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PhilStockWorld August Portfolio Review – Part 2

Image result for one million dollars animated gifImage result for one million dollars animated gif$2,152,571! 

That is up $10,166 since our last review and, rather than pull the plug entirely we simply elmintated about half our longs, leaving us 80% in CASH!!! and we let all our hedges ride, which leaves us in a net short position as our Short-Term Portfolio (STP) has $585,435 of downside protection and we halved the need for that protection in the LTP, leaving us farily bearish for the moment.  

If we want to get less bearish now, we can either cut back on our hedges or buy more longs so, on the whole, we've simply made a bearish turn that leaves our paired portfolios a lot more flexible for whatever storm lies ahead.  

And we're over 80% in CASH!!! and CASH!!! is the ultimate hedge.  We've been pretty cashy all year and being cashy does not stop you from making money as an options trader – since we get astounding leverage in a bull market – it just keeps you flexible and allows you to take advantage of opportunities.  

It's easy to make money in a bull market.  Apple (AAPL) is at $146.70 and you can buy the 2023 $140 ($24)/$150 ($19.25) bull call spread for $4.75 and you will get back $10 if AAPL is simply over $150 in January of 2023 – which is very likely to happen.  That would be a gain of $5.25 of 110% in just 16 months – that should keep you well ahead of inflation, right?  So we're not at all worried about making money if the market stays strong.  What we are worried about is having trouble getting out of positions if the market crashes and, at this particular moment – that risk outweighs the potential reward of staying in.

Earnings Portfolio Review:  $301,903 is up $4,502 since our last review and we touched nothing at the time but recently added a trade on GOLD – but that's it.  We already have $268,921 (89%) in CASH!!!, and we have already pared this portfolio down to positions we love AND this portfolio has it's own SQQQ hedge – so it's in great shape.

  • SBUX – This is a bearish leftover from a spread we already cashed out at the top and now we're up nicely on this too.  SBUX model does not do well in Covid lockdowns so this is a KEEPER!

  • HBI – At 94.1% profit it's very, very unlikely to hurt us but it's also nice to clear the decks.  Kill it.  
  • WBA – Same deal as it's a 2023 trade and we're already up 86.6% so not worth holding 15 more month to make 13.4%.  Kill it.
  • GILD – It's a $15,000 spread at net $5,975 so we have $9,025 upside potential and our worst-case obligation is owning 500 shares at $60, which would be wonderfull on this ridiculously undervalued company.  KEEPER!  

  • GOLD – A new, fun trade and gold should do well if the market crashes again AND it's an inflation hedge.  KEEPER! 
  • INTC – We're up about $14,000 and it's a $25,000 spread with only a few months left so it's a bird in the hand thing – as much as we love the stock. Kill it.  

  • PETS – I like them for the long-term but is that enough of a reason to hold them and risk being assigned 1,000 shares at $30?  This spread was a net $2,000 credit so if we roll the 2023 $30 puts, which are now a crazy $8.70 to the 2024 $20 puts at whatever costs less than $2,000, THEN we would be in the spread at net $0 and I'd LOVE to own up to 2,000 shares at $20 which means YES!, this is a KEEPER! and we'll also be happy to roll the Jan $25 calls to the Jan $15 calls for $5 ($10,000) and then we'd be in the $15/35 bull call spread ($40,000 potential) with 20 short $20 puts for net $10,000.  Yes, we can live with that "worst case" and the best case is that doesn't happen and we make more than $20,000 leaving it alone….

  • SQQQ – We brillianly pre-sold the 2023 $17 calls and now the Jan $30 calls will go worthless, as expected so this is essentially a free $120,000 hedge currently at net $18,150 – great bang for the buck as it's in the money by $33,600.  KEEPER!  

  • VIAC – Why waste time, you know I won't sell this.  KEEPER! 

X – So glad they haven't fellen yet.  Kill it.  Too risky going forward with China shutting back down.

We managed to kill 4 of our 10 positions so I'm very proud of myself.  Plus we have that hedge so there's no worries here.

 

 

IN PROGRESS

 

 


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  1. Good Morning.


