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Tremendous Tuesday – Markets Come Roaring Back

20,800 infected, 420 dead.

The good news is the rate of new infections is down to just 20% – that's actually a very good sign.  The same with deaths.  That means, for today, we can turn our attention away from worrying about the virus to worrying about our Democracy as the Iowa Caucus ended in shambles last night after "inconsistencies in the reporting data."  That's forcing a manual recount so there's no clear winner yet on the Democratic side while President Trump managed to beat no one and take the Republican nomination in "The Greatest Republican Caucus EVER."  

Iowa Democratic Party officials said the delay was because of the new rules requiring caucus leaders to report three sets of numbers to party headquarters, rather than just the delegate totals.  Since the caucuses began 50 years ago, Iowa Democrats reported only one number: the delegate count from each of the state’s precincts.  Many precinct chairs across the state abandoned the new app that was built to help tabulate and report results as they struggled to log in. They opted instead to use the telephone hotline to report.

You would think we could have SOMEONE design an app for voting that actually works.  Perhaps we can just co-opt Tinder and swipe right for the candidate you choose – it would probably get a lot more people to vote!  Well, at least it doesn't seem to be Russian hacking, yet….

Yuan pares losses after weakening past 7 per dollarBack in China, the PBOC pumped another 400 Billion Yuan ($57Bn) into the banking system through reverse repo operations in extreme emergency measures to keep the markets afloat or, what our own Federal Reserve calls: "Tuesday."  Of course China's economy is half our size so it is a very large anount of money – more like a Friday for our Fed…

China has also been letting the Yuan fall (more Yuan to th Dollar) though it did bounce the last few days as people have begun hoarding money in case the banks shut down.  Macau has been ordered shut for 2 weeks and Wynn Casinos (WYNN) gets 75% of their profits from Macau so take away a month and that's 7.5% that should be knocked off on guidance. 

WYNN is a good stock and not terribly expensive but I like the following play on them for our Earnings Portfolio:

  • Buy 3 WYNN 2022 $120 calls for $28.50 ($8,550) 
  • Sell 2 WYNN 2022 $140 calls for $20 ($4,000) 
  • Sell 5 WYNN March $130 calls for $10 ($5,000) 

We're using the 2022 spread as a hedge against the sale of short calls and the net of the spread is a $450 credit and, if the short calls expire worthless, whatever value is left on the bullish spread (now net $4,550) is our profit.  If WYNN pops back up, we simply buy more spreads to cover and roll our short calls to a higher strike.  

Of course, that's what we said about Tesla, which is now hitting the $900 mark in pre-market trading, giving the company a $160Bn market cap, which is 8 times sales and infinity and beyond times profits (there are none).  I guess things can only get better from here on the bottom line and the company did report a profit last quarter but WOW!  

It reminds me of Yahoo in 1999 – no matter how ridiculously high it went, it managed to go higher the next day.  Yahoo peaked out at $120/share in early 2000 but was back below $20 by the end of that year, wiping out over $100Bn of investor "value" which, back at the turn of the Century, was considered a lot of money.  Now we have Jeff Bezos alone who is worth more than that but he wasn't even worth $1Bn 20 years ago – so there's hope for all of us!   

Image result for yahoo 1999 chart"

Yahoo went up for the same reason TSLA is going up – future expectations.  There seemed to be no way that the Web's top search engine would ever be replaced and people were sure Yahoo would become what Google (GOOG) ended up becomming, which is a $1Tn company – though it's down about 4% pre-market despite an earnings beat on a 2% revenue miss, though profits were a beat.  Cloud Revenue was $2.6Bn, up 53% from $1.7Bn last year but GOOG is so far behind AMZN and MSFT Cloud Services now that investors are throwing in the towel.  

I like GOOG, they are making $35Bn against their $1Tn valuation so about 30x earnings isn't terrible but traders always want MORE and they want it NOW and GOOG is already up about 50% since June or, what TSLA calls – "Tuesday"…

If this is a real recovery, we should see our Strong Bounce Lines taken and held and, as we noted on Thursday, that's 3,280 on the S&P 500, so we'll be watching that line closely to see if it holds up but I dont' see that the situation has changed all that much yet so I think the market is getting a little ahead of itself this morning.  

IF we are recovering, I'm going to be liking FCX as a new play, probably for our Money Talk Portfolio tomorrow (along with IMAX at $16.82) as copper has been beaten down (we're long on /HG too at $2.50 – see last week's Live Trading Webinar) but FCX held up pretty well due to the fact that 35% of their revenue now comes from Gold, which has been flying higher and Molybdenum, which has a very steady industrial demand.  

At $11.44, FCX is a $16.5Bn stock and they are near break-even after spending Billions on expansion projects that don't finish until 2022 which they believe will drive cash flow to around $4Bn but even if it's $2Bn, that's a very attractive price for the stock but traders don't like to wait while I'm very happy to establish a long-term position so, for our Long-Term Portfolio (LTP), let's:

  • Sell 20 FCX 2022 $12 puts for $3 ($6,000) 
  • Buy 50 FCX 2022 $10 calls for $3.25 ($16,250) 
  • Sell 50 FCX 2022 $15 calls for $1.50 ($7,500) 

That's net $2,750 on the $25,000 spread so our upside potential is $22,250 (809%) in two years if FCX gets to $15 but $12 is already $10,000 with a $7,250 (263%) profit – and that's pretty much our starting point so I definitely like this trade and we're happy to sell more puts if they get cheaper as net $9 does not scare us on this stock.

