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Merry Trumpmas – Looking Forward to a Wild New Year

Still no 20,000?  

Well, that's got to be disappointing to the bulls (and all those Dow 20,000 hat salesmen).  Makes Barron's look a bit foolish but, then again, when don't they?  Unfortunately, Jan 20th ushers in the Trump error and, as you can see from this chart – markets usually suck under Republican administrations.  Now, some may say that's a political statement, because my FACT involved a political party and, to those people, I say suck it!  

Why do the markets perform poorly just because you stop giving money to the Bottom 90%, who spend their money and cause it to move throught the economy with a 3.6 multiplier and, instead, give it to the Top 10%, who save it and cause it to have a fractional multiplier?  According to many Conservative studies – we'll just never know but, what we do know, is that if we tax the people who don't spend money less, they'll get much, much richer.  

The so-called Trump rally, at the moment, stands at net 6% since the election and that's better than Bush II (the election was contested so chaos) and better than Nixon or Reagan but nowhere near as good as Ike's 8% rally but ALL of them, every single Republican President who flipped the Presidency, all of them has poor markets during their first year.  

Hey, maybe this time is different, right.  After all, if we don't start a trade war with China, we still have those nukes to fall back on.  If nothing else, this will be the most exciting administration since Nixon.  

For those of you not old enough to remember, that administration lurched from scandal to scandal and completely destroyed the economy with an aggressive military policy that rewarded their defense contractor backers.  At the time (early 70s) we were still practicing our "duck and cover" drills because you never knew when those pesky Russians were going to drop a nuke on our heads.  

No danger of that now as "Putie" is giving his State of the Union Address this morning and is crowing about the Trump victory, saying: 

“Democrats are losing on every front and looking for people to blame everywhere.  “They need to learn to lose with dignity.”

“Trump understood the mood of the people and kept going until the end, when nobody believed in him,” Putin said, adding with a grin. “Except for you and me.”

Putin responded to Trump's nuclear tweet (yes, apparently, this is how we conduct diplomacy now) by saying: "We need to strengthen the strategic nuclear forces, for that we should develop missiles capable of penetrating any current and prospective missile defense systems."  He also called for the balanced development of all branches of the armed forces, precision weapons, modern means of communication and inspection as well as electronic warfare systems.  There was, of course, much celebrating among Global defense contractors and Putin himself will make Billions through his control of Russian contractors.

Because of their work on nuclear fusion, Lockheed Martin (LMT) is our favorite US defense contractor and they've been down recently as Trump tweeted out his displeasure with F35 cost overruns but, overall, we think it's a nice opportunity to go long LTM:

  • Sell 5 LMT 2019 $200 puts for $13 ($6,500)
  • Buy 5 LMT 2019 $220 calls for $45 ($22,500) 
  • Sell 5 LMT 2019 $260 calls for $23 ($11,500) 

That puts you into the $20,000 spread that's 80% in the money for net $4,500 so the upside potential, if LMT just manages to move up $10 in two years, then it's a profit of $15,500 (344%) and ordinary margin on the short puts is about $10,000 but those puts are a nice 20% discount to the current price – we're playing conservative because we do expect a market pullback.

We also like Raytheon (RTN), who get paid almost $2M every time the US fires a Tomahawk missile (and we do that a lot!).   So, to bet on the escalating cold war (and the proxy wars we love to fight), we like:

  • Sell 5 RTN 2019 $120 puts for $8.50 ($4,200) 
  • Buy 5 RTN 2019 $120 calls for $29 ($14,500) 
  • Sell 5 RTN 2019 $145 calls for $15 ($7,500)

In this case net $2,800 in cash buys us a $12,500 spread so the upside potential at $145 (where we are now) is $9,700 (346%).  As with the LMT trade, we're being conservative in our initial entry, in case the market sells off but, if it doesn't, nothing wrong with "just" making a 346% return on cash.  Margin requirement for 5 short $120 puts is just $6,000, so it's a  nice, margin-efficient trade as well.

See, we can always find something to trade, in any type of market.  If Trump is going to make America great again and great means a massive military power that chews up resources and spurs a  stagflated economic disaster of epic proportions – then let's get ready to enjoy the ride. F*ck Yeah!  

As approved by our in-house counsel:

Please accept with no obligation, implied or implicit, our best wishes for an environmentally conscious, socially responsible, low-stress, non-addictive, gender-neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasion and/or traditions of others, or their choice not to practice religious or secular traditions at all. I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2017, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make America great. Not to imply that America is necessarily greater than any other country nor the only America in the Western Hemisphere. Also, this wish is made without regard to the race, creed, color, age, physical ability, religious faith or sexual preference of the wishee.

To our Conservative Friends, Merry Christmas and a Happy New Year!

All the best, 

- Phil


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  1. So close… They'll try again next week in a low volume week to get over 20K but I am worried that we might not see that again in 2017!

  2. Good technical explanation (with facts – I know hard to believe) on why we don't need more nuke and why our future president is clueless:

    We probably don’t need six different types of warheads to begin with. We probably don’t need thousands of them. We probably don’t need multiple ways of delivering them. Even the ones we already have are in the midst of being upgraded. We probably don’t need any of this, especially when it’s all almost certainly guaranteed to kill everyone.

    President-elect Donald Trump thinks we need more. And even scarier, Russian President Vladimir Putin seems to agree with him.

  3. And why he is clueless on the F-35 as well:

    One of the reasons the F-35 is so expensive is because the variant built for the United States Marine Corps, the F-35B, is capable of hovering, along with the ability to take off and land vertically like a helicopter. To make an F/A-18 do that, you’d have to somehow find the space for a whole bunch of venting and plumbing and additional computer systems. Plus you’d probably have to find the space for a cool-air lift fan, like the F-35B has, to avoid melting every single runway and ship deck the thing has the misfortune to come across. So you’d have to design an entirely new plane.

