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PhilStockWorld September Portfolio Review – Part 2

4,480.

That's the strong bounce line on the S&P 500 and we've been failing it all week and now we're failing it FOR the week and that's a big negative on the weekly charts.  We predicted that we would fail the strong bounce line on Monday, when it was 4,490 (we made a lower low on Wednesday, which lowered the bar for a bounce) based on the Fundamental Outlook for the week and so far, so right, I suppose.  

I'm feeling good about going to CASH!!! last month, September has not been kind and we've been finding some good bargains along the way to refresh our portfolios.  Our slimmed-down LTP still made $44,533 for the month but those gains were largely offset by our too-bearish (for now) STP, which we adjusted yesterday.  Of course, we didn't adjust it to be less bearish – a bit more so, if anything.

Our defense if the market goes higher will be to buy more longs.  There are plenty of bargains out there as some stocks have come down quite a bit like Las Vegas Sands (LVS), which is back in the realm of reality now at $37.50, which is $28.66Bn in market cap and, before Covid, LVS was making $2.5Bn per year.  I'm not suggesting we race right into this one (we just bought BYD) because China has changed the rules in Macau and, of course, Covid - but it's a good example of a stock we wouldn't have bought because it was way too high that has now become attractive again. 

There are always bargains to be had – if you are patient!  

Money Talk Portfolio Review:  Patience is what our Money Talk Portfo is all about, as we only trade it when we're on the show – roughly once per quarter.  We can't touch it otherwise so the picks have to be ROCK SOLID and we made a few changes in our last cycl – when I was on the show on September 1st (it taped on Aug 31st).  We cashed out our winning positions on IBM and SKT and we added HPQ and the afore-mentioned BYD.  The portfolio is down $962 for the month at $194,944 but that's up a healthy 94.9% and, best of all, we have $167,589 of lovely, lovely CASH!!!

  • BYD – Brand new trade from last time and no action so still a chance to grab this $40,000 spread for net $7,362.

  • GOLD – We widened this spread by dropping the long calls and GOLD has taken a turn for the worst but it's a great inflation hedge and we're still $7,500 in the money on this net $2,950 spread that has the potential to pay $30,000 at $27, which would put Gold (the metal) a bit over $2,000.

  • HPQ – Another newbie and I love the bargain.  It's cheaper than we bought it for with a net $2,350 credit on the $20,000 spread so that's $22,350 upside potential at $35.

  • PFE – Big pullback recently but we still love them, long-term.  We got in early so not worried at all.

  • SPWR – If they are this low at Thanksgiving, they will be my Stock of the Year for 2022 as this is a crazy-low price for an industry leader in the solar sector with every World Government looking to move to much more solar for the rest of this decade.   It's a $15,000 spread, currently at net $4,125 – easy money!  

  • VIAC – Or maybe this should be my stock of the year…   They have got to be joking with this price but someone has had a sell program running at this level since April.  Will they ever run out of shares to dump?  I think so and then we are left with VIAC at a $26Bn valuation – despite making $2.6Bn for the year.  Even better – they made $2.4Bn last year – this stock is Covid-proof! 

Why is there so much upside potential in these stocks?  Why are they all good for a new trade?  Becasue these are the ones we kept BECAUSE they have great upside potential and BECAUSE we would take them all as new trades.  That's how a great portfolio should look – especially a passive on that you can't adjust often.  

 

 

IN PROGRESS

 

 


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  1. Good Morning.


  2. you got your oil drop again phil congradulations


  3. Good morning! 

    Oil/Tommy – Well still waiting for the big one but I have to flip the contract anyway so this is a good place to cash out and I think I'll stay out for the weekend and hope for a pop to re-short.

    Holy crap the Nasdaq is power-diving!  