As I said, we'll see what actually sticks but starting the morning with two good trade ideas in opposite directions is a very good way to play this very uncertain market at the moment.

 


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  1. Good Morning!



  2. I asked last week if the TSLA March 1000 calls were safe as a joke, but it seems that nothing is safe with TSLA now. They seem quite determined to kill the shorts and there will be pain…  How can you keep up with a stock that is up $500 in a month?

     One powerful personal reminder to stay away from shorting individual stocks!


  3. Speaking of rapid growth:

    And looking at the YouTube numbers from Google, not slowing down!


  4. And on that topic:

    https://www.theverge.com/2020/2/3/21121207/youtube-google-alphabet-earnings-revenue-first-time-reveal-q4-2019

    On an annual basis, Google says YouTube generated $15 billion last year and contributed roughly 10 percent to all Google revenue. Those figures make YouTube’s ad business nearly one fifth the size of Facebook’s, and more than six times larger than all of Amazon-owned Twitch.


  5. STJ / Tesla has become bitcoin! We should develop a system that can steer us away from stocks that respond erratically!! Traditional analytics have no place in crazy town.  
    I knew we were f'kd when I overheard a guy I work with saying "damn, TSLA is $600, should I buy some??"  I think he did. 


  6. StJl / TSLA; Up to around the $400 mark fundamental analysis had a certain logic. The Saudi's seemed interested (although even they weren't aware of it?), Elon had agreed to mend his ways, cleaned up (slightly) the corporate governance side, and maybe a $300 – $450 price range could be explained. 

    My money advisor (who I generally tend to ignore) told me this morning that once Greta Thunberg got such a high profile and a platform to talk green and clean all day long, then as far as car companies go, TSLA was the only game in town (with the right credentials at this current moment in time).

    Last year I thought I was going to get my face ripped off by my attempts at shorting CMG – but I salvaged that by the skin of my teeth – using the layering of BCS (again and again), but most importantly biting the bullet on my short calls and buying them back when the momentum looked unstoppable.

    Not much help to those that are still short.


  7. Potter: you need a system that catches the TSLAs and the IMAXs – but I sure would prefer to dig myself out of a hole on IMAX than TSLA.

    Maybe the first place to start is to carefully check the list of stocks that are making a new 52 week highs. If they keep staying at the top of that list, than better to go long than to go short.


  8. Good morning! 

    Well the 50 dmas seem to be holding on the Big Chart so the broad rally is still in play IF /ES can hold 3,280 but I just shorted /NQ at 9,250 since I just don't see TSLA going over $900 so now it's a drag down if it pulls back.  It was, of course, $650 YESTERDAY so one would think $900 is a bit much on no news as it's $50Bn but money seems kind of meaningless – which means we should be seriously looking at inflation hedges for when this insanity leaks out of the markets. 

    Of course, NYSE has to be over 13,800 as well – so watch that too and 13,860 is the 5% line – so an interesting point of contention and look how cool it is that all our indexes are at the same chart level – haven't seen that in a long, long time.  

    Shorting/StJ – In this market, shorting is the Devil, that's for sure and TSLA is the 7th circle of Hell…

    Streaming/StJ – Well, having just switched to AT&T Uverse from Comcast, I can see why.  Uverse sucks by comparison from a user standpoint.  Comcast is more like NFLX – it's easy to find on-demand shows and they even link to NFLX and AMZN Prime Video as well as HBO-Go and all the other network streamers (mostly included).  It keeps track of what you watched and has good info on every show and it's well-organized. 

    Uverse is none of those things – it's crap!  I can't believe that this interface even still exists in 2020 – it's like time-warping to pre-Tivo days – even the original Tivo was way better than this.  Now I understand cord-cutting (I had Comcast in NJ too) – if this is what the #1 provider is offering, it's easy to see why people would jump on other platforms.  

    Wow, opening up 373!  Someone wants a rally.

    TSLA/Winston – Trefis is pretty good and they say $400 too:

    Greta angle is interesting because, not that it was reported in the US, but Davos was all about the Global Warming CRISIS and yes, we do need to make massive efforts to move to electric cars and most of TSLA's earnings come from subsidy credits and the bets are those are going to continue – even in the US and even under Trump.  That does make Billions of Dollars of difference to them.  

    The U.S. federal government is subsidizing electric cars with a $7,500 consumer tax break for the first 200,000 vehicles an automaker sells. Once the threshold is met, the tax credit is cut by half for all vehicles sold over the next six months and is then halved again for another six months before running out completely.

    The U.S. Congress at the end of 2019 declined to extend the cap to 600,000 electric vehicles per carmaker.

    So far, only Tesla and General Motors Co have hit the cap. Subsidies for Tesla finished at the end of 2019, while those for GM will run out on March 31.

    Tesla has seen soaring demand from Norway, where electric cars made up more than 40% in sales last year, a global record.

