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Friday Failure – China Trade War Heats Up While Canada Cools Off

Image result for trump china trade war cartoon$200Bn more in tariffs.

Now are you paying attention?  The market sure did yesterday when Trump said he wants to move ahead with his plan to impose $200Bn of additional tariffs as soon as next week, just two days after tweeting that he and President Xi would work out their trade deal, which drove the market to new highs.  Companies and members of the public have until Sept 6th to submit comments on the proposed duties, which cover everything from selfie sticks to semiconductors. The President plans to impose the tariffs once that deadline passes.

Trump cut off negotiations with China because of what he perceives as Beijing’s lack of cooperation in nuclear talks with North Korea, one of the people said. The president wants to squeeze China, believing the U.S. has leverage over Beijing, that person said.  Trump also threatened to pull out of the World Trade Organization as they have not been behind his illegal sanctions so far – that alone threatens to unwind the entire Global Economy but, thank Goodness, noboday takes the President seriously when he says insane things like that.

Trump also said (yes, he just keeps going) that the EU offer to scrap auto tariffs "is not good enough" meaning – well let's not pretend to know what he means but if NO TARIFFS are not good enough then I guess he wants the EU to offer incentives for their people to buy American cars?  I was going to say that's Batshit Crazy but then I thought that was going to far but then I looked up the definition of Batshit Crazy and yes, Trump is BATSHIT CRAZY!  

Image result for trump crazy

You know, after 8 years in office and millions of photos, there are NO pictures of Obama snarling at anybody or about anything.  Not even Bush II has any snarly pictures but he may tie Trump for dumb-looking pictures.  No snarly pictures of Clinton either and I couldn't find many Bush I pictures as he's pre-internet but I'm sure he snarled at least once so let's say you have to go back at least 30 years to find a President who even looks like this once – yet it's pretty much Trump's go-to expression.

Image result for trump google cartoonTrump was snarling last night when he said Google, Amazon and Facebook may be "in a very antitrust situation," as the companies refused to stop indexing bad news to the word Trump as he demanded earlier in the week.  “I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook, as you know, many people think it is a very antitrust situation, the three of them. But I just, I won’t comment on that.” said Trump, commenting on that.  

Trump’s latest attack on the technology companies began Tuesday when he claimed without providing evidence that Google’s news search function favored liberal over conservative outlets, tweeting that “This is a very serious situation-will be addressed!” Later, in a meeting in the Oval Office, he told reporters that Alphabet Inc.’s Google, Facebook Inc. and Twitter Inc. “are treading on very, very troubled territory.”

Trump continued with the topic at a rally in Evansville, Indiana, on Thursday night. "I’ve made it clear we as a country cannot tolerate" censorship and "rigged search results," the president said. "We’re not going to let them control what we can and cannot see, read, and learn from."  Which is what this is really about, censoring anti-Trump (real or perceived) information.  

Image result for trump google cartoon fake newsRepublican lap-dog, Senator Orrin Hatch of Utah on Thursday askedU.S. Federal Trade Commission Chairman Joseph Simons to re-examine Google’s conduct in search and digital advertising, saying reports of potentially anticompetitive conduct are “disquieting.”  Google said its search function is not used to set a political agenda and isn’t biased against any ideology.  

I guess swearing to "uphold and defend the Constitution of the United States of America" includes the 2nd Amendment but not the First?

This is serious stuff people, the President of the United States and his attack dogs in Congress are going after not only the Free Press but after the outlets that give you access to them.  People should be up in arms about this but, if they are, they are being portrayed by Trump's Conservative Media Pals as "left-wing wack jobs."  Perhaps the GOP should consider that, if they give the President the power to decide what news you should hear and what news you shouldn't – they may one day find themselves on the other end of that gun.