  2. World stocks fall as delta variant worries take center stage


  3. AP-NORC poll: COVID anxiety up, vaccine requirements favored



  4. Wall Street registers first signs of concern over economic recovery



  5. Covid Isn’t Going Away. So What Now?



  6. Phil, GOLD – Any thoughts to roll down our $18 Jan 2023 longs to $15 ?   Mid is approx $1.60 now to roll down again.


  7. Phil / AMZN –  Would like your view on this one….

    I'm looking at setting up a BCS and selling short term callers against it….  What do you think of the following set up….  ….  I've been waiting for it to stop falling and think that 3100 or 3000 should be a good support line …   Once it starts recovering I'd sell some short term callers in the 3500 range…  

    LONG 5X June '23  $3100 (530) Calls

    Short 5X June '23  $3700 (305) Calls


  8. batman, you took out the sold put from yesterdays post


  9. Phil. /AMZN —--  ( thanks stock)   on above position. I also would have told 1X of the Jun '23 $2800 ( 230). 


  10. Good morning!

    GOLD/Hicket – I'd rather wait and see what 2024 looks like but nothing wrong with the roll if you are of the midset to do it.  I'd put it in for $1.50 and be happy if it clicks.

    AMZN/Batman – It's a dangerously volatile stock.  Again, I'd wait for 2024 so you have more time to sell/roll and $225 for a $600 spread is obviously nice.  My big issue with AMZN is, at $1.6Tn ($3,200), they "only" make $30Bn so more than 50x earnings despite now being the size of WMT ($500Bn in sales).  WMT is $420Bn at $151 with $560Bn in sales and $17Bn in profit and those two are now 20% of all retail.  AMZN has now admitted what I predicted forever ago – they need physical stores to expand past the Web and MAYBE 20% of all retail will be through AMZN down the road but how do you picture your house chipping in to make that happen?  If they can't double on-line, going off-line isn't going to get them to $60Bn in profits and that would still be 26.66 x sales in some long-distant future at $3,200.   WMT is already making a big digital push – that's what's forcing AMZN to get stores – they can't beat the discount crowd.

    Things on AMZN are expensive and therefore profitable for AMZN but it's a service for the Top 10%, not the bottom 90%.  The bottom 90% is why they need stores and lock-boxes to deliver to, etc.  They are miles away from getting their act together to go after WMTs market and, even if they get there – WMT shoppers aren't dumb enough to pay a 30% mark-up for the pleasure of getting things on-line.

    So, bottom line, I would not go too heavy on an AMZN play.


  11. Phil,

    I thought LPL is in earnings portfolio as well, but missing from this review.

    https://www.philstockworld.com/toptrades/top-trades-for-thu-05-aug-2021-1344/


  12. Phil / AMZN – the stores willl pose some challenges a lot…. I don't think they are going after the bottom 90% of retail just maybe the next 20 % – they already have cheap disti centers in good location in cities where they can set these up…. or they can go with standalone,  in better locations for pick up the need anyway.  The key for them is in the AWS business ( and Bezos made sure the Key guy remained)…and of course the OTA video…. they print money here AWS, and they can subsidize lots of things with this until they drive out more and more competitors not named wall mart …..   Amazon is never cheap enough…. but they stumbled and gave us an opportunity…. 


  13. Phil / AMZN – do you know when the '24 options come out?


  14. 35,000 on the dot is the strong bounce line we expected.  S&P (4,415) also strong bouncing but it has to hold into the close, not just get touched. 

    Nasdaq back at highs despite China's massive privacy crackdown.  That makes no sense at all.

    Russell is failing – broadest index.

    Like the Nikkei

    Still liking /CL long over the $63 line and /RB at $2 – both with tight stops below.

    LPL/Kgab – I missed adding it but, since we're cutting back, consider it cut.  Chip shortage and more Covid means more trouble for LPL.

    Speaking of Covid trouble:

    Friggin' Florida!  

    50,000 new cases a day the past few days and today we hit our 3,000,000th infection in a state with 20M people (for now).  1/7 people have been infected and 1/20 have been infected recently.  

    Holy crap!  Keep in mind deaths are way lagging.  Last Nov 11th, we hit 143,000 cases per day (same as yesterday) and deaths were 1,431 and went on to 4,000/day by Jan.  Yesterday there were 1,734 deaths so we're outpacing last year already.  Delta is moving so fast the 7-day averages are grossly understating the problem.

