun the declines in coal and gas prices.
    • Though SunPower (SPWR -3.5%) beat Q4 estimates, the company is guiding for 2016 revenue of $3.2B-$3.4B, below a $3.42B consensus. GAAP net income guidance is at $0-$50M, and non-GAAP gross margin is expected to drop to 14%-16% from 2015's 23.9%. Deployments are expected to rise to 1.7GW-2GW from 2015's 1.15GW.
    • Q1 guidance is for revenue of $290M-$340M (below a $675.7M consensus), a GAAP net loss of $90M-$115M, and a non-GAAP gross margin of 12%-13%. The timing of revenue recognition for solar project sales can lead to big quarterly and annual sales fluctuations.
    • CEO Tom Werner was upbeat in his PR quotes: "In the power plant segment for the fourth quarter, we successfully met our project commitments, added to our pipeline and further built out our U.S. HoldCo asset base … In North America, our [residential] performance was solid as our fourth quarter results exceeded plan, we gained market share and broadened our leasing footprint as megawatt installed growth exceeded 45 percent year over year … In our commercial segment, we are well positioned for 2016, having added projects to our backlog and building our pipeline to over $1 billion."
    • Q4 details: Power plant revenue rose over 3x Y/Y to $1.05B (project timings). Commercial revenue rose 28% to $134.9M. Residential revenue fell 2% to $177.4M. 356MW of solar cells were produced vs. 361MW in Q3 and 313MW a year ago. MW recognized rose to 348MW from 208MW in Q3 and 294MW a year ago.

      Lifting EPS: Non-GAAP gross margin rose to 28.8% from 17.7% in Q3 and 8.3% a year ago. GAAP operating expenses rose 25% Y/Y to $138.3M. SunPower ended Q4 with $954M in cash, $500M in debt, and $1.11B in convertible debt. The company's project pipeline is now above 14GW.

    • Baird's Ben Kallo (Outperform rating, $44 target): "SPWR had strong Q4 results which exceeded estimates, partially due to the recognition of [the 50MW Hooper project] in Q4:15 instead of Q1:16, which caused SPWR to adjust 2016 guidance. Importantly, SPWR continues to see growing demand across all customer classes, and is confident in its ability to capture market share through capacity expansions and cost reductions. SPWR remains our favorite solar pick given its pipeline, technology, and balance sheet, and we would be buyers at current levels."
    • Deutsche's Vishal Shah (Buy rating, $37 target) notes management talked up the positive impact of the ITC extension on the earnings call, as well as the potential for module share gains as SunPower invests in its its P Series module line. SunPower plans to up its annual module production capacity to ~4GW over the next several years; 2016 capacity guidance is at 1.85GW.
    • SunPower's Q4 resultsearnings release, slides (.pdf), datasheet (.pdf)

    Caterpillar's sliding machinery sales continue to accelerate

    • Caterpillar (CAT -2.2%) is likely to cut its earnings estimates several times over the coming year, says Axiom Capital analyst Gordon Johnson, who rates CAT shares a Sell.
    • CAT's just-released rolling three-month machine sales show a 39% drop in energy and transport sales, which appears inconsistent with a separate company presentation that sees energy and transport sales for the full year dropping 10%-15%, which Johnson says “appears to assume a robust turn in fundamentals.”
    • The 39% January decline in energy and transport sales was even worse than the respective 32% and 29% drop in December and November; CAT's January worldwide retail machinery sales fell 15%, while sales to resource industries plunged 35% and sales to construction industries slipped 7%

     

     

     

     

    • A recent regulatory filing reveals Warren Buffett boosted his stake in Deere (NYSE:DE) by about 5.8M shares to about 22.88M shares, or a 7.2% stake.
    • Berkshire Hathaway is now the company's largest institutional shareholder with holdings worth nearly $2B.
    • After sinking 14% in 2015, Deere's stock is up about 7% this year through Wednesday – handily beating the S&P 500 and outperforming even Apple, Facebook, and Alphabet.
    • Deere is set to report fiscal first quarter earnings before the bell on Friday.
    • DE +1.5% premarket
    • SEC Form 13G