I guess they are counting on the fact that, whoever is in power when the press loses theirs will very possibly be the people who continue to be in power forever.  Historians will tell you that Trump is simply following Putin's playbook – he did a similar push to take over the media (as many as 50 anti-Putin journalists were actually murdered with hundreds of other assaults as Putin's followers attacked the "Enemies of the People") after he took office and laws were passed in 2014 extending the State near total control of mass-media.  As noted by Wikipedia

The Russian constitution provides for freedom of speech and press; however, government application of law, bureaucratic regulation, and politically motivated criminal investigations have forced the press to exercise self-censorship constraining its coverage of certain controversial issues, resulting in infringements of these rights.[4][5][13][14]According to Human Rights Watch, the Russian government exerts control over civil society through selective implementation of the law, restriction and censure.[8]

Gee, isn't that EXACTLY what's happening here, in America? 

How do you know when you are living in a police state?   Well, if they do it right, you never will! 

Have a great weekend, 

- Phil

 


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  1. Good Morning!



  2. Even the Italians got rid of "batshit crazy" (belusconi) and we'll do the same.

    We're better than Russia….


  3. Good morning!

    Every time I'm about to capitulate and make new Big Chart levels, we have a sell-off!  Still, they do need to be adjusted for the tax breaks as well as the economic improvements over the last few years (the lines are from 2015 predicting the range into the end of 2017).  

    Better than Russia/1020 – I hope so.  It's scary when you start seeing Senators getting behind his BS.

    /CL back at $70 for those who missed yesterday's short.  

    Check out this crazy squeeze on /RB's lines:

    Dollar strong today at 94.83 so maybe another chance to pick up /KCN9 below $110.

    /SI testing $14.60 again but, as I said yesterday, very dangerous to play. 

    That's up and down 0.15 just this morning at $50 per penny!  

    The thing is, if you can afford to laugh off a $750 move against you, then you can play but if a $750 loss stops you out then the almost 50/50 chance of getting stopped out turns it into a bad bet.  That's true with any Futures play (or options play, really) – we can make bets where the odds are in our favor but, even if the odds are 70/30 in our favor and even if statistics were absolute – we could still lose 3 times in a row.

    It doesn't matter if the next 7 times are going to be winners if the first 3 times stop you out with a loss, right?  That's a very simplistic example but even a 90% probability bet has a loser once in a while and if that loser is going to stop you from playing – then you lose – end of story.  

    That's why we spread our risk and play the odds across multiple positions and, of course, that's why we SELL PREMIUM, letting others take the risk for us as much as possible.  The Futures are not like that – it's all your risk and you can always lose as much as you can win so be very careful before you enter a position and make sure you're ready for being totally wrong.  If being wrong can hurt you more than something you can shrug off – don't play! 


  4. LULU- Phil, can probably add this one to your short list. Trailing P/E of 58 vs. projected earnings growth of 17%. On the plus side, however, no debt. 


  5. window dressing today???


  6. AMZN was 972 on 10/26/17, less than 11 months ago.


  7. LULU/Pstas – I kind of like them but not for $157!  Still, the opposite of "catching a falling kife" is "getting a rocket up your ass" for shorts, so stay away for me! 

    The reason I'm willing to short TSLA is because they are fundamentally a bad business model and the reason I'm willing to short AMZN is because we have gotten to the point ($1Tn) where it's simply not realistically possible for them to jump 20% without some actual improvement in the bottom line.  I like to short stocks that are CLEARLY up for the wrong reasons or way too far up to be justified by earnings but LULU I like – we used to buy them when they were down – we just lost interest because they never got cheap enough again but that's not a reason to short them.

    Submitted on 2016/12/04 at 10:49 a

    LULU/Pstas – I find it absolutely stunning that people fail to understand fashion is cyclical.  There's a reason you don't pay 40x earnings or even 20x for cyclical companies – no matter how hot they are or how much they are making, a year or two later it can go the opposite way.  Long-term cyclical investors understand this and used to happily hold these companies at steady 8-12 p/e's but these days they run them up to 40 when they are hot and down to 5 when they are cold.  Great opportunity if you know how to keep your head.  

    Submitted on 2015/09/04 at 10:35 am

    LULU/StJ – Girls were paying $100 for Jeans 20 years ago – I really don't think $150 yoga pants are that much of a stretch.  (get it?)  

