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Trade War Thursday – US and China Sitting Down Gives Markets Hope

Image result for trump china trade war"U.S. Seizes on Chinese Economic Vulnerability in Trade Talks."

That's the headline in the Wall Street Journal this morning and, frankly, that's NOT the way to enter into a negotiation.  Of course the WSJ has drunken all of Trump's Kool-Aid and they think he's a master negotiator who gets the upper hand by bullying and insulting the people he is dealing with so that, when he makes even the smallest concession, they are thrilled to accept it.  That may work in real estate, where you can burn bridges and move on but this is Geopolitics and those are the same countries you need to do business with tomorrow – you can't just screw everyone over without repercussions.  

As the "failing" NY Times (BOO, fake news, BOO!!!) noted yesterday, Chinese state media has been putting out videos depicting Trump as a bumbling bufoon of little consequence, releasing one video thanking President Trump for helping make China stronger. It shows him in unflattering poses, his brow furrowed and his mouth agape. Its sarcastic title: “Thanks Mr. Trump, you are GREAT!”  “They sense his (TRUMP's) increasing domestic weakness and see a chance to pile pressure on,” said Kerry Brown, a professor of Chinese politics at King’s College London.

Sadly, I had to insert "(TRUMP's)" in that quote because SOME people in this country are so brainwashed that they don't even know Trump is weak or that he's already expended all of his political capital and may be taken out of the oval office in handcuffs in the near future and they actually believe it's possible that Trump is the one negotiating from strength.  It's amazing, but it's true!  

Keep in mind, this is China's state-run TV that's mocking Trump – that is not something they are likely to do if they are about to bend over for him in trade talks this afternoon more tariffs have already been put into effect as of 12:01 this morning!  More likely, today's negotiations will go something like this SNL classic from the Obama years.

Xi Jinping has been the President of China since 2012 and before that was the Governor of Fujan Province (1999) and Zhejang Province (2002) before becomming Party Secretary in 2007, where he was groomed as the successor to Hu Jintao.  Trump, on the other hand, has been President for 18 months yet Trump walks into these negotiations thinking he has the upper hand?  That is how you end up with a disaster!  

Nonetheless, the markets have been making record highs on the assumption that we will be settling our trade war with China today or tomorrow.  This morning, China’s Commerce Ministry also said it plans to file a complaint with the World Trade Organization about the latest round of U.S. tariffs. “The Chinese side resolutely opposes this and we cannot but continue to take necessary countermeasures,” the ministry said in a statement

That's why we're continuing to short into the rally and we're back at S&P (/ES) 2,860 this morning, which is our primary shorting line (with tight stops above) along with 7,430 on the Nasdaq (/NQ) and 1,725 on the Russell (/ES) but the Dow (/YM) is already 100 points down from 25,850 – where we made a lovely $270 shorting it yeasterday afternoon.  So, if the Dow is over 25,750 or ANY of the others are over the line – DON'T SHORT – otherwise, we can short the laggards.  

Image result for us china tariffs chartThursday’s tariffs follow an earlier round of 25% levies on $34 billion worth of each other’s exports. The Trump administration is holding hearings this week on targeting another $200 billion in Chinese goods and could impose those penalties as early as next month. Since China imports far less from America than the U.S. does from China, Beijing plans to retaliate by slapping levies on $60 billion in U.S. exports.

The Trump administration has unleashed tariffs to try to pressure Beijing into curbing a trade imbalance that was $375 billion in China’s favor last year and to end practices that the U.S. says discriminate against American companies. Beijing attributes the trade imbalance to larger macroeconomic trends such as a lower U.S. savings rate, and denies its policies put foreign companies at a disadvantage.

The secret to all this is that Trump doesn't want to settle the Trade War because the Tariffs are nothing more than a TAX on the American people – especially American poor people, who buy the bulk of Chinese goods.  Taxing $200Bn worth of Chinese Imports by 25% costs US Consumers $50Bn and that money goes into Trump's budget and allows him to give $50Bn worth of tax breaks to his Billionaire Buddies – that's what this is really about.  If Trump resolves the trade issues – his excuse for sticking it to the taxpayers goes away – so we're betting there's no resolution and, once again, the American people lose while Trump gets richer.  

That's been the Russian model ever since Putin has been in power – why would they change a winning strategy now?

SDS is the 2x Ultra-Short ETF for the S&P 500 so even a 2.5% corrction in the S&P will send SDS from $34.50 to $36.22 and you can buy the Sept $33 ($1.60)/35.50 (0.50) bull call spread for $1.10 so you start out $1.50 in the money with the potential of a $2.50 payout, which would be a gain of $1.40 (127%) if the S&P pulls back to 2,785.


Compare that to a single, short /ES Futures contract which requires $6,380 in margin and would make $3,750 at 2,785.  There's no limit to the risk on /ES and it can be very painful if it turns against you while just 25 SDS spread contracts at $2,750 would make $3,500 on the same move so, in this particular case – it's more efficient to take the SDS spread as a hedge.


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  1. FU LB!!!!!!!!!!!!!!!!!!!!!!!

  2. morning post/learner, well said

  3. BABA up following earnings.

    Cashing in some of the puts I sold last Friday..

  4. Gotta love the "Triple" – FMCC. Thanks. Took the sting out of LB (closed 2 weeks ago.)

  5. Good Morning!

  6. kramer badmouthing lb on television ten minutes before the open

    somebody wants it lower lol


  7. Phil / LB – thanks,  I will be taking you up on the new trade.however, current prices on the 20s is 12.8 how is this going to hit 6 today ( last trade was 12.8)

    As a new spread, that would be:

    Buy 30 LB 2020 $20 calls for $6 ($18,000) 

    Sell 20 LB 2020 $35 calls for $4 ($8,000) 

    Sell 15 LB 2020 $30 puts for $6 ($9,000) 


  8. good luck with getting those fills batman 

  9. Sold some LB Jan 27.5 puts for $2.

  10. LB current  prices

    20s are 10X

    35s are at 3.2 ssh 

  11. Good morning! 

    LB/Learner – Nice to see somebody gets it.  CC doesn't seem to be improving things so far. 