     

    • MGM Resorts (NYSE:MGM) reports revenue at domestic properties increased 2% in Q4.
    • Las Vegas Strip casinos churned up a 12% increase in RevPAR to $152 during the quarter. Total revenue was up at the Luxor, New York-New York, Excalibur, Monte Carlo, and Circus Circus casinos.
    • Revenue at MGM China was down 31% and EBITDA fell off 29% on weak traffic trends for Macau. VIP table games revenue was down 49% Y/Y.
    • Previously: MGM Resorts misses by $0.13, misses on revenue (Feb. 18 2016)
    • MGM -2.69% premarket to $19.53.

    • La-Z-Boy (LZB +16.7%) soars after the company topped estimates with its FQ3 report.
    • Operating margins moved in the right direction for La-Z-Boy during the quarter.
    • Operating margin by segment: Upholstery segment 10.9%, Retail 8.0% vs. 4.7% a year ago, Casegoods 7.2% vs. 3.3% a year ago.
    • The business update from La-Z-Boy was somewhat cryptic. "We believe we have solid strategies in place to deliver ongoing profitable growth throughout the enterprise," indicates management. On the positive side, the company has achieved its $4M revenue per store target.

    • Believing IBM's (IBM +5.7%) current valuation doesn't reflect the company's efforts to grow its cloud/analytics exposure, Morgan Stanley's Katy Huberty has upgraded to Overweight and set a $140 target.
    • Huberty: "IBM Strategic Imperatives – data, cloud, engagement – now make up 35% of revenue and grew 17% in 2015, or 26% at constant currency, reflecting a faster-than-expected transformation to higher growth / higher value solutions. For comparison, Microsoft Cloud (Azure + Office 365) accounted for 36% of revenue and grew 20% in 2015. Yet IBM's share price reflects a perpetual decline in residual income, and these higher growth categories are undervalued based on our sum-of-the-parts (SOTP) analysis."
    • Of note: While IBM's Strategic Imperatives revenue rose 17% in 2015, total revenue fell 9% (1% exc. forex) after adjusting for divestitures. Free cash flow rose by $700M Y/Y to $13.1B, but is forecast to drop to $11B-$12B in 2016.
    • Regardless, Huberty expects the perceived disconnect between IBM's growth efforts and valuation to correct itself with the help of disclosures at IBM's Feb. 25 analyst day, stabilizing revenue, and improving free cash flow. She goes as far as to argue IBM "warrants a premium over other hardware companies that haven't invested heavily to transform to new computing paradigms," and predicts the company will deliver 2% annual free cash flow growth over the next two years (better than a consensus of -5%).
    • Following Huberty's upgrade and news of the $2.6B Truven Health Analytics deal, IBM is a large-cap standout on a morning markets are nearly flat. Shares are now up 14% from last Thursday's 52-week low of $116.90. They trade for 9.4x a 2017 EPS consensus of $14.16.

     