    The country has exempted battery-powered vehicles from the 25% value-added tax imposed on petrol and diesel engines, as well as other taxes levied on car purchases.

    The government originally considered phasing out some of those incentives by the end of 2019, but has since agreed to extend all tax exemptions until the end of 2021. Some political parties have called for a gradual reduction of incentives from 2022 onwards, although no plans are yet in place.

    Beijing has been slowly rolling back a generous five-year subsidy program for so-called new energy vehicles (NEVs), which began in 2016. It plans to phase out subsidies after 2020 amid criticism that some firms have become overly reliant on the funds. But China said it would not cut subsidies again this summer, an approach cheered by automakers.

    Tesla's China-built Model 3 cars will still receive subsidies as part of the government's NEV program, the company said in December.

    Sales of electric and hybrid vehicles in 2019 dropped for the first time in more than two years as the subsidy cuts reached new levels and have continued falling since.

    Electric vehicles in Germany are currently subsidized with a 4,000 euro ($4,437) grant while buyers of plug-in hybrids receive 3,000 euros – if the vehicle costs less than 60,000 euros.

    That puts Tesla's pricier Model S (which starts retailing for 86,800 euros in Germany) out of reach, but at a starting price of 44,400 euros the Model 3 is eligible. The subsidies are split evenly between the German federal government and the carmaker. The government in November made plans to increase the grants by half over the five years from 2020. But the German government said it is still awaiting approval by the European Commission on those increases.

    TSLA's China plant is only capable of producing 3,000 cars a week while Freemont is good for maybe 7,000 so the company is topped out at 500,000 cars (which is what they project, so no surprise) and no new plants are being built.  Perhaps they can increase their existing plants but they are still miles away from 1M cars – about 5% of the US market and 1.5% of the Global Market yet their market cap is 3x any other car company but TM ($200Bn), which is looking like a bargain these days.  


  9. 52-week / Winston – In fact I read an investment book years ago who made the case that companies making 52 week highs or lows tended to stay in that list for a while. Momentum does work – until it doesn't…


  10. TSLA – Sold a 2/7 950 call for $61.10.  Risking 8 points.


  11. Stop moved down to $50.


  12. OPEC 500,000 cut doesn't seem to be helping very much but I do like /CL off the $50 line with tight stops below. 

    I think people are scared of inventories but, if we get a good number, it could take off.  We already had a nice gain off the last test so it's house money.

    Still long /NG at avg $1.8275.

    Good job Albo – some has to stand up to those guys. 

    By the way, I have to leave about noon for a radio show (1pm), back later in the afternoon, I'd say 2:30.

    Image may contain: 2 people, people smiling

    Tomorrow no Webinar as I'm leaving early for Money Talk, which now shoots at 5pm.


  13. TSLA – Phil, that was pure, blind luck.  I put in a market order to the sell 1 950 put when they were trading for $40.  By the time the order was filled , they were $61 !

    Moving stops lower again.


  14. Phil// Clarification on the below IMAX trade.  Not sure what pre-roll means.  Should I roll down the Jun $20 puts to sept $18 puts as per suggestion or just watch?

    So, what do we do to protect?  IMAX options only go out to Sept so no emergency to roll the puts though we can sell 25 of the Sept $18 puts for $2.40 ($6,000) as a pre-roll for the Jun $20 puts that are now $3.50 so let's say a stop on 1/2 at $4 to be safe.  We'll let the short $20s die where they are and we'll salvage $1.40 from our 50 June $17 calls ($7,000) and buy 50 of the Sept $15 calls for $3 ($15,000) so we've given ourselves 3 more months and widened the spread by $2 ($10,000) for net $2,000.  


  15. Interesting triple top on ES in the 3290s? Will be telling if it breaks through and creates support…


  16. StJl – yes a classic momentum strategy – go long the 52 week highs until they are no longer at the top of the list.

    The rider is do not SHORT stocks on the 52 week high list!


  17. rookie, a pre-roll is when you are so confident that the position will go in your favour that you are not worried about increasing the position size for a short period of time. The stop is necessary in case the position does not go in your favour.

    So in this example, you would sell an additional 25 contracts of the Sept $18 puts, and leave the existing June $20 puts active (but subject to the stop mentioned above).

    Phil will correct me if I am wrong.


  18.  

    Citron is short TSLA :

     

    "We love TSLA and promised never to be short again. BUT when the computers start driving the market, we believe even Elon would short the stock here if he was a fund manager. This is no longer about the technology, it has become the new Wall St casino."


  19. TSLA/Albo – I hope you took it and ran – back to $908 now.  

    IMAX/Rookie – By pre-roll I mean selling the new ones while they are high-priced but waiting for a bounce to buy back the original short puts.  I think this is a really good bottom so I'm reluctant to pay that price for the June $20 puts and the stop keeps them from getting away from us but, hopefully, they just expire worthless and we make double.  

    And what Winston said! 

    Top/Potter – I don't think we have tops anymore.  This is all getting very 1999 where every week you think it can't get more ridiculous – but then it does.  

    Image result for nasdaq rise 1999"

    So now we're at 9,000 – up 50% since this chars from late 2017.  The Nas went from 2,000 to 5,000 in less than 2 years back then – almost what TSLA just did in 2 months.

