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TGIF – The Weak Ends Just in Time

Now oil is down 2.5%.

Of course $62 is going to be bouncy, that's our shorting line and, according to the fabulous 5% Rule™, a 5% drop gives us 1% bounces (20% of the drop) and we're down $1.60 from $63.60 so 0.32 bounces to $62.32 (weak) and $62.64 (strong).  If we fail to hold the weak bounce and head back to $62, there's a good chance it will fail.  Failing at $63.64 is a bit trickier as we could be consolidating for a move up or down – it requires patience.  

If we fail $63.64 and then fall back below the weak bounce line and consolidate between the strong and weak bounce lines – THEN we can anticipate a break lower.  How much lower?   At least half of the previous drop so another 1.25% to $61.66.  Now that we KNOW how much the potential reward is, we can calculate the potential risk and decide whether it's worth the trade.  Clearly, at $62.25, I can make a bet that $62.32 will fail and set a stop at $62.35, risking a loss of $100 per contract if we stop out at $62.35.  The next test would be at $62.60, with a stop at $62.70 – so another $100 risked but the reward of a drop back to $61.66 would be $1,000 gain per contract.  

We've been playing the Oil Futures (/CL) with conviction and, although we have a nice $10,000 gain this morning – it only makes us even as we've had to double down our two shorts twice.  Now we're at goal as all we ever wanted to do was get back to even and get back to 2 shorts – but now at a much higher basis ($62.24) for a long-term play.

Conviction shorts are very different and require a lot more risk tolerance – they are certainly not for everyone.  Our conviction is that next week's OPEC meeting will not do enough to keep prices over $60, so we're positioning for that.  

So we're back to just 2 short at $62.245 and we'll add 2 more at $62.60 with that same stop at $62.70 on the 2 new ones.  If we go higher than that, we wait to DD again at about $63.50, which would raise our basis to about $62.85 on 4 shorts and we'd be down $1,400 per contract.  Knowing how much you will win and how much you will lose helps you make better trading decisions – you should always have clear expectations for every trade.  

The 5% Rule™ is not TA – it's just math.  People like charts so we put them up but when I was young and rebellious, I refused to put charts on this site, thinking I could break people of the habit of staring at the entrails of companies to make predictions about their future.  Our predictions are based on Fundamentals, coupled with Short-Term and Long-Term macro analysis and the 5% Rule™ simply tells us where the inflection points will be – the places we are likely to see support and resistance along the way.  

OPEC+ (OPEC plus Russia, Mexico and 8 others) are meeting next week but it's very unlikely, in the midst of an Economic Crisis and with oil selling well over $50/barrel – that the Saudis will be able to get the other nations to pledge to continue production cuts.  

As you can see from the chart on the right, any loss of control over the producers that brings production back to normal levels would quickly create a massive glut of oil again – and we saw how long that took to grind down last year.  Only continued production cuts can keep oil prices over $50 but, like Powell's stimulus – at this point – where's the upside catalyst going to come from?

If you believe the oil market is well-controlled by OPEC, how come you can still buy oil for the Summer of 2022 for just over $55 per barrel?  Oil Futures are like Bitcoin – they are pure speculation and can swing wildly one way or the other but the long-term trends tell a story and the story, at the moment, is that short-term prices are too high and likely to correct.  Just like our economy, oil prices are being manipulated by a Central Board (OPEC) who are doing everything they can to keep the prices up but there are consequences for the OPEC nations – less oil production means less money to pay the bills and, unlike the US, other countries do have to pay their bills.  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Cash - 63.47 63.47 63.47 18:19
Feb 25