    • In a big expansion of the company's healthcare bet, IBM's Watson Health unit is buying Truven Health Analytics, a provider of healthcare data and analytics services for healthcare providers, enterprises, governments, and life sciences firms, for $2.6B from investment firm Veritas Capital. The deal is expected to close later this year.
    • The deal comes six months after one to buy top medical imaging software firm Merge Healthcare, and ten months after the purchases of patient data analysis software firm Phytel and clinical database provider Explorys. The Phytel/Explorys deals coincided with the launch of Watson Health, which aims to provide software/services that can deliver insights from large volumes of anonymized patient data.
    • Truven has over 8,500 clients, and will boost the size of Watson Health to over 5,000 employees. IBM: "Upon completion of the acquisition, IBM's health cloud will house one of the world's largest and most diverse collections of health-related data, representing an aggregate of approximately 300 million patient lives acquired from three companies. IBM plans to integrate Truven's extensive cloud-based data set spanning hundreds of different types of cost, claims, quality and outcomes information with its existing data sets."
    • Big Blue adds data/insights provided by Truven "inform benefit decisions for one in three Americans," and that Truven's "cloud-based technology, methodologies and health claims data" will be integrated with the Watson Health Cloud platform for providing cloud-based healthcare analytics and data sharing.
    • Recent IBM acquisitions
    • UBS states Samsung (OTC:SSNLF) is re-entering the OLED TV market, after having pulled out in 2014 (source: Notable Calls). Meanwhile, Korea's Pulse reports Samsung "may invest" around KRW4T ($3.3B) in OLED TV panel production over the next two years.
    • The site adds Samsung is expected to order equipment for producing 8th-gen OLED panels (can be cut into six 55" OLED TV panels) "in September this year and next year," with annual panel production capacity topping 2M sq. meters in 2018. New Samsung OLED TV sets are expected in 2017 or 2018.
    • LG Display (LPL +0.2%) has already unveiled plans for big OLED TV panel investments. OLED sets have won praise for their thinness, low power consumption, and superior contrast/deeper blacks, High prices have limited sales to date, but prices have gradually declined as production ramps. Sub-$2,000 LG sets are now available.
    • OLED materials and IP provider Universal Display (OLED +3.9%) is having a good day ahead of its Feb. 25 Q4 report. Pulse's report comes three weeks after industrial laser maker Coherent reported receiving major OLED-related orders, while adding shipments will start in calendar Q2 and continue through 2017.
    • In a party-line vote, the FCC has voted to proceed on new regulations that will allow for open competition in pay TV set-top boxes.
    • Agency Chairman Tom Wheeler had railed against a market where he says Americans spend $20B on leasing devices from their TV providers, paying rental fees that have jumped 185% since 1994 despite the fact that other consumer electronics have declined 90% in price in the same time frame.
    • The FCC's move could throw open the doors to a new generation of boxes from the likes of Apple and Alphabet as well as TiVo, among others.
    • “This issue is not complex,” Wheeler says, noting that the 1996 Telecommunications Act “explicitly instructed us to assure that there are competitive information devices, be it a box or an app.”
    • Voting on Wheeler's proposal is the start of a process. If a final order goes forward, MVPDs would have to provide information to third parties who could make devices that conformed to a specification to provide service.
    • Pay TV players: CMCSATWCCHTRCVC/OTCPK:ATCEYTDISHVZFTRCTL
    • Previously: Reports: FCC planning for open competition in set-top boxes (Jan. 27 2016)

     

    • January Leading Indicators: Leading Index -0.2% to 123.2 vs. -0.2% expected, -0.2% in Dec.
    • Coincident Index +0.3% to 113.2  vs. +0.1% prior.
    • Lagging Index +0.1% to 120.00 vs. +0.2% prior.
    • The decline in the stock market was an obvious factor during the month.
    • Bloomberg Consumer Comfort Index is 44.3 vs. 44.5 last week

  88. It’s definitely different this time…

    The 2008 analog lines the current trajectory up with August 2008 right after Treasury Secretary Paulson told the …


  89. Decline of Coal Demand Is ‘Irreversible’

    While oil and natural gas could see prices rebound as demand rises, coal has very little hope of ever seeing a price rebound again

    Demand for thermal coal is declining, a trend that appears to be “irreversible.”

    That is the conclusion from Goldman Sachs, which published a new report on the global …


  90. In the days after the August 24 ETFlash crash, the world’s “risk parity” funds had a near-death experience when as a result of the furious disconnect …


  91. There is more bad news for SunEdison, the solar-power company that has seen its stock plummet 92% in the past year.

    Bloomberg reported on Wednesday after the market had closed that the solar utility Hawaiian Electric Co. was canceling contracts for three projects it had with the company, saying …


  92. It took just seven days for almost everyone in economics to agree that negative interest rates are a failure: They have not achieved their goal of flushing cash out of the banking system to fuel inflation and growth through cheap credit.