    L Brands’ Guidance Cut Overshadows Earnings Beat

    FMCC/Damo – Well, we have to get some right…. cheeky

    Let's pull the trigger on 10,000 shares of FMCC for the LTP.  At $1.36, they just made 0.80 for the quarter but, of course, the Government stole it as they are still under "Conservership".  Mnuchin says they will review their status and this thing can explode if the Government steps back, even halfway.  

    Submitted on 2018/05/17 at 3:08 pm

    • FMCC – Brand new and they don't have options so strange for us but up 2.2% so why not?  I went in now because I think the Government may finally unwind them and, if so, it should be an easy triple.  

    Submitted on 2018/06/15 at 11:21 am

    • FMCC – Already up 20% and I like them long-term.  Sadly, no options.

    Submitted on 2018/07/20 at 12:23 pm

    • FMCC – I'm sorry but stock with no options bore the crap out of me!  It's up 16% but so what?  It's going to hit $2 and then we're out with a 50% profit - yawn!  

    LB/Batman – Those were the prices last Q, now there's a spike in vol so have to see what sticks but, at the moment:

    • Sell 15 LB 2020 $30 puts for $5.90 ($8,850) 
    • Buy 20 LB 2020 $20 calls for $10 ($20,000) 
    • Sell 15 LB 2020 $30 calls for $4.80 ($7,200) 

    That one is net $3,950 on the $20,000 spread that's 90% in the money to start.  Upside potential if they can claw back to $30 (up 3%) is $16,050 (406%), so that doesn't suck, does it?  

  12. LB con call – on diva… they look at it every quarter, clearly payout ratio is high…. they need to keep looking at it…. my take – if they don't start making progress on EPS in next qtr or two – it will be cut….  they've done it before

  13. Good Morning, All!

    The webinar replay is now available!

  14. LB adjustments:

    In the LTP we have 20 short 2020 $35 calls we can buy back for $2.50 ($5,000) 

    In the OOP we can roll our 20 2020 $25 calls ($6.50) to the $20 calls ($10) for $3.50 ($7,000) and we'll still wait to sell covers but, just 15 of the $30 calls at $4.80 ($7,200) would pay for the roll.  

  15. That last spread the short caller is clear to 4.35

  16. dreams….

  17. The conference call is a cluster F…. they are incredibly tentative and have nothing new in terms of strategy…   really just updates on what is happening in their market in terms of selling and margins


    First this:
    FNSR -2.4% (downgraded to Mkt Perform from Outperform at Raymond James.
    One day later :

    FNSR +3.2% (upgraded to Overweight from Neutral at Piper Jaffray).

    And :

    T- AT&T, Williams Cos (WMB) both added to BofA/Merrill's US 1 List.

    One day later:

    T – AT&T downgraded to Market Perform from Outperform at Wells Fargo.


    Covered some FNSR.











  19. Sorry guys, no lines today as I am traveling…

  20. how low will that POS go????

    what a disaster.

  21. Phil / LB …the short caller is at 4 ( last trade…  stock still falling…. may hit 25 – next support?  Picked some up at 4… so I'm in for 10 / 4 on the 20 / 30 spread with a 2/3 cover.

    I sold the Jan 19 35 callers for 1…. to help cover some stock…   not sure if they have an analyst day coming up, or some other catalyst…. 

  22. New tree planting trade. LOGM seem to have reached bottom. So I buy the Jan 20 BCS 70/90 for 10.00, and sell the Jan 20 75 put for 3.60. So 10$ puts you in a 20$ spread. While you waiting you sell monthly cherry calls Sept. 21 85 call fore .90.

  23. Sorry the LOGM play is set for March 19 as I thought it was Jan 20

  24. LB – My trading (TastyWorks) platform for Options is showing the 2020 Jan 20 Calls at $13, but TOS and Schwab shows $10 for the same.  Now I understand how they can offer such low commissions.  =)

  25. Phil,

    What would you recommend for a new LB play?

  26. LB if that Bra ever will take off I will eat it

  27. LB/Batman – You're right, they are not instilling any confidence, down to $28.50 now.  I don't think there's much they can do or say though as they are still transitioning and a new CEO is coming in for Pink, and they don't want to step on her plans.  The outgoing CEO made some really crappy statements too – I get the impression she's not leaving by choice.  Victoria's Secret is 2/3 of the business and Body Works 1/3 so I'm sure there's always been a rivalry and, essentially, they are replacing Denise with Amy BECAUSE Amy was putting up better numbers in her, smaller division. 

    FNSR/Albo – Up 7% now, hopefully some other joker can downgrade them! 

    Image result for russian underwear model womanLB/Batman – Analyst day?  Hopefully they can stay out of the spotlight for a Q or two and simply hit their numbers without any more "adjustments".  Sales were there so the bulk of the problems are internal yet people are trading off the narrative that Victoria Secret is no longer a thing.  I'll tell you that Pink is very much THE thing for young teens and the women I know still buy Victoria Secret stuff, despite the "Me Too" movement.  For some reason, they want to be empowered but not if they have to wear these.

    Founded in 1977, Victoria’s Secret has long been the leader in the women’s lingerie market, with $1.1 billion in revenues in 2015. IBISWorld analysts put Victoria’s Secret share of the entire lingerie market at 61.8%.