63.47s*
0.25

-
63.22

-
n/a
Apr'21 63.46 63.57 61.80 62.51 07:53
Feb 26

-
-1.02 185609 63.53 436222 Call Put
May'21 63.17 63.24 61.49 62.16 07:53
Feb 26

-
-1.06 38046 63.22 286311 Call Put
Jun'21 62.57 62.68 60.99 61.63 07:53
Feb 26

-
-1.07 32315 62.70 265186 Call Put
Jul'21 61.83 62.05 60.38 60.97 07:53
Feb 26

-
-1.10 10760 62.07 163457 Call Put
Aug'21 61.14 61.25 59.75 60.29 07:53
Feb 26

-
-1.10 6178 61.39 105038 Call Put
Sep'21 60.53 60.66 59.13 59.65 07:53
Feb 26

-
-1.09 6067 60.74 116654 Call Put
Oct'21 59.83 60.02 58.79 58.79 07:33
Feb 26

-
-1.33 2467 60.12 70399 Call Put
Nov'21 59.35 59.45 58.00 58.28 07:38
Feb 26

-
-1.28 880 59.56 70931 Call Put
Dec'21 58.99 58.99 57.52 58.02 07:53
Feb 26

-
-1.03 14533 59.05 324694 Call Put
Jan'22 58.32 58.46 57.10 57.29 07:35
Feb 26

-
-1.27 279 58.56 57583 Call Put
Feb'22 57.89 57.99 56.64 57.03 07:43
Feb 26

-
-1.08 245 58.11 43258 Call Put
Mar'22 56.90 56.90 56.82 56.82 23:33
Feb 25

-
-0.86 696 57.68 46350 Call Put
Apr'22 56.50 56.50 56.50 56.50 04:28
Feb 26

-
-0.78 88 57.28 18286 Call Put
May'22 56.91 56.91 56.91 56.91 18:18
Feb 25

56.91s*
0.04 1776 56.87 18908 Call Put
Jun'22 56.16 56.25 55.24 55.63 07:49
Feb 26

-
-0.94 2860 56.57 104079 Call Put
Jul'22 56.22 56.22 56.22 56.22 18:18
Feb 25

56.22s*
0.04 4610 56.18 22217 Call Put
Aug'22 55.90 55.90 55.90 55.90 18:18
Feb 25

55.90s*
0.04 2618 55.86 14271 Call Put
Sep'22 55.60 55.60 55.60 55.60 18:18
Feb 25

55.60s*
0.03 2924 55.57 19586 Call Put

There's also a lack of control with OPEC+ as, for example, Vladimir Putin may decide that there's more money to be made by shorting oil and then having Russia refuse to cooperate on cuts at next week's meeting.  As you can see, there are 436,000 open contracts of 1,000 barrels each at $63.53 and let's say Vlad shorts 100,000 contracts at $5,000 in margin per contract ($500M) and then Russia tanks the meeting and oil plunges to $6.  He would make $3,530 per contract or $353,000,000 for a week's "work".  But Putin has $80Bn – he can do a lot better if he wants to.

The Next Oil Price War - Saudi Arabia Vs. Russia - Commodity Trade MantraIn fact, that's why Putin has $80Bn – he controls the levers of a major World economy and constantly uses it to his advantage.  Now, let's say on the other hand, Russia cooperates and cuts production from 9.5Mb/d to 9Mb/d.  Even if oil goes to $65, revenues go from $570M/day at $60 (assuming a drop) to $585Mb/d at $65 so it would take Putin a month to make $353M, which isn't bad but that wouldn't be Putin's money, would it?  He would only get his share as an owner of some of the production whereas, playing the Futures – he gets it all.  

Do you think Putin made $80Bn by just taking his share?  

And then there is always option C, where Russia INCREASES production by 10%, oil falls to $55/barrel but that's $550M per day so little damage to Russia's revenue stream and Vlad pockets $850M instead.  Of course, no national leader would put their own self-interest ahead of their country's – right America?  

No matter what happens, expect a lot of rumors taking oil for a wild ride next week and we'll be watching the nonsense closely – as well as the nonsense of the market, which is finishing up it's second down week in a row.  If we were to use the 3,400 line as a base (340 on SPY) – as that's where we peeaked out in February of last year – then 3,960 was up 16.5%, which is a 15% move with a 10% overshoot.  The 15% line is 3,910 so we need to get over that or we look down to a 20% retrace of the 510 run so call that 100 points, back to 3,800 (weak retrace) and 3,700 (strong).

So that's very simple then, if 3,910 fails to be taken back and held into the close – we are very likely to see 3,800 and possibly 3,700 in the next two weeks.  So we know where the restistance is – now we think about what will happen to get us over it?  Will there be MORE FREE MONEY?  Can Powell be even more doveish?  Can Yellen ask for even more stimulus?  Will Republicans decide to give Joe Biden a blank check?  That's what the Democrats did for Bush in 2008 and what they did for Trump last year – I'm sure the Republicans will be just as cooperative in helping President Biden fix our economy.  