    That lesson will be difficult for conservatives to swallow. It …


  93. IBM – I am not down on them.  Just looking for education (which you provided).  I greatly lag in ability to gauge where a stock is heading and how to "be the house" against those targets.


  94. Why Science Denialism Is Costing Us A Fortune

    In case you haven’t heard, the moon landings were faked, the measles vaccine causes autism, climate change is a hoax, and genetically modified crops (GMOs) are, you know, the pits. If you want evidence, just check the Internet.

    Scientists like me adopt all kinds of strategies in trying to combat …


  95. Maybe China’s Economy Isn’t So Bad After All?

    China’s Lunar New Year is done. A record breaking 2.91 billion trips were made by trains, planes and automobiles, up 3.6% from last year, according to the National Development and Reform Commission. Six million of them went overseas. Those who stuck closer to home are estimated to have spent some …


  96. McDonald’s Corp. franchisees remained pessimistic about the company’s turnaround efforts during the much-hyped rollout of all-day breakfast, according to an internal survey.

    Only about 14 percent of McDonald’s domestic franchisees think the chain’s comeback plan is working, according to results from …


  97. MOSCOW (Reuters) – Russia’s steep economic slump may finally be easing, official data published on Thursday suggested, with retail sales and real wages falling in January less than had been expected.

    Russia’s economy contracted by 3.7 percent last year and is expected to shrink again in 2016, hit by …


  98. Bloomberg

    The share of Americans earning income from digital platforms such as Uber and Airbnb is growing rapidly, but those gigs typically supplement incomes rather than replace full-time work.

    Nearly 1% of U.S. adults earned income in September 2015 via one of the growing number of firms that are …


  99. Bracing for ‘Brexit’: Traders Get Defensive on British Pound

    Demand is spiking for contracts that protect investors from a big move in the British pound this summer—an indication that traders are girding for the aftermath of a referendum on the U.K.’s membership in the European Union.

    While wider markets have yet to show a clear reaction to the possibility of …


  100. Bernie Sanders has cut Hillary Clinton’s national polling lead in half after the results of the first two Democratic nominating contests, according to a new NBC News/Wall Street Journal poll.

    Still, Clinton holds a double-digit advantage over Sanders, with the next race taking place in Nevada on …


  101. The Democrats tell you they want to take care of the middle class, and the Republicans tell you they want to grow the economy. But the reality is, neither side is telling you the truth, only telling you what distracts you from the truth.

    The current financial condition of America and its people are …


  102. FRANKFURT (Reuters) – Growth and inflation risks are on the rise in the euro area, the minutes of the European Central Bank’s January meeting showed, and some policymakers are advocating the need to act pre-emptively in the face of new threats.

    Low inflation could become embedded, with poor wage …


  103. Bloomberg News/Landov

    WASHINGTON (MarketWatch) — Despite the “Sturm und Drang” of international and market developments, the U.S. economy “is, all in all, looking pretty good,” said San Francisco Fed President John Williams on Thursday.

    In a speech in Los Angeles, Williams said he continues to back a …


  104. VEVEY, Switzerland (Reuters) – Food group Nestle <NESN.VX> said it expected softer pricing and growth in line with last year in 2016 after full-year organic growth of 4.2 percent fell short of expectations, failing to show the hoped-for improvement in the fourth quarter.

    Like its peers, Nestle has …


  105. Anyone else having trouble with TOS??  Lots of "Unexpected errors" ????


  106. Three UK and Three Italia threaten Silicon Valley’s prevailing business model

    Two European wireless carriers plan to block online advertising on their networks, threatening Silicon Valley’s prevailing business model.

    The operators, Three UK and Three Italia, are working with Israeli company Shine …


  107. Francis Says Contraception Can Be Used to Slow Zika

    SÃO PAULO, Brazil — Pope Francis shook up an already intense debate over birth control and abortion in Latin American countries where the Zika virus is causing a public health emergency by declaring on Thursday that contraceptives could be used to prevent the spread of Zika, which researchers have …


  108. NEW YORK/LONDON (Reuters) – When the U.S. Federal Reserve’s newest policymaker Neel Kashkari dropped a bombshell with a call to break up big banks on Tuesday, it was met with a predictably indignant response from their lobbyists. One described his comments as “blind.” But while no one in the …


  109. Electric vehicle sales may be driven mostly by policy and preference right now, but they’ll soon be powered by dominant economics—including a profitable symbiosis between electrical drive and autonomous control, according to a former researcher for General Motors.