    Even at just 1.5% of the Nasdaq weight, TSLA's 200% move has added 3% to the Nas (300 points) since Dec – out of 700 points gained.  AAPL is up 15% and is weighted at 12% so 1.8% (200 points) of the Nas move is from AAPL.  That means, the other 98 companies combined only moved the index up 200 points (2%) while the index gained 8%.

    Bottom line – this is not a healthy, broad-based rally but, as long as nothing bad happens to AAPL and TSLA – no one is going to notice or care.  

    Citron/Albo – Best of luck to them!  $909


  20. I live in Seattle and haven't seen a Tesla in months. Those 25 cent 800 calls (Friday) we're mid 20's yesterday, and today they're 90+.

    A once in a lifetime opportunity missed. 


  21. It's basically one guy thinking TSLA should be over 900 right?


  22. Phil/SKT

    I guess we have the March 14/16 BCS with June 14 Put sold. Did we amend this position? what is your view with their latest earnings. sorry if I have miss your comments on this.

    regards


  23. Tesla/BDC – I live in Altadena (part of LA) and always see at least a couple of Teslas every time I go out for errands.


  24. Interesting with TSLA, the April $600 puts from yesterday at $24.40 are now $25.50 so they've gained money even though TSLA went $100 the wrong way.  That indicates that, aside from the internal volatility going through the roof – a lot of people are jumping in on the short side.  

    In the STP, amazingly we sold 5 TSLA Sept $750 calls for $132 ($66,000) yesterday and now they are $245 ($122,500) but, fortunately, the Sept $900 calls are now $180, so we're being paid $50 more to be at the money than we were yesterday.  We need to sell 7 of them to be at the same $122K(ish) but let's not jump the gun and just sell 3 of the Sept $900 calls for $180 and put a stop on 3 of the Sept $750 calls at $275, which should give us about $25 more before that triggers ($940ish).  If that happens, we'll effectively have rolled 3 $150 higher for net $95 ($28,500) and we'll have to make that up with the roll of the rest, possibly to the Jan $1,000s, which are now $185 though $1,000 is scary close now.  

    Also, there's no point in our 5 short 2022 $300 puts, which are still $20, we have 2 short Jan $550 puts at $60 and we can sell 5 Jan $600 puts for $75 ($37,500) keeping in mind it's about balance – we'll certainly be very happy if TSLA drops hard and they double up!  

    SKT/Pat – Wow, what a drop from a nice push higher.  There's nothing really to adjust, our call-away is $15 in 2022 and it's at $14 now – really right on track as opposed to being way over our target. 

    SKT Tanger Factory Outlet Centers Inc. 1000 10/29/2019 98 $17,150 $17.15 $-3.16 $16.80     $14.00 $0.16 $-3,155 -18.4% $13,995
    SKT Short Call 2022 21-JAN 15.00 CALL [SKT @ $14.00 $0.16] -10 10/29/2019 (717) $-2,950 $2.95 $-1.83     $1.13 $0.23 $1,825 61.9% $-1,125
    SKT Short Put 2022 21-JAN 15.00 PUT [SKT @ $14.00 $0.16] -10 10/29/2019 (717) $-3,200 $3.20 $1.25     $4.45 $0.14 $-1,250 -39.1% $-4,450

    Tanger Factory Outlet Centers (NYSE:SKTguidance for 2020 FFO per share of $1.96-$2.04 trails the consensus estimate of $2.16.

    Guidance assumes 2020 same-center net operating income for consolidated portfolio between -6.75% and -8.25%, reflecting $37.6M impairment recognized for Jeffersonville, OH, property, average occupancy of 92%-93%; and projected store closures related to tenant bankruptcies and restructurings.

    "While we anticipate potential near-term occupancy and rent pressure, we plan to lease strategically to upgrade our tenancy and the consumer experience in order to drive long-term growth," said CEO Steven B. Tanger.

    Q4 adjusted FFO per share of 59 cents per share beats the average analyst estimate of 56 cents and compares with 64 cents in the year-ago period.

    Current quarter includes a 4-cent per share dilutive impact related to assets sold in March 2019.

    Q4 same-center NOI for the consolidated portfolio fell 0.4% for the quarter and 0.7% for the full year, primarily due to the impact of tenant bankruptcies, lease modifications, and store closures.

    2020 guidance assumes 303K square feet of known closures relating to all Dressbarn and Kitchen Collection stores and certain Forever 21 and Destination Maternity stores that closed in January and 322K-372K square feet of potential additional closures.

    So they are "only" going to make $2 per $14 share?  Is this really something to panic over?  It's not like they aren't going to sell the space to someone eventually but traders tend to take these things as total write-offs where I see it more like 50% impactful.  They'll be surprised when earnings aren't so bad a year from now. 


  25. Taking /NG and running at $1.86. 


  26. TSLA – it's the same thing it's been since it went above $25 – the decarbonization space is huge, no one owns any of it yet, and TSLA is the closest company to actual solutions that is publicly traded.