    Submitted on 2015/06/09 at 10:09 am

    In the LTP, we have 10 LULU 2017 $55/75 bull call spreads at $8.42 (now $10) and we sold 5 Jan $50s for $3.50 that burned us.  We should have done this at the $60 line but missed it so now we'll roll the 5 short $50s ($18) to to 15 short Sept $67.50s ($4.40 = $13.20) and we'll sell 10 2017 $55 puts for $6 and we'll add 5 more 2017 $55/75 spreads at $10.

    That's the last time we played them.

    IMF says it stands behind Argentina – that's the excuse for the window-dressing.

    AMZN/BDC – What did they actually do to justify a $500Bn boost in market cap.  Did they start another AMZN from scratch?  


  8. BIG   another reason we don't trade stocks catering to the bottom 50%


  9. Trump is doing whatever he can to push the markets higher on the theory that people vote their pocket-books:

     

    The news from the Financial Markets is even better than anticipated. For all of you that have made a fortune in the markets, or seen your 401k’s rise beyond your wildest expectations, more good news is coming!

    Maybe he's right:

    Consumer Sentiment

    Chicago PMI


  10. CA's smart grid in real time. Very cool. Shows CO2 in real time too.


  11. Well it's 100 S&P points (3.5%) in 2 weeks so we're all going to be Billionaires if this keeps up!  cheeky

    Of course, I said many years ago that our only way out of debt was through hyperinflation but I was hoping it would come through rising wages, not just more and more wealth for the Top 1% while the wealth gap becomes worse than Egypt in the time of the Pharaohs… 

    Of course no one is preparing for 7 years of want.


  12. Woops, indexes turning down a bit.  Someone must have said something (my expert analysis on a lazy Friday). 

    Ah yes, Dollar flying up:

    Not seeing any major news to cause it.


  13. Probably Freeland saying we are not there yet.


  14. AP sources: Lawyer was told Russia had ‘Trump over a barrel’


  15. Trump Threatens to Pull U.S. Out of WTO If It Doesn’t ‘Shape Up’


  16. US to end all funding to UN agency for Palestinian refugees



  17. Honey, I Swept the Floor!


  18. Donald Trump’s approval rating sinks to lowest of his presidency


  19. successful bitcoin brute-force collisions.

    Interesting.





  20. Trump Says Democrats Can’t Impeach Him Because He’s Doing a ‘Great Job’



  21. EU to stop changing the clocks, Juncker pledges


  22. How Much Trouble Is Ted Cruz Really In?


  23. How to Take the Stress Out of Taking Time Off


  24. AMZN's median salary is $28k/yr and FB's is $240k. Half of AMZN's employees make less than $28k per year ($13.67/hr) and half of FB's make over $240k ($115/hr).

    Also, AMZN P/E is 160 and FB is 27…. AMZN may be worth $500/share.


  25. Anyone brave enough to call 187.52 a top on the QQQ yesterday?


  26. Phil what are your thoughts on DIS. Holding the Jan 20 BCS 95/110 and looking for more cherry calls or even strangle. My 105 and 108 putter and 113 and 115 callers are running out today. DIS has dropped a bit from 117 to 111, but still on the high side.
    As well DUK nice div payer BUT is in the middle of its range. Your thoughts



  27. F is dropping faster 2.4% against TSLA 1.4% hard to understand.



  28. Donald Trump just keeps claiming things he said on tape aren’t real



  29. ‘You know I got a pistol?’ the man yelled. So the Uber driver shot him



  30. going long TZA / SQQQ outright thru the weekend. Real heebie jeebies going on here. Feels like late January again.












  31. HBI look undervalued Phil?


  32. maybe amzn should buy LB!!!


  33. Dollar over 95.  /KCN9 @ $110.

    Brute force/BDC – That does not bode well for Bitcoin's security.

    AMZN/BDC – Not sure what's true but AMZN claims those statistics are unfair because large portion of workers are part-time so their salaries are being divided out with full-timers.  

    QQQ/BDC – Not anymore, still recovering from my bad Futures bet on /NQ.