    “What is going to happen here, I …


  110. China’s central bank will boost the amount of reserves that must be locked away by some banks that recently increased lending too quickly, people …


  111. Gold bears for years fed off the prospects for higher borrowing costs. Now bulls are thriving in a world where negative rates are becoming …


  112. This is a syndicated repost courtesy of True Economics. To view original, click here. Reposted with permission.

    Share!

    Recent media and analysts …


  113. Oil-Rich Nigeria Now Can’t Afford to Pay Teachers

    When Nigerian President Muhammadu Buhari came to power in May vowing to mend the economy, fight terrorism and end corruption, Kola Karim was upbeat. …


  114. Twitter Is Not a Failure

    And the fact that it’s collapsing in Wall Street’s estimation only reveals the utter perversion of the digital economy.

    To listen to Wall Street tell the story, Twitter is an abject failure. The stock is down more than 50 percent since co-founder Jack Dorsey took over as CEO last year. User growth …


  115. Morgan Stanley’s Adam Parker still isn’t sure what is going on in the markets.

    Parker has some of the most blunt and honest writing we read from Wall Street.

    Coming into 2016, he basically told clients that he was not sure what was going to happen to the stock market, which is probably something a …


  116. Russian oil production may slump 14 percent in the next five to 10 years under a worst-case scenario prepared by the Energy Ministry.

    Crude output may …


  117. KABUL, Afghanistan — When saboteurs crippled the Afghan capital’s power supply last month the tailors in Najeebullah’s clothing shop had to abandon their electric sewing machines for hand-cranked models. Their output fell by half.

    “I’ve lost nearly $215 since the power cuts,” Mr. Najeebullah, a …


  118. A popular monthly proxy of GDP confirmed what we already knew about the Japanese economy in late 2015 – it ended the year badly.

    The All Industrial …


  119. SHANGHAI (Reuters) – China’s yuan inched down against the dollar on Friday after the central bank fixed a slightly softer midpoint, but looked set for a solid weekly gain.

    Data published by the Chinese central bank late on Thursday indicated its foreign exchange assets, a barometer of currency flows …


  120. “We signed on in 2014 that we would end homelessness amongst veterans by the end of last year and we did it,” the governor said.The post This State …


  121. In the latest sign that China’s long-touted “opening up” is reversing into a “closing down,” a Chinese ministry has issued new rules that ban any foreign-invested company from publishing anything online in China, effective next month.

    The Ministry of Industry and Information Technology’s new rules …


  122. TOKYO—A clash Thursday between Japan’s central-bank chief and lawmakers highlighted the downside of negative interest rates: They are making the Japanese public feel negative.

    Bank of Japan Gov. Haruhiko Kuroda, who announced the nation’s first move into minus rates three weeks ago, found himself …


  123. Auction houses: art market on the block. An interesting and extensive article from the FT. Subscription required. Good read for BID investors.


  124. Value Investing is set for a comeback; that’s according to Barclays’ European Equity Strategy research team. In a note issued to clients, this week …


  125. Will dividend stocks save you in a bear market? An investment manager article which looks like it is designed to ensure individual investors shy away from managing their own money (maybe that comment is slightly too hard on the author). Main take away; when markets fall even dividend paying stocks fall (genius?). But an interesting list of dividend paying stocks and with performance figures showing how they fared during recent bear markets.


  126. April Brent crude on London’s ICE Futures exchange fell $0.26 to $34.02 a barrel

    Crude oil prices declined in early Asian trade Friday after crude inventories in the U.S. rose to a fresh weekly high, adding to a persistently stubborn global glut.