    The TSLA's of the world will take all the money from the petrochemical behemoths the same way amazon took money from the malls or google and facebook took it from newspaper advertising. The long term investing trend has been laid out: avoid oil and petrochemicals in favor of renewables. Investing in oil now is like investing in malls and newspapers in 1995. CHK anybody? LOLz!!!!

    TSLA is just first but they are not necessarily the best. Their primary mechanism is an electric car which is a copyable commodity. The solar/battery solution is mostly for show. It isn't cheap enough of a storage solution to be widespread though the distributed economics paradigm is the right direction, and they may be able to set some precedent here (though they haven't yet, take note). Mid-decade or so I predict a slew of IPO's from companies that are mostly stealth now (but have been working for years under the radar on their solutions) that bridge the gap between renewable energy and chemicals. This is the final death bell for the 100+ year old, entrenched petrochemical industry. I'm working on one of these nexus companies now as well, so this is the industry I'm in.


  27. My 520/660 spread showing no improvement today so not helping me with margin 


  28. Phil when you get back can you summarize the actual TSLA STP position as it stands after the rolls shown above.  Thx


  29. TSLA 2022 $900 ($260)/1,200 ($180) bull calls spread is $80 and provides upside protection and margin cover (PM accounts).  I'm just watching them for now but we'll have to add longs if TSLA gets to $1,000 and, amazingly, that's not out of the question.  

    Renwables/BDC – Good point, it's the Future.  In fact, TSLA was one of my "Future is Now" picks when we were discussing them in December.  

    Submitted on 2019/12/20 at 10:19 am

    TSLA/Maya – Game has changed, they are on our "Stocks of the Future" list now.  The car thing may not make money but the battery business is going well and I think their solar roof biz may take off too as CA is only the first state to mandate solar roofs on new construction so rich people will all want TSLA's new solar tiles – as it looks 1,000% better.  

    TSLA/JMD – See yesterday's comments from the Short-Term Portfolio.  If our position on TLSA wasn't mostly bullish (with a large short-put position), we would have gotten really screwed on this run up.

    TSLA/Palotay – Not nec. financially but a lot of excitement about their new battery tech makes me think they may do well in the future.  They just got a 93Mw order from Alaska using their new Mega Pack model after just finishing a 100Mw project in Australia ($66M) which the customer says has already saved them $28Mand TSLA promised to have it up and running in 100 days and they did.  Now Australia is asking for another 250Mw and this can all spread globally for TSLA very quickly.  

    Using Megapack, Tesla can deploy an emissions-free 250 MW, 1 GWh power plant in less than three months on a three-acre footprint — four times faster than a traditional fossil fuel power plant of that size. Megapack can also be DC-connected directly to solar, creating seamless renewable energy plants.

    That's the future baby!  

    TSLA/Palotay – I have simply come to respect their ability to ride things out and their battery business may save the company.  I certainly don't trust Musk so I still won't go long and the multiple is obscene but I am mostly saying why I wouldn't short them – despite the issues you raise (which are obvious and we've been talking about them for years yet, like Trump's many, many crimes – they don't seem to matter).

    You are right about Solar, SCTY was the leader by a mile and now, inside TSLA, they have slipped to 3rd place but I believe they are purposely restructuring and halted sales this year but, again, with Musk you never know what to believe.  Commodity or not – they are going to sell a lot of panels under the new law and commodity producers make money too.

    Image result for tesla solar roof sales competition

    If you want to be bearish on TSLA, I'd be way more worried about this chart:

    Image result for tesla solar roof sales competition

    Not much competition there. 

    Image result for tesla battery sales by quarter

    Image result for tesla battery sales by quarter

    Again, I'm not telling people to buy TSLA, just saying a bullish case can be made and stating what it is – in order to warn people not to short it either.

    Submitted on 2020/01/08 at 1:57 am

    TSLA/Palotay – Yes, that small float let's them manipulate the Hell out of the stock, unfortunately.  They did the same thing at the start of 2017, running from $180 at Thanksgiving to $380 (+111%) in June with barely a pause.  This run started at $210 in Aug and now $470 (+123%) but $100 of it came on two days in October and the last $70 came in the past 5 sessions so it's very unlikely there's a strong base to support it.

    Ah, I forgot all about this portfolio as it was right before I went to Thailand:

    Submitted on 2019/12/12 at 12:51 pm

    BYND/Pirate – You'd a better trader than I am if you're making money on the long side of this:

    Still, back at $75 I do like them again.  That's $4.5Bn and they'll do $500M next year in sales but the average American consumes 222.2 lbs of meat per year (including chicken), which seems insane but…  

    Americans are set to eat more meat in 2018 than ever before. According to data published by the US Department of Agriculture (USDA), consumers are expected to eat 222.2 pounds (100.8 kilo) of red meat and poultry this year, up from 216.9 pounds per person in 2017. That will surpass the previous record of 221.9 pounds per person, set in 2004, Bloomberg reports. The predicted increase is ending a trend of falling meat consumption that began with the Great Recession in 2008. In 2014, the consumption of red meat and poultry was still down at 201.8 pounds per capita before it started to climb steadily, reaching 211.1 pounds in 2015 and 214.6 in 2016. The figure predicted for 2018 corresponds to a meat intake of roughly 10 ounces (or 280 grams) per day, almost double the amount recommended by government nutritionists. According to USDA’s Choose MyPlate nutrition guidelines, adults should not eat more than 5 to 6 ounces of meat per day.

