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TGIF – Markets End the Quarter at All-Time Highs

Well, we did it!  

All of our indexes, exept the Nasdaq are at their highs and this party looks like it's never going to stop as long as people are willing to believe that Trump's tax plan will help the Middle Class or the Economy or that the Fed withdrawing stimulus will have no effect (even though adding stimulus had a HUGE effect) or that as long as you don't hear about North Korea for a week because people are worried about who's kneeling at a football game – that all is well in America.  

And how can things not be great?  If the facts don't fit the narrative, they change the facts.  Treasury Secretary Steve Mnuchin told the press in Las Vegas that workers benefit the most from Corporate Tax Cuts and, if you think that sounds preposterous, you could have fact-checked it with a 2012 report from the Treasury's Office of Tax Analysis that showed workers pay 18% of Corporate taxes and owners pay 82% so what Mnuchin claimed is only about 450% untrue.   When challenged on this — the Treasury department REMOVED the report from the public records.  

“Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.” – Orwell, 1984

Image result for trump tweets cartoon1984 was not meant to be an instruction manual!  It's not legal to alter or remove Government records – even if they do contradict with the bullshit you are currently spouting.  When Trump deletes his embarrassing tweets supporting politicians who get trounced in elections – he's committing a Federal offense in violation of the Presidential Records Act of 1978, which was introduced in the wake of the Watergate Scandal to prevent exactly the sort of thing this administration is doing.  

Meanwhile, in another nod to Nixon, the Administration is compiliing an enemies list and demanding Social Media Companies like Facebook (FB) turn over the account information on people who simply "LIKE" a page that's anti-Trump like "DisruptJ20" which helped organize the protests in Washington DC.   WARNING – Following that link may put you on a list that leads you to be turned down for Government jobs or contracts, may result in a tax audit and may lead to you being placed on the "No-Fly" list – just for starters.  Isn't America Great Again???

Meanwhile, I just finished my interview on Benzinga's Pre-Market Prep and the LB trade we played back on Aug 21st (eclipse day) is already up 164%, so they are thrilled with me.  When pressed for another trade, I pointed them to yesterday morning's TZA/AAPL hedge as it's very hard, in good conscience, to pick another long for a large audience when the markets have so much uncertaintly ahead and, of course, so few people are properly hedged. 

The TZA/AAPL spread netted just $650 on the $10,000 spread and TZA is at $13.73 with the Russell at 1,489 so, with our goal of $14, if the Russell even twitches lower – we get paid in full.  In theory, if the Russell goes higher, the Apple puts expire worthless and our cost of $10,000 insurance between now and November expirations is just $650 – not a bad way to hedge!  

They know I'm no fan of Tesla (TSLA) but it's too scary to short so they asked if I liked General Motors (GM) and sure I do but I like Ford (F) better and we didn't have time to look at a trade on it but, in Wednesday's Live Member Chat Room, we had the following discussion about buying the stock:

F –  The question is, what are you in the stock for?  The 0.60 dividend on 7,000 shares is $4,200 and selling 70 2019 $12s for $1 raises $7,000 and maybe $5,250 in dividends (5) for $12,250 and that drops to $5,250 at $11 and deteriorates from there.  

I submit to you that cashing the stock and just selling 100 of the 2019 $12 puts for $1.55 nets you $15,500 at $12 and your break-even is down at $10.45 and you save $84,000 in cash against $12,500 in margin or less assuming you have PM.  So what is the stock for?  

And yes, I know we have F in our portfolios but it's more to teach people how to deal with dividend stocks than it is to have F specifically in the portfolio.  So nothing wrong with your play but consider if it's worth the effort when you can simply promise to buy 10,000 F and collect $15,500 without all the fuss.  

In other words, if you are going into Ford (or any dividend stock) with the intent of hedging it to collect the dividend "safely" – why not just sell puts against the stock instead.  In the case of F, they pay 0.15 per quarter and we can sell the 2019 $12 puts for $1.55 which is 10 QUARTERS worth of dividends – and we get it RIGHT NOW for selling the puts, which only obligate us to buy the stock for $12 in Jan, 2019 (if it's below that price).  Currently, F is at $11.96 and, if they assign you, you lose 0.04 on the stock but gain the $1.55 from the assigned contract – so no downside there.  

Break-even on the trade is $10.45, which is a 15% discount to the current price and, as mentioned above, anything over $12 means you keep the $1.55 and have 5 bonus dividend payments over the next 5 quarters (between now and Jan 2019) almost double what you would collect by laying out $1,500 for the stock and waiting (and risking).  So your downside is less and your upside is more unless F is over $13 but, over $13, you would have hit the cap of your short calls anyway (if you were hedging) so really, there's no reason at all to own the stock BUT you can still collect double their usual dividends for NOT owning it (see: "How to Buy a Stock for a 15-20% Discount").

