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30,000 Friday – Dow Holding the Line so Far

Dow 30,000 – amazing! 

Well, maybe not that amazing as we were at 28,872 in January so, on the whole, we're up 1,200 points (4%) for the year but, considering what has happened to us since January – that's pretty remarkable.  Of course we did drop to 19,000 (down 36.66%) in March but back up over 50% since then has more than made up for it – pretty exactly made up for it, in fact – as if someone were trying to paint a picture.  

It's the Great Pumpkin, Charlie Brown is a Christmas special wearing a  Halloween costume - VoxPictures are subjective, of course – and so is belief.  As Linus has taught us, if one person believes in the Great Pumpkin, no matter how convincing his story is, people tend to think he is crazy.  But, if millions of people believe in Santa Clause – we have a national holiday!

At the moment, millions of people believe in the stock market and let's all hope that illusion isn't shattered too harshly.  On the whole, we only have 4% more faith in 30,000 than we had in January and, unlike the Great Pumpkin, 30,000 did finally show up – though also unlike the Great Pumpking, 30,000 appeared because the market had A LOT of help – about $20Tn Globally, in fact. 

For $20Tn, I'm pretty sure I could make Santa Clause real too!  Let's see, there are about 2.2Bn children (under 18) so that's about $10,000 per child we've borrowed and spent bailing out the Global Economy so yes, I'm pretty sure we could have spent that money to put a bike or a doll under their trees instead – even including delivery charges (or we could use Prime and get it for free!) though having someone dress up in a red suit and devour cookies would make it a bit more expensive – but I think we'd still have a bit of change left from our $20Tn shopping spree.

Food Insecurity Is A Serious Problem In America, And Has Long-Term Effects  On Our ChildrenTHAT is how much money we've spent propping up the markets this year.  In the US, in fact, we spent $6Tn and we have 74M children so that's $81,000 per child – Merry Christmas indeed!  According to the GOP, we can't afford to feed these children and we can't afford to educate these children or provide them with child care, but we will spend whatever it takes to arrest and detain them, right?  

Boy are our values screwed up or what?

What will happen to our beloved Markets when the stimulus is removed?  Will the market look like this little girl and have to go begging on the side of the street for some inflows?  That's what happened to the market in 2008 and Hell – that's what happened to the market in March!  How quickly we forget, right?  We have a vaccine and, hopefully, by Summer things will begin getting back to normal but keep in mind that vaccinating people doesn't make them immune – it only trains their bodies to fight the disease so all those vaccinated people can still become infected and can still be carriers – yet they are going to be more likely to be careless in their behavior creating a lot more danger for the unvaccinated.  

The only way to eradicate the virus is a combination of vaccines and continued precautions until we have successfully vaccinated more than 75% of the population and that's then assuming that Covid-19 doesn't constantly mutate like the flu virus, which slips past the vaccines on a regular, annual basis.  Fortunately, we're changing our leadership and hopefully we can start taking sensible steps to addressing this problem but, clearly, no steps are going to be taken prior to January 20th and another 3,000 Americans died yesterday and 10,000 people will die over the weekend, which is far more than every single person you are likely to see in a week unless you go to a stadium – all dead.  

Have a great weekend, 

- Phil

All dead, all dead

All the dreams we had

And I wonder why I still live on

All dead, all dead

And alone I'm spared

My sweeter half instead

All dead

And gone

All dead… – Queen


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  1. Do vaccines also protect businesses against lower earnings next quarter?

  2. Good Morning.

  3. Good riddance. Earnings StJ.  LOL. Look at biotechs. Majority don't earn a dime. Yet, many are in the billions in valuation.  :)

  4. Also…

  5. Just to keep things in perspective! Looks we'll need another 8 years to clean up the mess left behind.

  6. And a fun representation:

  7. Nice move on INTC so far – good call Phil! I sold a few Jan 45 puts in lieu of stock, buying those back here at a nice profit.  Still short some further out in time.

  8. sk2020 - I missed your post about selling calls to cover on INTC and WBA yesterday. Yesterday I sold to cover with Feb 52.5 calls in INTC, and with April 47.50 calls on WBA. I'd be happy to have either/both get called away since I'm still short some puts too.

    These are shorter term options than what Phil is often working with in the portfolios, but we have the luxury of doing that since we're not obligated to keep track of our positions publicly like he does. 

  9. The fragile recovery

  10. The MAGA Revolution Devours Its Own

  11. Good morning!

    Protectlion/StJ – That's what stimulus is for.  Maybe this is the genius of Trump, he doesn't stop borrowing just because he's bankrupt – he doubles down.  And, whether it works or not, you say it worked and call it a victory and, if you say it often enough – people forget it's a lie.