    DIS/Yodi – DIS is a 20-year hold to me.  They are in a very heavy spending cycle with the Star Wars parks but if they do half as well as Universal's Harry Potter Park, they'll add Billions to the bottom line.  Meanwhile, ESPN will keep struggling and that will keep a lid on growth as they really have to figure out how to remodel their revenues against cord-cutting.  Sounds like you nailed your targets for the Q and I think $110 is still the right line for next Q, though DIS would not be exempt from a crash so I'd go lighter on the short puts.

    F/Yodi – Well that credit downgrade is forcing a lot of rules-based funds to sell them.

    Heebie Jeebies/BDC – I've been feeling it for a while, one day it might actually matter.  

    HBI/Tangled – Certainly they are undevalued at $17.50 as that's $6.3Bn with $7Bn in sales and $635M in profits (10x).  They did some restructuring last year and took a big hit in Q4 but should come out with $1.75 per share this year so a good, steady thing to own whenever it's low in the channel.

    Year End 30th Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
    Revenue $m 4,526 4,628 5,325 5,732 6,028 6,471 6,631 6,772 6,850 +7.4%
    Operating Profit $m 440.1 515.2 564 595.1 775.6 723.1 739.2     +10.4%
    Net Profit $m 164.7 330.5 404.5 428.9 539.4 61.9 38.8 634.8 672.2 -17.8%
    EPS Reported $ 0.58 0.81 0.99 1.06 1.40 1.41 1.36     +19.5%
    EPS Normalised $ 0.58 0.81 0.99 1.06 1.40 2.29 1.96 1.75 1.89 +31.6%
    EPS Growth % -5.1 +40.0 +22.2 +7.2 +31.4 +64.1 +16.4 -23.7 +7.86  
    PE Ratio x           7.64 8.93 10.0 9.28  
    PEG x           n/a n/a 1.27 3.22
    Profitability

    In fact, we do not have HBI in the LTP so let's add it!  

    • Sell 30 2020 $18 puts for $2.70 ($8,100)
    • Buy 50 2020 $13 calls for $5 ($25,000) 
    • Sell 50 2020 $20 calls for $1.45 ($7,250) 

    That's net $9,650 on the $35,000 spread that's $4.50 ($22,500) in the money to start and, of course, when HBI gets up in the channel again, we can sell some short calls to whittle down the basis but the upside potential on just this is $25,350 (262%) and that's just 17 months away!  

    LB/Jabob – If AMZN bought LB it would add 33% to their earnings.  I guess that means LB is worth $330Bn?  


  34. HBI – why only selling 30 puts and not 50?   You said when rises in the channel sell some short calls.  Do you mean some closer to expiration than the 2020 calls already sold?


  35. Tangle HBI even the other day we did have a long discussions on selling puts.

    Just for the record I holds BCS only 10x and the put 4x!!!!! Taken out 5/4/18


  36. HBI/Tangled – Because 30 puts obligates us for $54,000 ($27,000 in margin) and our $700,000 LTP has $1.4M in buying power so $70,000 allocation blocks.   I like to have some wriggle room – just in case something goes lower (like LB).  And yes, I mean selling short-term calls against the long, very bullish spread.  So we have $22,500 upside to play with and a $9,650 cost basis and, right now, we could sell 10 Jan $18 calls for $1 to pick up $1,000 in 140 of 504 days but, even though that's unlikely to hurt us, I'd rather sell 20 Jan $20 calls for $1 ($2,000) on a bounce (now 0.40) so we can afford to burn 30 days (5%) and wait to see if they turn up or not.

    If they don't turn up, we can sell 25 April $17 calls for $2 ($5,000) to pay for 1/2 of what we laid out on the long spread and put a stop on $10 at $3 and 10 at $4 and 5 at $5 which would be a loss of $4,000 but, if we're paying back $5 on the April $17s then HBI would be close to $22 and we'd be in the $35,000 spread that's 10% in the money for net $13,650 and that would still be fine and then we could sell 10 or 15 $25 calls for $2,000 to begin bringing it back to $9,650.  