    The popularity of dairy products, for example cheese and butter, has also increased to an all-time high, the USDA figures reveal. Domestic meat production is on the rise as well. The total production of red meat and poultry is expected to reach about 103.5 billion pounds in 2018, compared with 97.6 billion pounds in 2016. (ab)

    So 100Bn pounds at $2 a pound is $200Bn and let's say plants get to $40Bn in 10 years and BYND has 10% of that market so $4Bn – that seems to justify $4.5Bn as they should make much more than $225M selling that (economies of scale, etc).  So, when a Company of the Future can easily grow into conservative estimates – I have to like the play – even if it's a bit ahead of the curve now.

    Certainly I like BYND enough to sell 2022 $60 puts for $14.50 to net in for $45.50, which is 40% below the current price so let's make that the first trade of the Future is Now Portfolio:

    • Sell 5 BYND 2022 $60 puts for $14.50 ($7,250)

    Now we have $107,250 to start with though the margin is a rude $7,500 as BYND is so crazy – otherwise I would have sold 10.  

    Submitted on 2019/12/26 at 2:51 pm

    BYND/Stock – One of our Stocks of the Future.   That's a list we have to get back to accumulating after New Year's.  They actually made $5M last Q and, while that's a mile from justifying a $4.7Bn valuation at $76, they are manufacturers and should scale up well and they have been supply-constrained in sales with growing demand so I think they do $600M next year and make $100M and that's still 47x but I think they cover it by 2022 easily and they can grow from there (fish, chicken, pork, better meat) so I like them for a long-term accumulate – starting with short 2022 $60 puts at $14 – that's a net $46 entry (26% off) as a worst case. 

    Here's the stocks we were looking at:

    Solar is the future and the future is now.  

    Let's see:  Crypotcurrency, Solar Energy, Hydrogen Fuel Cells, Quantum Computers, Virgin Galactic, Gene Therapy… 

    Submitted on 2019/12/10 at 1:41 pm

    I'm thinking we should put together a portfolio of "Future is Now" stocks like SPCE – Something that represents the leader in each Future Field like CRSP, ISRG, etc…

    Submitted on 2019/12/11 at 10:53 am

    • SPCE/Albo – I want to set up a "Future" is now Portfolio, let's talk candidates:
    • SPCE
    • TSLA
    • BYND
    • SPWR 
    • LMT (Fusion) 
    • DIS (entertainment) 
    • XYL (water treatment)
    • WM (more people, more waste)
    • CRSP
    • IBM (AI) 
    • QCOM (5G…) 
    • ISRG 
    • BLDP, PLUG, FCEL (not sure which)

    Additional ideas would be appreciated.  

    Let's get back to these – we'll see what's cheap.  

    OK, off to do the radio show.

    Margin/Coulter – If you have PM, they take what you WOULD make into account.  

    TSLA/Options – will do.


  30. Tesla – I have at least a half dozen on my street here in San Diego….


  31. 1020 - any powerwalls?


  32. Teslas everywhere around here in San Mateo, CA.  Also, seeing a constant stream of their trailer truck loads of new  outbound cars & returning empties on Highway 101 daily…


  33. Coulter – Not sure how under water you are, but a few hundred points ago I rolled most of my (large) loss into a short call spread, the 2021 450/550.  Which has WAY less delta, and has defined risk.  It isn't looking great now, but most parabolic moves like this end in tears for the longs, and it is way more relaxing have a defined risk position when things are acting so illogical.


  34. Powerwalls – I do see more of them, but not as many as one would think.


  35. APT

    APT makes surgical masks among other products.  Stock gapped up to 7.85 early last week.  Bought some at 4.92 and covered 2/3 with the Feb 5 calls for .60.


  36. IMO globally we're trading a new kind of currency based on carbon debt for fiat currency (government debt). We're all indebted to both, so why not? The latter is more efficient: the knowledge economy is now past it's inflection point replacing the manufacturing economy in size, which is a 1-2 orders of magnitude step up in valuation (total money supply).  

    The new economy will create 10,000 new billionaires (sorry "green new deal," you're using the old model)

    Oil majors are toast

    Technical Innovation drives decarbonization

    Yes there are parallels to "bitcoin" but whatever. But who cares? Bitcoin is a very specific mechanism: it's a transactional, algorithmic-based system of trust that is more efficient than a transactional, fiat system of trust (law based). All that fake money created out of fake oil contracts needs to go somewhere.

    There's still the patience element. Look at the chart: TSLA crossed 185 in 2013. It hit 185 five more times, including as recently as last year. However, the long term trend always wins. I remember we liked TSLA in 2013 at $25 because we thought it was a relatively cheap way for AAPL to enter the car commodity market. We were right.