If we make it through earnings without a pullback, we'll be happy to get more bullish but, as I said on Benzinga this morning – I think it's very important for now to have hedges and our rule of thumb is putting 25-33% of our profits into our hedges – in order to lock in our ill-gotten gains!  

Please be careful out there and have a great weekend,

- Phil


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  1. It seems that it would be a good time to cut taxes on capital gains now! And see some selling by end of year.

  2. phil, did i understand correctly you plan to remain short (will you double down?) even as /TF prints 1500, which many on this board including you have suggested is inevitable.  so you would not go long till we retrace to 1400?

  3. FU FTR!!!!

  4. Good Morning.

  5. Thoughts of changing the Fed Reserve Chairman also not spooking the markets. Specially RUT 

  6. Good morning!  


    SBUX on sale:

    /TF/Lunar – Well I don't want to throw good money after bad so I'm not adding any shorts but I do want to give it until next week before giving up.  I may DD at 1,500 but with very tight stops above that.

    Fed/Pat – That's been talked about all year, only surprise will be who they pick but I think Trump might stick with Yellen.  It would show he can leave a Trump appointee in place (if they play ball) and, of course, it's hard for him to say he isn't happy with the market – or the economy he was bragging about yesterday.  If he changes the Fed now, then anything bad that happens will be seen as his fault.

  7. SGYP up today for the first time in a while. No news I can see. 

  8. I just finished the Sept Portfolio Review if anyone is interested.  LTP/STP combo is up $20,961 since last week's reviews so I think we're just the right amount of bullish for this rally.  

    SGYP/Jet – Still in the OOP.  We're looking for $4 in 2019.

  9. Phil / SBUX – There are several puts in the portfolios, is now the time to get more constructive with this?  

    I think this is worth 65 70 although there may be a bit more downside.    The lunch deal is still being developed  I actually tried the a couple of the sandwiches and they were good.  following same model as when the pushed breakfast – pre-made, oven warm up, and good bread….  

  10. This is what leadership in the phase of racial tension should look like.  Clear Concise and with conviction.

    Hopefully this hits The Prez's screen

    Air Force Academy head: Racists 'need to get out' after prep school incident

  11. If the tax plan falls apart IWM could drop 10%. When is the drop dead date to pass this?

  12. This is what leadership in the FACE of racial tension should look like.  Clear Concise and with conviction.

  13. Totally Agree batman!

  14. That was great Batman!

    FU racists!!!!!

  15. Sec. Price flying around for $400k and only paying 13% of it (in hindsight, after getting caught). I think we need to price Trump's swamp. Peat bog is heavy.

    My family took a trip this summer – around ~$2000 for 3 to fly coach across the country and back. For grins and giggles I looked into a private charter — $25000, so $25k * 0.13 = $3250 which we would've done in a heartbeat (it was priceless though, American airlines canceled our connecting flight due to maintenance and the RUDE counter agent seriously asked me "what do you want me to do about it?", so how could we experience true Hoi Polloi indignation without US-based carrier airline travel??).

    But anyways…. This criminal, who is worth $8.2M, is charging you for his private flights and ask yourself, do black guys that rob liquor stores return 13% of the cash drawer? (and only after getting caught)? hmmmm….

  16. flights/BDC

    Total was over 1mm not counting to military jet trips to Europe so make that 1.5mm and he's paying 52k.

  17. And not the only one in this admin to do it either… These guys are leaving the good life on our dime. They are the true welfare queens!

  18. WYNN – New yearly high. 

  19. Comment content omitted because it is too long.

  20. SBUX/Batman – Well, they are not in the OOP and just the short 2019 $50 puts in the LTP we sold for $5 back in Feb and now $3.30 and we're back to the same place we went in at the time ($54).  

    While $54 is $78Bn against $21Bn in sales and $3.2Bn in profits, that's 24x earnings and I'm not sure I'm comfortable that SBUX is growing well enough for me to pay 24x earnings. 