Have a great weekend, 

- Phil

 


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  1. Good morning 


  2. Phil / AAPL – I'm looking at the following spreed for this….  Would like your thoughts…..

    Long 20x Jan '23 $100 Calls (35)

    Short 20x Jan '23 $130 Calls (21) 


  3. Good morning!  

    AAPL/Batman – $122 is $2Tn so let's say $120 is the inflection point for AAPL as $2Tn is a lot of market cap.  Even with p/e inflation, it's still 2% of the ENTIRE market cap of US equities.   Of course, AAPL makes $60Bn a year but $60Bn is not $100Bn (p/e 20) and that's a $40Bn gap that earnings have to fill into the day when valuation normalize which, at their current pace of growth, will take them about 30 years.  

    Year End 26th Sep 2015 2016 2017 2018 2019 2020 TTM 2021E 2022E CAGR / Avg
    Total Revenue
    $m

    233,715 215,639 229,234 265,595 260,174 274,515 294,135 333,687 348,101 3.27%
    Operating Profit
    $m

    71,230 60,024 61,344 70,898 63,930 66,288 74,253     -1.43%
    Net Profit
    $m

    53,394 45,687 48,351 59,531 55,256 57,411 63,930 74,874 75,749 1.46%
    EPS Reported
    $

    2.30 2.08 2.30 3.05 2.97 3.28 3.70     7.29%
    EPS Normalised
    $

    2.30 2.08 2.30 3.05 2.97 3.28 3.70 4.45 4.69 7.29%
    EPS Growth
    %

    +42.8 -9.88 +10.8 +32.6 -2.62 +10.2 +16.9 +35.9 +5.26  
    PE Ratio
    x

              36.9 32.7 27.2 25.8  
    PEG
     

              1.03 0.910 5.17 3.98  
     

    That's why we're only playing AAPL in the Butterfly Portfolio, with the $120/150 bull call spread simply there to cover our short-term call sales (April $125s at the moment) and we don't even have long-term puts – too risky.  Just because it's no longer ridiculously over-priced, doesn't mean it's a bargain.  We took our original longs off the table with AAPL and now we're essentially bearish since $140 and $122 doesn't change my mind – I'm not even sure $100 will….

    It doesn't matter how much you like a stock – too much is too much.


  4. Whee – and down go the markets again!  

    $62 failed on /CL!  

    • February University of Michigan Consumer Sentiment: 76.8 vs. 76.4 expected and preliminary estimate of 76.2 and 79.0 in January.
    • Current Economic Conditions: 86.2 vs. preliminary estimate of 86.2 and 86.7 in January.
    • Index of Consumer Expectations 70.7 vs. preliminary estimate of 69.8 and 74.0 in January.
    • February's consumer sentiment index was slightly lower than January's read.
    • "All of February's loss was due to households with incomes below $75,000, with the declines mainly concentrated in future economic prospects."


  5. Phil / ETSY,

    Would like to hear your thoughts on Etsy after reporting a 111% growth in revenue in 2020 to $ 1.73 billion. Is it similar to Wayfair or do you see Etsy as a long term play in the e-commerce segment?


  6. See, we shorted Tech (SQQQ, TQQQ) because it was way overpriced and we shorted small caps (TZA) because Consumers are hurting badly.  These are the macros I keep yammering on about that drive our investing decisions months before the rest of the market catches on to reality.  

    And, of course, TSLA:

    CMG 

    Good time to check our hedges in the STP:  

    • TQQQ – $60,000 spread, net $32,100 and halfway in the money so all good with $28,000 to go.
    • CMG – Hey, they are making almost $12 per $1,400 share – why not.  Yes, that's why we're 6/3 short on them with 5 short calls.  Even though we're up $100,000 – it's a $180,000+ spread and I'm super-confident we can do better.  $80,000 to go.
    • FXP – China having a bad week too and I'm not worried about the March $40s but I'm sad it's only a $20,000 spread at $35, though we do have a chance to roll.  Net $9,500 so $10,500 to go (ish).   FXP is great for a new hedge – not this spread but a new one would work great.