    AWS/Batman – That was the low-hanging fruit and they already got that.  Huge competition now so hard to expand.  AWS is where all their profits come from, not retail sales.  2024 options should be out by Sept.


  15. Phil-the Delta virus is going wild up in thinly populated No Wisc also. The towns on the south shore had a festival day Saturday and one person who circulated through all the booths, who was vaccinated, has infected untold numbers of participants. Two of my friends have quarantined and one has already tested positive after 5 days. The person who circulated was not masked and has underlying health problems in her 80's  was taken out of the county for treatment as all the hospitals are full. Apparently no more ventilators available. Anyways, just goes to show how infectious this blasted thing is as we are all presuming it is the Delta since everyone was vaccinated. The one in the hospital is not expected to survive so walking around like you are impervious is absolutely insanity. 


  16. Phil,

    re the AMZN discussion, my impression/experience is that stuff on AMZN is cheaper – not more expensive – than in brick/mortar stores like WMT. Even comparing food items (crackers, cookies, canned goods), AMZN is cheaper by >20%. Also, AMZN seems to offer more options and, arguably, better quality. I can understand that folks without computers (far fewer than the "bottom 90%") don't have access to AMZN but what percentage of the market is that? No question AMZN stock is more expensive than WMT but I have to question whether AMZN's merchandise is. Just my thoughts.

    TIA


  17. 8800-Disagree about AMZN. We have received subpar gifts sent by relatives etc that were nothing but garbage. It got to the point that we told EVERYONE to never send us anything from them. Not to mention the packages that arrived from them that were never ordered etc, etc. And the phone calls that 899.00 dollars was charged to my credit card for my latest order. Do not have an account with AMZN and have never ordered anything from them since they ripped me off over 15 years ago for over 125.00. The latest is my sister who supposedly sent a electric teapot for my birthday that never arrived after three months. AMZN said it was stolen meanwhile sitting on the $ she paid for 3 months. She was told also to never send anything from them. They don't support our public library's or treat their employees decently. Right up their with Walfart another one we avoid. FWIW


  18. Pirate,

    Interesting – and surprising – that you have had such a different qualitative experience with AMZN. I have had those bogus cellphone calls advising that there were bogus charges to my AMZN CC but that had nothing to do with AMZN itself – just scammers using the AMZN name to get your attention. In South Philly, we just tell those folks to be careful starting their car in the morning and that usually stops that crap.


  19. Sorry to hear that Pirate.  In Florida there are no particular incidents, just a general disaster.  

    AMZN/8800 – Some things are cheaper but many things are huge rip-offs.  Of course, that's very subjective, depending on where you live.  In NY/NJ, you can find anything you want as cheap as AMZN.   Believe me, if AMZN really saved money, more people from the bottom 80% would be using them.  There are some interesting numbers with AMZN like they spent $22Bn on marketing last year, up from $19Bn in 2019 – that's pretty massive.  Shipping costs went up 50%, to over $60Bn 

    Characteristic Online stores Physical stores Retail third-party seller services Subscription services AWS Other
    2014 68.51 - 11.75 2.76 4.64 1.32
    2015 76.86 - 16.09 4.47 7.88 1.71
    2016 91.43 - 22.99 6.39 12.22 2.95
    2017 108.35 5.8 31.88 9.72 17.46 4.65
    2018 122.99 17.22 42.75 14.17 25.66 10.11
    2019 141.25 17.19 53.76 19.21 35.03 14.09
    2020 197.35 16.23 80.46 25.21 45.37 21.45

    That's where the money comes from. AWS is $13Bn of their profit, almost half.  The rest is from Prime Memberships and the rest of the business is a $13Bn loss so what is it you'd like them to expand to justify a $1.6Tn market cap?  


  20. Just got an alert on my phone that the Delray Beach Fire Department will be administering Moderna shots today from 3pm – 9pm and everyone who comes will get a free gift from the Downtown Merchants.  This must be one hell of a crisis.   

    I'm supposed to go to a party tomorrow but I think I'm going to pass.  