    Year End 02nd Oct 2011 2012 2013 2014 2015 2016 TTM 2017E 2018E CAGR / Avg
    Revenue $m 11,700 13,277 14,867 16,448 19,163 21,316 22,400 22,510 24,776 +12.7%
    Operating Profit $m 1,729 1,997 -201.8 3,081 3,931 4,172 4,340     +19.3%
    Net Profit $m 1,246 1,384 8.30 2,068 2,757 2,818 2,897 3,014 3,396 +17.7%
    EPS Reported $ 0.81 0.90 0.005 1.36 1.82 1.90 1.97     +18.6%
    EPS Normalised $ 0.80 0.91 1.21 1.36 1.69 1.92 2.03 2.07 2.37 +19.2%
    EPS Growth % +24.0 +14.2 +32.6 +12.9 +23.9 +13.7 +11.5 +8.18 +14.1  
    PE Ratio x           28.4 26.9 26.3 23.0  
    PEG x           3.48 3.29 1.87 1.59

    Consider that they bought David's Tea and they bought that bakery and they added breakfast and lunch (in progress, as you note) and all they have to show for that since 2015 is 15% growth over 2 years?  We know coffee is cheap (though not really much of their overall cost) and labor costs will be rising along with minimum wages so I think it's more a case of $64 being way too far ahead of themselves than it is $54 being a tremendous sale.  

    That was my logic in Feb and that's my logic now so, while I don't mind selling SBUX 2020 $50 puts for $4.80 (about what we sold the 2019s for) – I don't feel it warrants a more aggressive play than that.  At net $45.20 – (p/e below 20), I'm confident they can at least maintain sales and grow along with the global GDP but there's no compelling reason for me to pay 20% more than that for an entry. 

    Good article on Air force.

    Drop dead/BDC – I'd say the same kind of drop dead as the Obamacare repeal – now pushed back to Jan 2019.  


  21. Price/BDC – I haven't even bought that one up.  I have scandal fatigue.  Worst thing about Price is he made his bones crusading against Government waste.  Another Republican hypocrite for the wall!  

    Image result for tom price hypocrite

    Speaking of hypocrites, Trump is speaking/lying about the tax plan.  His strategy is brilliant, he lies constantly, makes up facts and the reporters are getting tired of pointing out the lies but that then makes his base think he must be telling the truth because, if he didn't, then the "Liberal Media" would be making a fuss.  

    It's really the same scam he runs to get development contracts – he tells you he'll build the BEST building for a lot less money in half the time and it doesn't matter if he's full of crap because, once he's got your money, he can make a million excuses along the way and you end up paying double for a mediocre building that took twice as long as he said it would and you barely break even (if you are lucky) and he walks away rich.  Half the contractors in this country have the skills to be President tomorrow if these are the only requirements.

    WYNN/Albo – That one really got away. 


  22. I changed my name to protect the innocent.  I worked for a developer/builder like Trump for 4 years, same kind of business ethics, though not the same kind of schmuck.  Learned a lot about hard work, but never had the heart or stomach for cheating people.

  23. Well! Let's just price in all the tax cuts and count on these bumbling R's to pass it all! I mean they did so well with O'care repeal, sky's the limit, right? With Trump in charge what could go wrong? I think people have lost their minds… but can't fight 'em… if that doesn't work we'll just print more, borrow more… easy peasy!

  24. The tax bill won't pass the Senate alone, Rand Paul, Susan Collins, Bob Corker and possibly McCain are against it already.  As for Congress, no Republican from NJ and NY will pass it because it will be death to their careers considering the state and local taxes are so high and would now not be deductible.

  25. KHC at one year lows

  26. BDC…Price is paying for the 'seat', so your 13% is high in price.  More like 1/3 that if not 1/2.

    Chaos in Washington makes for a good market.  Up UP UP UP!

  27. I understand property tax will not be deductible either?

  28. @latch

    State and local taxes include property tax so that is correct.

  29. thanks — that is BS — how can the Fed Gov. tax money -i.e.  state taxes –  I never received?

  30. I still can't understand how people can be so deluded? He has always been a liar, cheat and big mouthed fraud who thinks its "the American Way" to file bankruptcy. There is a total lack of morals in this country and it just keeps getting worse every day. There has always been cheats who think its a hoot to steal from others, but this whole swamp is truly frightening.

  31. KHC/Stock – and i'm still short.. rolled puts and stops down last Friday… 

    Wondering if I want to get short UAL again..or maybe LUV.

  32. This huge surge on IWM is killing my TZA hedge.  I'm only half covered, which is looking really dumb now.  I'm guessing the right move is to wait until next week to see what sticks, before adjusting?  Right now my position is 160 April 14 calls, short 50 January 20 calls, and short 50 April 20 calls, and short 40 January $20 puts.  

  33. DF – still watching for a new long entry, but no confirmation this has stopped going down, and if markets slip…  March 18 $10 might get for ~.70 which is about 35% on regular margin.. but… meh.  Just going to watch.