    • SCO – Big fail here but we're only down a bit.  Still 3 weeks to go so we'll see how the meeting plays out.
    • SQQQ – We sold more short calls so now it's "just" the $10 spread but that's $400,000 at $30 but $30 is not likely, $21 is and at $21 is a $220,000 spread and currently net $18,000 so how cool is this with a $200,000 upside if the Nasdaq drops 17%?  And what's the risk?  The short calls are covered (except the year advantage so we'll have to adjust at some point) and the March puts are easy to roll.   Why did we sell short 2023 calls?  Because the premiums were ridiculous and we LOVE to sell premium.  Since our $10 calls are in the money they have a high delta and will keep up with the 2023 short calls for a good 6 months and, meanwhile, we sold 200 x $6 of premium ($120,000) while our long calls hold 200 x $2 in premium ($40,000) so $80,000 will 50% decay in a year – paying for all of our premium!  
    • TSLA – It looks tiny but it's already up $27,000 and it's an $80,000 spread at net $18,150 and we'll sell more short calls to collect more cash and probably end up with a free spread.  $60,000 potential.

    So that's $378,000 of upside protection now as we've realized $80,000 since our last review.  It's still more than adequate to cover the LTP but that doesn't mean we'll just sit and take LTP losses just because we can afford to.  We'll have to watch carefully to see who's weak and who's strong.


  7. Phil// Your thoughts on GOLD – Since the yield is starting to rise and the dollar going up, won't that put pressure on GOLD?  As you can see that stock has been hammered hard.  Where do you see bottoming out?  Thanks.


  8. Phil could you recommend a specific new spread on FXP?


  9. Phil / AAPL – Thanks for your view…  you make a good point on valuation, however I think apple will benefit from the new stimulus in a big way . this year, same as last year… China is strong as well and will pickup as well, as the rest of the world opens up opportunity there as well….  The growth next year will not have the typical drop of negative / drop in  Revenue growth as they have in the past,  they  have Services and Accessories filling the lull, and they have learned how to price the Lin-up to cover drops in value in the iPhone…   at 20X you get to a 110 price and at 25 X 140 price…  below Included a snapshot of my outlook…  they still a net cash position of over 100 billion so interest rates will not hurt them….   

     


  10. GOLD/Rookie – It's not a short-term bet but a long-term play.  As we recently discussed, they depleted their reserves while prices were high (raising cash) and now, when prices come back down, they will add reserves by buying mines from their competitors who need cash cheaply.  That's their job but you can't play them Q/Q, has to be Y/Y.  $15 is where we're always excited to buy them and the position in the LTP was net $400 so it's not like we spent our allocation yet.   We're not worried about the $20 puts that net us in for $17 on 1,000 shares ($17,000) and we'd LOT to roll our 30 $23 calls at $2.85 to the $18 calls at $4.25 for net $1.40 ($4,200), right?  That would put us in the GOLD 2023 $18/27 bull call spread for net $4,600 in the LTP – still not even close to bothering our allocation block but a $5 improvement on last month's entry.   

    GOLD Long Call 2023 20-JAN 23.00 CALL [GOLD @ $18.83 $-0.53] 30 1/7/2021 (693) $17,400 $5.80 $-2.94 $5.80     $2.87 $-0.19 $-8,805 -50.6% $8,595
    GOLD Short Call 2023 20-JAN 27.00 CALL [GOLD @ $18.83 $-0.53] -30 1/7/2021 (693) $-13,500 $4.50 $-2.25     $2.26 $0.01 $6,735 49.9% $-6,765
    GOLD Short Put 2023 20-JAN 20.00 PUT [GOLD @ $18.83 $-0.53] -10 1/8/2021 (693) $-3,000 $3.00 $2.08     $5.08 $0.23 $-2,075 -69.2% $-5,075

    If the stock drops another $5 and we have to roll to the 2023 $13 calls for another $4,200 do you think I'll be upset or thrilled?

    FXP/Hicket – It's a 2x ETF at $28 so a 20% drop in China is a 40% gain to $39, so that's our target range.  As a new trade I'd go for: 

    • Buy 20 FXP June $30 calls for $2 ($4,000)  
    • Sell 20 FXP April $40 calls for 0.70 ($1,4000) 
    • Sell 10 FXP June $25 puts for $1.60 ($1,600) 

    That's net $1,000 on the $2,000 rollable spread and you'll certainly be able to sell 20 more June calls to make it free protection.  


  11. Phil// Is it official that we roll our GOLD $23 strike to $18 strike?  Thanks.


  12. Yes, that's why it's blue.




  13. Democrats launch sweeping bid to overhaul US election laws


  14. Is anyone else having issues with TOS today? 


  15. yes-I have big time problems with them all of a sudden not tos but TD.