  21. Phil / AMZN – They made huge investments in logistics due to COVID demand…..  They took advantage of the high demand and low cost of acquiring land and buildings to expand at a multi year low costs…. these costs were sort of pulled forward with Covid and will now serve a a base for growth to grow leverage.   These guys are really smart operators and have chosen wisely in where they tend to invest in new businesses.   They have grown 4 Fortune 500 businesses in the course of 5 to 6 years from a standstill.   AWS is a cash cow that will grow double digits for years to come – ( 5G near term booster).  They have the worlds best logistics networked…. they are just starting to sell this as a service…   5 years from we may see their next Fortune 500 company….  


  22. To each his own, Batman.  For me, I'm not paying the 5-years from now price for a perfect scenario.   


  23. Phil,

    Thanks for that AMZN perspective - wasn't aware of those higher cost categories. 


  24. Dividend Portfolio Review:  $398,052 is up $7,445 since our last review and that's just fine as we only shoot for a nice, steady 30% gain in our Dividend Portfolio.  We are doing better than that (up 95% since 10/25/19) only because we started with $100,000 and lost almost half of it last March and we took another $100,000 from the STP (which was up $400,000) and doubled down on what we had.  So now we're up 95% on the $200,000 and that's exactly what you are supposed to do in a crash but you can't do that if you don't have money on the sidelines to deploy – keep that in mind!  

    We only have $121,716 on the sidelines now and this portfolio is the least able to withstand a correction because, rather than having nice, flexible options with lots of cash – we own stock.  Stocks suck!   Dividends are nice, of course but then you have to own stock.  

    • F – Kill it.
    • GILD – KEEPER!
    • M – Kill it.
    • SPG – Kill it. 
    • VIAC – KEEPER!  
    • ET – This will be called away in January.
    • TWO – What a crash – let's sell some puts!   Sell 10 2023 $7 puts for $2.20 ($2,200).  Of course we'll roll the short calls when the time comes. 

    • DOW – Brand new so KEEPER!  
    • FRO – Let's buy back the short Jan $10 calls as I think we're in the bottom of the channel.

    • MO – Right on target.  KEEPER!  
    • NLY – On target.  KEEPER! 

    • PFE – More vaccines.  KEEPER! 

    • RIO – South America?!?  Kill it!   Actually this one is much better than it looks as they paid a $5.61 special dividend on 8/12, which all has to be fixed and wasn't yet.  Still killing it though.

    • VTRS – Brand new and on track.  KEEPER!

    • PETS – We are aggressively long but I'm willing to wait for a bounce.    KEEPER! 

    • SIG – Started paying dividends again!  KEEPER! Until we get called away.

    • T – Also aggressively waiting for a bounce.  When we have to adjust the puts, I'll sell some calls either way.  KEEPER!  



  25. Phil,

    Any further thoughts on BABA – still comfortable holding the position?

    Thanks


  26. BABA/8800 – Not so much comfortable as stuck.  

    Top of the Market Tuesday – Cashing Out While We Can

    BABA – Big pain recently.  This company is at about 1/2 their proper value. Last Q showed great growth but everyone is freaking out about China but I don't think they are out to destroy tech companies (not all of them).  Going to let it ride. 

    We're down about $45K but I'd rather roll to the 2024 $150 calls than take the loss.  We can sell some short calls to make up some loss along the way but there's nothing wrong with the actual business, this is all happening out of fear and the opportunity is not to be fearful with the crowd – which is a very hard thing to do.

    Being "Greedy" When Others Are "Fearful" Intentional Actions to Take  Advantage of Volatility — Kansas City Fee-Only Financial Planning | St.  Louis Fee-Only Financial Planning

    There's no mystery to my actions – I like to cash out when the market is high and it's easy to get good prices and I like to buy when people are panicking when it's easy to get good prices. 

    Indexes are being pined up into the close.

       

    Have a great weekend, everyone!

    - Phil


  27. BABA/8800 – By the way, our BABA play in the LTP is 20 2023 $200s, now $19 and 10 short 2023 $200 puts, now $60 with BABA at $158.  We are down $52,300 on the long calls and down $26,900 on the short puts but, as long as we REALLY want to own BABA – that's not a big deal.   2023 $150 puts are $30 so clearly we can roll to about 15 2024 $150 puts for the same $60,000 ($40) when those come out. 

