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The Week Ahead – Elections, Data and Jobs

What a busy week!  

It hasn't even started yet and the dow is up over 400 points.  Why?  Who know?  Actually, it's because it's Monday and Monday's pre-market futures are very easy to manipulate.  Trump is 10 points behind Biden in the WSJ/NBC poll so he has to at least push the markets up into the election so he can keep pretending he's got a great economy.   It's hard for him to keep up with the other charade – that he's "beaten" the virus – when the infection rate is hitting new daily records in the US 50% higher than the previous peaks after the July 4th idiocy and now it's time for holiday idiocy, where you get to infect your entire family at Thanksgiving.  

My Nephew, Neice and Sister-in-Law all got it last week and they all seem to be doing OK, thank goodness but that's how fast it spreads through a house – as soon as my Nephew showed symptoms it was too late for his mother and sister to avoid it.  Testing might have helped but we don't test – so we'll never know.  

Stanford did a study of 18 Trump rallies between June and September and found that 30,000 of his followers were infected with 700 of them dying for their leader.  Trump knew about this early on and held the rallies anyway as he loves the idea that his followers are willing to die for him – what's a bigger power/ego trip than that?   At a rate of 1,000 infections per day doubling every 3 months, we'll all be dying for Trump in the near future?  How soon, you may ask? 

Well, 100,000 new infections per day between now and February is 9,000,000 but then 200,000/day through May is 18,000,000 by August and then 300,000/day into November will give us another 27M infected so, if we "stay the course" and re-elect Trump and he continues to do nothing, then we're looking at 54M new infections by this time next year.  MAGA!

This is what is going on in the UK (our Government refuses to allow official research into the "fake" virus like this) and this is why the UK just announced a one-month lockdown this weekend – along with most of Europe.  That's because these projections – the same ones we'd be seeing in the US if we were allowed to make projections – are terrifying.  And Europe isn't even trying compared to the US in their pace of infections.  In fact, America has so many infections that it has to be compared to entire continents in terms of new cases per day:

Column: Trump confirms the story | Columnists | wcfcourier.comTrump CAN'T call for a lockdown ahead of the election.  His whole attack on Joe Biden is that Biden will call for a lockdown if he's elected so it's not even possible for Trump to consider doing the right thing at this point.  Instead, just to maintain another one of Trump's lies, tens of thousands more American lives will be sacrificed on the atlar of Trump.  But that's nothing compared to the hundreds of thousands who will pay the price of 4 more years if he manages to stay in office.  

We're at peak insanity folks and the markets are doing pretty well considering and, since Biden is up 10% in the polls, we have to assume the Biden Victory is baked in but Biden will raise Corporate Taxes for sure, and that's going to send earnings backwards so I really don't think that's very bullish for the market but it's a lot more bullish than letting 54M more Americans get infected over the next 12 months with a virus that, so far, has killed 2.5% of the people infected so that would be 1,350,000 Americans dead – over 100,000 per month - if we stay this course for just one more year.   

Scanning life through the picture window

She finds the slinky vagabond

He coughs as he passes her Ford Mustang

But Heaven forbid, she'll take anything

All the way from Washington

Her bread-winner begs off the bathroom floor

We live for just these twenty years


Do we have to die for the fifty more?  – Bowie 

It's a busy week on the Economic Calendar with PMI, ISM and Construction Spending hitting the books just after the bell.  Tomorrow we'll see factory orders followed by PMI and ISM Services  and then Thursday it's the Fed Announcement followed by Powell's press conference and Friday it's the Big Kahuna – Non-Farm Payrolls.

Earnings are still slamming us daily and we're getting into the small caps, which is very dangerous territory so enjoy the last of the big-time spenders while you can.  While it's tempting to play, the election is far too much of a wild card and that ain't over 'till it's over – could be weeks…

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Meanwhile, rather than depress you with news, here's a few charts that make you go hmmmmm.