  37. do you think mr stick comes out to dress the windows today???


  38. Phil,

    What are your /CL and /RB positions heading into the weekend?


  39. Yodi-interesting times in Germany.  What are your thoughts on how Germany will resolve its declining labor force (given the demographics) if they turn away immigrants?  Is it just immigrants who the AFD feels don't have the same values as Germans or just any immigrants?   I am asking because I am curious about how Germans think these issues should be resolved and am not criticizing or passing judgement.  Thanks.

    https://www.nytimes.com/2018/08/30/world/europe/germany-neo-nazi-protests-chemnitz.html


  40. By the way, that's another reason I don't mind owning a lot of something like HBI as they are $17.50 but, if they were assigned to us, we can sell the 2020 15 calls for $3.70 so let's say the stock drops 20% to $14 and the short $18 puts are $4.50 (down $5,400) and the spread, with an 0.40 net delta, is down another $6,000 so we'd be down $11,400 on the spread with and effectively we'd own the stock so we shut down the spread (-$6,000) and take the assignment of 5,000 shares for the $9,650 we put in + 3,000 x $18 = $54,000 so net cost is $69,650 = $23.21/share.

    If we then sold the $15 puts for $4 and the $35 calls for $3.50, our net would drop to $15.77/15.38 if assigned another 3,000 so the question to answer BEFORE getting into this trade, is do you REALLY want to own 6,000 shares of HBI for $90,000?  If you are good with that, then there's no reason not to play it here.

    That's just our 2-year plan.  If HBI drops another 20% from $14 to $11, we then sell more puts and calls for another $5 (assuming we get less on the way down) and our basis on up to 12,000 shares is $10 so we go from $90,000 to up to $120,000.

    Now, if you think HBI has no actual value other than what the market says – then it's not a good way to play but if you believe the company is actually worth something, then you'd love to have a full allocation block of it ($60,000 of margin at $120,000) for net $10 – even though that's 60% off the current price.  

    If you don't feel that way, then consider the risk of losing net $11,000 if they fall 20% vs the potential reward of gaining $22,500 if they go up slightly.  And that's why I add the play to the LTP.  As we were saying earlier, if you spread a good amount of positive risk/reward plays around in your portfolio and half of them pay off and some of the other half are not a total disaster – you'll come out well ahead of the game!  

    Stick/Jabob – Too much uncertainty but you can never count out Mr Stick.  

    Image result for mr stick

    /CL/Japar – Same thing, one short /CL at $70 and 2 short /RB at $2, never got a good DD opportunity on either.  


  41. 5 CMG Jan 17 2020 460 Call / CMG Jan 17 2020 580 Call

    -2 CMG Jan 18 2019 520 Call

    Phil how do you decide when would you close out shorter term calls on a longer term spread? I have the above and it seems CMG now is a bit oversold and sitting on the 50 day would it make sense to cover half (all) of the 2019s and resell on a bounce? thx


  42. Speaking of which.  I always tell you guys to read old reviews but how many do?  Well, here's our previous LTP review from when it was fairly new in Jan of 2014:

    Just going by what I said above, think about where we'd be now if we tripled up when a stock fell 40% on us.

    • CAT bottomed out at $60 in early 2016, now $140.
    • DE bottomed out at $72 in early 2016, now $143
    • EGLE did some kind of reverse split, so call those a loss.
    • FCX bottomed out at $4 in 2013, now $14 our net would be about $17 (40% below our first put sale)
    • NLY is perpetually between $9 and $12 – making a fortune.
    • GLL bottomed out at $65 in mid 2016, now $82 – that was aa short so we were good.  
    • AAPL split 7/1 so that was a $71/78.50 bull call spread, was never in danger so we ONLY made the original allocation (but then did new ones) 
    • ABX bottomed about at $6.50 in late 2015 but then back to $22.50 in mid 2016 and was a huge winner as we kept adding to it (as we are doing with the current batch).  Had they never dropped, we never would have had such a huge winner.  
    • BRCM now AVGO.  Went up like a rocket so we only made the first allocation.
    • CLF went to $2.50 and we stuck with them for another huge winner, now $10
    • MSFT Ballmer was still keeping them down back then but they took off and we only had the one block.
    • SPY is, of course out in space now.  At the time we thought the whole index was still undervlaued and I guess it was – by 100%?
    • T is my perennial buy at $30 and it topped out at $42.50 in early 2016 and we just went back in at $30 and now $31.80.