    The 2023 $200s can be rolled to the $150s ($38.50) for $19.50 and we could pay for half of that by selling the 2023 $250 calls for $10 so net about $17,000 to get to the 2023 $150/250 bull call spread and hopefully better in 2024 and we'll have 15 short $150 puts after spending a grand total of our original $57,600 so $73,750 will be the cost of our $200,000 2024 $150/250 spread.  

    We'll have about 800 days to sell and we can currently sell 10 of the Jan $185 calls for $10 ($10,000) using 150 days.  If we make 5 sales like that, we drop our net cost to $23,750 and that is why, at the moment, I'm not too worried – it can be worked out.  That's without selling puts or doubling down or anything fancy and our short obligation to buy 1,500 shares at $150 ($225,000) is not much more than our current obligation to buy 1,000 shares at $200, is it?  

    That's why I'd rather be patient and see what the 2024s look like before making a decision and, of course, I think the whole market is likely to correct and BABA was $170 last March so we're even lower than that now but it was back at $319 last October.  We just need some Chinese Batmans who feel BABA is a bargain as much as AMZN but the difference is BABA is trading at 19 times earnings – not 50+.


  28. That's the whole greedy/fearful thing, folks.  You have to be a Fundamentalist to look at this chart and say BUYBUYBUY!  

    The chart is horrendous but the chart carries little weight in FA – it's the value of the company we care about and nothing has changed that during this downturn and nothing in their earnings report indicated any change.  BABA does not sell your information – they use it, but they don't sell it.  Much like AMZN.  It does suck to have a position when sentiment turns against it but we all have houses and most of us held onto them during the 2008 crash, right?  Was the house worth less or was it just selling for less at the time?  So we didn't sell them and then they came back.

    Sure it would have been nice if they just went up and up and up – but that's not how things work in the real world.

    Be Fearful When Others Are Greedy - Arbor Asset Allocation Model Portfolio  (AAAMP) Value Blog


  29. Comment content omitted because it is too long.


  30. Here's an example from last year:

    Submitted on 2019/10/07 at 12:11 pm

    There's a trade:  We like Sunpower (SPWR) anyway and they went on sale since we got out and we'd LOVE to own them at $10 for the long run as $10/share is $1.4Bn and we know SPWR is capable of earning over $200M for the year and they did make $121M last Q though probably still a loss this year but, going forward – I think they'll do great.  

    Year End 30th Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 2,507 3,027 1,576 2,553 1,794 1,726 1,670 1,974 2,217 -7.2%
    Operating Profit $m 158.9 251.2 -206.3 -371.9 -1,025 -849 -288.5      
    Net Profit $m 95.6 245.9 -187 -448.6 -929.1 -811.1 -216.3 -53.9 28.2  
    EPS Reported $ 0.69 1.55 -1.39 -3.25 -4.49 -5.76 -1.66      
    EPS Normalised $ 0.70 1.62 -1.36 -2.57 -1.48 -3.15 -1.75 -0.34 0.19  
    EPS Growth %   +131.5                
    PE Ratio x           n/a n/a n/a 55.5  
    PEG x           n/a n/a n/a 0.58
    Profitability

    They can go lower, so we shouldn't go crazy but 2022 options are out so I'd say selling 10 2022 $10 puts at $3.90 ($3,900) is a no brainer and we can put 1/2 back to work on a spread like this:

    • Sell 10 SPWR 2022 $10 puts for $3.90 ($3,900)
    • Buy 15 SPWR 2022 $12 calls for $3.40 ($5,100) 
    • Sell 15 SPWR 2022 $17 calls for $2 ($3,000) 
    • Sell 5 SPWR Jan $12 calls for 0.85 ($425) 

    That's a net $2,225 credit on the $7,500 spread and, if it goes lower, we'd be happy to roll down the long calls at $2.50/$5 roll ($3,750), which would put us in a $10,000 $7/17 spread for $1,525.  If it's flat or down, we sell 8 more sets of short calls for $3,200 or more and that puts us back to a credit anyway so figure net $8 on 1,000 shares is our worst case.  If SPWR goes up, we roll the short calls but we'll be happy to buy more long spreads if that becomes a problem.  Lots of ways to win – not many ways to lose – that makes it a nice trade! 