  34. Latch… how? Threat of force. To collect those voluntary income taxes. They have no fear of the public, because you have no more representation, unless you buy some…

  35. Morals/pirate – no kidding. where's the outrage? and the newest corporate poster boy from Equifax. Why is he not in protective custody?
    Batman – the Air Force article was excellent, thanks for sharing. Great clarity, which is long overdue in too many venues.

  36. Deluded, they are out there. I was at a repair shop
    last weekend. The guy there said he liked Rump because
    his is a businessman and goal oriented. He thought
    it was great that Rump was donating his salary
    (“after Obama had hiked it to $400k). I assured
    him that he he was getting some benefits, like
    receiving a potential billion dollar savings on
    inheritance taxes or AMT. The only tax we know he
    had to pay so far.

  37. Rand Paul, yes he ran for president in the primaries… nobody liked his hair. Remember? Now we have Trump. Lots of hair, and little else. Ron Paul ran too, remember? Revolution, sound money, end the wars… he was nuts, or so the MSM said. I campaigned for both, most wouldn't listen. Here we are.

  38. NCS – Houston-based, may have a boom year ahead:  "Metal components segment's products include metal roof and wall panels, doors, metal partitions, metal trim, insulated metal panel (IMP) products and other related accessories. The Company manufactures and distributes a range of metal products for the non-residential construction market."

  39. ZGNX…wow.  Fenfluramine.  The old Fen part of Fen/Phen….that caused heart issues.  ZGNX has a low dose for seizures, going to give GWPH a run for their money.  Old is new…..

  40. Scotty, Muck, Pirati, Baron – "I worked for a developer/builder like Trump for 4 years, same kind of business ethics, though not the same kind of schmuck.  Learned a lot about hard work, but never had the heart or stomach for cheating people."

    Why do you think they call them CON – Tractors?  Steam rolling people and leaving a path of destruction in their wake.  Only met one in my lifetime, that I did not consider a waste, nor want to, and Out.

  41. NVCR/Pharm – know anything about these guys/space?  slipping down here at end of quarter, testing 50-day ma

  42. CNBC breaking news: GOP tax plan favors the richest, tax analysis shows

    There's a shocker

  43. Cheating/Baron – Yeah, it's a really scammy sort of business, unfortunately.  Lots of hard-working people ON the project but they guys who have to wrangle the money are often very Trumpian.  Of course, if they are not – then how are they ever going to win a project?  There were good people, but a lot of them worked for families, like the Pritzkers – investors that built great relationships over generations.  Trump goes the other way, he figures he'll never run out of people he can screw over.  

    Can't fight it/Mkucs – Yep, very 1999.  I went bearish in the spring, gave up in the summer, went with the flow in the fall and then cashed out into the winter as I simply refused to participate in such insanity.  Best decision I ever made, poured the money into a business and sold that for 10x 5 years later.  

    Image result for 1999 stock market

    States/Rustle – There's going to be all kinds of pushback – and then there will be a CBO score with a $10Tn price tag once they eliminate all the BS rosey outlook the GOP is pushing.  

    KHC/Stock – Still not cheap.  They are looking to acquire someone to keep up appearances and, in this market, it's pretty much a guarantee they'll be overpaying.  You can overpay for tech or drugs and get away with it because the margins are so good but you can't overpay for consumer products – that's just insane!  

    Where's the growth?  So it's all going to be about cost-cutting for them 

    Property Tax/Latch – Yes, that's a massive increase for middle-class homeowners and, also, there will be no more individual deduction so the $12,000 they claim is more more like $7,500 and then you can't deduct state taxes or property taxes.  And these rubes think Trump is going to make their taxes go down!  Would be funny if not so tragic.

    Image result for tragedy comedy trump

    Related image

    Related image

    Related image

    TZA/Palotay – Nothing to do at this point but ride it out.  April 14 calls are $1.80 and the Jan $20s are toast at 0.34.  Roll-wise, the April $10s are $3.90 and you can sell the $17s for $1.10 so net $1 to roll down to those and then you're $3.50 in the money and can't lose that unless TZA drops 27% so a 9% gain on / and, if a 9% gain on /TF isn't going to make you a lot more money than you'll lose on the hedge – you are doing it wrong!  

    DF/Scott – That whole sector is having all sorts of issues.  

    Benefits/Randers – Next time, mention this:

    The Government is Paying $2.4 Million to Rent Space in New York …

    Lease documents obtained by the Journal showed the government agreed to pay $2.39 million for a 3,475 square foot space from April 11, 2017 to Sept. 30, 2018 — above market rate for similarly sized high rise luxury apartments, the report said.

