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Friday Failure – Europe in a Recession Seems to Matter

Recession in Europe – again?

The eurozone economy has suffered a weak start to the year, with high coronavirus infection rates and government restrictions increasing the risk of a second recession since the pandemic first struck last year.  Fresh Covid-19 outbreaks that authorities have struggled to contain are continuing to weigh on economic activity and have damped expectations for a strong global recovery in the first half, a reality that US Investors, so far, have refused to face.

In the early months of the year, a number of large economies face the threat of declining output as restaurants, cinemas and a wider range of businesses that involve close physical proximity are closed or have had their activities severely curtailed.  Data firm IHS Markit said its Composite Purchasing Managers Index, which measures activity in the manufacturing and services sectors, for the eurozone fell to 47.5 in January from 49.1 in December. A reading below 50 points to a decline in activity.

A similar survey for Japan pointed to a bigger contraction in the services sector, while figures for the U.S. to be released later Friday are expected to point to a slowdown in the services recovery.

Antimicrobial resistance - Time to behave like a real Ostrich - Innovate UKSeriously people – we're not shocked by this, are we?  Most of the investing community is playing ostrich and have been keeping their heads firmly in the sand and pretending the vaccines will somehow "fix" everything but we've had flu vaccines for decades and, guess what, people still get the flu!  We are simply refusing to have realistic discussions about our future because it's just too depressing to contemplate but to go the opposite way and invest as if things could not possibly be brighter for our near-term future is simply foolish.

We are still in the middle of a Global Catastrophe and it is NOT fixed.  We haven't even seen the real repurcussions of the damage it's caused because we are filling all our economic holes with endless supplies of money and we're acting as if that has no long-term consequences.  Now that Joe Biden is President, the GOP is worried about the debt again and is seeking to block his $1.9Tn spending program.  Then where would we be?

Chart: How Coronavirus Stimulus Packages Compare | Statista

Seriously people, 20% of your GDP can't be stimulus – it's simply not a sustainable situation!  DESPITE Germany kicking in 40% of their GDP, Italy 49% (half!), France 29% and the UK 26%, Europe is STILL entering its 2nd Recession in 12 months or, what used to be called a Depression.  Technically, a Depression is a severe and prolonged downturn in economic activity commonly defined as an extreme Recession that lasts three or more years or which leads to a decline in real GDP of at least 10% – so we are not, technically, there yet but, if this vaccine doesn't work out as hoped – it will already be year two.

Studies of South African Virus Strain Raise Immunity Concerns

I'm sorry, I know this is depressing but this is REALITY and we've been taking a very long break from reality but now we're back and we need to show backbone to face up to our REAL problems and find REAL solutions – not to pin our faith on false panaceas.  

That's not to say we can't still invest – we just need to keep our heads.  IBM was our Stock of the Year in 2019, when it hit $120 in Novermber of 2018 and, at that time, we determined the fair value for the company to be $150 but last night they had disappointing earnings and fell back to $120 (-8.5%) this morning so, once again – we love them.  As I said to our Members last night in our Live Chat Room:

IBM – Q4 Sales were $20.4Bn, down 6% from last year but there was a 9% increase in cloud offset by a 24% decline in transaction processing BECAUSE EVERYTHING IS CLOSED!!!  IBM is the backbone to most of retail since they were there first and they are still the legacy systems for most major retailers.   Similarly, Global Tech Services was down 6% BECAUSE EVERYTHING IS CLOSED!!!  Systems were down 18% (no one is investing this year) and that caused Financing to be down 5% SINCE THEY FINANCE THE SYSTEMS!!!   

For 2021 IBM projects Free Cash Flow of $11-12Bn and, at $122.30, you can buy the whole company for $117Bn.  

This will be a good one to jump on.

We already have a position on IBM in our Long-Term Portfolio from the March crash and we'll be taking advantage and adding to that in today's Live Member Chat Room and we'll also be looking for a new trade idea for our Top Trade Alert Members. 

This is why we have CASH!!! on the sidelines into earnings season – to take advantage of sales on blue chips!  And there is no bluer chip than Big Blue!

Have a great weekend, 

- Phil

 


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  1. Phil IBM there we are I still remember the discussion on the Jan 21 roll of one member being worried about his Jan 21 120 call ??? as you told him to roll to Mar 125 ??? Did you look in to the crystal ball? I did roll a bit higher to 135 now as well in good standing.


  2. 5 charts on the future of the global economy



  3. UK Christmas retail sales worse than expected


  4. Biden cleans house at VOA after revolt over Trump changes




  5. Good Morning!


  6. Reality is:

    1. No plan for vaccination from the Trump administration probably slowed down the recovery by a couple of months.
    2. Obstructionism from the GOP in Congress will mean that just like in 2009, we'll have to agree to a half-ass stimulus effort! 

    Maybe the Dems get really pissed this time and simply eliminate the filibuster to get things done! GOP will cry about the tyranny but it will only be reaping what they have been sowing for the last 10 years. $1.9T should be a down-payment. When you can borrow at less than 1% and you can get 2% return on that money, you need to borrow as much as you can.


  7. No one should be under the illusion that Biden's path is not without landmines…..


  8. 1029- After threading through the mortality landmines of the last four years? Comparitively speaking, Biden's will be a walk in the warm blooming roses park!


  9. …but only if he eliminates the filibuster… :)


  10. My thought is the GOP showed the way to get things done is with that budget reconciliation joke.  Biden could give stimulus checks to everyone and use fuzzy math to show this growing the economy by 3%+ per year for 10 years and it miraculously pays for itself.


  11. Possible to early but I just bought the first Jan 23 100 call IBM for 24.35. Just for reference Jan 2021 22 call sells for about 18$


  12. Yodi / IBM

    I am trying to understand the implication of $24.35 and $18. Are you staying you are only paying $6.35 more for 2 years?

    Thanks.