    Think or Swim says ordinary margin is $3,889.62 on the short calls so not very efficient but it's a stock we'd REALLY like to own long term – certainly going on the Watch List!  Assuming no fancy stuff we could make $9,725 (437%) because of the credit PLUS whatever bonus money we make selling a few calls along the way.  

    Still a good price on them and a huge return potential – this one is in contention too.  The trick is not finding the 300% returns but how sure we are that we can make them?


  31. Submitted on 2019/12/02 at 10:03 am

    SPWR/Crazy – Nope, not accurate at all, thanks.  Not even sure where that came from.

    Officially, we will go with:

    add it to our Short-Term Portfolio with the following trade:

    • Sell 10 SPWR 2022 $8 puts for $3.30 ($3,300)
    • Buy 30 SPWR March $6 calls for $1.90 ($5,700) 
    • Sell 30 SPWR March $8 calls for $9 ($2,700) 
    • Buy 30 SPWR 2022 $8 calls for $2.70 ($8,100)
    • Sell 30 SPWR 2022 $12 calls for $1.70 ($5,100)

    The net on the spread is $2,700 and, if all goes well, we will make $3,000 on the March spread, leaving us with a net $300 credit on the 30 long 2022 $8/12 spreads that are worth up to $12,000.  We're obligated to buy 1,000 shares of SPWR if they stay below $8 and our net would be $10.70 ($10,700) if everything else went worthless but I like the short-term payoff potential on this one and, if SPWR is at, say $6 and we have to buy 1,000 for $10,700, we simply buy 1,000 more for $6 and our average is $8.35 on 2,000 shares and then we sell more puts and calls!  

    SPWR/Batman – The reaction is a little harsh, I think.  

    SunPower (NASDAQ:SPWR): Q4 Non-GAAP EPS of $0.23 in-line; GAAP EPS of $0.03 beats by $0.15.

    Revenue of $607M (+15.5% Y/Y) misses by $7.98M.

    Press Release

    SunPower (NASDAQ:SPWR-5.8% after-hours after slightly missing expectations for both Q4 earnings and revenues and issuing in-line guidance for FY 2020 revenues.

    Q4 residential revenue rose to a record with 27% MW growth vs. the year-ago quarter, and global shipment volumes gained more than 80% Y/Y to a record.

    SunPower sees full-year revenues of $2.1B-$2.3B vs. $2.28B analyst consensus estimate; for Q1, the company forecasts revenues of $435M-$470M vs. $409M consensus, as well as gross margin of 9%-12%, adjusted EBITDA flat to negative 15M and MW deployed of 520-570 MW.

    As a result of the restructuring of its commercial direct business, SunPower forecasts FY 2020 adjusted EBITDA of $125M-$175M.


  32. SPWR is at $1.5Bn at $9 so 10x 2020 earnings is not something I'd throw away.  Not every company is like TSLA and fudges the books to make every quarter look great.  If SPWR thought they'd deliver a $20M project ($500M/qtr in sales) by Dec 31st and it got delayed until Jan 15th – then they take a sales hit but it doesn't impact their long-term growth trends.  

    Year End 30th Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Total Revenue
    $m

     

    2,507 3,027 1,576 2,553 1,794 1,726 1,717 2,010 2,257 -7.19%
    Operating Profit
    $m

     

    159 251 -206 -372 -1,025 -849 -256      
    Net Profit
    $m

     

    95.6 246 -187 -449 -929 -811 -141 -45.0 22.9  
    EPS Reported
    $

     

    0.688 1.55 -1.39 -3.25 -4.49 -5.76 -1.13      
    EPS Normalised
    $

     

    0.701 1.62 -1.36 -2.57 -1.48 -3.15 -1.10 -0.307 0.140  
    EPS Growth
    %

     

      +131                
    PE Ratio
    x

     

                    78.1  
    PEG
     

     

                    0.514  
    Profitability

    SPWR split back in 2015, it's not like they lost revenues, they pursued a different path and have been growing well since reorganizing in 2017 and they remain on track. It's not a company we expect to take off like a rocket – just one we'd like to own for many years as they grow.  That's why we only sold 2022 $8 puts (for $3.10) in the Money Talk Portfolio – the net $4.90 entry is all we were looking for. 