  16. my 3 big pullback plays died hard


  17. hmmm CMG at 115 p/e seems reasonable.


  18. TOS/Willsons – Seems fine in Florida.

    Pullbacks/BDC – Crazy market.  Still, Nasdaq only did what it was supposed to do – weak bounce to 13,100, as expected:

    Indexes failing too:

    And oil:

    Will be interesting to see how next week goes.

    CMG/BDC – I hear they might charge more for avocado.  It's like NFLX, people think they can just raise prices and make more money – like no one ever took Econ 101

    There's another tempting short at 100x earnings.


  19. the world of NFTs. It's pretty nutty.


  20. BFLY this company looks really interesting, from a scientific not investment standpoint, though options are available.  I might sell one of the farthest/lowest puts to keep an eye on it.  Oct $12.50  for $3.00

    https://www.butterflynetwork.com/


  21. Phil – post vaccines let's go play the WSOP main event. $1 gentleman's bet who makes it further… ?


  22. I'll bite on BFLY. Happy with KULR so far!


  23. Phil,

    Any thoughts on TSM at these levels?

    Thanks


  24. Late to the day party….

    ARNA….flier for data in March b'f OPEX…$90C for 80c or better…..gamblers money only.

    GOLD…did the Jan23 18/27 BCS, sellingn 15P for net 10c credit (TOS would not let me do a butterfly and modify…hummmmmm…..)

    Selling KPTI Mar 12.5P for 35c.  Give them to me at that price, please.


  25. DJIA is down 300…SPX is even…..NADX is up 125….shennanigans.


  26. NFT/BDC – That is beyond idiotic.  People just have way too much time and money.

    BFLY/Stock – Cool, it's like Star Trek.

    “Two-thirds of the world’s population gets no imaging at all,” he added. “When you put something on a chip, the price goes down and you democratize it.”

    The Bill and Melinda Gates Foundation is one of his backers, as are the investment arms of other family philanthropies.

    A product that solves a global need – very nice!

    Poker/BDC – Well I sure miss doing that!  

    TSM/Harip – Not sure how they are affected by the chip shortages.  Also not sure how much money they are making!   According to this, they are somehow making $17.6Bn???  If that's right, they are very cheap at $125Bn but that doesn't really make sense.  I'd want to check into that more carefully.

    Year End 31st Dec 2015 2016 2017 2018 2019 2020 2021E 2022E CAGR / Avg
    Total Revenue
    TWDm

    843,497 947,938 977,447 1,031,474 1,069,985 1,339,255 1,532,613 1,767,432 9.69%
    Operating Profit
    TWDm

    319,755 377,799 385,547 383,626 372,695 566,784     12.1%
    Net Profit
    TWDm

    306,574 334,247 343,111 351,131 345,264 517,885 577,860 668,538 11.1%
    EPS Reported
    TWD

    59.1 64.5 66.2 67.7 66.6 99.9     11.1%
    EPS Normalised
    TWD

    59.5 64.5 66.3 67.9 66.7 99.9 112 130 10.9%
    EPS Growth
    %

    +16.5 +8.31 +2.91 +2.42 -1.86 +49.7 +11.9 +16.4  
    PE Ratio
    x

              35.2 31.4 27.0  
    PEG
     

              2.96 1.91 1.31  
     

    Not much pop into the close.

    Have a great weekend everyone, 

    - Phil


  27. I love TSM, but those numbers are probably in New Taiwanese Dollars, which is about 0.036 (1/28th) of USD. They will be maxed out on production for at least the next year, with no real alternatives as building new plants takes years. Unless there’s a natural disaster, or the current drought gets a whole lot worse (lots of water is used in these plants), they’re printing money. They pay a small (1.75%) dividend, but wih the price as high as it is, I’ve just been selling Jan 2023 puts in the $80 range as I’d love to have more of them at that price.


  28. Seems like US$48BB in revenue, 21BB in pretax profit, and 20.5BB in Net profit (using 0.0359 TWD to USD exchange rate) for 2020.