  13. Good morning!

    Wow, INTC went hard the other way, down 7% now.  IBM crushed down 11% so we have to move on that:

    IBM Long Call 2023 20-JAN 110.00 CALL [IBM @ $117.70 $-13.96] 20 10/12/2020 (728) $50,000 $25.00 $-5.93 $25.00     $19.08 $-8.89 $-11,850 -23.7% $38,150
    IBM Short Call 2023 20-JAN 125.00 CALL [IBM @ $117.70 $-13.96] -20 10/12/2020 (728) $-38,000 $19.00 $-6.35     $12.65 $-7.45 $12,700 33.4% $-25,300
    IBM Short Put 2023 20-JAN 100.00 PUT [IBM @ $117.70 $-13.96] -10 10/12/2020 (728) $-11,750 $11.75 $2.00     $13.75 $3.85 $-2,000 -17.0% $-13,750

    In the LTP, let's sell 10 more IBM 2023 $100 puts for $14 ($14,000) and let's use that money to buy back 1/2 (10) of the $125 calls ($13,000) and we will certainly roll our 10 2023 $110 calls at $19 to the 2023 $100 calls at $24 for net $5 ($10,000).  So for net $9,000 we've rolled $20,000 deeper into the money (keeping up with the drop) and widened our spread by $20,000 and removed 1/2 the covers and we still have an open slot to sell 10 (for example) April $120s, now $5 ($5,000), which were $13 yesterday and if we make just 2 sales like that we pay for the whole adjustment.  

    Not that IBM can't go lower but I'm worried it won't and we'll miss it.  

    INTC Short Put 2022 21-JAN 30.00 PUT [INTC @ $58.61 $-3.85] -10 3/12/2020 (364) $-3,000 $3.00 $-2.33 $7.00     $0.67 $0.07 $2,330 77.7% $-670
    INTC Short Put 2022 21-JAN 50.00 PUT [INTC @ $58.61 $-3.85] -20 7/24/2020 (364) $-17,000 $8.50 $-4.13     $4.38 $0.78 $8,250 48.5% $-8,750
    INTC Long Call 2023 20-JAN 35.00 CALL [INTC @ $58.61 $-3.85] 50 11/17/2020 (728) $67,000 $13.40 $11.85     $25.25 $-3.75 $59,250 88.4% $126,250
    INTC Short Call 2023 20-JAN 50.00 CALL [INTC @ $58.61 $-3.85] -50 11/17/2020 (728) $-31,250 $6.25 $7.95     $14.20 $-3.30 $-39,750 -127.2% $-71,000

    The problem here is we had such a good entry that this doesn't really affect us.  

    So, as a new trade, it's going to be IBM and I'd go this way:

    • Sell 10 IBM 2023 $110 puts at $18.50 ($18,500) 
    • Buy 20 IBM 2023 $100 calls for $25 ($50,000)
    • Sell 20 IBM 2023 $120 calls for $15 ($30,000) 

    ?That's net $1,500 on the $40,000 spread so the upside potential is $38,500 (2,566%) if IBM can claw back to $120 in two years.  The downside risk is owning 1,000 shares of IBM for net $111.50 – and from there we could sell more puts and calls to drop the basis well under $100.  Think or Swim says 10 short IBM 110 puts cost us $7,660 in margin so it's a very margin-efficient trade also.  

    Our Earnings Portfolio has plenty of buying power so let's do the above trade by half – selling 5 puts and buying 10 of the spreads for $19,250 of upside potential, which would be 19% of our starting basis on this one trade.  

    Oil flew back to $52.50 


  14. sk2020 IBM when I buy a leap call I always like to know what if the Jan 23 would be today. With other words what would I get for the call today. Yes there is a 6 dollar down between the two. So I have at least two years to sell calls to do better than 6$. I trust I explained myself. Obviously if you still sell a Jan 23 put you will reduce the price even more. But you will wait for selling short term calls until the dust has settled!


  15. you seel Phil above sells a Jan23 110 put for 18.50, compare with the 18 dollar you would get for the Jan 23 call if it was today you still have a credit of .50.


  16. INTC / Phil – I am not that bullish on these guys. They are not going to disappear but there is just so much more competition today than even 1 year ago. Apple is designing their own CPU, so is Amazon now and Google and Microsoft are looking into it. Mostly for the server market. On desktop and portables, AMD is much more of a force now, and O/S are moving to ARM where there are many competitors with QCOM and now most likely NVDA following their ARM acquisition. 

    And INTC is really having trouble keeping up with other competitors on technology – still working on 10 nm tech when others are on 5 nm now. 

    So they won't disappear – lots of cash and talent. But their better days are behind IMO.


  17. IBM- perhaps their better days are also behind them. As I recall, Buffet bought IBM back about 10 yrs ago and exited the position some years later absorbing modest losses. Always a bit cryptic about stock moves, he limited his comment to something about not valuing IBM the same as previously. Only guessing but perhaps referring to a once wide competitive moat that has been eroding. So, like INTC, still a viable company with potential to improve post pandemic but my view, being more risk averse at this stage of my investing days, is to view these old war horses as cash cows perhaps better played for the income/dividend/covered calls. 


  18. Oh, and perhaps a few spreads just for fun. 


  19. IBM and INTC are both companies in the "technology space" that have lost its way because they stopped investing in innovation the way they needed to or their competitors have been.  Instead they focused on financial engineering business model taking on debt and buying back stock.   

    Intel keep coming up marginal improvements year over year thinking that because they "set the pace" on performance improvement, they can continue to clock revenue. 

    IBM has been through so many restructuring now that even their loyal (service) customers are leaving to the smaller firms more dedicated to please. (I know a long time IBMer telling me they changed sales territories every 3-6 months to make sales people compete and save commissions).    They still have valuable assets, tech and brand equity, but they need to be run like a a true tech company (innovation, smart risk taking, etc) to become leaders again.

    To Phil's point though – the spreads are not on them winning the war, just for them to improve marginally over 2 years when people's perception change. That is high probability.


  20. STJ, don't forget that QCOM just bought NUVIA, Jim Keller went to Tenstorent, and AMD filed a patent for integrating programmable logic into their CPUs.  If that last one isn't a bet against raw x86/x64, I don't know what is.


  21. INTC/StJ – I don't consider it that bullish to believe they are worth 10x earnings.  Our target price on INTC is $50, not $60 or $70.  It just so happens that, at $57, we can make a net $37,000 trade that pays $75,000 at $50 so, to me, that's like betting a $20 bill will be worth $20 in two years and you're saying "no it won't" and you are willing to pay me +$38,000 if it is.  I really don't think it's foolish or even dangerous to take those bets and I'd rather take those bets in this market than bet on some MoMo stock getting past 50x earnings and holding that for two years.  

    As to "lagging" this has been their schedule since their 2018 report.  2020 was always going to be a gap year and the jackals have been let loose to make a story up about Intel having trouble when all they are doing is sticking to their plan – as they do in every cycle and have since the 1970s.  