    So it's hard for them to grow share from there yet, somehow, revenues do keep rising, though slowly:

    Financial Summary
    Year End 03rd Feb 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 10,459 10,773 11,454 12,154 12,574 12,632 12,822 13,081 13,470 +3.8%
    Operating Profit $m 1,573 1,743 1,953 2,192 2,003 1,728 1,674     +1.9%
    Net Profit $m 753 903 1,042 1,253 1,158 983 937 769.4 783.4 +5.5%
    EPS Reported $ 2.54 3.05 3.50 4.22 3.98 3.11 2.97     +4.2%
    EPS Normalised $ 2.81 3.05 3.50 4.22 3.98 3.11 2.97 2.77 2.85 +2.1%
    EPS Growth % -7.2 +8.7 +14.7 +20.5 -5.7 -21.9 -21.5 -11.0 +3.01  
    PE Ratio x           10.5 10.9 11.7 11.4  
    PEG x           n/a n/a 3.91 4.36

    That's why they don't have and don't deserve a 20x multiple (or 40x the way this market is) but 12x $3 is $36 so, assuming now growth and a little bit of efficiency, they are ridiculously undervalued.  

    And, as this point, they are paying a $2.40 dividend on a $28.65 stock so it's almost worth flipping our short puts to stock.  In the LTP, we sold 15 2020 $37.50 puts for $9.70 so net $27.80 is almost the current price but we never thought we'd actually get to buy them for that!  If we convert to stock at $27.80 and then sell the 2020 $27.50 calls for $5 and 15 2020 $30 puts for $6.50 we drop our basis to net $16.30, called away with a 50% gain at $27.50 and collecting $2.40 (14.7%) dividends while we wait.  Oh, the horror!  

    Jabob is doing almost as good a job at keeping people from taking advantage of the dip now as he did back in May.  Maybe he'll be able to save people from the next 20% run as well….

    LOGM/Yodi – I think these cloud companies are going to go through the same down cycle as the storage companies did once they hit saturation.  It's the same thing, everyone is pouring money into the cloud and, eventually, there will be an overcapacity and/or the next new thing comes along and suddenly they are just a commodity play.  Of course, over the long run, VMW and NTAP pivoted to the cloud, so they are good again.  I just think a bit over-enthusiastic now.  

    LB/Grass – That's crazy but $13 is way too much, obviously, as it's net $33 with the stock at $28.50.  Bid/ask on the $20s is now $9/9.70 with the last at $9.40.

    LB/Japar – At this particular second, I like:

    • Sell 10 LB 2020 $30 puts for $6.40 ($6,400) 
    • Buy 20 LB 2020 $20 calls for $9.40 ($18,800) 
    • Sell 15 LB 2020 $27.50 calls for $6 ($7,500) 

    That's net $4,900 on the $15,000 spread that's 3/4 covered so you have room to sell 5-10 short calls like (but not now) the Jan $30s at $2 so, even if you just sold 5 for $1,000, that's 148 days out of 512 there is to sell so, even at that pace, you could knock your net down to $1,900 on a spread that's 100% in the money to start.  

  28. phil,

    Your thoughts on a more conservative use of SDS as a hedge:

    The in-the-money Oct 33/34 @ .41 would return 150% in 60 days if SDS just holds 34 (not a lock in this environment). The Sep 33/34 spread is at .68 returning 50% with half the time exposure.


  29. LOGM I finally settled for the DEC 19 70/90 BCS for 9.95 and sold the Dec. 19 70 put for 7.28. Still waiting for the Sep 85 call to fill.

  30. SDS/8800 – Those are fine but they are very all or nothing sorts of trades so make sure you are buying this insurance policy for very good reasons and that the cost over the time-frame makes sense.    

  31. give me a break… i am not doing anything. keeping people from buying… yeah, right.

    is it just like i did a good job keeping people away from buying HMNY when it was 100000X  higher than it is today?

    sorry, if i feel like venting on another one of those "value" picks that has cost PSW members ???? real money. 

    some of us actually have "REAL" not "VIRTUAL" money in these names and don't like seeing them drop over 50% in a year.

    So sorry again if I am not pleased about having another opportunity to take advantage of another dip in one of your FU picks that keeps sinking. 

    maybe, it will recover in time and you can tell everyone how great you are at picking bottoms.

    but these speculative falling knives are going to have a difficult time recovering if this market ever does stop moving straight up, in my opinion.

    good grief! 

  32. Phil

    Understood -its the cost of  insurance. At the moment, well worth it so far.


  33. Phil Just another thought on LB. I stayed away from it because most women I know can not afford the premium of Victoria's Secret and Bath and Body. I personally like them and on occasion have bought there more on their sales, however. Also, I was wondering with this ME TOO taking hold if has provided some focal point for women not going for the "sexy" stuff anymore as sending the wrong message? I also perused the financials on them and saw that cash flow was weakening. So many people are struggling to afford the gas at $3 bucks a gallon that undergarments are like movies=you've got to have that extra income. Working with the food bank and other helping institutions I possibly see things not in the eastern high income aspect. IMHO.

  34. LB reached a recent high of $63 on December 26th, 2017. It was at $75 on Dec 9th, 2016. Since the beginning of this year it has been pretty much on a continuous downtrend and has never really built a base over a period of time which could act as price support. Recently, $30 looked like it might provide some support but given the continuous poor business results, and yesterday's earnings, the price of the stock has sliced downwards through that $30 level. 

    As has been mentioned, difficult to see a catalyst that would generate buying interest in the stock. Personally I would have thought that any cut to the dividend would be a negative impact on the stock, but defer to those who counter-intuitively believe that would act as a catalyst. Recent examples of negative stock price action after dividend cuts: FTR, TEVA, GE.

    Likely to add additional headwinds on the stock price increasing any time soon are the buyers who got in at much higher prices and are waiting for a rebound just to get out of the stock and cut their losses.