    But let’s ignore the vertical jumping version for a second.

    The very shape of the F-35, not to mention the materials it’s made out of, make it nearly invisible to radar. The F/A-18 E/F Super Hornet, with a shape inspired by its F/A-18 C/D Hornet predecessor, is not nearly invisible to radar. It has some radar-reducing measures, sure, but it’s not the same thing. To make it do so, you would have to change the shape of the plane entirely. Which would make it not an F/A-18. It would make it something else.

    It would make it an entirely new plane.

    An entirely new plane from the ground up.

    An entirely new and costly weapons system.

    Not an F/A-18.

    The F-35 program is a complete nightmare, and Donald Trump somehow managed to imagine something even worse.

  4. Good Morning

  5. I posted this article last night where they say that AI could threaten up to 47 of jobs in the US:

    The interesting fact is that in my industry (translation), we have been introducing more and more automation over the last 25 years and yet, this has not cost any jobs. On the contrary, in some cases, we need more people. The productivity of translators has been improved by well over 200% (in some cases much more). The same with project managers and yet, no job losses. What happened is that with higher productivity and lower costs, companies found more stuff they wanted to get translated. And also, we are now generating more content than ever before. 

    Could that apply to other industries as well? An interesting case.

  6. UVXY / Jomptien – Thanks for the update on the reverse split. They must have been holding back on doing it because they already have 3 sets of options in January from the last 2 splits. I guess they didn't want to add another one. But they should do a 10X reverse split – last time it lasted less than one year…

  7. Good Morning.

  8. FU GNC!!!!


  9. LMT down 5.50$ !!!!

  10. B4 I forget, Happy Holidays to all. Looking forward to 2017 and a very prosperous year as the Trump error begins.

  11. I hope Phil breaks out of his stock picking slump soon ;-)

  12. Someone out there seems to really like AGN this morning. Thoughts on them longer term?

  13. Good morning!  

    Europe has a half day today so just about closed already.  Italy "fixed" for the moment but generally flat over there.  We were down but big move to get us flat now (9:50) and we'll see if they can get us green.  /RB back to $1.60, Dollar 103.12.

    Big Chart – As silly as it looks now. 

    Low volume/StJ – It's kind of low already:

    Date Open High Low Close Adj Close* Volume
    Dec 23, 2016 225.43 225.52 225.36 225.48 225.48 3,070,942
    Dec 22, 2016 225.60 225.74 224.92 225.38 225.38 52,567,100
    Dec 21, 2016 226.25 226.45 225.77 225.77 225.77 67,909,000
    Dec 20, 2016 226.15 226.57 225.88 226.40 226.40 89,838,800
    Dec 19, 2016 225.25 226.02 225.08 225.53 225.53 90,341,100
    Dec 16, 2016 226.01 226.08 224.67 225.04 225.04 156,420,200
    Dec 16, 2016 1.32893 Dividend
    Dec 15, 2016 226.16 227.81 225.89 226.81 226.81 124,972,600
    Dec 14, 2016 227.41 228.23 225.37 225.88 225.88 142,501,800

    Nukes/StJ – Well, since 100 nukes would obliterate the planet (not little 15KTn firecrackers like Hiroshima was anymore):

    This is the power of a modern nuke:


    Please keep this in mind when you talk to people about how important it is for us to have "nuclear superiority" vs that Liberal BS where we do everything we can to make sure these terrible weapons are never used.  

    When you vote for people who think it's OK to use these weapons – you are definitely part of the problem!

    AI/StJ – I think that's about right.  We're one, maybe two generations away from AI replacing almost anyone who works on a computer for a living.  Legal secretaries, accountants (good riddance!), customer service, order takers, bookeepers, office secretaries…   I think Translation is a bit unique because there was X amount of content that was too expensive to translate and, because you crossed a threshold, the orders flooded in.  Of course, how many companies were able to fire in-house translators?  

    GNC/Jabob – Wow, people really don't like the new direction.  BUYBUYBUY I say.  

    LMT/Yodi – That's why it's a good time to buy, Trump making noise that he'll pull the F35 program. 

    Slump/Jabob – How come when I say CASH!!! 1,000 times, that's not a pick?  cheeky  

  14. Happy Holidays to all, from the BOHOL in the Philippines 81 degrees today

    Thanks Phil for another good year

  15. Well if you played LMT right at the right time I show a 550$ within 15 minutes

  16. The LMT is a typical indication how people jump overboard and throw their shares away.

  17. I hope that's not Centigrade, QC!  

    $550/Yodi – That works out to an annualized Billion percent…

  18. Phil LMT I only did the 5 opt. and when I saw the price dropping to 42, 220 long I asked for another long and the price jumped up instantly to 43.10!!! Changing my longs from red to green!

  19. Annualized/Phil – Now yer talk'n! :-)

  20. Phil it 27.2 celsius just nice 

  21. Translators / Phil – The industry has been based on an outsourcing model for a long time now so automation has not really changed anything. There are few in-house translators except in governmental agencies. What my company and others are bringing to market now is disintermediation so smaller business will close their doors because direct access to translators will be easier. That could be the tipping point for the industry – but we are still a long way from a complete overhaul. There is a lot of resistance like I assume in every industry.

  22. Are the market open all day today  ?

  23. Phil/HOV,

    running up….keep it going or will you cash out and wait for a pull back..I have around 1000 shares in my 401K.