    That's $130,000/month for 3,475 feet!  This apartment is literally down the street from Trump Tower for $15,000/month for 1,743 ft.  Not only that but even IN Trump Tower, no one pays that kind of rent!   Would you rather have $400,000 or $2.4M?  I don't recall Obama renting his property out to the Government in any of the 8 years he was in office.  T

    That's what I mean about scandal fatigue – this one doesn't even rate a mention nationally.  Just a petty $1.5M overcharge that goes in his pocket – it's nothing compared to all the other stuff he does so this just gets ignored.  It's like the mafia.  If the cops bust them and "only" find untaxed cigarettes or liquor – it's not even worth writing up.

    Pauls/Mkucs – Well we sure would have done well on our gold plays…

    NCS/Scott – That sounds like a good little business. Short-term options so I never play them but reasonably priced and you sell puts and calls to lower the basis but their chart has crazy spikes down -  I'd wait for one of those.  

    Oops, Tax policy center already has a report showing what complete BS the Trump Tax Plan is.  $2.6Tn drop in revenues from corporations while households pay $476Bn MORE.  60% of people between $150K and $350K will pay more while only 3% of Top 1% will pay more.   Benefits to bottom 95% is about 1.2% overall, 8.5% for top 1%.

    Hedge funds rake in massive benefits!  cheeky

  44. Wow, check out the move in ONE DAY (see above):

  45. KHC/Phil   You hit the nail with the cost cutting.  Kraft has zero based budgeting, which basically means that if you work there, you have to bring your own pens & pencils, post it notes and a mouse among others. For real.

  46. LPX – big hit today on downgrades. big put buys yesterday, too.

  47. Phil / SBUX – Thanks for the feedback.  I do believe there could be more pain in the near term with comps.  I'm going with the '20 puts and watch it – if it comes in a bit lower in the next two quarters, may take a longer look at it.  thanks,

  48. KR - considering for long position. p/e down about 12. plenty of option choices and volume. Next earnings Nov. 30.  No big dividend, but not too mean (2.57%).  Hmm. On my watch list.

  49. SCG – wow.. abandoning two nuke plants really pulling them back.

  50. 29-Sep-17 08:26 ET


    SCANA Corp downgraded to Sell at Williams Capital Group; tgt lowered to $40  (50.99)

    Williams Capital Group downgrades SCG to Sell from Hold and lowers their tgt to $40 from $50. Yesterday, SCG was reportedly the target of a new shareholder lawsuit accusing co of manipulating the stock by deception (i.e. lying about V.C. Summer construction). The Public Service Commission of South Carolina (PSCSC) also tasked the newly appointed hearing officer to quickly schedule briefings and oral arguments in the South Carolina Office of Regulatory Staff's (ORS) prior day petition to reduce SCE&G's rates. SCE&G's petition to dismiss yesterday morning was not addressed.  Firm was actually somewhat encouraged by the tenor of the commission's order to hold substantive hearings in the ORS rate request. However, as a first cut, they are dramatically reducing their 2018-2019 ests to reflect what they believe is a reasonable expectation for the regulatory outcome in the V.C. Summer abandonment disaster.


    28-Sep-17 18:23 ET


    SCANA Corp: South Carolina PSC defers action on request to suspend revised rates collections; company intends to vigorously defend its rights and claims, including appealing any adverse decision  (50.99 -0.23)

    At its Business Meeting today, the SCPSC ordered a hearing officer to establish a briefing schedule and hearing date concerning the ORS's request. The SCPSC cited the need for due process and for additional review given the potential impact of the proposed actions. In its ruling today, the SCPSC stated, "Judgments of this magnitude require the highest measure of care, but also require expedient action. We are acting today with caution and purpose." SCE&G's existing retail electric rates will remain in effect pending further action of the SCPSC. On September 26, 2017, the Office of the Attorney General for the State of South Carolina, at the request of members of the South Carolina House of Representatives, issued an opinion that portions of the BLRA, as applied, are constitutionally suspect.


    27-Sep-17 08:16 ET


    SCANA Corp target lowered to $50 at Williams Capital Group — Tuesday events – almost all bad, critical new insights  (55.57)

    Williams Capital Group lowers their SCG tgt to $50 from $70. On Tuesday, September 26, the South Carolina House Utility Ratepayer Protection Committee held another hearing to provide opportunities for public comment for about seven hours. Former Public Service Commission of South Carolina (PSCSC) commissioner James Atkins also presented and suggested SCE&G be put on "probation." A constitutional opinion was also released by the South Carolina Attorney General's Office yesterday morning regarding the BLRA. In the opinion, the Solicitor General notes several legal problems with the BLRA and found "concerns about the overall constitutionality" of the law. The legislators appeared to be energized by the BLRA legal opinion. South Carolina Representative Smith proclaimed that firm now "have the ability to look back." At one point, Representative Smith implied that the House committee is considering reducing rates back to perhaps 2012 levels. He said that legislators are looking to start "returning money to customers" quickly.