    It's really not complicated.  By the time we closed that LTP, last year, we had about 60 positions but you start by building it with a diverse group of stocks that you are ready, willing AND able to build on if the PRICE (not VALUE) goes down while you're holding them. 

    Of course if something changes, you may get out but, if the price changes but the Fundamentals don't – then maybe the price is wrong and it's simply a good time to buy more but these trades play out over YEARS – not months or quarters!

    CMG/Coulter – The perfect answer for that is "only when it's funny" but you have to have seen all of "Who Framed Roger Rabbit" to understand it.  There's no one answer but you just need to look at what you can ultimately get out of a spread ($120) vs what you can get out now (5x $28.50 less the short calls at 2x $20) and then decide if you have a better use for $10,250 than hoping to collect $60,000 if all goes well.  How likely to you think it is that they hit your target but also, how much money can you collect regardless of whether or not they hit your target?  

    I don't see CMG as oversold, I saw it as overbought when we made our adjustments to get bearish at $520, now it's the right price.  I think your target is too ambitious and I sure as HELL would not give the Jan $520 callers $20 – that's an insane amount of money.

    In fact, as your CMG 2020 $460 ($86)/$520 ($57.50) bull call spread is only $28.50 so I'd be very happy to have 10 of those ($28,500) and sell 4 of the Jan $520 calls for $20 ($8,000) as I'm collecting 30% of my money back on my first sale (out of 4) so it's likely to be a free spread without even having to sell puts and only a 40% cover.   

    Selling premium and then buying it back early is like renting your condo for the weekend and then kicking the tenants out early and handing them their money back -you'd better have a REALLY good reason for doing that or you are just crazy!  


  43. Seer, in ref. to your question I will like to make it short.
    Since 2015 Merkel and Germany did receive more than 1.5 million refugees. Over 90 % are Muslims in a catholic country. Most of them, in no way, do have the standard and education for employment in Germany. 50 % are females, accompanied by many children. All receive possible a minimum income of 680 € per person per month, free medical from the government.
    The cultural integration is very difficult. Woman, as you possible know, have very much different standing in family cycles. They do not speak the language.
    All this does not go down very well with the local German population. Regretfully this does not bring a favorite light to foreigners in Germany. I can say this for myself as I am as well are married to a foreigner.
    I trust form this view you will understand the problem which is arising in Germany.


  44. CMG "I think your target is too ambitious"

    I thought this was your play from last week chat 2020 $460/$520 and sell shorter term calls (though you had a lower strike on the short terms)

    I planned on keeping the 2020 spread.  I just thought could buy back half the short term premium and then resell the short term premium on a bounce


  45. Phil – my tongue in cheek post for the end of the month:

    I really do read your old reviews and they are a priceless the archive. The previous post on the Jan 2014 LTP  – I guess a case of yes, but…..

    Note with interest the post of Friday, March 14th, 2014 – the opening exhortation was:

    "I don't think I could have been more clear on Tuesday that CASH!!! was the way to go, with 6 mentions of going to CASH!!! in the morning post alone.  All my logic and reasoning is right there and, on Wednesday morning, I was still yammering on about going to CASH!!! "

    The following question is asked:

    "Burrben

    March 14th, 2014 at 8:32 am | Permalink | Tweet this Ignore this user

    Phil, did you get to cash in all the portfolio’s you track?"

    and I think Phil's answer is pretty clear:

    phil

    March 14th, 2014 at 9:16 am | Permalink | Tweet this Ignore this user

    CASH/Burr – I'm not cashing out the Virtual Portfolios as it's just too much hassle and it's valuable to teach the adjustment of positions in adverse market conditions but, to be very clear – I think CASH!!! is very, very important at the moment and unless you are HAPPY to sit through a 20%+ drop in the market and wait 3 years for it to correct – CASH!!! is your best position.  CASH!!!  Have I mentioned  CASH!!! clearly enough?  CASH!!!