  37. One more point: The manufacturing economy cannot solve for the carbon problem because the economic model is backwards: the energy we want is worth more than the carbon we emit. This is why "conservation" and "green new deals" are a total disaster. Conserve what? Going from 10 flights a year to 9? Or flying around to tell others not to fly around? (sorry Al Gore). No, it's the economic model that changes. Being carbon-negative productive is key, and it's essential to understanding the knowledge economy; the innovation it brings. In the knowledge economy we use free energy to conserve carbon. Therefore the more we do it (the more productive we are), the more carbon we offset and/or directly sequester. 


  38. sorry, I know nobody reads what I say or cares. 


  39. I read and answered.  :/


  40. It matters not if others 'react' 

     

    Ego is a bitch.


  41. LOL not true BDC, a lot of us made money trading cryptos thanks to you (when we had no idea what a 'crypto' was!) so you'll always be a must read.  Much appreciated!!


  42. bdchris – I'm reading. And trying to get my head around it… I'm just a construction guy that also trades. Don't have the education to figure some of this stuff out. Sorry. But I'm trying to get filled on a long shot 1100/1110 BCS on TSLA to see if I can scoop up a nice $100,000 before the end of the week, no luck so far getting fills at a price I'm willing to pay (70 cents).


  43. Phil what's a reasonable strike for CMG puts against the June 2021 short 840 calls



  44. If I were Elon, I would bring out a secondary offering, and discount it down to even $700 to get the stock sold.


  45. Elon / Albo – A couple more days and $1000 would also be a discount!


  46. Looks like TSLA might become a $1T company before FB!


  47. bdcris – You might be surprise at how many people read / enjoy your musings. I agree that technology innovation will have to drive decarbonization. Future opportunities will be in carbon neutral gasoline / fuel (which does exist), battery technology (many companies working on better alternatives), carbon sequestration and fusion technology. Please keep the thoughts flowing….


  48. Place your bets TSLA close 

    850 or 1000 


  49. 1020 – I do genuinely hope being openly derogatory and insulting towards me helps you in some way or serves something important for you internally.


  50. BioD / CO2 Mitigation  - I have a todo to research the CO2 Mitigation / Decarbonization industry.   I did some preliminary reading and the area looks wide open with several technologies that seem very 'long shot' ideas.  Have you done any research I this area ? or can you recommend some articles?


  51. CMG earnings after the close tonight. Fridays Options indicating a roughly $57 move up or down with CMG currently @ $885

    Always fun and games.


  52. TXT /  

    https://www.wsj.com/articles/bombardier-in-talks-to-sell-business-jet-unit-to-textron-11580835712?mod=djemalertNEWS

    DEALS ALERT

     

    Bombardier in Talks to Sell Business-Jet Unit to Textron

    Bombardier is in talks to sell its business-jet division to Textron as the struggling Canadian train and plane maker moves to pare its debts, people familiar with the matter said.


  53. TSLA;

    All the American car companies added have a smaller cap than Tesla, meanwhile, Musk distracts himself in Twitter with discussions about 5G and technical stuff of Space X…

    In my opinion, is privileged information about something special, maybe (I´m speculating) a breakthrough  or something spectacular around the company, 

    Musk destroyed all the circus around  Space launches with a couple of fresh ideas that destroyed the oligopoly dedicated to sucking NASA´s money, perhaps something is coming in the car industry too.

    There is not logic around this but a relevant fact not informed.


  54. Knowing the Tesla price is a joke doesn't stop people from getting Margin calls and having to cover


  55. im a little out of touch on earnings this week – who are the big reporters today / tmrw on the S&P?

     

    thanks!!!


  56. Coulter – $1000 today, and it wouldn't surprise me if it overran the options chain by Friday.


  57. Potter   I like ABBV for a Feb14 BCS 


  58. did they freeze TSLA Options? I'm getting invalid symbol?? other stocks working


  59. Holy cow – things are still going up I see.  

    TSLA $936?!?  WTF?

    CMG/Coulter – It's a restaurant trading at 80x earnings so hard to call anything reasonable.  Given great growth (which they don't have), let's say 40x but they do have earnings growth as they just came off a couple of rough years (after poisoning their customers).  So the real bet is they get back to making $500M and 40x that is $20Bn and $886 is $25Bn so figure 20% off is $708 so that's where I'd target a pull back that should hold (unless they decide to poison more customers).  

    Now the June $700 puts are only $10 – that's not much fun so I'd go by more what the 2022 $700 puts are ($55) and the June $800 puts are $28 so I think no worries selling those as you can roll them to 1/2x and down $100 in strike.


  60. $960!

    TSLA/Coulter – Good point,up from $650 to $950 in 48 hours.  

    Earnings/Potter – Still plenty to come.

    Image

    Image

    Image

    TSLA/Coulter – Mine work. 


  61. a Quick $100 pull back might scare a couple people?? will see tomorrow

    960 probably shook some shorts out too who knows


  62. Coulter – I bet it scares everyone that was a buyer at $960. They're rationalizing right now, "it's ok, it'll retake $960 tomorrow and I'll be fine."


  63. TSLA – I'm thinking Tesla is ripe for an Iron Condor. If they can get filled. 


  64. CMG can't make its mind up here

    I'd be fine with flat
     


  65. Poor F – time to sell some $8 puts tomorrow morning.


  66. F should say in the CC that they are going all electric in 2020 and will sell solar roofs as well! They'll trade at $500 by Friday.