    INTC/Ati – Yes, getting their groove back.

    That reminds me, everyone should check out Netflix's Connected – Episode 4 (Digits):

    It's a show covering Benford's Law, which is now being mis-used to "prove" voter fraud in the election by Conservatives though it actually DISproves it when using more rigorous data.  While that's silly, the law itself is very interesting and I'd love to know what you guys think.

    Check out Tanger taking off:

  12. Going to be hard to pick a Trade of the Year if all my table-bangers are taking off….

  13. SKT Tanger Factory Outlet Centers Inc. 8000 2/12/2020 296 $57,360 $7.17 $3.36 $5.73     $10.53 $0.60 $26,880 46.9% $84,240
    SKT Short Call 2022 21-JAN 13.00 CALL [SKT @ $10.53 $0.60] -20 2/12/2020 (413) $-3,600 $1.80 $0.04     $1.84 $0.29 $-80 -2.2% $-3,680
    SKT Short Put 2023 20-JAN 10.00 PUT [SKT @ $10.53 $0.60] -40 10/16/2020 (777) $-21,960 $5.49 $-0.94     $4.55 $1.05 $3,760 17.1% $-18,200

  14. I know we had some fun with ETHE and it's 50% to 500% premium over NAV, but it gets crazier: behold LTCN. It holds 0.093 litecoins per share, or ~$9. It traded as high as 500 on Nov. 25th, or 6000% premium, up from ~$30 in October.

    There' s no such thing as "efficient pricing" in open market theory. If you believe this deprecated fallacy, thie evidence herein destroys your system of belief.

  15. Phil,  MRK --  Jan 2023 $70 Put selling for $7.50; say 5 contracts to start; Any interest from you on this trade.  They are buying OncoImmune, in the Covid space….seems they have a drug in Phase 3… Your thoughts always appreciated…Thank you.

  16. Wow BDC… that is nuts. Maybe LTCN is worth a small poke when it nears some kind of support or when the premium drops somewhat. I understand what a scam these things are, but hey, maybe people don't see much difference between something trading at 100x NAV or at a P/E ratio of 100.

    I'm still holding some ETHE just in case it goes parabolic.

  17. C/Phil:  Banks still seem to be lagging behind.  Any thoughts on C?

  18. MRK/Jasu – Nothing wrong with MRK – another good solid drug company with bonus money from Covid. 

    PFE has been doing well since we picked them:

    C/Kinki – 1/3 of small businesses have closed and 1/3 of the ones that remain say they need some kind of help to survive.  That kind of stuff can blow back hard on the banks so I'm not gung-ho investing in them.  

    I'm working on a deal with some Chinese investors and they were just laughing at me because I'm still trapped in the house.  They are pretty much done with the virus and business is back to normal there.

    Have a great weekend folks, 

    - Phil

  19. Some weekend thoughts

    AS Phil commented on MRK yes I do hold some profitable plays but still no stock. The stock still trading in the middle of its range as well is a good div. payer with a 3.17 yield. As always there are two sides of the coin.
    Say you sell the Jan 23 72.5 put for  8.45 PM margin 507.00 downside protection to 64.05. A reasonable deal and you can use the 845$ immediately.
    Whereas on the other side you buy the stock for 8194.00 and over a period of 8.5 times you would receive .65x 100 x 8.5 equals 552.50. 292.50 less than above. 
    On the surface # 1 is the better deal. But do not forget on a cash secured put you should have 7250.00 backing you put sale.!!! 
    But what about your stock will return to its old highs of 9/3/20 87$ or 12/20/19 to 92$. Even at 87$ your 100 stocks has increased by 500$ this would give me 552.50 (div) plus 500.00 equals 1052.50 against the put sale of 845.00 alone.
    Here my ideal play would be Buy 200 stocks @ 81.94 sell 2x Jan23 72.5 puts @ 8.45, sell 1x Jan23 85 call for 8.00 and to do some monthly work sell 1x Jan21 85 call for 1.11. 
    I let you do the math as your net cash layout will be 13,787.00. I might mention that you can possible do the short monthly call sale for another conservative 20 times say 1.11 or 2220.00.
    Obviously you do not have to stick to 200 stocks as you can do this in multiples of the above example.
    But don’t bet the farm on it as it is only my money I can lose or gain.

  20. Phil, Yodi

    Thanks for the input on MRK; will look to evaluate and trade accordingly.

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