    Image

    refer to caption

    Covered calls/Pstas – That is how we're playing them.  Just covering one call with another.


  22. We discussed this 7 years ago. Wya to go, MSM!

    and GME. Yowzer. The reddit gang really has a hold on this one.


  23. IBM needs an IBM-Coin. 


  24. Yodi 

    Thank you for the explanation. That helps.


  25. Phil / IBM   I'm out fo my position except for some LT puts ( '22 and '23 110 puts) ……..  I ended up breaking even on this after 2 years and too much time spent on this….   I may look at this once they provide more data on the spin off.  But this company is struggling .  The last quarter was not all that terrible,  but it's clear that at best improvement is back end loaded, and even then the areas that will benefit the most will be the 'spin of'f company late '21 / early '22….  The trimmed own company will run by a technical guy which I think is great, as they need to figure out what to acquire and how to develop products….   Yesterday I contemplated selling my long calls and shorting the stock in a big way into earnings….  but did not pull the trigger…   I did short it at 135 but not near enough …..  

    IBM Can’t Spin Its Way Out of Trouble 

    Disappointing results bring stock back to where it was before the company announced a spin-off meant to boost growth prospects 

    https://www.wsj.com/articles/ibm-cant-spin-its-way-out-of-trouble-11611342429?mod=djemheard_t

     


  26. Phil – No disagreement from me on MoMos vs INTC! I am just worried that INTC has more pain ahead. Just my $0.02 and I have been wrong in the past. In fact, I was wrong just yesterday :-)


  27. Comment content omitted because it is too long.


  28. IBM/Batman – Yep, they just don't keep up with the changes and now they are changing divisions and such – what a mess!  