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Investors have not been impressed by results

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Come on, that one is funny!  

 


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  1. Good Morning.



  2. if the daily new infections is 100000 from now till feb why would it drop to only 2000 for march april may


  3. Morning Phil,

    i have a winner in choppy seas. 
    ROKU currently @$200

    (Sept 2022)

    10 x BCS 90/160 (paid $27)

    3 x $150 short puts (was paid $48)

    That was net $12,600 on the $70k spread

    current value around $30k so not even half way there and the I'm way way in the money.  
     

    In macro terms, do you just leave this to cook?   It's just crazy to me how poorly priced the bcs is and how over priced the short puts are. Im Happy to be patient but just don't want to be too risky.

    thanks MM 


  4. In a sign that we live in a vibrant democracy, they are now building a bigger fence around the White House and stores in Washington are boarding up. I guess they are expecting trouble if (as apparently he plans), Trump declares victory before all votes are counted because votes have never been counted past midnight on election day before, right? I remember when ABC called Lincoln's victory that night, and they stopped counting after that. Not sure how SCOTUS could go along with that but apparently we have to prepare for anything now. Look at history, compare the huge racist dog whistle that Trump is using every day now, his supporter's tactics to what we saw in Europe in the 30's! The little fascist playbook is on full force now.


  5. Good morning!

    Big Chart – Things that make you go MMMM…

    So there's 2 ways those M patterns resolve and that's like they are now, holding the middle leg, which is bullish or, failing the middle leg and heading down to match the lower leg of where it all began – that would be ugly.

    2,000/Tommy – I meant 200,000.  The numbers are so staggering it's hard to wrap your head around it.

    ROKU/Monk – $200 is $25Bn and up 100% since last year – why?  That is the reddest chart I've ever seen!  Way too risky for me.

    Year End 31st Dec 2014 2015 2016 2017 2018 2019 TTM 2020E 2021E CAGR / Avg
    Total Revenue
    $m

      320 399 513 743 1,129 1,349 1,592 2,167 37.1%
    Operating Profit
    $m

      -37.6 -43.4 -22.0 -13.3 -65.1 -141      
    Net Profit
    $m

      -40.6 -42.8 -63.5 -8.86 -59.9 -139 -174 -123  
    EPS Reported
    $

    0.000 -0.429 -0.451 -0.640 -0.085 -0.520 -1.15      
    EPS Normalised
    $

    0.000 -0.429 -0.449 -0.625 -0.085 -0.493 -1.15 -1.41 -0.961  
    EPS Growth
    %

                       
    PE Ratio
    x

                       
    PEG
     

                       
     

    Riots/StJ – Very scary.  Was a big discussion yesterday on TV regarding our path to Civil War.  Way too many good points were made…

    America is bracing for chaos.

    As the most powerful country in the world heads into what is shaping up to be the messiest, most contested election in its history, no one really knows what will happen.

    But one thing appears certain – there will be violence.

    With the November 3 (US time) election just days away, huge swathes of shopfronts in downtown Washington, Chicago and New York have been boarded up with plywood, as long-suffering store owners prepare for the worst.

     

    "I'm usually a very positive person – I hope for the best," Washington DC salon owner Alex Provenzano, whose store is one block north of the White House, told 'USA Today' last week. "But the people are very stressed out, and there is a lot of uncertainty in the country right now. It's pretty scary."

    Provenzano said his entire street was vandalised during Black Lives Matter riots in May after the death of George Floyd, and his store only removed the plywood in July – now it's going back up.

    The damage bill from the rioting, looting and arson in the months after the May 25 death of Floyd has already been estimated at up to $US2 billion, Axios reported last month.

    More than 30 people died in the violent riots, which researchers said accounted for just 7 per cent of the "overwhelmingly peaceful" protests around the country.

    They're boarding up Macy's in NYC – that's pretty bad!  

    Image

    Image

    It's so strange being a parent and having to warn your kids not to go out on Election Night….  WTF has happened to this country?  