    It might be good to wait for more price discovery before adjusting or initiating new positions in LB. I would like to see the stock get back above the $30 level and stay above it for a sustained period of time. 

    I don't see the stock recovering any time soon, so putting the stock on watch might be appropriate. Missing out on a few points of upside may be preferable to trying to pick a bottom.

  35. Jabo, I can feel your pain. If I would pick only on winners I most probably had doubled my ports by now.
    I can only say if someone, including me, makes a trade suggestion you should always take it with a pinch of salt. Do your own research and follow your gut feeling. But never just follow the herd.
    I have plays some go back as far as 5 and even 10 years on record. I accumulate the gains and losses of the plays on all stocks. So a stock like MO or PM having a bad quarter does not harm my overall profit position on the overall plays.
    LB is a stock I never have liked, I even will not enter their stores, as for my little opinion they sell a small rag for a hell of a price. Like buying a big bun of a hamburger with a tiny piece of meat in the middle.

  36. Grasshopper / TastyWorks now quoting the LB 2020 $20 calls $9.00 bid / $10.10 ask, mid $9.56

  37. HMNY/Jabob – We always knew that was a long-shot "penny" stock but LB is a serious company and the fact that you don't know the difference is a problem.  And, FYI, I have 80,000 shares of HMNY (as I have noted in the past) and I will have 160,000 if they go to 0.2 for another $3,200 and an average of 0.07 ($11,200) overall.  As from the beginning, I fully expect to lose it (1/4 of an allocation block) but it would be nice if I don't.  And the Hedge Fund has LB and I'm sure we'll be adding to that position – LIKE WE ARE SUPPOSED TO – when it is cheap.  As noted last earnings this is what we intended to do if LB got cheaper – if you bail on the plan now – of course you are going to have a loss.  

    In the LTP, after buying back the 20 short 2020 $35 calls, we have 30 long LB 2020 $20 calls that are $8.50 in the money ($25,500) and will pay us $45,000 at $35 and our current net loss is $18,625, 1/3 of an allocation block.  

    10 LB 2018 20-JUL 35.00 CALL SC $ 0.00 5/24/2018 $ 1,600.00 7/20/2018 57
    $ 1,600.00 100 %
    15 LB 2020 17-JAN 30.00 PUT SP $ 10,200.00 5/23/2018 $ 7,800.00   92
    $ -2,400.00 -30.8 %
    20 LB 2020 17-JAN 35.00 CALL SC $ 5,000.00 5/24/2018 $ 11,000.00   91
    $ 6,000.00 54.5 %
    30 LB 2020 17-JAN 20.00 CALL LC $ 42,000.00 5/23/2018 $ 26,400.00   92
    $ -15,600.00 -37.1 %
    15 LB 2020 17-JAN 40.00 CALL SC $ 3,750.00 4/24/2018 $ 6,375.00 5/23/2018 29
    $ 2,625.00 41.2 %
    30 LB 2020 17-JAN 30.00 CALL LC $ 23,400.00 4/20/2018 $ 27,900.00 6/5/2018 46
    $ 4,500.00 19.2 %
    15 LB 2020 17-JAN 37.50 PUT SP $ 19,800.00 5/11/2018 $ 14,550.00   104
    $ -5,250.00 -36.1 %
    10 LB 2020 17-JAN 45.00 PUT SP $ 14,650.00 3/1/2018 $ 11,000.00 4/23/2018 53
    $ -3,650.00 -33.2 %
    30 LB 2020 17-JAN 50.00 CALL SC $ 6,000.00 3/1/2018 $ 20,550.00 4/20/2018 50
    $ 14,550.00 70.8 %
    30 LB 2020 17-JAN 35.00 CALL LC $ 39,000.00 3/1/2018 $ 18,000.00 4/26/2018 56
    $ -21,000.00 -53.8 %
    Total Gain/Loss for LB
    $ -18,625.00 -11.4 %

    Image result for 2001 obelisk gifRather than cursing at it like cavemen faced with an obelisk, as I noted above, even if we chickened out and sold the $30 calls for $4.80 ($7,200), we would then be in a $30,000 $20/30 bull call spread for $11,425 with an upside of $18,575 (162%) if LB can just get back to $30 by next Jan.

    So the lesson (for those willing to learn) is that DESPITE a stock dropping from $40 (in March when we entered BECAUSE they sold off from $60) to $28 (which is 30%, not 50%), because we followed our strategy and scaled in and sold short calls along the way, we are still (hopefully) able to salvage a very nice win from this stock – assuming it's finally found a bottom.  Of course, if they do move up and we only have to sell the $35 calls for the same $7,200, then our upside will be $15,000 higher for another 131% or a 293% return on cash, not even counting any gains we may get on the short $37.50 puts if they recover.

    Until we're down half an allocation block ($25,000) and have to seriously consider pulling the plug – you are just being an ass and not helping at all unless you think the guy who ignores the lessons, disrupts the class and fails to grasp the concepts being taught is the hero of the story?

    LB/Pirate – I agree that it's a high-end market but sales are not that far off and margins are not that squeezed.  The main reason for the slowdown in sales growth is they ditched the catalog last year and elminated swimsuits entirely ($1Bn in sales) as they were low-margin and seasonal and they just rolled out stores in China, which were very expensive and will take a year or two more to start contributing to the bottom line.  International is currently nothing for LB – if they can get even a little success overseas, this stock can double up:


    operating profit

    Within L Brands, Victoria's Secret represents three subgroups: Victoria's Secret Lingerie, Victoria's Secret Beauty, and Pink. One could easily assume that Victoria's Secret Lingerie overshadows the other two in value, but it is important to understand that Victoria's Secret Beauty features 4 of the top 20 fragrances in the US and that Pink represents a USD 3bn+ sales base with a sales/square feet ratio above the Victoria's Secret's shops.