    • 1956: Williamsburg conference. Watson Jr. gathered some 100 senior IBM executives together for a special three-day meeting in Williamsburg, Virginia. The meeting resulted in a new organizational structure that featured a six-member corporate management committee and delegated more authority to business unit leadership. It was the first major meeting IBM had ever held without Thomas J. Watson Sr., and it marked the emergence of the second generation of IBM leadership.[122]
    • 1956: Artificial intelligenceArthur L. Samuel of IBM's Poughkeepsie, New York, laboratory programs an IBM 704 to play checkers (English draughts) using a method in which the machine can "learn" from its own experience. It is believed to be the first "self-learning" program, a demonstration of the concept of artificial intelligence.[123]
    • 1957: FORTRAN. IBM revolutionizes programming with the introduction of FORTRAN (Formula Translator), which soon becomes the most widely used computer programming language for technical work. FORTRAN is still the basis for many important numerical analysis programs.[124]
    • 1958: SAGE AN/FSQ-7. The SAGE (Semi-Automatic Ground Environment) AN/FSQ-7 computer is built under contract to MIT's Lincoln Laboratory for the North American Air Defense System.[125]
    • 1958: IBM domestic Time Equipment Division sold to Simplex. IBM announces the sale of the domestic Time Equipment Division (clocks et al.) business to Simplex Time Recorder Company. The IBM time equipment service force will be transferred to the Electric Typewriter Division.[126]
    • 1958: Open Door program. First implemented by Watson, Sr., in the 1910s, the Open Door was a traditional company practice that granted employees with complaints hearings with senior executives, up to and including Watson Sr. IBM formalized this practice into policy in 1958 with the creation of the Open Door Program.[127]
    • 1959: Speak up! A further example of IBM's willingness to solicit and act upon employee feedback, the Speak Up! Program was first created in San Jose.[128]
    • 1959: IBM 1401. IBM introduces 1401, the first high-volume, stored-program, core-memory, transistorized computer. Its versatility in running enterprise applications of all kinds helped it become the most popular computer model in the world in the early 1960s.[129]
    • 1959: IBM 1403. IBM introduces the 1403 chain printer, which launches the era of high-speed, high-volume impact printing. The 1403 will not be surpassed for print quality until the advent of laser printing in the 1970s.[130]
    •  
    • 1961: IBM 7030 Stretch. IBM delivers its first 7030 Stretch supercomputer. Stretch falls short of its original design objectives, and is not a commercial success. But it is a visionary product that pioneers numerous revolutionary computing technologies which are soon widely adopted by the computer industry.[139][140]
    • 1961: Thomas J. Watson Research Center. IBM moves its research headquarters from Poughkeepsie, NY to Westchester County, NY, opening the Thomas J. Watson Research Center which remains IBM's largest research facility, centering on semiconductors, computer science, physical science, and mathematics. The lab which IBM established at Columbia University in 1945 was closed and moved to the Yorktown Heights laboratory in 1970.[141]
    • 1961: IBM Selectric typewriter. IBM introduces the Selectric typewriter product line. Later Selectric models feature memory, giving rise to the concepts of word processing and desktop publishing. The machine won numerous awards for its design and functionality. Selectrics and their descendants eventually captured 75 percent of the United States market for electric typewriters used in business.[142] IBM replaced the Selectric line with the IBM Wheelwriter in 1984 and transferred its typewriter business to the newly formed Lexmark in 1991.[143]
    • 1961: Report Program Generator. IBM offers its Report Program Generator, an application that allows IBM 1401 users to produce reports. This capability was widely adopted throughout the industry, becoming a feature offered in subsequent generations of computers. It played an important role in the successful introduction of computers into small businesses.[144]
    • 1962: Basic beliefs. Drawing on established IBM policies, Thomas J. Watson, Jr., codifies three IBM basic beliefs: respect for the individual, customer service, and excellence.[145]
    • 1962: SABRE. Two IBM 7090 mainframes formed the backbone of the SABRE reservation system for American Airlines. As the first airline reservation system to work live over phone lines, SABRE linked high-speed computers and data communications to handle seat inventory and passenger records.[146]
    • 1964: IBM System/360. In the most important product announcement in company history to date, IBM introduces the IBM System/360: a new concept in computers which creates a "family" of small to large computers, incorporating IBM Solid Logic Technology (SLT) microelectronics and using the same programming instructions. The concept of a compatible "family" of computers transforms the industry.[147]
    • 1964: Word processing. IBM introduces the IBM Magnetic Tape Selectric Typewriter, a product that pioneered the application of magnetic recording devices to typewriting, and gave rise to desktop word processing. Referred to then as "power typing," the feature of revising stored text improved office efficiency by allowing typists to type at "rough draft" speed without the pressure of worrying about mistakes.[148]
    • 1964: New corporate headquarters. IBM moves its corporate headquarters from New York City to Armonk, New York.[149]
    • 1965: Gemini space flights. A 59-pound onboard IBM guidance computer is used on all Gemini space flights, including the first spaceship rendezvous. IBM scientists complete the most precise computation of the Moon's orbit and develop a fabrication technique to connect hundreds of circuits on a silicon wafer.[150]
    • 1965: New York World's Fair. The IBM Pavilion at the New York World's Fair closes, having hosted more than 10 million visitors during its two-year existence.[151]
    • 1966: Dynamic Random-Access Memory (DRAM). IBM invents one-transistor DRAM cells which permit major increases in memory capacity. DRAM chips become the mainstay of modern computer memory systems: the "crude oil" of the information age is born.[152]
    • 1966: IBM System/4 Pi. IBM ships its first System/4Pi computer, designed to meet U.S. Department of Defense and NASA requirements. More than 9000 units of the 4Pi systems are delivered by the 1980s for use in the air, sea, and space.[153]
    • 1966: IBM Information Management System (IMS). IBM designed the Information Management System (IMS) with Rockwell and Caterpillar starting in 1966 for the Apollo program, where it was used to inventory the very large bill of materials (BOM) for the Saturn V moon rocket and Apollo space vehicle.
    • 1967: Fractal geometry. IBM researcher Benoit Mandelbrot conceives fractal geometry – the concept that seemingly irregular shapes can have identical structure at all scales. This new geometry makes it possible to mathematically describe the kinds of irregularities existing in nature. The concept greatly impacts the fields of engineering, economics, metallurgy, art, health sciences, and computer graphics and animation.[154]
    • 1968: IBM Customer Information Control System (CICS). IBM introduces the CICS transaction monitor. CICS remains to this day the industry's most popular transactions monitor.[155]
    • 1969: Antitrust. The United States government launches what would become a 13-year-long antitrust suit against IBM. The suit becomes a draining war of attrition, and is eventually dropped in 1982,[156] after IBM's share of the mainframe market declined from 70% to 62%.[157]
    • 1969: Unbundling. IBM adopts a new marketing policy that charges separately for most systems engineering activities, future computer programs, and customer education courses. This "unbundling" gives rise to a multibillion-dollar software and services industry.[158]
    • 1969: Magnetic stripe cards. The American National Standards Institute makes the IBM-developed magnetic stripe technology a national standard, jump starting the credit card industry. Two years later, the International Organization for Standardization adopts the IBM design, making it a world standard.[159]
    • 1969: First moon landing. IBM personnel and computers help NASA land the first men on the Moon.
    • 1970: System/370. IBM announces System/370 as successor to System/360.
    • 1970: Relational databases. IBM introduces relational databases which call for information stored within a computer to be arranged in easy-to-interpret tables to access and manage large amounts of data. Today, nearly all database structures are based on the IBM concept of relational databases.
    • 1970: Office copiers. IBM introduces its first of three models of xerographic copiers. These machines mark the first commercial use of organic photoconductors which since grew to become the dominant technology.
    • 1971: Speech recognition. IBM achieves its first operational application of speech recognition, which enables engineers servicing equipment to talk to and receive spoken answers from a computer that can recognize about 5,000 words. Today, IBM's ViaVoice recognition technology has a vocabulary of 64,000 words and a 260,000-word back-up dictionary.[166]
    • 1971: Floppy disk. IBM introduces the floppy disk. Convenient and highly portable, the floppy becomes a personal computer industry standard for storing data.[167]
    • 1973: Winchester storage technology. The IBM 3340 disk unit—known as "Winchester" after IBM's internal project name—is introduced, an advanced technology which more than doubled the information density on disk surfaces. It featured a smaller, lighter read/write head that was designed to ride on an air film only 18 millionths of an inch thick. Winchester technology was adopted by the industry and used for the next two decades.[168]
    • 1973: Nobel Prize. Dr. Leo Esaki, an IBM Fellow who joined the company in 1960, shares the 1973 Nobel Prize in physics for his 1958 discovery of the phenomenon of electron tunneling. His discovery of the semiconductor junction called the Esaki diode finds wide use in electronics applications. More importantly, his work in the field of semiconductors lays a foundation for further exploration in the electronic transport of solids.[169]
    • 1974: SNA. IBM announces Systems Network Architecture (SNA), a networking protocol for computing systems. SNA is a uniform set of rules and procedures for computer communications to free computer users from the technical complexities of communicating through local, national, and international computer networks. SNA becomes the most widely used system for data processing until more open architecture standards were approved in the 1990s.[170]
    •  
    • mid-1970s: IBM VNET. VNET was an international computer networking system deployed in the mid-1970s, providing email and file-transfer for IBM. By September 1979, the network had grown to include 285 mainframe nodes in Europe, Asia, and North America.
    • 1975: Fractals. IBM researcher Benoit Mandelbrot conceives fractal geometry—the concept that seemingly irregular shapes can have identical structure at all scales. This new geometry makes it possible to describe mathematically the kinds of irregularities existing in nature. Fractals later make a great impact on engineering, economics, metallurgy, art, and health sciences, and are also applied in the field of computer graphics and animation.[191]
    • 1975: IBM 5100 Portable computer. IBM introduces the 5100 Portable Computer, a 50 lb. desktop machine that put computer capabilities at the fingertips of engineers, analysts, statisticians, and other problem-solvers. More "luggable" than portable, the 5100 can serve as a terminal for the System/370 and costs from $9000 to $20,000.[192]
    • 1976: Space Shuttle. The Enterprise, the first vehicle in the U.S. Space Shuttle program, makes its debut at Palmdale, California, carrying IBM AP-101 flight computers and special hardware built by IBM.
    • 1976: Laser printer. The first IBM 3800 printer is installed. The 3800 is the first commercial printer to combine laser technology and electrophotography. The technology speeds the printing of bank statements, premium notices, and other high-volume documents, and remains a workhorse for billing and accounts receivable departments.[193]
    • 1977: Data Encryption Standard. IBM-developed Data Encryption Standard (DES), a cryptographic algorithm, is adopted by the U.S. National Bureau of Standards as a national standard.[194]
    • 1979: Retail checkout. IBM develops the Universal Product Code (UPC) in the 1970s as a method for embedding pricing and identification information on individual retail items. In 1979, IBM applies holographic scanner technology in IBM's supermarket checkout station to read the UPC stripes on merchandise, one of the first major commercial uses of holography. IBM's support of the UPC concept helps lead to its widespread acceptance by retail and other industries around the world.[195]
    • 1979: Thin film recording heads. Instead of using hand-wound wire structures as coils for inductive elements, IBM researchers substitute thin film "wires" patterned by optical lithography. This leads to higher performance recording heads at a reduced cost and establishes IBM's leadership in "areal density": storing the most data in the least space. The result is higher-capacity and higher-performance disk drives.[196]
    • 1979: Overcoming barriers to technology use. Since 1946, with its announcement of Chinese and Arabic ideographic character typewriters, IBM has worked to overcome cultural and physical barriers to the use of technology. As part of these ongoing efforts, IBM introduces the 3270 Kanji Display Terminal; the System/34 Kanji System with an ideographic feature, which processes more than 11,000 Japanese and Chinese characters; and the Audio Typing Unit for sight-impaired typists.
    • 1979: First multi-function copier/printer. A communication-enabled laser printer and photocopier combination was introduced, the IBM 6670 Information Distributor. This was the first multi-function (copier/printer) device for the office market.