    CASH!!!

     


  46. But I jest, the valuable lesson I think, is that even for yourself with all those eons of experience, it becomes a very delicate balance and a very difficult situation when confronted with reducing risk completely by cashing out, or ploughing ahead into the unknown and keep a portfolio running with the potential of losing 20% of that portfolio.

    I love and hate the virtuals portfolios. They are a great learning exercise, but put a hell of a lot of pressure on your good self to keep up the performance which is sometimes difficult to replicate for the average user. And of course as was mentioned, practically it is a lot easier to close out a virtual portfolio than a real money portfolio.


  47. Yodi-thanks.  It seems that still leaves the country with more anti-immigration sentiment at a time when they have a big hole in the labor forces to fill.  Hopefully, they will find a productive way to resolve the issues.


  48. Seer, I do not believe that we have such a big labor problem as it is put out to the public. Many poeple over the age of 50 can not even get a job any more.


  49. Yodi, you are similar to the US in that regard then!


  50. CMG/Coulter – OK, that was our play AFTER we took the profit on our much lower-strike longs and the $460/520 spread is there JUST IN CASE we got burned on the short $520 calls we had no intention whatsoever of buying back.  The whole point was to let them play out and expire worthless while protecting ourselves with a cheap spread.  

    CASH/Winston – Well that's right, I thought the market would get cheaper and I wanted to wait but it would have been VERY dull around here if I just waited until the crash of 2016 to begin buying, wouldn't it?  As I noted where you quoted, the purpose of the virtual portfolios is to TEACH so, at the time, I was teaching a slow, patient build and how to handle the downturns.  In the case of the current portfolios, we began in Jan and had a nice crash in Feb, so, very UNLIKE 2014, we jumped in and quickly executed 1/2 our buy list in the first month.

    When the LTP hit 35% this July, I said I though I'd rather go to CASH and I cashed out my kids college accounts because they were hard to hedge and now the LTP is up 40% but, on the whole, I could have happily skipped the extra 5% ($25,000) and backpacked around Asia for the summer.  

    This is a stock market site, we teach trading ideas and portfolio management and analyze the market and it's hard to do that while dogmatically not putting out any trade ideas and, just because I don't like a market enough to risk vital money (like my kids college accounts) doesn't mean we can't trade it (like our Hedge Fund is doing) and make fantastic returns.  Meanwhile, if someone asks me what I think about the market – including the overbought market we have right now – I will tell them I'd rather be in CASH!!!

    So you can use that quote 4 years from now to tell me I contradicted myself if it makes you happy too.

    Meanwhile, markets still bouncing around on the latest NAFTA rumor but still overall, flatlining into the end of month.  

    Have a great weekend folks,

    - Phil


  51. Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!

    So, they printed what he said and that's dishonest?  Obviously Bloomberg shouldn't print things said off the record but, then again, this is only Trump's word against Bloomberg's that he said it should be off the record so who is more trustworthy of the two?  Also, of course, Trump has a pretty large record of saying things like that "on the record" so how is this a stretch?

    Cruz must be in serious trouble:

    I will be doing a major rally for Senator Ted Cruz in October. I’m picking the biggest stadium in Texas we can find. As you know, Ted has my complete and total Endorsement. His opponent is a disaster for Texas – weak on Second Amendment, Crime, Borders, Military, and Vets!

    From the guy who's weak on the First Amendment!  