  51. DF/Phil – not all, but quite a few down. K, GIS.. yet POST is at all time highs

  52. KHC/Stock – Well that's not encouraging then, not much room left to cut! 

    LPX/Scott – That's interesting.  They are good for about $2/share when their business isn't disrupted.  I'd like to see how low they get but worth watching. 

    SBUX/Batman – Good approach.

    SCG/Scott – Class action suits, regulatory investigations, subppoens…  Yikes! 

    Well here's a Friday we could have skipped – just drifting along all day on the RUT and Dow with /ES and /NQ dressing the windows:

    Europe had their pump too:

    POST/Scott – And the funny thing is, they haven't made a profit in years.  I guess people think they are some kind of tech stock?

  53. UNH- not cheap but what is your take on their business . They have no exposure to ACA. 

  54. Taxes / Phil – Trump is not taking a salary but according to the NYT would take a $1B tax cut over time… That $400K suddenly looks like chump change. The AMT used to be the only tax he paid and now they want to eliminate it. Coincidence?

  55. Also- ABT- as you noted earlier, the new device for diabetics could be a winner. 30 million afflicted in US and successful in EU. No pricing or uptake rates projected that I can find but back of the napkin calcs using some EU pricing could be enough to move their needle.

    Stock is not cheap. 

  56. Speaking of companies that don't make money, now Musk says he can fly you from London to NY in 30 mins - sorry, 29 minutes.  

    The reusable rockets would apparently have a maximum speed of 27,000 km per hour (16,777 mph), although earth flights would travel at just over 7,000mph, allowing flights of thousands of miles in as little as 22 minutes.

    The BFR (which stands for big f****** rocket) is a newly-unveiled spacecraft that Musk says will be able to travel to Mars, and which is due to be launched for the first time in 2022 before colonising the planet from 2024.

    However, he said there was no reason why the rockets should not be able to travel to different locations on earth.

    "If you build a ship that's capable of going to Mars, what if you take that same ship and go to another place on earth, so we looked at that and the results are quite interesting," he said. He later added that "cost per seat should be about the same as full fare economy in an aircraft".

    You know, God bless the guy if he pulls it off but it violates any sense of credibility that the cost will be the same as an ECONOMY airline ticket.  What's the payload of a rocket?  Fuel consumption?  Crew requirements?  Astronauts don't have luggage…

    Musk - who also apparently finds the time to run electric car maker Tesla, develop brain-computer interfaces, save the world from evil artificial intelligence and build underground high-speed trains - said the craft would be able to hold around 100 people.

    I know the space shuttle uses about 500,000 gallons of fuel.  Rocket fuel is cheaper than gas but it's not 0.20/gallon, is it?  Also, how much of the World's supply of oxygen is he planning to burn up?  Jet fuel is mainly liquid oxygen. 

    Just more BS to distract you from TLSA's troubles. 

    UNH/Pstas – I do like them when they are cheap but $195 is not that cheap, though they do make $10/share.  Nice long-term hold but not right for our portfolios at $195 as it makes assignments so expensive but a would be worth it at $150, which we may never see again.

  57. Taxes/StJ – I agree that he's self-dealing.  I was just saying that to say he's not taking a salary and then diverting Millions of Government Dollars into his pocket is truly despicable.  No different than Putin or some tin-pot Dictator in the Third World.

    ABT/Pstas – Yeah, I wasn't thrilled with their internals so I didn't call a play once I had a chance to look.  Hard to get a handle on whether or not the core business is doing well before we bet on new business. 

  58. Musk – yes you can fly anywhere in under an hour.  Of course you have to arrive at the spaceport 24 hours ahead of the flight with a good chance of a weather hold and you have to wait quite a while after landing to debark.  But probably a pretty cool ride.

  59. EMN – breakout moves following last month breakout to new all time highs.. and maybe not even too expensive with a P/E of a mere 14.43. Earnings cover the dividend with lots of room to spare.

  60. Spaceport/Tangled – He says they will use floating platforms (like those tests).  If you survive the landing, you'll be ferried to the shore (though then what about customs?).  It's too funny – if we already had that, he'd be saying he's got a prototype teleporter.  

    Image result for the fly teleporter animated gif

    EMN/Scott – Nice, boring company.  I would have loved them in May at $76, 20% higher for no particular reason bothers me a bit. 