    • 1980: Thermal conduction modules. IBM introduces the 3081 processor, the company's most powerful to date, which features Thermal Conduction Modules. In 1990, the Institute of Electrical and Electronics Engineers, Inc., awards its 1990 Corporate Innovation Recognition to IBM for the development of the Multilayer Ceramic Thermal Conduction Module for high performance computers.[197]
    • 1980: Reduced instruction set computing (RISC) architecture. IBM successfully builds the first prototype computer employing IBM Fellow John Cocke's RISC architecture. RISC simplified the instructions given to computers, making them faster and more powerful. Today, RISC architecture is the basis of most workstations and widely viewed as the dominant computing architecture.[198]
    • 1981: IBM PC. The IBM Personal Computer goes mass market and helps revolutionize the way the world does business. A year later, Time Magazine gives its "Person of the Year" award to the Personal Computer.[199]
    • 1981: LASIK surgery. Three IBM scientists invent the excimer laser surgical procedure that later forms the basis of LASIK and PRK corrective eye surgeries.[200]
    • 1982: Antitrust suit. The United States antitrust suit against IBM, filed in 1969, is dismissed as being "without merit."[201]
    • 1982: Trellis-coded modulation. Trellis-coded modulation (TCM) is first used in voice-band modems to send data at higher rates over telephone channels. Today, TCM is applied in a large variety of terrestrial and satellite-based transmission systems as a key technique for achieving faster and more reliable digital transmission.[202]
    • 1983: IBM PCjr. IBM announces the widely anticipated PCjr., IBM's attempt to enter the home computing marketplace. The product, however, fails to capture the fancy of consumers due to its lack of compatibility with IBM PC software, its higher price point, and its unfortunate ‘chiclet’ keyboard design. IBM terminates the product after 18 months of disappointing sales.[203]
    • 1984: IBM 3480 magnetic tape system. The industry's most advanced magnetic tape system, the IBM 3480, introduces a new generation of tape drives that replace the familiar reel of tape with an easy-to-handle cartridge. The 3480 was the industry's first tape system to use "thin-film" recording head technology.
    • 1984: Sexual discrimination. IBM adds sexual orientation to the company's non-discrimination policy. IBM becomes one of the first major companies to make this change.[204]
    • 1984: ROLM partnership/acquisition. IBM acquires ROLM Corporation for $1.25 billion.[172] Based in Santa Clara, CA (subsequent to an existing partnership),[205] IBM intended to develop digital telephone switches to compete directly with Northern Telecom and AT&T.[206] Two of the most popular systems were the large scale PABX coined ROLM CBX and the smaller PABX coined ROLM Redwood. ROLM is later acquired by Siemens AG in 1989–1992.[207][208]
    • 1985: MCI. IBM acquires 18% of MCI Communications, the United States's second-largest long-distance carrier, in June 1985.[172]
    • 1985: RP3. Sparked in part by national concerns over losing its technology leadership crown in the early 1980s, IBM re-enters the supercomputing field with the RP3 (IBM Research Parallel Processor Prototype). IBM researchers worked with scientists from the New York University's Courant Institute of Mathematical Science to design RP3, an experimental computer consisting of up to 512 processors, linked in parallel and connected to as many as two billion characters of main memory. Over the next five years, IBM provides more than $30 million in products and support to a supercomputer facility established at Cornell University in Ithaca, New York.[209]
    • 1985: Token Ring Network. IBM's Token Ring technology brings a new level of control to local area networks and quickly becomes an industry standard for networks that connect printers, workstations and servers.[210]
    • 1986: IBM Almaden Research Center. IBM Research dedicates the Almaden Research Center in California. Today, Almaden is IBM's second-largest laboratory focused on storage systems, technology and computer science.[211]
    • 1986: Nobel Prize: Scanning tunneling microscopyIBM Fellows Gerd K. Binnig and Heinrich Rohrer of the IBM Zurich Research Laboratory win the 1986 Nobel Prize in physics for their work in scanning tunneling microscopy. Drs. Binnig and Rohrer are recognized for developing a powerful microscopy technique which permits scientists to make images of surfaces so detailed that individual atoms may be seen.[212]
    • 1987: Nobel Prize: High-Temperature SuperconductivityJ. Georg Bednorz and IBM Fellow Alex Müller of the IBM Zurich Research Laboratory receive the 1987 Nobel Prize for physics for their breakthrough discovery of high-temperature superconductivity in a new class of materials. They discover superconductivity in ceramic oxides that carry electricity without loss of energy at much higher temperatures than any other superconductor.[213]
    • 1987: Antivirus tools. As personal computers become vulnerable to attack from viruses, a small research group at IBM develops, practically overnight, a suite of antivirus tools. The effort leads to the establishment of the High Integrity Computing Laboratory (HICL) at IBM. HICL goes on to pioneer the science of theoretical and observational computer virus epidemiology.[214]
    • 1987: Special needs access. IBM Researchers demonstrate the feasibility for blind computer users to read information directly from computer screens with the aid of an experimental mouse. And in 1988 the IBM Personal System/2 Screen Reader is announced, permitting blind or visually impaired people to hear the text as it is displayed on the screen in the same way a sighted person would see it. This is the first in the IBM Independence Series of products for computer users with special needs.[215]
    • 1988: IBM AS/400. IBM introduces the IBM Application System/400 (AS/400), a new family of easy-to-use computers designed for small and intermediate-sized companies. As part of the introduction, IBM and IBM Business Partners worldwide announce more than 1,000 software packages in the biggest simultaneous applications announcement in computer history. The AS/400 quickly becomes one of the world's most popular business computing systems.[216]
    • 1988: National Science Foundation Network (NSFNET). IBM collaborates with the Merit NetworkMCI Communications, the State of Michigan, and the National Science Foundation to upgrade and expand the 56K bit per second NSFNET to 1.5M bps (T1) and later 45M bps (T3). This partnership provides the network infrastructure and lays the groundwork for the explosive growth of the Internet in the 1990s. The NSFNET upgrade boosts network capacity, not only making it faster, but also allowing more intensive forms of data, such as the graphics now common on the World Wide Web, to travel across the Internet.[217]
    • 1989: Silicon germanium transistors. The replacing of expensive and exotic materials like gallium arsenide with silicon germanium (known as SiGe), championed by IBM Fellow Bernie Meyerson, creates faster chips at lower costs. Introducing germanium into the base layer of an otherwise all-silicon bipolar transistor allows for significant improvements in operating frequency, current, noise and power capabilities.[218]