    Image result for trump twitter crowd real image


  52. Seer,
    Just to a follow up on our conversation re Germany and labor problem, I did not wish to fill up too much our site in respect to discussions not related to trading.
    I feel we do hear already enough about the great US Leader.
    Even that I do not like the way Merkel runs the show, she still has leader qualities Trump never can dream off, of having.
    Our labor problem in Germany is mainly the lack of special qualified personal,
    Like doctors and scientists.
    Out of 100 refugees you will hardly find NON to qualify. However I am afraid 3 to 5 % of the hundred are terrorist or potential terrorists.
    A great amount of young male Muslims are entering a world in Europa, highly different to the world they come from. In their world you can hardly recognize a woman, in exchange they enter a world with liquor, drugs and open skin or flesh. Many I think cannot handle the shock, and think all flesh must be for free. On top the woman has only a lower standing in their world.
    This obviously ends up in rape and abuse.
    Basically daily we have reports of knife attacks like today in Amsterdam again.
    A refugee from Afghanistan with a permit to stay in Germany on top of it.
    So Markel’s statement in 2015 WIR SCHAFFEN DAS has become her greatest mistake, which German people hold against her. She possible mend it good at the given time, but it started like a small camp fire and ended up as a great California forest fire.
    So today we look at countries like Italy, Austria, Hungary, Scandinavia, and possible a bunch more, which do not except new refugees. As hard as it might look but they all have learned their lesson. Even Spain I think get tired of refugees especially from central Africa, which I personally can confirm, littering the beaches and beach walks by trying to sell cheap Chinese stuff and possible drugs.
    Now Merkel is touring some African states to peddle the idea to take their people back, by flashing the Germans hard earned cash, which in return only lends up in certain Swiss banking accounts. I have lived long enough in the south of Africa to know the way things are managed.
    Since the white man has left Africa and handed control to their own people’s destiny, things have surely run out of control just to say the least. Just show me only one country which has prospered.
    I can make this statement, as my own son still lives there.
    So as you can see, the whole situation has run a bit out of control, and no one seems to have a good answer.
    Looking from this side of the pond to you, I can only say as sooner you get rid of a mentally sick brain clown, and replace him even better with a Clinton type guy, who even sometimes did let his little brain take control over his big brain.
    The problem possible in Europe is they have too many brains.
    All have a nice week end and hope we will get back to some normal trading in September.


  53. Yodi-thanks, I appreciate the input and the time.  I think this is related to long-term investing and trading.  How these issues are handled (immigration, labor shortage, if there are any, etc.) is going to have a huge impact.  Hopefully, we are on the right side of those trades.

    Enjoy your weekend,  Spain, Italy or Croatia this winter?


  54. Spain


  55. The Boring Secret to Getting Rich






  56. The Supreme Court Confirmation Charade



  57. Good morning,

    RB/Phil- sudden spike back up, averaging down here?


  58. Phil,

    Time to play hurricane season with /NG?


  59. Good morning!  

    I hope everyone is having a nice holiday weekend…

    Markets are closed today but Futures are trading up a bit.  Not sure why /RB popped so I wouldn't just knee-jerk go shorter without knowing…  Oil is still under $70 at the moment so maybe it's just people going long in anticipation of holiday demand but I don't think we get EIA until Thursday, so it's early either way to be jumping on more shorts – BUT if you want to stare at them, we can DD at $2.03 only to play for rejection on the new ones and take very quick profits off the table simply to lower our basis a bit on the first batch.  

    /NG/Japar – It's usually a good gamble here but the chart is very falling knife at the moment, I'd rather enter at $2.80 than $2.85 but the reward potential does outweigh the risk, overall.

    /SI long over the $14.50 line is my current favorite play:

     


  60. Happy labour my american friends,

    SI/Phil- if the trend is Dollar strengthening with more trade war news, do you think when the $200b tariffs hits.. the USD will strengthen again pushing Silver down? 


  61. Yes, that's why it's a dangerous trade at $50/penny but, at some point, the Dollar stops going down or people just panic into gold and silver from various countries (hopefully).


  62. Why Trump is so frantic right now





  63. A Bogus Deal on Nafta


  64. After 17 years of war, Taliban field commanders signal openness to peace talks


  65. RB/Phil- CL above $70… RB crushing our shorts…


  66. /RB/Dave – That's why I wanted to wait to DD, now ($2.05) is a good time to DD, with tight stops below and you don't have to get even to get back down to original size, just a penny improvement is nice.