  24. phil, i am interested in shorting TSLA again.  could you suggest a bear spread?  TIA

  25. Streaming services:

    Netflix (NFLX) is to streaming as Facebook (FB) is to social as (AMZN) is to e-commerce.  More than 50% of survey participants have a Netflix account, which is a massive number.  Back in late 2014 this reading was less than 40%, so Netflix continues to trend higher but hasn’t yet hit critical mass in our opinion.  Looking at the remaining services, we’ve seen Amazon Prime, Hulu and Spotify all trend higher as well over the past two years, while Pandora (P) is essentially flat.  The percentage of consumers that didn’t have an account with any of the services in the chart has dipped from the mid-40s to 30.2% as of November.


  26. An illustration like this makes you wonder why so many people choose to focus obsess on the incidences of negative returns in a given year (boxes left of center). The red boxes don’t represent negative years for stocks, just years in which a recession occurred. You’ll be surprised to find some green years (economic growth) having down-stock market performance and some red years with gains. It’s counterintuitive but so is a lot about the interplay between markets and economics.

  27. StJeanLuc

    Returns….   That's very interesting.  I'm gonna have to think about this a while to wrap my head around the points you spell out about green and red..  Thanks!

  28. Is there news out on GNC? 

    I don't see anything but it has been clobbered the last two days?

  29. Jack Bogle seems to think that the fiduciary rule was a good thing and repealing would be a mistake:

    Fiduciary means putting the client first, and as I have observed in the past, the only other rule we have is the client comes second.

    It seems equally clear to me that it's only a matter of time that the SEC adopts a comparable rule for all accounts. [The fiduciary rule, set to go into effect in April 2017, covers only retirement money.]

    The idea that I have a retirement account with a broker and he takes good care of me, and I have a personal account [and the broker's interest comes first] just flies in the face of common sense. If his customers don't have retirement plans, he doesn't worry about things — he sticks with the whole suitability rule. [Under the current setup, advisers that have not opted to be fiduciaries only have to provide investments that are suitable, not necessarily ones in the best interest.]

  30. Trump/nukes:

    Seems Trump tweet is nothing more than an extension of current Obama administration assessment/policy.

    On Monday, in his first visit to Minot Air Force Base in North Dakota as U.S. Secretary of Defense, Ash Carter said America's nuclear deterrence was the "bedrock" of its security, and the Pentagon's No. 1 priority.

    "If we don't replace these systems, quite simply they will age even more, and become unsafe, unreliable, and ineffective," Carter said, speaking at a lectern in front of a B-52 bomber loaded with cruise missiles.

    "The fact is, most of our nuclear weapon delivery systems have already been extended decades beyond their original expected service lives. So it's not a choice between replacing these platforms or keeping them – it's really a choice between replacing them or losing them," Carter said.

  31. Not so sure pstas:

    Brzezinski shared Trump's off-the-air remarks with viewers on MSNBC's "Morning Joe" Friday after she said she spoke with Trump and asked him to clarify his tweet.


    “Let it be an arms race,” Brzezinski said Trump had told her. ”We will outmatch them at every pass and outlast them all.”

  32. And also:

    Nixon was also big on strategic ambiguity – again, keeping his counterparts off balance by keeping his plans opaque and changing. Trump does Nixon one better by not only keeping his true plans hidden even from those closest to him but even keeping them from himself. It's the ultimate strategic ambiguity. My true plans are unknowable because I haven't even shared them with myself.

    There's no logic to the details besides whatever details are at hand to suit the self-assertion and aggressive positioning of the moment. But all those details will end up mattering.

  33. Phil – CL  hitting the $53 mark – time to short?

  34. SGYP up today, looks like more positive trial results

  35. There is a difference between modernizing and adding more…

  36. hope GNC could stay in the double digits.

    I still haven't seen news on this POS?

  37. All day/QC – Yep!  

    HOV/Pat – I'm not going to pull a 2018 play unless it's 80% of max value.  With 1,000 shares, I would cover half and sell 1/2 puts like 2018 $2 ($1.15) calls and $2 puts (0.30) so you get $1.45 off the table and worst case is you are reassigned 500 at net 0.55 and, to the upside, you net out of half at $3.45.  If you aren't THRILLED with the idea of getting another 500 shares for net 0.55 – then obviously you should be cashing out your $2.88 shares, right?  

    TSLA/Lunar – They broke into an uptrend in a strong market – I would not short them here.  

    There will be the Model 3 rollout and GigaFactory announcements to short into in 2017, this is closer to the bottom of the channel than the top.  Musk is also a Trump adviser – another reason to avoid a short.

    NFLX/StJ – Sure they have an account, but do they pay for it?  NFLX makes these amazing claims of penetration but $8Bn in sales at $100/yr is 80M paying customers WorldWide, less than TWX has on HBO ($28Bn in sales) and TWX makes $4Bn profit, NFLX spends all but $200M.  

    Red boxes/StJ – Well, if you throw out 1897,1904, 1908 (industrial revolution), when it only took a few companies making a fortune to make the index and 1945 was massive war spending (DDay) then, generally, you can see that it's not a good idea to bet the market up when there's a recession.  Oh yeah, and the $3-4Tn pumped in in 2009 maybe shouldn't be counted either…  That's the problem – people think that stimulus is sustainable and can be turned on any time – that's not how it works…

    We'll see, Japan is our test case at 250% of their GDP in debt.  If they can somehow work their way out of that, there's hope for us all.  So far though, devaluing (robbing) the people's savings of 1/3 of their buying power hasn't done the trick.  I wonder how well Americans would do with 1/3 less stuff?  