    • 1990: System/390. IBM makes its most comprehensive product announcement in 25 years by introducing the System/390 family. IBM incorporates complementary metal oxide silicon (CMOS) based processors into System/390 Parallel Enterprise Server in 1995, and in 1998 the System/390 G5 Parallel Enterprise Server 10-way Turbo model smashed the 1,000 MIPS barrier, making it the world's most powerful mainframe.[219]
    • 1990: RISC System/6000. IBM announces the RISC System/6000, a family of nine workstations that are among the fastest and most powerful in the industry. The RISC System/6000 uses Reduced instruction set computing technology, an innovative computer design pioneered by IBM that simplifies processing steps to speed the execution of commands.[220]
    • 1990: Moving individual atomsDonald M. Eigler, a physicist and IBM Fellow at the IBM Almaden Research Center demonstrated the ability to manipulate individual atoms using a scanning tunneling microscope, writing I-B-M using 35 individual xenon atoms.[221]
    • 1990: Environmental programs'. IBM joins 14 other leading U.S. corporations in April to establish a worldwide program designed to achieve environmental, health and safety goals by continuously improving environmental management practices and performance. IBM has invested more than $1 billion since 1973 to provide environmental protection for the communities in which IBM facilities are located.[222]
    • 1991: Services business. IBM reenters the computer services business through the formation of the Integrated Systems Solution Corporation. Still in compliance with the provisions of the 1956 Consent Decree, in just four ISSC becomes the second largest provider of computer services. The new business becomes one of IBM's primary revenue streams.[223]
    • 1992: Thinkpad. IBM introduces a new line of notebook computers. Housed in a distinctive black case and featuring the innovative TrackPoint device nestled in the middle of the keyboard, the ThinkPad is an immediate hit and goes on to collect more than 300 awards for design and quality.[224]
    •  
    • 1993: Billion-dollar losses. IBM misreads two significant trends in the computer industry: personal computers and client-server computing: and as a result loses more than $8 billion in 1993, its third straight year of billion-dollar losses. Since 1991, the company has lost $16 billion, and many feel IBM is no longer a viable player in the industry.[243]
    • 1993: Louis V. Gerstner, Jr.. Gerstner arrives as IBM's chairman and CEO on April 1, 1993. For the first time since the arrival of Thomas J. Watson, Sr., in 1914, IBM has a leader pulled from outside its ranks. Gerstner had been chairman and CEO of RJR Nabisco for four years and had previously spent 11 years as a top executive at American Express.[244]
    • 1993: IBM Scalable POWERparallel system. IBM introduces the Scalable POWERparallel System, the first in a family of microprocessor-based supercomputers using RISC System/6000 technology. IBM pioneers the breakthrough scalable parallel system technology of joining smaller, mass-produced computer processors rather than relying on one larger, custom-designed processor. Complex queries could then be broken down into a series of smaller jobs that are run concurrently ("in parallel") to speed their completion.[245]
    • 1994: Turnaround. IBM reports a profit for the year, its first since 1990. Over the next few years, the company successfully charts a new business course, one that focuses less on its traditional strengths in hardware, and more on services, software, and its ability to craft technology solutions.[246]
    • 1994: IBM RAMAC Array Storage Family. The IBM RAMAC Array Family is announced. With features like highly parallel processing, multi-level cache, RAID 5, and redundant components, RAMAC represents a major advance in information storage technology. Consisting of the RAMAC Array Direct Access Storage Device (DASD) and the RAMAC Array Subsystem, the products become one of IBM's most successful storage product launches ever, with almost 2,000 systems shipped to customers in its first three months of availability.[247]
    • 1994: Speech recognition. IBM releases the IBM Personal Dictation System (IPDS), the first wave of speech recognition products for the personal computer. It is later renamed VoiceType, and its capabilities are expanded to include control of computer applications and desktops simply by talking to them, without touching a keyboard. In 1997 IBM announces ViaVoice Gold, software that gives people a hands-free way to dictate text and navigate the desktop with the power of natural, continuous speech.[248]
    • 1995: Lotus Development Corporation acquisition. IBM acquires all of the outstanding shares of the Lotus Development Corporation, whose pioneering Notes software enables greater collaboration across an enterprise and whose acquisition makes IBM the world's largest software company.[249]
    • 1995: Glueball calculation. IBM scientists complete a two-year calculation – the largest single numerical calculation in the history of computing – to pin down the properties of an elusive elementary particle called a "glueball." The calculation was carried out on GF11, a massively parallel computer at the IBM Thomas J. Watson Research Center.[250]
    • 1996: IBM Austin Research Laboratory opens. Based in Austin, Texas, the lab is focused on advanced circuit design as well as new design techniques and tools for very high performance microprocessors.[251]
    • 1996: Atlanta Olympics. IBM suffers a highly public embarrassment when its IT support of the Olympic Games in Atlanta experiences technical difficulties.[252]
    • 1996: Domestic partner benefits. IBM announces Domestic Partner Benefits for gay and lesbian employees.[253]
    • 1997: Deep Blue. The 32-node IBM RS/6000 SP supercomputer, Deep Blue, defeats World Chess Champion Garry Kasparov in the first known instance of a computer vanquishing a reigning world champion chess player in a tournament-style competition.[254]
    • 1997: eBusiness. IBM coins the term and defined an enormous new industry by using the Internet as a medium for real business and institutional transformation. e-business becomes synonymous with doing business in the Internet age.[255]
    • 1998: CMOS Gigaprocessor. IBM unveils the first microprocessor that runs at 1 billion cycles per second. IBM scientists develop new Silicon on insulator chips to be used in the construction of a mainstream processor. The breakthrough ushers in new circuit designs and product groups.[256]
    • 1999: Blue Gene. IBM Research starts a computer architecture cooperative project with the Lawrence Livermore National Laboratory, the United States Department of Energy (which is partially funding the project), and academia to build new supercomputers (4) capable of more than one quadrillion operations per second (one petaflop). Nicknamed "Blue Gene," the new supercomputers perform 500 times faster than other powerful supercomputers and can simulate folding complex proteins.[257]
    • 2000: Quantum mirage nanotechnology. IBM scientists discover a way to transport information on the atomic scale that uses electrons instead of conventional wiring. This new phenomenon, called the Quantum mirage effect, enables data transfer within future nanoscale electronic circuits too small to use wires. The quantum mirage technique is a unique way of sending information through solid forms and could do away with wiring that connects nanocircuit components.[258]