    Since we can get $2.50 now for the 2022 $8 puts and since that's pretty much free money, let's sell 10 in the Future is Now Porfolio ($2,500) and, for the LTP, let's:

    • Sell 20 SPWR 2022 $8 puts for $2.50 ($5,000) 
    • Buy 40 SPWR 2022 5 calls for $5.15 ($20,600)
    • Sell 40 SPWR 2022 $12 calls for $2.40 ($9,600) 

    That's net $6,000 on the $28,000 spread that's $16,000 in the money to start with $22,000 (366%) upside potential at $12 in two years.   I don't mind waiting for that and our worst case is owning 2,000 shares at net $22,000 or $11/share so even if SPWR is down at $5, if we bought 2,000 more for $10,000 our average would be $8 (less than it is now) for 4,000 shares and we could sell $5 puts and calls to drop our basis.  I would almost prefer that to making the $16,000!


  33. Submitted on 2020/02/20 at 11:12 am

    SPWR/Wing – We sold some short puts already in the MTP, I don't remember having a spread but sure, I'd sell 10/40 for now and another 10 if rejected at $11 or, if not rejected, then $12,etc. 

    Submitted on 2020/03/22 at 11:13 pm

    SPWR/Tangled – Since the 2022 $8 puts are now $4.25, you should simply be thrilled if they expire worthless but you can always add the 2022 $8 ($2)/12 ($1.50) bull call spreads for 0.50 if you are a believer – seems like a very good risk/reward ratio to me.

    Post-pandemic book/1020 – I don't know, my cuneiform's a little rusty…

    Obviously, that joke was for the Democrats. 

    As was that one…

    SPWR/Hicket – I like them because they make the most efficient (not the cheapest) solar cells.  INTC used to make the most efficient (not the cheapest) CPUs.  Worked out well for them in the long run as Moore's Law tends to wipe out the price difference in a few generations and then people only want the best.  

    I like the last slide as revenues were down 25% and they quickly scaled back expenses to compensate – that's a great forward-looking sign.

    The best thing about them is you can sell the 2022 $8 puts for $3.50 and that nets you in for $4.50 if they go lower (33% off) or, if they get away and go higher, you still make 77% on your cash commitment in 2 years and the margin is only $472.36 if you sell 10 for $3,500 – so it's a very efficient way to generate an income.  

    If you want to be more aggressive, the 2022 $5 ($2.85)/$12 ($1.30) bull call spread is $1.55, so the break-even there is just about the current price at $6.55 but you only tie up $1.55 with $5.45 (351%) upside potential at $12+.  

    Too bad we already have them or I'd pick them again!

    Bang3 GIFs - Get the best GIF on GIPHY


  34. Submitted on 2020/05/14 at 2:26 pm

    Future is Now Portfolio Review:

    • SPWR – We liked it so much we played it twice. Both long-term and both with $5 calls and $8 puts – just different upside targets.   Potential is net $48,000 for the 2 and currently net $1,350 so there's $46,650 (3,455%) upside potential – so I'd say that's good for a new trade!  

    So we have about $60,000 worth of upside potential, mostly SPWR, over the next 18 months and we have plenty of buying power so we'll keep our eyes open for positive trends so we can go Back to the FUTURE!!!

    Back to the future GIF - Find on GIFER

    Here's the stocks we were looking at:

    Solar is the future and the future is now.  

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

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

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

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

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

    When SPWR dropped from $8 (where we thought it was a great deal) to $2.64, we didn't decide it sucked and got out.  WE BOUGHT A LOT MORE.  Why?  Because the Fundamentals had not changed so we turned it into a major position in most of our portfolios.  

    We did the same with M and WBA and F and BA and GILD and HBI and IRBT and IMAX and IBM and INTC and LABU and LB….  If you buy a house for $500,000 and it goes to $1M and then down to $250,000 – rather than sell the house for $250,000 – BUY ANOTHER HOUSE!!! 

    That's why rich people get richer – we can buy another house.  Poor people are forced to sell their houses for $250,000 because they lost their job in the crisis that dropped home prices 75%.  These are normal economic cycles and you can either take advantage of them or be ripped to shreds by them.


  35. Hey, that's the slide I was looking for – they DON'T have a lot of dependence on China and that means any sell-off now is silly too!