       

    • The stock market will be fighting to keep its modest gains for the week today, but is starting on the back foot.
    • The S&P (SP500) -0.1% and Nasdq (COMP:IND) -0.2% are down, with the Dow (DJI) off a couple of points.
    • The 10-year Treasury yield is up 2 basis points to 1.35% after another choppy week.
    • While the S&P is still looking like it will gain for the week, it is also still on a course for its first losing month since January.
    • "The SPX is consolidating below resistance from the prior August highs (4,480)," Craig W. Johnson, technical market strategist at Piper Sandler writes. "A breakout above this area would leave the 4,500-point milestone and the September highs at 4,537 as the next major hurdles to clear. Downside support comes into play at the rising 50-day MA (4,434), followed by the July highs at 4,422."
    • The economic calendar is light today, typical for a Friday, but the University of Michigan will release its preliminary numbers for consumer sentiment in September shortly after the opening bell.
    • Economists are looking for a small rise to 72 from 70.3 in August.
    • Sentiment is getting a closer look after the dour figures of late look to be at odds with spending. August retail sales showed a surprise gain yesterday.
    • "The US Michigan consumer sentiment inflation expectations will get attention, but consumers remain useless at forecasting inflation (only economists can forecast inflation)," Paul Donovan, chief global economist at UBS, writes wryly. "Political polarization will be on display. Republicans are the most pessimistic they have been in over a decade; Democrats are more optimistic now than at any point in ex-President Trump’s administration."
    • See the stocks making the biggest moves this morning.

     

     

    • U.S. home sales dropped 3.5% in August, while the median sale price also slipped 1.2% to $335K, albeit still the "second-highest August sales total in the 13-year history of our report," said Nick Bailey president of RE/MAX, according to the RE/MAX August National Housing Report, which surveys 51 metro areas.
    • It appears momentum in the 2021 housing boom is gradually easing, but strong demand and tight inventory conditions persisted in August, which "could be with us for the foreseeable future," Bailey added.
    • "In fact, the drop in home prices might signal to potential sellers that it's time to get off the fence in case they fall further, which in turn could draw more buyers into the mix."
    • Months supply of inventory in August of 1.3 fell from 1.5 in July and "significantly" less than 1.9 in August 2020.
    • Average days on market of 24 was one day more than July and reflected sales that were 18 days faster, on average, than in August a year ago.
    • The number of homes for sale also fell 6.2% M/M and down 26.7% Y/Y.
    • Previously, (Aug. 17) Home inventory rose in July but the hot housing market has room to run.

    • Money market funds witnessed capital outflows totaling $45.3B, which is the largest outflow they seen all year.
    • Leading investors to be overall net sellers of fund assets encompassing both ETFs and conventional funds for the second week out of the past three. 
    • Traders and investors removed $33.1B from the market according to the latest Refinitiv Lipper U.S. fund flow insight report.
    • Market participants will also notice that equity funds garnered $5.9B, taxable bond funds pulled in $5B, and tax-exempt bond funds attracted $1.3B.
    • SPDR S&P 500 ETF (NYSEARCA:SPY) and Invesco QQQ Trust 1 (NASDAQ:QQQ) led all equity ETFs as they took in $3B and $1.5B in net new money. In contrast, iShares Russell 2000 ETF (NYSEARCA:IWM) and Select Sector Financials SPDR (NYSEARCA:XLF) hemorrhaged out the greatest  outflows for the week totaling $878M and $621M.
    • From a fixed income ETF viewpoint, SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (NYSEARCA:BIL) attracted the most significant inflows totaling $526M, and Schwab US TIPS ETF (NYSEARCA:SCHP) came in second, pulling in $241M.
    • On the flipside, iBoxx $High Yield Corporates (NYSEARCA:HYG) and iShares: iBoxx $Investment Grade Corporates (NYSEARCA:LQD) saw net outflows of $1B and $369M.
    • In addition to the weekly net outflows, ETFs have been in the spotlight for another reason. Oregon Democratic Sen. Ron Wyden is proposing a tax loophole plan that can significantly affect the ETF marketplace.