    The bondholders get an automatic haircut.  They buy a 85,000 Yen 10-Year Bond in 2012 for $10,000 and get 5% ($500) in annual interest and now 85,000 Yen is worth $6,530 even with $2,500 in interest in your pocket, you are still screwed out of $970 so they already have a -2% bond!  

    GNC/Jabob – Big reorganization, people no likee.  I think they are even changing the name.  I think they are changing their name because a Chinese buyer wants it for the recognition.  Over there, people love taking supplements.  

    Nukes/Pstas – So, rather than get into another expensive, ridiculous race to upgrade, wouldn't it be a nice idea for everyone to agree to significantly reduce their stockpiles?   You really only need 100 nukes to obliterate all life on this planet and, presumably, we'd only be aiming for the other half of the planet (unless those Mexicans try to come over the wall – then all bets are off).  So 50 would do the trick, 100 is redundant and 150 is triple-redundant – the US and Russia have 8,000 EACH!

    Related image

    And what StJ said!  

    /CL/Latch – Tempting but I'd rather enjoy my weekend.

  38. Amri the driver who drove the truck in to christmas market in Berlin was shot and killed in Mailand.

    Best way before he would have got a warm apartment with three meals a day in Germany. Good job for Italian police.

  39. yodi / ISIS Ahole     He was in an Italian jail for 4 yrs and not deported because , " the Tunisian Government did not prepare the papers in time".  So he was released to the wild.  :(

  40. Latch, yes these are all facts but still one up for the Italians. He was not deported from Germany. They are assholes!!!

  41. yodi – agreed. These two Carabinieri Rock/ Real heroes.

  42. FU JO!!!

    FU GNC!!!

    FU RH!!!

    FU TWTR!!!

    FU PSO!!!

    FU FTR!!!


    I think I need a 3 day weekend ;-)

  43. Phil – what do you know about AGN?  (It looks like the tax loss selling stopped today)

  44. /Phil/SI-are you sticking with 1L over the weekend?

  45. jabo – you for SI

  46. forgot even*

  47. Man, glad I'm not using real $$ today. Paper traded silver. 3 long at 15.89 avg. down 2300. Short 1 rb, down 1302. Just for fun but still….

    I still think /rb short is the right play so I'm going to add here but the next contract 

  48. Sold a few more SHLD Jan 2018 $10 puts for $4.60.  Dicey, but trusting in Bruce Berkowitz's judgment.

  49. /CL jumps to above 53 in a flash — will it hold?

  50. Phil / BTUUQ-

    Peabody announced their Plan  of re-org / bk plan yesterday and I read it as all BTUUQ shares will be cancelled.  The stock is down ~10% today but I thought it would be worthless today.  Am I missing something?  I am short some 2018 calls that I was hoping would be $0.01 today (they are definitely not!).  Thanks Phil!

    "As part of the plan of reorganization, the company anticipates emerging as a public company.  As frequently occurs in Chapter 11 processes, the plan provides that current Peabody Energy equity securities will be cancelled and extinguished upon the effective date of a confirmed plan of reorganization by the bankruptcy court, and holders would not receive any value for such equity interests."

  51. Driver/Yodi – I don't know, they want to be martyrs, why give it to them?

    Nice portfolio Jabob – looks like a buy list to me.  Let us know when you capitulate and I can build a new portfolio with those!  cheeky

    I just added 2 more /KCN7s at $1.413.  Hopefully JO gets back to $18, where we started playing them in June.  

    It's been quite the year for Jabob:

    Submitted on 2016/01/04 at 11:05 am

    FU OIL!!!!


    FU nat gas!!!!

    FU BID!!!

    FU ABX!!!!

    FU SCO!!!!

    FU RIG!!!!

    FU LABU!!!!!

    FU BHI!!!!!

    FU AMZN!!!!!

    Submitted on 2016/10/06 at 11:03 am

    FU miners!!!!! 

    FU GILD!!!!

    FU F!!!!

    Fu /rb

    FU TZA!!!!

    FU DXY!!!!

    Submitted on 2016/12/06 at 12:01 pm

    FU TEVA!!!!

    I think I'll have the guys send out an automated Top Trade Alert keyed to you saying FU to a trade!  cheeky  Maybe over the holidays you can read the article on scaling – would probably do you a world of good…

    AGN/Datra – They are a real mess after that aborted merger with PFE.  Of course, PFE thought they were worth 50% more so perhaps we should give them the benefit of the doubt?  They spun off generics to TEVA (who we do like) so I'm not really sure what the new company is anymore but they are sitting on a mountain of cash and bought back 20% of their stock with the TEVA money.  

    I like the fact that you can sell 2019 $170 puts for $22.50, that's net $147.50, down about 25%, so a good buffer.  I'd start off there and wait for earnings before adding a bull spread.  

    /SI/Raviis – Took the DD at $15.75, not sure if we'll see that again.

    Added 2 more /KCN7 but man does that look terrible!  

    /RB spiking for the holidays – Merry Christmas America!  

    It doesn't seem like much but the difference between $1.58 and $1.63 is $160M at the pump this weekend.  Do that every holiday and it starts adding up to real money! 

    SHLD/Albo – That's exciting.  

    /CL/Latch – Yep, same BS, jacked up for the holiday.

  52. Phil, current thoughts on TLT?

  53. SHLD – Phil, I noticed there was no exclamation mark.  I know you don't like this play, but only put enough money in it to pay $500 per month til expiration.  Won't be a big loss if I get put to at $5.60.

    BTW, has anyone looked at the chart on QUIK lately ?  That was going to be my pick for 2017, but it started going up too soon.  Back to the drawing board.

  54. Phil--I am scaling.

    And your stock picks make it much easier to scale in at much lower prices.