  6. Phil ROKU – so I'm $40+' in the money and half way to target on the spread.  You advise I exit?


  7. Phil-re infections. Son came from the TCI to find work to pay his bills and has been working in two restaurant/bars for a couple of months since Wisc was ordered open by the Repugnants. No one wearing masks etc, of course since it is "just a hoax." One of the waitress's kids came home sick from school, but she came into work anyways. Needless to say everyone got infected and my son got very ill so was tested and it came back positive. Now my spouse is ill and running temps so it is the total lack of control, acceptance and idiocy that is running rampant in this country that is the big threat. Most of my friends say if Trump steals the election (again) they will ask Canada for asylum and have their firearms at the ready. Everyone is afraid, but are prepared for whatever transpires. As a friend said "We are Democrats with firearms. We have no choice." So sad how low we have sunk.


  8. pirateinvestore canada just announced we want lots of immigration over next three years  but im sorry you will have to leave all guns at the boarder. lol


  9. Pirate – Sorry to see your family is not doing well….

     

    Hang in there!


  10. Pirateinvestor

    Sorry to hear about your family Hang in there



  11. ROKU/Monk – I just think there's way too much danger of a major pullback so you either have to spend a lot to hedge it or just get out.  

    Democrats with firearms/Pirate – I'm pretty sure that's how the first Civil War started…


  12. Doctors Begin to Crack Covid’s Mysterious Long-Term Effects


  13. How Trump Could Attempt a Coup





  14. tommy, 1020- we were long time Canada property owners on Manitoulin Island and know the rules and ins and outs. After Homeland Security came in it turned out to be such a hassle going back over and back, with the long lines at the Soo to get over the bridge, we got fed up. Also our cabin was trashed by the neighbor"s relatives and the OPP did nothing though the four wheel tracks led right from their place to ours. They got into other neighbors properties and we even had a witness. We got our revenge though. We sold our gorgeous lake property to the Sudbury chief of police and his wife! Hoping for the best with this sneaky virus. Thankfully we are mostly strong and healthy which helps.








  15. pirateinvestor Bars and restaurants is since the beginning are 100% death trap. Better Russian roulette. Easy to say Monday morning quarter back. Sorry to hear it happen to your family. But trying to play this enemy by the rules is hard.

    No contact with people, masks distance to each other, avoid any groups of people, washing of hands most often. Not observing these few rules is trading your health with death!!!! And dead men do not have to pay any bills that is one cancellation. So it is a hard choice until we have a vaccine. Or a miracle healing like the Clown. Have not really been in a restaurant since Feb. But I must say my wife is a super cook. Even as an old man I still like to stay alive a bit longer.


  16. Hi Phil, 

    As per the webinar reminding you to look in to IVZ (Invesco) 

    thank you as always 

    Pat


  17. I hope some of you guys traded ABBV when I did mentioned it.


  18. Phil / Earnings data-

    Sorry I know you've mentioned this before but I cant find the post.  Where do you get the earnings data tables in your responses?  Ex. the annual info on ROKU above.  Thx!


  19. yodi/ABBV  Was that when ABBV was in the sixties in March or when it was 100 in July?  ;)


  20. 1020 you need to sometimes read my comments it helps !!!!!!


  21. LQDA / anyone understand what happened to cause a 27% drop?  


  22. I always read your comments Yodi!  


  23. Looks to be the purchase of Raregen. Not sure if this is a good/bad thing long term. Need domain expert Pharm to weigh in. Lol .. this is what you get when you're clueless of an industry.


  24. Yodi – I raise a Bitburger for all your help.

    https://www.bitburger.com/beers/seasonals/festbier/

     

    $16 for a case of 24 from Costco!