    On the New York Mercantile Exchange, light, sweet …


  127. Gold is having one of its best starts to a year in history as investors start to lose faith in central bankers’ ability to deal with economic …


  128. Hong Kong’s developers, who are throwing in enticements from iPhones to wine coupons in response to the slowest home sales in 25 years, might be …


  129. Ocean temperatures are soaring — and that is bad news for many forms of marine life, including rock lobsters, according to two new studies from …


  130. Tuesday, a group of countries that include Saudi Arabia and Russia agreed in principle to freeze oil-production rates. On the surface, this sounds like a good thing. But it’s really just a bunch of bull.

    As regular Growth Stock Wire readers know, oil prices fell from more than $105 per barrel in …


  131. During Market Turmoil, Just Listen to Your Financial Plan – BAM…

    Carl Richards, Director of Investor Education, 2/17/2016

    Every year, right around this time, all the big brokerage firms, economists and banks come …


  132. The only things hotter than Western Australia’s scorched Outback are the mining companies preparing to supply the lithiumneeded by the likes of …


  133. Good morning! 

    March oil (/CLH6)back to $30 and you know that's the rollover pressure.  It might go lower so tight stops but it's holding /CLJ6 (April) down at $32.25 so we can play that long with a stop if /CLH6 goes under $30 (very tight stops) and we'll play it by ear otherwise.  Still 65,000 contracts at the NYMEX as of the close so barely time to roll and, of course, those roll months are STUFFED already with 1Bn barrels worth of contracts (FAKE!!!, of course).  

    IBM/Tangled – My main point is you have to have a premise and that premise has to have a target and you are either on or off track and you adjust your target based on new information that comes in – NOT on what the squiggly lines look like!  

    If our target on IBM is $200 in Jan 2018 then we expect it to gain about $4 per month so if it's up $4, that's on track but if it's up $12 – THEN maybe we think it went a bit too fast and lock in the gains.  Now, you may think IBM is up $15 from $117 but I'm sure you know I will tell you it never should have been at $117 in the first place.  The 50 dma is $130 and we can count progress from there and the 200 dma is $145 so not much upside resistance until there and, at $4 per months, we should test $145 right around next earnings.  THEN we can cover! 

    TOS/Edro – Constant memory issues, TDA has really screwed them up completely.  I think they are trying to drive people off the platform so they can shut it down (they bought TOS for the accounts, not the platform). 

    Art/Winston – It's a down cycle, happens all the time in that business.  Russia and China pulled back but not to the point where they're liquidating what they have so there's not much on the market to sell and not many sellers to buy it.  This too shall pass. 

    You never know when the market will swing back around – you just want to own a lot of cheap BID when it does.  They've muddled through for 272 years of up and down markets so when they are down 50%, rather than think they'll go down 75%, I prefer to accumulate more shares and, if they go down 75%, I'd buy some more because it's not a business with a high overhead and they are sitting on $600M in cash, dropping $100M+ to the bottom line with a market cap of $1.5Bn so I KNOW I will love them at $1Bn ($14) if we get there.  

    For now, in the LTP, we only have 10 short 2018 $35 puts we sold for $7.40 that are down 100%.  In the OOP, we have 15 short 2018 $23 puts (we rolled) at $8.10 and 40 $15/23 bull call spreads at $3.15 and we sold 15 March $22 calls for $1.05 that are now hurting us (but they paid for the roll).  I'm not even worried enough about the 2018 $35 puts to roll them…

    Dividends/Winston – The stocks don't "save you" in a bear market but the edge of collecting a 3% dividend over 20 years means people who follow that strategy will tend to fare better over time – especially if they steadily re-invest the dividend into more stock. 


  134. This chart says it all on BID "Be fearful when others are greedy and be greedy when others are fearful" - 

    For the last 10 years now, cyclical stocks have consistently been the best bargains in the market because the time-frame for the average investor isn't long enough for them to see an economic cycle so they dump cyclicals like they are toxic as they have their natural bottoms and they overbuy like maniacs when they are topping out.  As VALUE investors, we get to take full advantage of that idiocy!