    Keep up the good work ;-)

  55. What was the gnc play?

  56. BTUUQ/EMike – People are silly with BKs, they think it's like a lottery ticket but generally they go worthless and stay worthless.  Of course, strange things do happen so stay on your toes.  It's only a PLAN, that may not be the final deal.

    TLT/JMD – I expected more of a bounce, at least to 120.  Priced about right at that level though.

    QUIK/Albo – Timing is everything with these plays. 

    GNC/JMD - December 14th, 2016 at 2:50 pm | (Unlocked) | Permalink

    Also, in the Webinar, for the LTP,  we decided to take GNC, which pays an 0.80 dividend, and flip our 15 2018 $17.50 puts ($6) to 30 2019 $12.50 puts ($3.40) for a credit and we'll buy 3,000 shares of the stock ($13.14) and sell 30 2019 $12.50 calls for $3.70.  

    That puts us in the stock for net $7.39/9.945 – even better as a new trade!   That makes the 0.80 dividend 10% while you wait.

  57. Phil,

    Martyrs. This is not the point. What agrivates me that, if the guy would not have been shot, he would have received a life in paradise in a German gail, and the German people would have to pay for him for the rest of his life, or better for 25 years. This is not Russia where they go to the salt mines! No they will get a nice warm clean apartment, possible still with TV and three meals a day. If the poor guy would get seek, Dr.s and Hospital is free for him. This is why they need a guy like Trump here I think. One really can get p…sed off to have asshole in Government like we have here. 

  58. Yodi, for what it is worth, I agree with you.  Our system was/is broken and doesn't get ahead of the problem. So, maybe Trump's new policies will. I trust so.  We need to get rid of the preachers of hate, Imam's or otherwise.  The Islamic schools, and the prison systems radicalize the people who are predisposed by the basic tenets of Islam to further violence against all of us who are not of their belief's. So, a reformation has to come to them and how I don't know for certain.  For sure, however, is that the moderates of Islam need to stand up against the radicals.  I recommend, "Preachers of Hate", by Kenneth R. Timmerman. Sad that we need to talk about this at this time of the Season, but if we don't now—when?

  59. Don't you think terrorists would prefer death/martyrdom and their 99 virgins, over a lifetime in jail?  Most of them have been so brainwashed that they welcome death.  Dying in a hail of bullets or blowing themselves up is a win in their mind.  Rotting in jail for 40-50 years probably terrifies the few that have thought of the consequences of their actions.  With this in mind, I would prefer to incarcerate them, as jail is more of a deterrent, than death.

  60. Yodi/Germany — I think you already had "a guy like Trump" in Germany, about 85 years ago…his name slips my mind at the moment…started with an "H"? Something like that. He sure got rid of the undesirables! How did that work out?

  61. “No human race is superior; no religious faith is inferior. All collective judgments are wrong. Only racists make them” 
    Elie Wiesel

    “The opposite of love is not hate, it's indifference. The opposite of art is not ugliness, it's indifference. The opposite of faith is not heresy, it's indifference. And the opposite of life is not death, it's indifference.” 
    Elie Wiesel

  62. BTUUQ / Phil -  Will do, thank you-

  63. escohen 5, Boy, to equate "undesirables" to a terrorists and murder is a disingenuous stretch to include Trump as a comparable to Hitler. What an insult! That doesn't begin to equate, particularly when you may not  have someone on the front line in this fight against terrorism. What more, what is the solution—certainly not ISIS, nor the myopic view of what is the root cause of the problem.

  64. escohen5

    I am very surprised you do compair Trump with Hitler. No comment. I trust you do not miss a relative visiting the christmas market in Berlin?

    I feel only the worst death could be good enough for these bastards.

  65. Phil – are you carrying any index trades into the weekend? Shorting /TF etc?  What is your read on how the markets will fair in early Jan?  It seems to me that they are waiting for a grand spending bill – $1 Trillion from Trump to get us off towards 21,000.  Just don't see a real reason to short at the moment,

  66. Been  a long day buying silver below 15.775 and waiting, but hopeful it will pay nicely. I am going to need it if KC stays this ugly. I took a poke yesterday at 1.38 thinking I had it made and now at 1.36 it is not pretty. Being patient though and hoping, hoping til I get back to black. (Amy Winehouse reference for the musical among us)

  67. Newt/Trump – Hmmmm, let's see:  Promises of discrimination and exclusion of a religious minority; scapegoating that minority; indications that he will disregard laws regarding, for example, torture (i.e., war crimes) and conflicts of interest, etc; militarism, promises of foreign wars; racism, xenophobia, nativism; white nationalism and anti-semitism rampant in his administration; close relationship with corporatists and business interests; reliance on fake news and other modern propaganda; repeating lies over and over again, hoping the masses will accept them as "truth"…the list goes on. If this is what you wanted, you got it.

  68. Yodi/Berlin — No, I don't miss any relatives in Berlin, as I have none.  However, I do miss the relatives that I no longer have in Eastern Poland and Ukraine, who ceased to exist in about 1943. I heard they were nice people.

    Aber, sprechen Sie weiter, Yodi.

  69. escohen, you must be a bitter person, and I reframe from expressing my opinion on our trading site,

    but just wait and see, possible the man used some very unorthodox methods in his election campaign.

    I can not believe all Republicans are cheese heads.

    but I think "du hast mehr Angst als Vaterlandsliebe", possible you are not an American.

  70. On a happier note,  Happy Holiday Season everyone !

  71. You to Albo have a happy and blessed Holiday season.

  72. Jail/Yodi – Well, I don't think jail should be pleasant but not sure Gitmo is the answer either.  We used to execute murderers, I am all for that but, as Palotay notes, we don't want to give them what they want either.  