    • Evercore ISI's spin through yesterday's retail sales surprise for August found positives for its top five in the broadlines/hardlines sector, with the back-to-school strength portending some upbeat results to come in the winter season.
    • Those retail sales rose 0.7% from July, and up a solid 15.1% year-over-year with momentum from clothing stores, as well as restaurants and even general merchandise.
    • And Evercore notes that ex-Autos/Gas/Restaurants, the figures were up 11.4% year-over-year, with the two-year stacks accelerating from July, up to +20.7%.
    • Retail spending is "well above" the 4% nominal historical year-over-year norm – and analyst Greg Melich and team hold the view that "the sticky demand strength is more reflective of a new plateau for future growth than pull forward requiring 'payback' of nominal decline."
    • Its second-half forecast for 5% growth (15% from 2019) probably has more upside risk than down, they say, looking at strength in its retail sales lead indicator; the correlation of back-to-school sales with holiday demand; and accelerating inflation and corresponding strength in pricing power.
    • Digging into details: Home improvement sales rose 6.3% Y/Y in August, down slightly from a three-month trend – but despite that, the firm feels "nesting trends are well established and sticky through 2021." And that "paints a solid backdrop" for Home Depot (NYSE:HD) and Lowe's (NYSE:LOW).
    • It's expecting the home improvement market to grow 10% this year even after a 13% rise in 2020. Its Home Improvement Lead Indicator (used to project six-month demand) decelerated 500 basis points in July, but Web traffic for the two big retailers is following a typical seasonal deceleration, it notes. Tractor Supply (NASDAQ:TSCO) also followed that trend, but is staying above 2019 and 2020 levels, and Floor & Decor (NYSE:FND) didn't see a deceleration and is "significantly" above strong 2020 levels.
    • Consumer Electronics and Appliances decelerated to +18% in August from +22% in July, but it's still marking strong growth against last year's COVID-depressed backdrop.
    • "With inflation persistent for now, we believe Consumer Electronics can gain share of wallet for several years, as it did from 2000-2007" – and Best Buy (NYSE:BBY) is "uniquely positioned to ride this wave," with the past few years' digital investments putting the retailer in a place to pivot to the "accelerated Multichannel revolution."
    • Turning to General Merchandise, it rose 15.5% year-over-year vs. a three-month trend of 12.5%, the firm notes (and jumped 17.4% vs. August 2019). Those including Walmart (NYSE:WMT), Target (NYSE:TGT) and Costco (NASDAQ:COST) posted strong back-to-school trends, and Evercore likes Costco with two catalysts (a likely fee hike, and food inflation), calling it a "consistent share winner." Meanwhile, Dollar General (NYSE:DG) is favored in the 12- to 18-month view.
    • Grocery, Food at Home and Inflation are picking up, it says, and home strength is the key driver of significant outperformance in 2021 by Albertsons (NYSE:ACI) and Kroger (NYSE:KR).
    • And finally on Auto Parts & Tires, sales were up 7.7% year-over-year and the industry has grown 14% since August 2019; that mid-teens two-year growth is about triple the historic norms, Evercore notes. DIY has been "stubbornly strong" despite fading stimulus and tough comparisons. But here Evercore starts a positive Tactical Trading call on Genuine Parts Co. (NYSE:GPC), owner of NAPA – stabilized share, improved execution, and likely to benefit from enhanced pricing. And its top pick in the sector for outsized share gain is O'Reilly Automotive (NASDAQ:ORLY), while it also has an Outperform rating on Advance Auto Parts (NYSE:AAP).
    • The firm says its top overall picks are those fitting into its "MEND" framework for post-pandemic success: Multi-channel, E-commerce, Nesting, and De-densification. And those are Best Buy (BBY), O'Reilly Automotive (ORLY), Sherwin-Williams (NYSE:SHW), Amazon.com (NASDAQ:AMZN) and Petco Health and Wellness (NASDAQ:WOOF)

     

     