  25. 1020 You could have not read this one 10/6 I bought the stk at 86.65 and sold the 88 Nov 6 88 call for 2.10


  26. You're right, I missed that one… :)


  27. don't bet you farm on it


  28. This is a bit confusing. Storefronts boarding up to protect against "overwhelmingly peaceful protests"? Democrats with guns-who are the targets? MAGA hat wearers fair game? Civil war- who has time for that now- we are right in the middle of football season? Asylum in Canada- lovely country, lovely people, great beer and fishing, visited many times. Just who or what are you escaping from? 

    I know what I am going to do Wednesday- if Trump wins, go fishing; if Biden wins, go fishing. I recall the post 2016 election  attack of the vapors. My comment then is the same as now- chill!


  29. Yodi – You'll have to forgive me. As a LQDA holder and anxious Democrat, I feel the need for a bit of gallows humor… :)

    https://www.merriam-webster.com/dictionary/gallows%20humor


  30. pstas – Yeah, we do live a bit of the charmed life here in So.Cal….


  31. 1020 That's quite OK we do need a bit of fun in these trying times. The worse for me is that we have such a lot of idiots who do not seam to understand the grave danger of today. 


  32. Working in a bar today is the same as working in to a lions cadge and feeding chicken wings to them. They mostly will eat the chicken wings!!!!!


  33. Staying alive/Yodi – I go out about one a week and eat in outdoor restaurant.  Drives me crazy to be home every day but, as the virus gets worse – I'm a little less inclined to venture out when 1/40 people have it.  

    IVZ/Pat – IVZ is $6Bn at $13.40 and makes $700M growing nicely – very worthwhile.   They also pay an 0.62 (4.3%) dividend  AND they have long-dated options so a real winner.  

    Year End 31st Dec 2014 2015 2016 2017 2018 2019 TTM 2020E 2021E CAGR / Avg
    Total Revenue
    $m

    5,163 5,151 4,743 5,160 5,314 6,117 6,258 4,375 4,441 3.45%
    Operating Profit
    $m

    1,292 1,371 1,185 1,279 1,205 808 1,017     -8.96%
    Net Profit
    $m

    988 968 854 1,127 883 688 730 766 905 -6.98%
    EPS Reported
    $

    2.28 2.26 2.06 2.43 2.17 1.28 1.07     -10.8%
    EPS Normalised
    $

    2.28 2.28 2.06 2.61 2.43 2.44 1.74 1.70 1.98 1.40%
    EPS Growth
    %

    +16.3 +0.196 -9.75 +26.8 -6.79 +0.302 -31.1 -30.2 +16.4  
    PE Ratio
    x

              5.37 7.55 7.69 6.61  
    PEG
     

                  0.470 0.785  
     

    They cut their dividend in half earlier this year and that killed the stock but I think they may increase it so good time to own them so we can make an aggressive addition to the Dividend Portfolio like this:

    • Buy 2,000 shares IVZ at $13.40 ($26,800)
    • Sell 20 2023 $15 calls for $3.00 ($6,000) 
    • Sell 10 2023 $12 puts for $3.35 ($3,350) 

    That's net $17,450 for 2,000 shares or $8.725/share – a whopping 34.8% discount to the current price and, if we are assigned 1,000 more at $12, then our cost per share on 3,000 would still be just $9.82, still about 30% off the current price as our worst-case scenario.  And, of course, we'd just sell more puts and calls.   

    ABBV/Yodi – Good timing!

    Earnings/EMike – That's from Stockopedia, which you have to pay for.

    LQDA/Jedda – They are acquiring RareGen, people think they are over-paying.

    Chill/Pstas – Good advice but, given the atmosphere – I prefer my kids stay home.


  34. Phil / GOGL – lots of upgrades on this in the last 2 days…..  target price over 1900…. 


  35. Pstas-Who are the targets? Anyone who threatens us. Wisc is a "stand your ground" state just like Fla. Anyone threatens your life, or property you have a "right" to dispense with, no questions asked. We only own guns because I inherited them BUT up in the North where it is not uncommon for some of these nutters to own 10 or 30 guns you truly have no choice. And Dumpy encourages these people!