    Moderates/Newt – That's true and if the moderates don't begin to stand up, there will be a lot more problems for all Muslims.  Every time they shoot up a school or blow up a market, they radicalize millions of people against Muslims – as you can see from the US elections, they've effectively already tipped the scales to the point where a guy who wants to ban Muslims gets elected President.   Terrorism caused that at the root.

    Indexes/Latch – Nope, I have no idea what will happen next week so I'm not going to bet on it.  

    KC/Craigs – That one is getting annoying.

    That's right, Happy Holidays!  Let's all try to get along… as long as there's no Muslims, gays, blacks…  That's the slippery slope we try to avoid – once you decide it's OK to blanketly hate one group, then why isn't it OK to hate the next?  At one point, after the horrors of WWII, for a brief period we grew up and decided to give peace a chance – but then Reagan got elected and we shot the guy who wrote that song…

    Merry Christmas to all and to all a good night!

  73. Merry Christmas/Happy Hannukah .. to all.

    Wishing all Peace and Happiness for the long weekend.

  74. Thanks Phil best wishes to you too.

  75. Merry Christmas Everyone! 

  76. Yodi, "Sie," bitte, ist mehr korrekt.

    I am an American, and I have no "fear over Fatherlandlove" or whatever the translation is.

    I think, however, as a German, you should be a little more sensitive regarding installing a German government with fascist characteristics. Please refer to the StrafgesetzbuchSection 86.

  77. I'd like to wish Phil and everyone else that contributes to this board a very Merry Christmas and happy New Year.  The wealth of knowledge on here is incredible, and it has greatly contributed to my understanding of markets, politics, and the world in general.  This year was when Phil's teachings all seemed to click in place, and my portfolio's performance shot up, and for that I am very grateful.  Thank you!

  78. I trust you allow me still to have my own opinion thank YOU Sie bitte are you somthing extra?

  79. Merry Christmas and Happy Hannukah to all the members! And peace on earth hopefully.

  80. Happy Hanukkah and Merry Christmas to everyone!

    Stay warm, dry, and enjoy some holiday cheer.. :-)

  81. Brownback wants Trump to emulate what he did in Kansas because it worked so well:

    I think I would want to stick to what actually does work! 

  82. I am going to enjoy 3 days of peace and forget all the insanity running rampant around the world and our country. Best to all of you and your loved ones, wherever they may be.

  83. Latch- I can't wait to see how they pay for that spending bill you're waiting for. We know it won't be through taxing the rich, nor cutting defense, so perhaps the disabled and poor will be asked to give up those lucrative few hundred per month they live on. That's what Christmas is all about, letting the poor and disabled stay out in the cold and have babies in mangers. 

    Happy Holidays everyone and may we survive this administration in the coming year. 

  84. Phil, From what I have read, Trump isn't about banning Muslims as he wants to slow the immigration of "people" from the middle east and other areas and ck. their backgrounds.  Notably, this isn't an open door policy but for a practical and humanitarian approach is it really fair to expose our citizens, guests and invitees to the radical actions/danger of a few Muslims even though it might benefit some Muslims.  As it is, according to Fox news we have accepted tens of thousands from areas of Somalia, Afghanistan, Syria, and Iraq.  How much vetting has there really been, and from what I have read not nearly enough…Bakersfield, Minneapolis, Miami, etc. etc.  Soon the internet will have  filters for preventing the spread of "hate" and this will eliminate the spread of the home ground Muslim extremists.

  85. Have a Merry Christmas everyone!  

  86. Merry Christmas to all and to all the best of times.  For the non Christians and those who aren't prone to the wishes of a Merry Christmas, may you have Happy Days off and celebrate your Holidays (if any) with safety,  peace and good will.

  87. Merry Christmas and Happy Holidays to all.

  88. Just in time for the holidays.. Dave Collum's 2016 Year-in-Review.


  89. What happened to that guy here who had like 10000000000 on the JO trade and would brag about drinking coffee all the time??

  90. I haven't entered the JO trade, but I am intrigued. I have faith in Phil's conviction, and he did get a nice move his way. Seems anything agriculture related is getting cheaper. My last gallon of milk was $1.49… gotta feel for that farmer, at that price I'm feeling sorry for the cow! Now I feel blessed to watch it fall and wait for the turn. I'm wondering if it's cheap enough to be in the running for trade of the year, so I might join in for a cup or two myself at 18.

  91. craig – spending. ? Really, where do you thing QE1,2,3 came from? The Fed will buy the $1 Trillion bond  What is another trillion in long term liabilities amongst friends?  :)

  92. Yodi/Germany — Of course you can have your own opinion.  I am reminding you, however, that perhaps it is not a good idea for you to suggest that Germany adopt fascism again, or at any time, ever.

    As for "Sie" vs. "du," one does not have to be "extra special" to expect the standard use of the German language. We are not on a "du" level, obviously, because you do not know me. Your use of "du" is inappropriate. I addressed you as "Sie" because it is polite and because I do not know you and you are older than I am. Is this something that really needs an explanation?

  93. A very Merry Christmas to Phil and all on the board – many thanks for everyone's contributions to help navigate through the trials and tribulations of the markets. From my side it was a most satisfactory year from an investing point of view.

    I am particularly excited about 2017, especially as I have decided to make the trek from London to Las Vegas to join the PSW conference. What a privilege.

  94. I am starting a new strategy – at the first Jabo FU, I add a stock to my watchlist. I make it a buy at the second one and initiate a 25% position at the third one. And add a bit at each subsequent one. I have to backtest it though but it looks sound to me…


  95. Let the debate begin:

    Barron’s Prescription for U.S. Economic Growth

    How to cut $8.6 trillion in federal spending and balance the budget without raising taxes.