  61. Musk is huckster but also a hustler. He is a big , bold thinker and doer. We need more of this not less. Does not mean I would invest my money in some of his ventures but I give credit where due. How many of us could start a car company from virtual scratch, warts and all. Not me. 

  62. Pstas – Thanks for info on ABT.  I haven't been following them.  Phil mentioned them yesterday.

  63. Musk/Pstas – He didn't actually start it, he came in as an investor in the Series A round for $7.5M, which gave him control.  He's an amazing guy but he started Zip2 (online city guides) with his brother in 1995 and he ended up with $22M in 1999 – right before it crashed out.  Then he founded using $10M and one year later they merged with PayPal but within a year they kicked him out as CEO but Ebay bought them and he got $165M from that deal.  Then he put about $100M into SpaceX and that was about to fail and he couldn't raise money for them but he put money into TSLA instead and, though they have never made a penny (and probably never will), it enabled him to have more reasons to raise money and saved SpaceX as well.

    Maybe time will prove him out to be a genius but also very possible he's just a huckster who's very good at convincing people something will be a good investment when clearly it's not.

    /CL having a super-flat day but /RB trailing off.  

    That's why we take those quick wins and get out!  

    Honey badger don't care:

    • Reuters reports that two senators from both parties have almost completed a bipartisan fix for health insurance exchanges. The leaders, Republican Lamar Alexander and Democrat Patty Murray, are finalizing the details that include preserving government payments to insurers aimed at making health insurance affordable for low-income enrollees and more flexibility for the states to design insurance programs.
    • On Wednesday, health insurers signed agreements with the government that ensures every U.S. county will have at least one company selling ACA plans.
    • The total U.S. rig count rose by 5 to 940, following last week's drop of 1 and breaking a string of three straight weekly declines, Baker Hughes reports in its latest survey.
    • The oil rig count gained 6 to 750 after declining for four of the previous five weeks, while gas rigs fell by 1 to 189 with a rig is classified as miscellaneous.
    • Crude oil prices are little changed, with WTI +0.1% at $51.63/bbl.
    • Philadelphia Fed President Patrick Harker's base case is for another rate hike in December and three more next year. That all depends on inflation returning as expected. "I do worry that we've been saying 'transitory' for a while."
    • "There's no magic around December," he says, suggesting a delay in hiking would be okay if the data isn't yet clear.
    • Harker spoke at a Q&A at a Philadelphia Fed conference.
    • Iron ore prices are down 21% in September, ensuring the biggest monthly decline since May 2016 and the first back-to-back quarterly loss since 2015, and analysts think the final three months of the year may bring further declines.
    • Environmental initiatives in China, which will limit the operating hours of steel smelters in a bid to ease smog in major cities, are seen hurting Chinese demand for iron ore in Q4 and possibly leading to backlogs at ports and further price falls.
    • "We think that local governments are likely to carry out the environmental cuts forcefully," Goldman Sachs analysts say. "The market has not fully priced the negative environmental restrictions on iron ore demand. Therefore, we expect iron ore prices to fall further going into Q4."
    • But the news out of China is not all bad for the world's top suppliers to the seaborne iron ore market, as the government this week said it would cancel about a third of iron ore mining licenses – more than 1K – as part of efforts to improve air quality.
    • Amazon (NASDAQ:AMZN) is moving ahead with three science fiction shows in hopes of creating its own Game of Thrones type of success.
    • Variety reports that the shows adapted from three popular science fiction works: Neal Stephenson’s Snow Crash, Larry Niven’s Ringworld, and Greg Rucka’s Lazarus. Rucka was a force behind Netflix’s Jessica Jones series. 
    • Amazon has ramped up content spending for the next year and currently has 67 TV shows and 20 movies in some stage of production.
    • In other Amazon news, Detroit Mayor Mike Duggan is wooing the company to build its second headquarters, HQ2, in his city.
    • Amazon shares are up 0.66%
    • The WSJ earlier reported the former Fed governor as meeting yesterday with the president and the Treasury secretary to discuss the job, and prediction markets are painting Warsh as the clear favorite.
    • That's seen as good for banks, particularly the regional players, as Warsh is thought to be in favor of regulatory rollback.
    • The KRE is up 1%, and KBE 0.9%.
    • U.S. Bancorp (USB +0.6%), Regions Financial (RF +1.3%), New York Community (NYCB+0.9%), KeyCorp (KEY +1%), BB&T (BBT +1.1%), Fifth Third (FITB +1.4%), M&T (MTB +1.4%), Zions (ZION +1%)
    • Following a number of economic reports over the last two days, the Atlanta Fed tracker ups its estimate of Q3 GDP growth from 2.1% to 2.3%.
    • At the start of August, GDPNow was seeing 4% growth.
    • The Blue Chip consensus remains at about 2.7%.
    • Starbucks (SBUX -1.1%) swings lower in early trading after Stephens slices its price target all the way down to $52 from $58.
    • The firm doesn't think Starbucks is immune from the broad slowdown in retail foot traffic and frets that the extra labor required to solve the Mobile Order and Pay congestion issues will weigh on margins.
    • "While we continue to view Starbucks as one of the highest quality restaurant/retailers in the world, we believe the stock is now trading at a higher multiple relative to its future level of EPS growth," writes analyst Will Slabaugh.