  36. Pstas – I guess you also go fishing on Wednesday if Trump claims victory before votes are counted and asks the court (that he packed) to invalidate mail-in ballots or whatever other shenanigans he tries. Our worst fears from 2016 have in fact being realized and maybe even worse! So not vapors, sorry. 230,000 people are dead, many of them could have been prevented! Institutions are being damaged, the fabric of the nation being stretched. So not vapor either!


  37. Phil / batman / GOOG

    here's my trade

    2 BCS Jan 2023 1500/2000 and sold 2 Jan 2023 1200 puts for net debit of $3,195. 

    It's now worth $18,445 for a spread of $100K.

    I plan to keep them. In spite of Anti Trust, Google has long ways to go in terms of monetizing their assets. 

    Would love to hear Phil's view too.


  38. Fishing? Actually, I may go Tuesday as Wednesday's forecast calls for mid 80's temps and I prefer a bit cooler. Life can be so challenging. 

    The Constitution is unequivocal: 

    Section 1 of the Twentieth Amendment, ratified in 1933, sets the expiration date for these terms at noon on January 20 of each year following a presidential election

    Sure, there are likely scads of eager and forthright legal hired guns of both political persuasions cluttering up courthouses nationwide teeing up self righteous arguments over this and that monstrous act of self evident injustice. It will all be sorted out in good time and in the extremely unlikely event (should circumstances dictate) the current occupant refuses to go, I am sure we can drum up, even in this new age of defunding, enough stout law enforcement to execute an eviction notice. So, yes indeed, vapors. 

    By the way, if you have not already,  be sure to vote!


  39. GOOGL/Batman – That had a nice Q but election spending is strong, ads are way up because people are home all day – nothing I'd extrapolate.

    xkcd: Sustainable

    At $1,622, GOOLG is at $1.1Tn and makes $32Bn, so let's say $40Bn in 2 years.  That's still 27.5x GENEROUS future earnings and $1,900 is 20% higher so $1.3Tn would put them over 30x for 2 straight years.  Doesn't seem that sustainable to me…

    Anti-Trust/Sk – I think Europe may take action – another reason I think they are somewhat capped here.  

    Voting/Pstas – As they say in Chicago: "Vote early, vote often…"  

    Woops, there goes the rally….

    Speaking of the over-priced Nasdaq – can't hold 11,000?  

    Things that make you go MMMM

    There's that lower leg!  Only 4,000 points away….


  40. Phil / SQQQ

    Looking to buy some SQQQ hedges. Would you suggest going for the June $25-$35 BCS at 1.95 or the Jan $25-$35 BCS at 2.15


  41. Phil, so sorry to hear about your family.  Hoping they are okay and make it through.  I work partially for a private school and once the principal was infected, then the vice principal, the admin assistant, the counselor and the marketing person, all in lock step one by one.  Thankful to be able to work away from them, but always terrified for my children who are in public school here in GA


  42. SQQQ/Jij – SQQQ is at $25 so gaining $10 would be 40% so a 13% drop in the Nasdaq to get there. I'd rather spend a little more and go for the March $20 ($8.40)/$30 ($5.40) bull call spread for $3 as you are $5 in the money and you can set a stop at $1 for the same $2 and you'd sold more premium that will burn faster, covering the holiday period, the transition (hopefully) of power and Q1 earnings – which are our primary concerns.

    Thanks RPeri – It is very scary out there.  


  43. Biden 85 million to tdump's 65 million – Senate 51 Dems to 47 Reps with Georgia deciding the last two in January. That's my SWAG  :)

     

    VOTE!!!


  44. I just dropped my ballot & my wife’s ballot off at the municipal drop box, crazy easy!

    If Uncle Joe wins he should require voting like this going forward to improve voter turnout.

    And if Comrade P**sy Grabber wins he should make this illegal so Republicans can stay in power.