    Dealing with the problem requires recognizing the path we are on, and why it must be reversed. According to the Long-Term Budget Outlook published by the CBO in July, the debt will reach 141% of GDP by 2046. That’s way above its World War II high, and it’s expected to continue climbing from there if nothing is done. Indeed, an earlier CBO report compared the risk faced by the U.S. to the debt-related crises in Argentina, Ireland, and Greece.

    The agency foresees that “investors would lose confidence in the government’s ability to manage its budget.” In response, interest rates on government debt could spike abruptly, setting off destabilizing rises in private-sector rates that could cause a financial crisis, which would in turn destabilize the global economy.

    That scary scenario looms if the current business-as-usual approach is allowed to continue.

    and in fact, more than 40 cents of each dollar of our reductions comes from programs other than Social Security and health care. For example, we propose a decrease of nearly $1 trillion in defense spending over 10 years out of planned outlays on defense of $6.5 trillion.

    IN HIS 1999 STATE OF THE UNION ADDRESS, President Clinton warned: “With the number of elderly Americans set to double by 2030, the baby boom will become a senior boom,” leaving the government “unable to pay the full benefits older Americans have been promised.” Even if the full benefits could be paid, the cupboard would be bare when the millennials become seniors, prompting Boston University economist Laurence Kotlikoff to brand the baby boomers “the greediest generation.”


  96. St.J- Your FU portfolio is a great idea! However, it got me thinking about investing and timing. I came aboard in 2014 or perhaps late 2013 and while I haven't gone back to look at all of Phil's picks, my recollection is that many from the first year were energy related or materials, such as RIG, CLF, etc. which makes sense as a value investor. Many went the FU way at first and took a long time to recover. Many needed multiple adjustments to eventually become winners. I have had a very hard time learning how to make those adjustments on my own and have lost money because of that. It is really important to know that you must learn to leg in slowly, make adjustments to losing trades in a timely manner , not chase the winners after they and decide if you 

    have patience enough to invest this way. Phil will count a pick like RIG as a winner, but if you went in on his initial call and didn't add to your losses for almost two years with doubling down and adding at lower and lower prices, I think you would be way down still as we began when RIG was over $45 and we watched it drop to $20 in the first three months, then to $15 in the next few, and finally below $8 almost two years later. We are now calling it a winner at $14.50 if you added and threw money at it all this time. So, if you lose money for two years is that successful investing? The answer is yes, because if you started small and did all the adjustments you are in great position now to make money as RIG should now grow from here, but you better be well capitalized and have made choices other than those on the FU list along the way. I learned this the hard way by doing too many of those materials trades early on and taking too big a position relative to my portfolio, but I learned quickly and cut my losers quickly and started legging in and being more diversified. Now I can afford to hold the ones that start slowly, TASR, JO, etc. and make adjustments as needed. I would, as I said, like to get better at seeing those without Phil, but accept for now that's not the case. My point here is, that as a value investor, the FU's are inevitable and as Phil preaches must be turned into opportunity. I also know how hard that is. 

  97. I don't mind the teasing about the FUs.

    But for every RIG and CLF I can name a BTU and GTAT too…

    Phil has a great mind and knack for trading options and maybe futures too.

    I have learned a ton and that is why I have remained on this board for many years now.

    For every FU stock or option position he has also made some great calls like AAPL and IBM just to name a couple good ones.

    EVen Phil will admit he a a tendency to be early.

    Unfortunately, I have been buried by a few of those "early" value calls and sometimes I had the patience and they worked out and sometimes I didn't add to them when they have been crushed.

    Usually, those names (ABX,CLF,RIG,FCX,LL) did hit bottoms and rallied but they would all have to rally over 100% from here to get to where Phil originally thought they were gifts.

    Trading these dogs with fleas might end up OK in the long run if you kept lowering your average cost the way Phil tries to teach but that could take many many years with a lot of them. And it isn't like Phil or anyone on this board didn't think CLF wasn't a possible bankruptcy a year ago. It looked like it was another BTU.

    Also, it is easy to see how some of these dogs escaped disaster but don't you think the "overvalued" all-time high stock market has helped some of these POS stocks rally much more than they would have in a more normal market? Heck, look at the market throughout 2016 after the initial drop--almost EVERYTHING has gone through the roof! So maybe RIG climbing its way back to 14 and CLF to 9 isn't anything to brag about when they were "great values" at 45 and 25…. 

    Again, I am not complaining and was happy to make and lose some $$ on Phil's pounding the table plays.

    It is just a different investing strategy that takes a lot of patience, discipline, and sometimes a very strong stomach.

    Hope everyone is having a wonderful holiday! 

  98. Jabo, I can easy see your opinion and yes if there was a 100% win with every trade mentioned on this board, we all would be sitting on a yacht in the Virgin or Bahamas. I aswell hold these dogs with flees and I just let them run to the bitter end, writing them off as a loss.

    I look at it that way, if we win 65 times and lose 35 times, I sitting good. Yes it does not always help to double and double until you feel the doubling has failed.

    Have an happy holiday.

  99. All in good fun Jabo and thanks for being a good sport!

    Even though Phil is no great TA believer, it still makes sense to me to check both charts and fundamentals. I got burned a couple of times, but checking trends and being more patient does help being too early even if some times you end up a bit late.

  100. Yodi

    Happy holidays!

  101. Happy Holidays to all. I enjoy the conversation here and feel like I have many friends here at PSW. Let's kill me in 2017!