    Have a great weekend folks!  

    - Phil

  64. LOL, Dow popped 18 points into the Bell, S&P hit 2,520 but failed at the last second.  Dow 22,400 – nice round number.  Nas Comp is 6,495!  

  65. AGN hitting the 200 mark….  time to look at this… 

  66. ICYMI – KEXP (where the music matters!) just finished their countdown of top 600 songs.  #1 most played in their history is… LCD Soundsystem "Someone Great"

    (I would never have guessed this.)

  67. Good morning! 

    Another mass shooting this morning, this was a local Vegas boy shooting up a concert at Mandalay Bay.  Very nice as I'm going to the Katy Perry concert at the Garden this evening with Jackie.  100 injured, 20 dead and the NRA wants you to know it was an illegal gun – so don't blame our gun culture!  

    Las Vegas Shooting Leaves at Least 20 Dead, More Than 100 Wounded

    Now the TV is saying 50 dead!  Joe on CNBC is so anxious to spin this as a lone, deranged gunman that should do nothing to disparage gun-loving Americans or the NRA that he cut off an FBI profiler who was saying the shooter was not insane and this was a calculated, methodical attack with a goal of killing as many people as possible (he booked a room on the 32nd floor, overlooking the outdoor concert and shot from there).  Joe cuts her off and say "well, that's all semantics" – AMAZING!  

    Of course the market is higher this morning as nothing is bad news for the markets.  Due to the Spanish vote, the Dollar popped to 93.50 and that made /NKD happy, back at our shorting line at 20,500 but very tight stops if it goes over – especially with a strong Dollar but, if the Dollar double tops at 93.50, /NKD should fall back.

    Spanish Police Storm Polling Stations to Block Catalan VoteSpanish police in riot gear smashed in the doors of polling stations and dragged protesters away by the hair, beating some with batons and firing rubber bullets at others on Sunday as they tried to shut down an illegal referendum on independence in Catalonia. Despite the police brutality against largely peaceful demonstrations, voting began in many locations across northeast Spain at 9 a.m. The Catalan government said 73 percent of polling stations were open. Spain’s representative in the region, Enric Millo, said the vote had been “dismantled.”

    The Latest on Catalonia's Independence Referendum

    China Throws Its Sinking Private Sector a Life Vest

    Japan’s Business Confidence Surges Ahead of Election

    What’s an Initial Coin Offering? ICOs Explained in 11 Questions

    Behind ‘Grassroots’ Campaigns Over Airbnb, Millions of Industry Dollars

    Hedge Funds Rebound, Drawing in New Cash

    Catalans Support Secession in Vote Marred by Violence

    The Results Are In: 89% Of Catalans Vote For Independence

    Spanish PM Rajoy Blasts Catalans' "Mockery Of Democracy", Says Spain "Responded With Firmness, Calm" Injuring 761 People

    Spain is flirting with another Civil War

    Trump Rejects Dialogue With North Korea

    Trump: Talking to NK's Kim a waste, 'will do what needs to be done'

    The Link Between Economic Growth and Tax Cuts Is Tenuous

    FEMA’s Foul-Up in Puerto Rico

    Trump plans a pivot to deregulation, pushing roll back of Obama-era red-tape

    Robert Gore: "The US Has Become An Infantile Nation"

    Uber Ex-CEO Names Directors in Power Play

    Harvard Takes Top Honors in WSJ/THE College Rankings

    The Colleges Whose Graduates Do Best Financially

    Biggest Surprises in the WSJ/THE College Rankings

    Why Food CEOs Are Rushing for the ExitsPackaged food companies are in trouble, squeezed by changing consumer preferences, more aggressive supermarkets and stagnant prices. More mergers may be on the way.

    This is why the bull market can keep running for years even if investors dump stocks

  68. Holy cow, this is what one guy with a gun can do and we want to make sure 320M people have free access to these things?


  69. If only EVERYONE were armed, they could have returned fire and shot at the hotel, right?