    This is a great note too:

    There is no denying that we are in a promotional environment, and Victoria's Secret is not the only one offering large discounts. In a way, this is related to the aforementioned surge in popularity of bralettes. While constructed bras require some sort of design expertise in order to design bras that are both fashionable and offer the necessary support, bralettes target women with an A- or B-cup size and thus require less support. This handicaps Victoria's Secret as they cannot really leverage their manufacturing expertise within this segment and are left to compete on the fashion aspect. Needless to say, the amount of players that can compete on fashion is far larger than those that can compete on design. This has allowed players such as American Eagle Outfitters' Aerie (AEO) to enter the market. With no clear differentiating aspects other than brand and fashion, it is impossible for Victoria's Secret to warrant the same premium pricing that it has for constructed bras. The lack of product differentiation has turned the bralettes market in a market that competes on price and promotions. Whether or not bralettes are here to stay is a topic on which I will not comment. If it turns out that bralettes are more fad than fashion, then Victoria's Secret will be a prime benefactor of the return to constructed bras.

    Some bears also claim that Victoria's Secret fails to inspire the younger generation shoppers but a recent study by Goldman Sachs actually reveals Victoria's Secret as one of the most loved brands for Generation Z members and Millennials.

    While the profitability of the international segment is currently depressed due to a rapid store build-out in China and due to Brexit-related problems, it must be noted that the operating margin of this segment was in the low twenties before the China expansion. While it may take 2-3 years before start-up costs fade off and the new stores reach maturity, it should be expected that the international segment will be a large contributor to L Brands operating profit growth.


    Their reduced guidance brings 2018 down to $2.70 (possibly less) but no change projected for next year or year's after.  I love them as a long-term investment but, in the short run – you have to deal with the ups and downs.

  38. Yodi--we are all paying subscribers, right?

    We read every week about these incredible gains on THIS site, right?

    These gains are made supposedly from Phil's picks on this site, right?

    These huge gains are from names like LB, GE, ABX, HMNY, HBI, CBI, JO, BJO, F, FTR, GNC, SPWR, NAK, MVEN, WPM, CDE, CHK, MT, TEVA, etc…   right?

    Phil loves to give me grief and make me out to be the villain if I ever vent or disagree with him on this board. 

    Maybe, I should be quiet and never vent, complain, or ask questions.

    Only Phil seems to mind.

    Still, I would love to hear from actual members on this board if THEY are even coming close to the returns that Phil supposedly is making this year (or the last two years).

    If others are making great returns with Phil's picks than I will apologize, of course.

    But I highly doubt it.

    Again, I am not saying that LB is HMNY. 

    I just hate having to adjust every few months and then HOPE for a recovery.

    And BTW, HMNY was not recommended as a lottery ticket when it was well over 7!

  39. Phil

    Not sure if you saw this question

    Is there a trade on AMC  Entertainment Holdings, Inc.

    If HMNY is over


  40. Jabo,
    Here I have learned and look different at things.
    Over the years being with PSW I have first of all learned and gained in knowledge of trading. This to me is one of the biggest gains.
    Over that time my biggest one day drop was 450K. That was the time when the bottom was falling out of the market.
    I do hold some of the stocks you quote, like GE, ABX, HBI and F. The rest I do not have. HBI is a profitable play for me. GE I like to compare with Siemens, which is doing very well in Germany.
    Gold well you cannot blame Phil for that, it could do better. I hold however GLD with a profit at this stage, build up over time. Like in some month I am closing up to 120 plays on a witching day.
    However with most of my plays I hold 200 to 500 stock on armchair plays and with 90% of them I have no pain. My BCS run normally between 4x up to 6x. Not like Phil’s ports 20 and 40x.
    So my risk is spread over many nests. Certainly not all of them are winners, but if you gain 60 times and lose 40 times you doing well.
    Again I do take all recommendations with a pinch of salt. Take the TSLA play I did the first and I am in the one running now. I believed in his recommendation and both turning out OK, I think.
    I still remember the play on Caesar Palace, paid my trip to Atlanta!
    Obviously by lower numbers you will lose less and as well gain less.
    So again make your own decision and run your own ship.

  41. LB – was gonna ask if there was any mention on their China expansion for those who listened to the earnings call as in the past they anticipated there could be a very big growth opportunity there? I think they're current sales are somehting like 90-95% North America (and maybe UK?) so international expansion does seem like a reasonable place for them to look for growth? 

  42. "Only Phil seems to mind"/Jabob – That's because over 75% of the Members have you on ignore.  You are closing in on Shadowfax's all-time high, so congrats on that.   Hell I was even ignoring you for a while – can't really think of why I stopped now….

    As to HMNY – as usual, you are full of crap:

    HMNY/QC – I'm dubious about their model but I guess that won't stop them from going higher (like AMZN or TSLA).  Still, it's not in my nature to chase a 100%+ gain in two weeks.  

    That's my first ever comment on them.   Took another 3 months before I was willing to take a poke at them:

    Wow, Moviepass is getting $2 kickbacks from 4 movie studios for every ticket they buy!  They say when they promote a film – they can account for 10% of the box office and are generally accounting for 3% of the box office.   Prices seem to have gone way up – looks like $50/month now.  

    I don't see any reason not to sell 10 HMNY Aug $7.50 puts for $3.50 ($3,500) in the LTP and buy 20 $5 ($3)/$10 ($1.50) bull call spreads for net $1.50 ($3,000) for a net $500 credit on the $10,000 spread that's half in the money.  Worst case is we end up owning 1,000 shares for net $7 and I'm really starting to like what they are doing.  Revenues in 2016 were $6.7M and this year trending around $6 but I think it's going to explode.  

    Submitted on 2018/01/23 at 1:31 pm

    HMNY/Albo – I'm starting to really like their plan.