    • 2000: IBM ASCI White – Fastest supercomputer. IBM delivers the world's most powerful computer to the US Department of Energy, powerful enough to process an Internet transaction for every person on Earth in less than a minute. IBM built the supercomputer to accurately test the safety and effectiveness of the nation's aging nuclear weapons stockpile. This computer is 1,000 times more powerful than Deep Blue, the supercomputer that beat Garry Kasparov in chess in 1997.[259]
    • 2000: Flexible transistors. IBM created flexible transistors, combining organic and inorganic materials as a medium for semiconductors. This technology enables things like an "electronic newspaper", so lightweight and inexpensive that leaving one behind on the airplane or in a hotel lobby is no big deal. By eliminating the limitations of etching computer circuits in silicon, flexible transistors make it possible to create a new generation of inexpensive computer displays that can be embedded into curved plastic or other materials.[260]
    • 2000: Sydney Olympics. After a successful engagement at the 2000 Olympic games in Sydney, IBM ends its 40-year technology partnership with the International Olympic Committee.[261]
    • 2001: Holocaust controversy. A controversial book, IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America's Most Powerful Corporation by Edwin Black, accuses IBM of having knowingly assisted Nazi authorities in the perpetuation of the Holocaust through the provision of tabulating products and services. Several lawsuits are filed against IBM by Holocaust victims seeking restitution for their suffering and losses. All lawsuits related to this issue were eventually dropped without recovery.[262]
    • 2001: Carbon nanotube transistors. IBM researchers build the world's first transistors out of carbon nanotubes – tiny cylinders of carbon atoms that are 500 times smaller than silicon-based transistors and 1,000 times stronger than steel. The breakthrough is an important step in finding materials that can be used to build computer chips when silicon-based chips can't be made any smaller.[263]
    • 2001: Low power initiative. IBM launches its low-power initiative to improve the energy efficiency of IT and accelerates the development of ultra-low power components and power-efficient servers, storage systems, personal computers and ThinkPad notebook computers.[264]
    • 2001: Greater density & chip speeds. IBM is first to mass-produce computer hard disk drives using a revolutionary new type of magnetic coating – "pixie dust" – that eventually quadruples data density of current hard disk drive products. IBM also unveils "strained silicon," a breakthrough that alters silicon to boost chip speeds by up to 35 percent.[265][266]
    • 2002: The Hard disk drive business is sold to Hitachi.[267]
    • 2003: Blue Gene/L. The BLUE GENE team unveils a proto-type of its Blue Gene/L computer roughly the size of a standard dishwasher that ranks as the 73rd most powerful supercomputer in the world. This cubic meter machine is a small scale model of the full Blue Gene/L built for the Lawrence Livermore National Laboratory in California, which will be 128 times larger when it's unveiled two years later.[268]
    • 2005: Crusade Against Cancer. IBM joins forces with Memorial Sloan-Kettering Cancer Center (MSKCC), the Molecular Profiling Institute and the CHU Sainte-Justine Research Center to collaborate on cancer research by building state-of-the-art integrated information management systems.[269]
    • 2005: The PC division is sold. The PC division (including Thinkpads) is sold to Chinese manufacturer, Lenovo.[270]
    • 2006: Translation software. IBM delivers an advanced speech-to-speech translation system to U.S. forces in Iraq using bidirectional English to Arabic translation software that improves communication between military personnel and Iraqi forces and citizens. The breakthrough software offsets the current shortage of military linguists.[271]
    • 2007: Renewable energy. IBM is recognized by the US EPA for its leading green power purchases in the US and for its support and participation in EPA's Fortune 500 Green Power Challenge. IBM ranked 12th on the EPA's list of Green Power Partners for 2007. IBM purchased enough renewable energy in 2007 to meet 4% of its US electricity use and 9% of its global electricity purchases. IBM's commitment to green power helps cut greenhouse gas emissions.[272]
    • 2007: River watch using IBM Stream Computing. In a unique collaboration, The Beacon Institute and IBM created the first technology-based river monitoring network. The River and Estuary Observatory Network (REON) allows for minute-to-minute monitoring of New York's Hudson River via an integrated network of sensors, robotics and computational technology. This first-of-its-kind project is made possible by IBM's "Stream Computing," a fundamentally new computer architecture that can examine thousands of information sources to help scientists better understand what is happening as it happens.[273][274]
    • 2007: Patent power. IBM has been granted more US patents than any other company. From 1993 to 2007, IBM was awarded over 38,000 US patents and has invested about $5 billion a year in research, development, and engineering since 1996. IBM's current active portfolio is about 26,000 patents in the US and over 40,000 patents worldwide is a direct result of that investment.[275]
    • 2008: IBM Roadrunner No.1 Supercomputer. For a record-setting ninth consecutive time, IBM takes the No.1 spot in the ranking of the world's most powerful supercomputers with the IBM computer built for the Roadrunner project at Los Alamos National Laboratory. It is the first in the world to operate at speeds faster than one quadrillion calculations per second and remains the world speed champion for over a year. The Los Alamos system is twice as energy-efficient as the No. 2 computer at the time, using about half the electricity to maintain the same level of computing power.[276]
    • 2008: Green power. IBM opens its "greenest" data center in Boulder, Colorado. The energy-efficient facility is part of a $350 million investment by IBM in Boulder to help meet customer demand for reducing energy costs. The new data center features leading-edge technologies and services, including high-density computing systems with virtualization technology. Green Power centers allow IBM and its customers to cut their carbon footprint.[277]
    • 2011: Watson. IBM's supercomputer Watson competed on the TV show Jeopardy! against Ken Jennings and Brad Rutter and won convincingly. The competition was presented by PBS.[278]
    • June 16, 2011: IBM founded 100 years ago. Mark Krantz and Jon Swartz in USA Today state It has remained at the forefront through the decades… the fifth-most-valuable U.S. company [today] … demonstrated a strength shared by most 100-year-old companies: the ability to change. … survived not only the Depression and several recessions, but technological shifts and intense competition as well.[279]
    • October 28, 2018 Red Hat acquisition for $34 billion On October 28, 2018, IBM announced its intent to acquire Red Hat for US$34 billion, in one of its largest-ever acquisitions. The company will operate out of IBM's Hybrid Cloud division.[280][281][282][283]