  67. Here is the ultimate proof of the madness of crowds:  the Tesla 1500 Feb 7 call sold today at a high of $9.40 with three days remaining. Unbelievable.


  68. $900 – still respectable. 

    WYNN held up well today.

    CMG – Good earnings but they were already priced in:

    Chipotle crushed estimates on the top and bottom lines, and shares initially fell 3% before paring losses and jumping 2% in after-hours trading. Shares of the burrito giant hit all-time highs Tuesday.

    Here were the main numbers for Chipotle’s fourth quarter, compared to Bloomberg estimates:

    • Revenue: $1.44 billion vs. $1.4 billion expected

    • Adjusted earnings per share: $2.86 vs. $2.73 expected

    • Same-store sales: +13.4% vs. +9.8% expected

    The company’s digital sales during the fourth quarter grew 78.3% and accounted for 19.6% of total sales. Digital orders have been growing at a rapid clip and are important to Chipotle’s business because they usually have higher check averages and create a much more seamless experience for customers. In the third quarter, digital sales accounted for 18.2% of Chipotle’s total sales for the quarter.

    "We had a strong ending to 2019 as Q4 marks the eighth-consecutive quarter of accelerating comparable sales, which highlights that running great restaurants with the right leaders and the right culture is delivering outstanding financial performance," CEO Brian Niccol said in a statement. 

    "For the full year, Chipotle's average unit volumes exceeded $2.2 million and digital sales surpassed a billion dollars, showing that our key strategies are working, and the Chipotle brand is thriving as we build a sustainable model that helps cultivate a better world."

    Looking to 2020, Chipotle expects mid-single digit comparable restaurant sales growth and plans to open 150 to 165 new restaurants.

    Chipotle’s fourth-quarter results come on the heels of a strong third quarter, when the fast-casual chain reported 11% same-store sales growth and nearly 88% growth in digital sales.

    F is for fail:

    Ford (F) could see some investors drive away from the stock following its fourth quarter earnings release Tuesday afternoon.

    • 4Q Net sales: $39.7 billion vs. $36.3 billion estimate

    • 4Q Adjusted diluted EPS: $0.12 vs. $0.17 estimate

    • FY20 EPS outlook: $0.94 to $1.20 vs. $1.31 estimate

    Admitted execution issues in the U.S. tied to the new Explorer SUV and challenging conditions for automakers globally weighed on Ford to close out 2019. The company’s sales fell 5% from the prior year, adjusted operating profit margins dropped 230 basis points and free cash flow decreased to $500 million from $1.5 billion. Sales dropped in all geographic regions.

    One saving grace was a 61% bottom line improvement in China, reflecting Ford’s efforts to restructure the business.

    While Ford has made good progress on its $11 billion restructuring plan unveiled in 2018 and moved quickly to pivot to electric vehicle production (see new investments in Tesla rival Rivian and partnership with Volkswagen), investors may be taken aback by Ford’s early 2020 profit outlook.

    Ford CFO Tim Stone says the outlook — which is well below consensus forecasts — doesn’t include any “influence” from the coronavirus outbreak in China. Stone declined to share the status of Ford’s business in China except that they are monitoring the coronavirus situation and believes it’s “very fluid” and is taking “actions” for customers.

    “The guidance we have given is appropriate,” Stone said, adding that the outlook reflects headwinds such as late in the year launches of the new F-150 and electric Mach E and benefits from restructuring efforts.

    Still, making $1 per $under $9 share is good to me.

    True, StJ.

    TSLA/John – Wow, wish I'd caught that one.  Sold the March $1,000s ($120).


  69. Oil got worse, RB too – Bad API, I suppose.  


  70. Buying a Friday 800 put for $13 seemed a lot safer than selling the $1000 calls


  71. Already did that yesterday – didn't work!


  72. Mayor Pete in the lead, Bernie close 2nd.  Warren 3rd and Biden a sad 4th.  


  73. biodiesel chris. Im not smart enough to understand all of it but I always read what you say and usually find it interesting.


  74. Phil looking at the tala after hours trades they seem to be bouncing between 900 and 960 any idea what that means? Are people being forced to cover at the 960 range?




  75. Hyundai halts Korea output as China outbreak fallout spreads


  76. ‘A Systemwide Disaster’: How the Iowa Caucuses Melted Down


  77. BDC/Insult  I'm only pointing out your need for attention for generous comments given is akin to me looking for others wish me a Good Morning…..

     

    I say Good Morning daily, as much for me as for the others in the room. Nothing more.


  78. Go 1020. Your morning salutations always make me smile????


  79. 1020… fat finger…I meant a smiley face after my comment. You are more awesome than you know. Keep it up,  ????


  80. Thanks willsons, that makes me :)


  81. Biden’s poor showing in Iowa shakes establishment support


  82. Stop Bernie Sanders Now


  83. Asian shares up on China efforts despite virus worries






  84. 1020 I always waiting of some constructive comments. You never know how the morning will turn out!!!!!

    Looking at my TSLA play shown on Mondays comments it seems as I can not get over 3.1K where ever they go. Locked in to my max.

    Will look for the next gamble.



  85. UK economy rebounds as services sector hits 16-month high