    Submitted on 2018/02/13 at 8:10 am

    HMNY/Learner – Apparently, they don't own all of MoviePass and now the stock is adjusting to reflect their true, current percentage of ownership.  

    Submitted on 2018/02/13 at 10:26 am

    With HMNY, our $130M company is raising $100M in cash so we're diluting – this is not surprising, and has no effect on our long-term outlook but it would be silly not to take advantage ourselves.  We never had HMNY in the OOP, because we thought it might go lower and, in the LTP, we have the Aug $5/10 bull call spread (20) with short $7.50 puts (10) at a net credit of $500 so we're obligated to own 1,000 shares of HMNY at $7 in our $500,000 portfolio.  I think we can work this one out!  

    Submitted on 2018/02/16 at 11:06 am

    • HMNY – They just diluted the crap out of shareholders so, if we want to stay in, we should buy more.  Let's just shut this position down and change it to the following:  Buy 50 2020 $2.50 calls at $2.40 ($12,000), Sell 20 2020 $7.50 puts for $4.10 ($8,200).  That will be net $3,800 plus the $2,200 we lost on the first spread puts us in for $6,000 on 5,000 $2.50 calls so our break-even is $3.70 – as long as we're over $7.50, of course.  Counting the short puts, our break-even is below $5, where we'd be down $5,000 on the puts but up $6,500 on the calls – maybe.  
    • Submitted on 2018/03/13 at 10:35 am
    • HMNY/Jabob, Albo – It's basically a penny-stock start-up.  Up or down 10% is nothing.  The whole market cap is $128M but they have 3M subscribers at $10/month = $30M x 12 = $360M and certainly losing money but if they can show they are going to hit 6M subscribers then they are NFLX or AMZN and can really pop if people get enthusiastic about them.  
    • Submitted on 2018/03/13 at 3:49 pm
    • HMNY – Not good so far but a very speculative stock (Movie Pass people) and it's a $12,500 spread we paid $1,250 for so a 10-bagger if things go well.  Even better as a new trade – it's net $0 now!
    • Submitted on 2018/03/14 at 11:51 am
    • HMNY - We got aggressive on these but it's likely to be a slow recovery.  This one is very speculative but look at that spike to $35 – that would be $162,500 on the $2.50 calls so, on the whole, I don't mind being down $3K while we wait.  

    So I guess your not listening includes when I directly answer your question and tell you it's like a penny-stock startup.  I can see you may have missed two comments the same day saying it was VERY SPECULATIVE because I didn't specifically say "Jabob" and, of course 7 days later you added it to your complaint list:

    bunch of dogs with fleas (GE, HMNY, ABX, IMAX, FTR, GNC, TEVA, JO, F, LB, HBI)…

    Hope these MOFO companies will one day actually move higher… DANGIT!

    Down $1 

    Down $750.

    Down $1.75

    up $5 

    Down $2.40 

    Down $1 

    up $7 

    Down $10 but we weren't actually playing it – they discontinued JO.

    Down $1 

    Down $10

    Down $1 

    So, despite the fact that you only pick the stocks that have performed poorly, only HMNY really wiped out while the others have another 17 months left on them and aren't in real trouble and, other than LB and ABX, are all just 1st round investments we would double up on – IF THEY GOT LOWER.  

    So there's your answer and now I'm going to put you back on ignore as I need another break from your BS.  

    International/CRS – Yes, I wish they had put someone in Pink with more International experience, someone from China or Japan, where there are huge opportunities.  

  43. As always, I am the villian.

    But the silence from the PSW board about who actually made money is DEAFENING!

  44. Meanwhile, back to the markets…

    Only the Nas is left green at the moment (7,440) but /YM down another 100 points and /ES still just under 2,860 (lagging) with /RTY down to 1,718.  

    As Central Bankers Meet, Economic Uncertainties Weigh on Sunny Outlook

    The formal discussion at this week’s Fed retreat with global central bankers will be about the impact of monopolies, but new economic uncertainties are sure to dominate chats over cocktails and mountain hikes.

    Oil is holding up near $68 but /RB not recovering at $2.058.  /KC had a nice pop but then thought better of it;

    Dollar back up is keeping pressure on things:

    Juror in Manafort Trial Says There Was One Holdout

    The juror told Fox News the evidence against former Trump campaign chairman Paul Manafort was “overwhelming” and that other jurors tried to convince the lone holdout.

    Rest of jury wanted to convict on all counts, she says

    That's the problem, all it takes is one Trump loyalist in a 12-man jury and you can't get a conviction!  

    Trump Decries ‘Flipping,’ Again Clashes With Sessions

    President Trump, speaking after Michael Cohen implicated him in a crime in a plea deal, said so-called flipping “almost ought to be illegal” and launched a new attack on Jeff Sessions. The attorney general said the Justice Department won’t be influenced by politics. 

    Enquirer Publisher CEO Given Immunity In Cohen Case

    Federal prosecutors granted immunity to David Pecker, CEO of the company that publishes the National Enquirer and a longtime friend of President Trump, in the Michael Cohen investigation. 3574 minutes ago

    We are certainly getting to the fun part!  

    Strong Consumption Breathes New Life Into Retail Stocks

    U.S. consumer spending is so strong that it’s even boosting shares of left-for-dead retailers. While bricks-and-mortar chains have struggled to transform themselves, many are being helped along by Americans’ increasing willingness to spend.

  45. Jabo

    I have an under 50k account  that im trading I dont do all the trades but pick and chose to keep diversified. Im not in APPL due to the cost and most trades are usually in 5 lots verses 10/20 lot size.