  102. Was supposed to say kill em in 2017, meaning the markets.  Please don't kill me. 

  103. Phil has a new post up, but if you are reading this… close your computer and go enjoy the holiday.

  104. Amazon echo is pretty cool. 

  105. Wow, the markets are closed today.  I thought they were open!  

    Closed next Monday too, that one I knew about.

    Debate/Pstas – Really?  What's to debate, yet another plan to screw people out of the retirement plan they ALREADY PAID FOR while cutting off health care.  As to the F35s, it's great to tell pilots they will instead get planes that are "better than most" instead but better than most means worse than some and you are essentially sealing their fate (and the war effort) if they ever have to actually go into battle against better-equipped opponents.  Just another attempt to hand superiority to Russia which is, of course, a running theme of the Trump administration.

    RIG/Craigs – Actually, it's net positive after a very bad start but the whole point is sticking with it allowed us to turn it around as we worked our way up into a much bigger position at the much lower prices – this is exactly what scaling in is supposed to accomplish.  The point is not to lose money, so, even though we're only up net $3,000 – it beats the hell out of being down $25,000 had we said FU to it and walked away.

    50 RIG 2018 19-JAN 13.00 CALL SC $ 20,000.00 4/12/2016 $ 12,500.00   258
    $ -7,500.00 -60.0 %
    50 RIG 2018 19-JAN 8.00 CALL LC $ 16,250.00 4/12/2016 $ 35,500.00   258
    $ 19,250.00 118.5 %
    40 RIG 2018 19-JAN 15.00 PUT SP $ 13,800.00 12/14/2015 $ 27,200.00   378
    $ 13,400.00 49.3 %
    50 RIG 2017 20-JAN 20.00 CALL SC $ 1,050.00 3/13/2015 $ 10,000.00 4/12/2016 396
    $ 8,950.00 89.5 %
    50 RIG 2017 20-JAN 13.00 CALL LC $ 21,250.00 3/13/2015 $ 5,000.00 4/12/2016 396
    $ -16,250.00 -76.5 %
    20 RIG 2017 20-JAN 15.00 PUT SP $ 10,400.00 2/26/2015 $ 9,900.00 12/16/2015 293
    $ -500.00 -5.1 %
    20 RIG 2017 20-JAN 18.00 CALL SC $ 4,200.00 12/5/2014 $ 9,800.00 9/4/2015 273
    $ 5,600.00 57.1 %
    2000 Transocean Offshore Inc. (RIG) LS $ 38,000.00 12/4/2014 $ 28,700.00 3/12/2015 98
    $ -9,300.00 -24.5 %
    5 RIG 2016 15-JAN 35.00 PUT SP $ 6,175.00 4/14/2014 $ 2,450.00 11/14/2014 214
    $ -3,725.00 -152.0 %
    10 RIG 2016 15-JAN 33.00 PUT SP $ 10,480.00 8/1/2014 $ 3,050.00 11/14/2014 105
    $ -7,430.00 -243.6 %
    10 RIG 2016 15-JAN 40.00 PUT SP $ 5,650.00 2/11/2014 $ 6,500.00 5/29/2014 107
    $ 850.00 13.1 %
    10 RIG 2016 15-JAN 50.00 CALL SC $ 1,450.00 2/12/2014 $ 3,000.00 4/17/2014 64
    $ 1,550.00 51.7 %
    10 RIG 2016 15-JAN 40.00 CALL LC $ 6,500.00 2/11/2014 $ 4,700.00 5/29/2014 107
    $ -1,800.00 -27.7 %
    Total Gain/Loss for RIG
    $ 3,095.00 2.0 %

    Down $25,000 is a loss of 1/2 of an allocation block in the LTP – the correct thing to do (assuming we still believe in the position) is to take that other $25,000 and make that big bet at the much lower prices.  We know something is undervalued but there's no way to know when people's attitudes will change.  If your investing premise says you must find a value stock that hits at an exact time – you will very often be disappointed – the timing is the hard part.

    BTU/Jabob – Of course there will be big losers but the point is to save most of the trades so there are many many winners to offset it.  Being early is my biggest flaw for sure.  

    Killing Craigs in 2017 is something we can all get behind! cheeky

  106. Killing Craigs –  Once we kill Craigs in 2017, Bill O'Reilley will add another to his Killing X series. Happy Holidays

  107. Is this the current post?

    If so /nkd above 19505. 

  108. Maya1

    Happy holidays for you to. My wife and I have enjoyed a very nice Christmas with friends under the full sunshine in Spain. As last year, you can beat the European winter mostly rain or snow, by being here in the south of Spain.

  109. Conference/Vegas/Caesars Hotel

    Hi All!

    Happy Holidays!

    Please go on the web portal assigned our group and make the booking for your room for Feb 11-13.

    The site:

    Or, for a reservation FEE of $25, you can do it on the phone: 866-227-5944 and please tell them you are with PSW conference or group code SCPSW7.

    Looking forward to meeting all. Should be great fun!

    2 seats are taken in the plane- I can take one more person if anyone is interested from San Diego on Sat Feb 11, returning Mon, Feb 13 after conference.

  110. Video on Skepticism: hat tip to Barry

  111. Winston   Excellent video, now to get my roommate to watch it! Stupid is his favorite word for anyone he disagrees with… so sick of his attitude I'm ready to kick him out. A depressed ex marine, he is pretty intelligent but for a guy who delivers pizza for a living by choice, the whole snob thing really doesn't work for him. Now he's taken to watching Fox news and the garbage he spouts is becoming unbearable. I was hoping it was a passing phase and have tried different approaches, seems to just get worse. When life gives him lemons he throws them at people.