     

    Taiwan Semiconductor Manufacturing Co. Ltd. – Taiwan

    12 Months ended Dec. 31:    Figures in New Taiwan dollars.

                                     2020                 2019 

    Revenue         NT$1,339,254,811,000 NT$1,069,985,448,000 

    Pretax Profit     NT$584,777,180,000   NT$389,845,336,000 

    Net Profit        NT$517,885,387,000   NT$345,263,668,000 

    Earnings Per Share    

    Basic                       19.97                13.32

    Diluted                     19.97                13.32


  29. Berkshire Hathaway 2020 Shareholder letter – Selected Highlights

     

    Berkshire earned $42.5 billion in 2020 according to generally accepted accounting principles (commonly called “GAAP”). The four components of that figure are $21.9 billion of operating earnings, $4.9 billion of realized capital gains, a $26.7 billion gain from an increase in the amount of net unrealized capital gains that exist in the stocks we hold and, finally, an $11 billion loss from a write-down in the value of a few subsidiary and affiliate businesses that we own. All items are stated on an after-tax basis. Operating earnings are what count most, even during periods when they are not the largest item in our GAAP total. Our focus at Berkshire is both to increase this segment of our income and to acquire large and favorably-situated businesses. Last year, however, we met neither goal: Berkshire made no sizable acquisitions and operating earnings fell 9%. We did, though, increase Berkshire’s per-share intrinsic value by both retaining earnings and repurchasing about 5% of our shares. 

    The final component in our GAAP figure – that ugly $11 billion write-down – is almost entirely the quantification of a mistake I made in 2016. That year, Berkshire purchased Precision Castparts (“PCC”), and I paid too much for the company. 

    Investing illusions can continue for a surprisingly long time. Wall Street loves the fees that deal-making generates, and the press loves the stories that colorful promoters provide. At a point, also, the soaring price of a promoted stock can itself become the “proof” that an illusion is reality. 

    And bonds are not the place to be these days. Can you believe that the income recently available from a 10-year U.S. Treasury bond – the yield was 0.93% at yearend – had fallen 94% from the 15.8% yield available in September 1981? In certain large and important countries, such as Germany and Japan, investors earn a negative return on trillions of dollars of sovereign debt. Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future. 

    Last year we demonstrated our enthusiasm for Berkshire’s spread of properties by repurchasing the equivalent of 80,998 “A” shares, spending $24.7 billion in the process. That action increased your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet. 

    In no way do we think that Berkshire shares should be repurchased at simply any price. I emphasize that point because American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse. 

    This agreeable dynamic continues. Berkshire has repurchased more shares since yearend and is likely to further reduce its share count in the future 

    When you next fly over Knoxville or Omaha, tip your hat to the Claytons, Haslams and Blumkins as well as to the army of successful entrepreneurs who populate every part of our country. These builders needed America’s framework for prosperity – a unique experiment when it was crafted in 1789 – to achieve their potential. In turn, America needed citizens like Jim C., Jim H., Mrs. B and Louie to accomplish the miracles our founding fathers sought. Today, many people forge similar miracles throughout the world, creating a spread of prosperity that benefits all of humanity. In its brief 232 years of existence, however, there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking. Beyond that, we retain our constitutional aspiration of becoming “a more perfect union.” Progress on that front has been slow, uneven and often discouraging. We have, however, moved forward and will continue to do so. Our unwavering conclusion: Never bet against America. 

    The tens of millions of other investors and speculators in the United States and elsewhere have a wide variety of equity choices to fit their tastes. They will find CEOs and market gurus with enticing ideas. If they want price targets, managed earnings and “stories,” they will not lack suitors. “Technicians” will confidently instruct them as to what some wiggles on a chart portend for a stock’s next move. The calls for action will never stop. Many of those investors, I should add, will do quite well. After all, ownership of stocks is very much a “positive-sum” game. Indeed, a patient and level-headed monkey, who constructs a portfolio by throwing 50 darts at a board listing all of the S&P 500, will – over time – enjoy dividends and capital gains, just as long as it never gets tempted to make changes in its original “selections.”

     

    Once again, the annual meeting will be virtual, streamed by Yahoo – May 1st. This year , from Los Angeles to include Charlie in the Q&A. 


  30. The ratio of the price of copper to the price of gold is a great inflation indicator. Copper has rallied a great deal while gold is slightly down. This tells us the U.S. 10-Year Treasury should be at 2.25% right now.”

     

    – Jeffrey Gundlach,

    Founder, DoubleLine Capital LP