    I am in GIS up 600,NLY up 225,ABX up 50,BJO down 10,F down 50,HBI up 220

    im in LB and show a loss of 3k due part of that is my own fault as my short calls never filled so I had naked long calls and I had jan 2019 calls verses jan 2020 calls.I rolled today to the 2020 call though

    I was doing pretty good so far til that self inflicted wound

    I had a very small HMNY position and took a loss verses doubling down.

    Plus with what Ive learned from being a member I average 400 to 800 per week trading futures

  46. To take the full and entire responsibility for all that life brings can be quite the relief for many…… :)

  47. HMNY/ Doubled down my position at $2.2…

  48. SGMS/Phil- do you think a turnaround is coming for them?

  49. Phil / LB – I'm moving off of this… however it should be noted that The 30 Calls were at 4.8 very briefly this am for about 2 minutes and only traded 10 contracts….  

    Really we should be waiting for the downgrade police to buy the long calls….  there's lots of pressure on this.  Additionally, and this is anecdotal… to Pirate's point.  I don't see the pull for this brand anymore… more Athleta, Lulumon –  

  50. YOUR TRADES ARE YOUR TRADES!  This site, for me, is where I have learned how to use options & futures.  It is also where I get a constant flow of new ideas.  I appreciate the ideas, but it is up to me to research those ideas for validity, devise a strategy, and determine the proper allocation if I choose to move forward.  It is also on me to adjust a trade, take a profit, or bank a loss.  

    In addition, it’s great to know that I have many sources, mostly Phil, if I get lost in a trade.  But I stopped whining about my own decisions years ago.  If you can’t find any value here, then why stay?  I have been here for 8 years, and am greatful to PHIL and fellow members.  I manage about half a million, and although I may not always achieve what Phil does, I am not complaining.  I have learned so much.  Thank you Phil!

  51. SGMS/Dave – Turnaround to what?  Though no start-up, I don't think they've ever made a profit.  At least they grow revenues and the losses are paring but, even if they do make $62.7M next year after losing (so far) $201M in Q1 and $6M in Q2, do I really want to pay $3Bn for that (50x earnings)?  It just doesn't do it for me.

    Just because some idiots were paying 100x earnings for the stock in May doesn't make is a good deal at 50x earnings in August…

    LB/Batman – To be clear, I was NOT saying to sell the $30 calls for $4.80 or $4.60 or $5 – I was saying that IF we sold 15 of them for $4.80 ($7,200), that would pay for the roll but, at the moment, I'd rather wait to cover at a higher price (now $3.80).  The short calls that we DID want to buy back were easy to fill as were the long $20s (now $9.40) while the $25s are still $5.90/6.50 despite the additional sell-off. 

    Obviously I've been watching LB for a long time and I'm a lot more worried about missing out at these prices than I am about more downside so I wanted to pull the trigger today and not leave it to chance.  

    You're welcome DC, Yodi, Bert – thanks!  

  52. LB- I will add my 2 cents to the current squabble. I have no position nor do I plan on opening one despite the stock price. I did not save it but I posted some time ago,  an analysis of the insider's stripping major cash from the business via special dividends over the years resulting in a negative book value/high debt load. A look at the balance sheet should at least raise some red flag if one has a basic understanding of accounting and security analysis. At it's simplest, negative book value means that if I were to buy the entire company; sell off all the assets to pay creditors, I would still owe money. Granted, it is more complex than that but at it's core, they are running the business on borrowed money and have been doing so for an extended period so they are obviously gifted at financial engineering and more power to them. So, from my risk perspective, it is not a good place for my money but others are free to play. 

  53. Phil, there are three things I've learned here (the hard way) that I consider to be critical.

    1. Be patient.  A spread might go out to 2020. Well, that's 16 months away.  A lot of your plays seem "wrong" at first because you're usually big-picture and thinking long-term.  Short-term, anything can happen, so what does it matter if it's up or down a bit on any given day unless there is some material change in circumstances?  In the past,  I definitely bailed out early on some things where I should have just waited. 

    2. Don't buy anything you don't understand.  There are some very savvy and experienced investors here.  What's good for them is not necessarily good for me.  In other words, don't try to ski the double-diamonds when all you know is the bunny slope.

    3. To quote a wise person, "hope is not an investment strategy."

  54. Dividends/Pstas – I'd like to see a link to where you're seeing "special" dividends paid to insiders.   I consider the whole $2.40 dividend to be silly as it's $668M/yr while they have borrowed $1B since 2013 while they could have paid down $3Bn in debt (half) instead.   They also bought back $1.8Bn (20%) worth of their own stock – also a huge waste of money so perhaps what they really need is a bit of activist investorism.  

    Still, they are servicing the debt, servicing the dividend and they are sitting on $1Bn in cash so a good couple of years before they are even forced to look at the dividend so I'm willing to give them a couple of quarters – especially as they haven't borrowed anything under the new CEO.

    Good lessons Tom, thanks.

  55. Phil, most members here seem to be quite active traders throughout the day. So, perhaps an unusual question for this forum. If I were to target a reasonably conservative (well, it's actually pretty good but most trades here have far higher targets) 10% a year on the assets but with the minimum involvement necessary and the minimum risk/uncertainty possible, what approach would you recommend? Thanks!

  56. P.S. The above is just because I will be working full time from September and expect to have far less time for the strategies requiring more active monitoring and/or adjustments but would not want to go the fully passive investment… So wonder if there might be an "in-between" solution

  57. I think that we all have a different investment styles. Like DC, I have learned to use options from Phil and pick my own investments. Sometimes I jump in trades with Phil like GE or F or ABX, but I size the poaitions based on my own outlook. But most of my positions are my own or recommendations from other members I value like Albo or Yodi.

  58. LB- dividends- as I said, I did not save the post but my data came form LB 10Q's. Like the man said, "you can look it up".