  29. When will they get it through their thick heads that it's over?  

    In October 2020, IBM announced it is splitting itself into two public companies.[286] IBM will focus on high-margin cloud computing and artificial intelligence, built on the foundation of the 2019 Red Hat acquisition. The legacy Managed Infrastructure Services unit will be spun off into a new public company "NewCo, yet to be formally named" to manage clients’ IT infrastructure and accounts,and have 4,600 clients in 115 countries, with a backlog of $60 billion.[287]

    High quality line graph showing IBM's Market Value from 1920 through 2019 aligned by chief executive officer (CEO).


  30. Phil. IBM –   Lots of Great Engineers –  I worked at IBM for 10 Years – the last year as a executive in the old PC business….  When I was there I always marveled at the engineering talent they attracted….  Top Schools off the chart smart people…  I did not realize how much talent they wasted, by tunneling efforts, not being commercializing new developments ( scary, the things I saw in the labs that never saw the light of day) . and how much energy was wasted on reporting / presentations……  until I moved to Silicon Valley…    I leftt because IBM moved from wanting to win and leading industries – even creating industries….  to being defensive and wanting to not loose….  When  I got to the valley I realized how engineering talent could be utilized and how being a technical / business leader one  could achieve incredible feats…..    I think Buffet might got it right when he exited the investment in the business several years ago….  I'd love to invest in this under Krishna….  and I think next year may be a good time…. I'm not sure….  


  31. Phil . IBM – On talent…. the Engineers in the Valley were great, but IBM had better raw talent higher  and ceiling Engineers and Managers…  better trained and developed….  I remember thinking – if I could recruit just 10 of the Hight Potential managers and technical leaders – they could play a huge / transformative role ….  this was in a with 15K people not 200K, but still the impact would be off the charts…..  I was to hire only 2….  They other eight call me from time to time…. wondering what life would have been like if they had moved over…


  32. IBM is banking heavily on their RedHat aquisition for the hybrid cloud market that is woefully underserved. Our company has been using it for just over a year with good results. I sense (hope) this is the beginning of a more open enterprise like MSFT after Balmer. To be seen. 


  33. Jeddah. IBM –  I think. that was the hope in moving Krishna into the CEO role —-  Made the most logical sense to move the business to the next step….  and with the divestiture his skills set and experience should be better leveraged


  34. INTC - Intel files for mixed securities shelf offering, no amount given given


  35. I am retired now. I used to work for a company that is a very large IBM client. I used to negotiate the ELAs. Most of the large financials institutions still use their mainframes to run their core business. They are all eager to move to cloud. IBM had a large sales force that practically lived in client offices and had great relationships. They could have been effective in helping the clients to cloud using hybrid cloud offerings. IBM has such a huge history of creating VMs, CICS, DBs, CPUs, Storage etc. Just like LEAP premiums, IBM's revenue seem to decay quarter by quarter with no new revenue source. 

    It's extraordinary to see Amazon and Google which had no computing history (or legacy talent) basically redefined the computer industry for enterprises. They are growing like crazy. 


  36. IBM ( So. San Jose) is where I met my wife…and her Dad…. :)


  37. JMIA  the AMZN of Africa. Jumped 24% in one day. The company operates out of Berlin Germany.
    Question if it is an AMZN where will it land up? Buying the stock now I feel, is like jumping on a running train. Having said that, confirms the running train theory as the stock was trading in Nov. at 13$
    Question, can one make exceptions? 
    I am thinking of making the following plays.
     Buy sell a combo 4x Jan23 45 call (buy) (sell) 55 put at a cost of 4.88 ( 7.10 see note below) sell 2x Mar 21 65 calls for 9.60. If the potential of increase is very strong the 6 or 7 dollars different from today’s price will be chewed up quickly, so at least having 4 longs against 2 shorts will make it easier to roll the shorts. Obviously you could take full advantage of the 4 longs and sell 4 shorts, but with 2 shorts I feel better. Further note these are prices before opening and the stock may adjust by Monday.
    Even that the combo shows 4.88 taking call and put singly the cost shows some 7.10, so needs to be checked.!!!!
    The above play has potential gain of 10% by March, provided the stock stays in today’s range, going higher say 61 your gain is 15%. Interesting the cost for the above play is only 40$ (at 4.88!!!!)
    Now my second play is 2x Jan23 combo cost 4.88 (7.10????) and sell 2x Jan 23 70 call for 9.60. So in this case you even get out with a credit. Potential gain is 100 to 125 % in 726 days. Just sit tight and count the daisies. I like more the selling of shorter month calls as the potential income is much greater.
    Obviously you can change the option entries in proportion to the above. Just don’t bet the farm!!! Possible this stock is still in children’s shoes and may be another TSLA or AMZN. 
    The system set up by the company makes it easier for Africans to conduct their purchases.






  38. To compliment my play on NIO, trying to buy more Jan 23 leap calls 30 for under 41$. One can reduce cost by selling some Jan 23 40 puts @ 14$.

    New play on LI Jan 23 combo buy 10x 25 calls sell 5x 25 puts @ under 29$ and sell Mar 21 call 38 @ 4.00