    I will cop to some poetic excess however as to the "insider" comment. The special dividends were paid to all stock holders but insiders hold a lot so they got a lot. 

    Just not a way I would run a business so I pass and wait for another fat pitch. 

  59. Republicans Urge Embattled Incumbents to Speak Out on Trump

  60. Yodi,

    Is KIM is good for an armchair trade?


  61. Yodi,

    I think I see why not KIM is good. Not able to sell good calls against it.


  62. 10%/Alter – Well it still depends on what you're actually doing.  If it's because you have $5M and want to make $500,000 a year with as little risk as possible, it's a different strategy than if you have $50,000 and want to make $5,000.  Generally, people with $50,000 aren't happy with $5,000 though…

    There's no such thing as completely safe, of course but, if I had $5M in buying power and wanted to make $500,000 – I'd first look at some Blue-chip stocks, preferably that pay dividends, that I would not mind owning for the long-term and then set up some short puts like we have in the LTP.  

    For example, T is at $32.41 and I'd certainly love to own them for $30 or less and, with a $5M portfolio I have $10M in buying power so my allocations (dividing by $20) are about $500,000 so a 1/4 allocation block would have me owning about $125,000 worth of T so 4,000 shares.  That means I then look to see what puts I can sell 40 of and the 2020 $33 puts are $4 so I could collect $16,000 for promising to buy 4,000 shares of T at $33 ($132,000) which is 12% over 2 years. 

    It's not great but it's very low-risk and a good start.  Your goal is to collect $500,000 (on $5M) so we'd need about 30 positions like that so it wouldn't be ALL of the strategy, but it can be the start of one.  

    Another pretty safe way to play is to buy an in the money blue chip like F, which is very cheap at $9.65 and pays an 0.60 dividend.  If you buy 20,000 shares for $9.65 and sell 200 2020 $7.87 calls for $2 you would be very well covered at net $7.65 ($153,000) and you'd collect $12,000/yr in dividends and you might get called away sometimes but then you just re-buy and you can also sell short-term calls like 100 Jan $9s for 0.95 ($9,500) and if F goes over $10, you just buy it to cover and it can't hurt you.  Otherwise, if you collect another $3,000 a quarter in premium – that's a bonus $12,000 paying you back net $24,000 (15.6%) annually.  

    Stuff like that is the way to go if you just want to generate a safe(ish) income though I would argue that a well-run hedge fund is actually safer (as they dynamically adjust to market conditions) and will generate a much better return.

    Otherwise, the Butterfly Plays require very little attention and make 30-40% so you could just invest 1/4 of the money and use those, keeping the other 75% "safe" in TBills while letting the other 25% make you 10% on the whole pile (so $12% overall if all goes well). 

    MO/DC – Very nice.  

  63. LB  Phil – Thank You for your guidance this AM on this.  I appreciate your feedback and guidance.  You're doing a good job given all the noise this am…  


    I moved /  with am positioned with the 20/30 BCS you recommended today ( partial cover)…  I've got some shorter term 'cherry callers' that will either get me out of this at close break even at the end of the year ( 35) , or more likely drop my basis by 1.xx… I agree that this is a good company.  It is being run poorly with GM dropping from 41.5 to 36.5 and probably down to 35 before it's said and done.  Revenue is flat because of the large discounting they are having to do.  This is fixable but they need to get to a point where they get the right marketing message, and product mix.  I'm giving them another year…  This new Division CEO for Pink needs to clean house ( which looks like she  may be doing w/ the Q3 at almost 0 profit which may be driven by pink / VS)  and address the issues.   Time will tell.

  64. Just filled another 40,000 HMNY at 0.02!   Next offer is 120,000 at 0.01 and then wait for the reverse split so my 240,000 becomes 1,000.

    LB/Batman – Don't forget, new CEOs tend to "kitchen sink" their first Q, which they can blame on the previous CEO and then, a year later, show how much progress they've made off the easy comps.  

  65. Yahoo says HMNY has market cap of $13M, the only way they have that is if they have a zillion shares outstanding!  

  66. Gabor,

    KIM I have traded the stock before. On the surface the stock is in the middle of a range.

    You can enter the Sept. 21 17.5/17.5 straddle. Interest rate is good. Even that the stock is below the put sale. A longer play would be the Jan 19 same straddle for a price of 2.10 Lower protection 15.40 not bade.

  67. Last month, HMNY shut down on the 26th (cash ran out) so that's what people are betting will happen again but we haven't had so many blockbusters this month and they've changed policies so I don't think it will happen again but we'll have to see.  

  68. La Jolla, Calif.–based Triton Funds LLC is preparing to approach shareholders of MoviePass parent Helios and Matheson Analytics Inc. in an attempt to assume control of the troubled company, according to the venture fund’s co-founders.

    Triton first approached Helios and Matheson last week, and the company seemed open to discussions at first, Yaffa said. By Friday, though, he and Triton’s other founders were told Helios and Matheson was no longer interested, he reported.

    Now, the fund is planning to “take a page out of Carl Icahn’s book,” said Yaffa. “We are deciding on our final valuation, and then we will reach out to the shareholders of HMNY,” he said, referring to Helios and Matheson by its ticker symbol.

  69. SEC to review decision rejecting bitcoin ETFs

  70. Slide in banks, energy firms weighs on US stock indexes

  71. Sales at Gap brand stores worsen, shares fall

  72. Powell could tackle key issues in high-profile speech Friday

  73. Bull Run | Financial Times

  74. Asian shares track Wall St weakness as eyes on Fed comment

  75. US-China trade talks end with no breakthrough

  76. Good morning! 

    Futures are up again on no particular news and despite trade talks ending with no solution (as expected).

    We're only back to sameish shorting lines so same opportunity if they fail again.  25,750, 2,865, 7,450 and 1,725 – very tight stops if anyone goes over, of course.