    • United Airlines (UAL +1.4%) temporarily stopped all its US and Canada flights early Friday morning following a systemwide outage that impacted the boarding process. Customers said they were experiencing issues logging into the company's website and app to access tickets or check bags.
    • The airline issued a statement around 8 am noting that all systems were operating normally again after a 45 minute ground stop due to "technical issues." Only 1% of flights were delayed and none were cancelled, according to flightaware.com.
    • Shares dipped briefly after the news but are now up 0.88% pre-market. The company also announced Friday that it would begin flying three weekly flights between Washington DC and Lagos, Nigeria.
    • Yesterday, airline stocks jumped following a bright outlook by Ryanair and news of lessening COVID restrictions in Europe.
    • Congressman Kevin Brady (R.-Tex.), the ranking member of the House Ways and Means Committee, said Friday that he supports the renomination of Federal Reserve Chair Jerome Powell "less and less each day," citing what he sees as mismanagement of the current economic situation.
    • "Frankly, I think they have been in denial of a number of these issues," he told CNBC, referring to policymakers on the Fed.
    • Specifically, Brady pointed to inflation as one of the economic challenges the Fed has mishandled.
    • The Republican also accused the Fed of encouraging Congress to increase spending.
    • "I'm questioning his leadership, frankly," Brady said of the Fed chief.
    • Brady also criticized the tax proposals made by President Joe Biden, saying they would be bad for the economy. He also repeated his opposition to the pending $3.5T infrastructure bill currently under consideration in Congress.
    • "I don't think we've ever seen a government spend so much money to kill so many jobs, drive up inflation and create the greatest expansion of the welfare state in our history," he said.
    • Despite Brady's waning support for Fed Chair Powell, Washington insiders are expecting him to secure another term as the head of the central bank.


    • Wynn Resorts (WYNN -2.4%obtained a $1.5B credit line from Bank of China following news of increased government regulation at Macau, the world's largest gambling center. Wynn will also be able to borrow an additional $1B under certain conditions.
    • The credit line will be used to refinance the debt of Wynn Macau and its subsidiaries, along with funding "ongoing working capital needs and for general corporate purposes.”
    • Shares of Wynn have fallen each day this week, dropping over 22% since the news. Other casino stocks have seen similar declines as the government will hold a 45-day consultation to discuss the territory's gaming law reforms.
    • Meanwhile, Macau gambling stocks have been downgraded by analysts given the lower potential for earnings.
    • Wynn Resorts (NASDAQ:WYNN) sees another bull run to the sidelines amid the revelation that Macau regulators will be closely involved with gaming operators.
    • Jefferies lowers its rating on Wynn to Hold from Buy and sets a price target of $83.
    • Analyst David Katz: "The recent developments in Macau around concession renewals implied tighter restrictions on the gaming industry going forward. We believe WYNN's VIP business, which had been the primary earnings contributor pre-COVID, could be materially impacted. Combined with the ongoing COVID overhang, we are taking a more conservative approach, lowering our estimates."
    • Argus also downgraded WYNN today with a move to a Hold rating from Buy. "Our less optimistic view reflects heightened scrutiny by the Macau government as it begins a 45-day consultation period in which it overhauls regulations, reviews the number of casino licenses it will grant and scrutinizes supervisory requirements," updates John Staszak.
    • Shares of Wynn Resorts (WYNN) are down 18% for the week with Wall Street confidence cracked over the Macau disruption.

    • Over 60 cryptocurrency exchanges in South Korea have until Friday midnight to notify customers of a partial or full suspension of trading services, a week before a new anti-money laundering regulation comes into effect, Reuters reports, citing people familiar with the matter.
    • "Should some or all services need to be closed, (exchanges) should notify customers of the expected closing date and the procedures to withdraw money by at least seven days before the closure," the Financial Services Commission said earlier this week.
    • Exchanges that have not registered with the Financial Intelligence Unit by Sept. 24, as well as those that have registered but failed to secure partnerships with banks will be prohibited from trading in won.
    • Of all exchanges, nearly 40 are set to suspend all services, while another 28 have security certificates, but have not secured bank partnerships, Reuters notes.
    • A mere four exchanges – Upbit, Bithumb, Coinone and Korbit – have registered and secured partnerships, and thus can make won settlements.
    • Some smaller exchanges already said they will end Won trading, and will continue operations involving only digital coin trading until securing partnerships with banks, Reuters reports.
    • In the crypto universe, Bitcoin (BTC-USD -1.3%) slides to $47.4K in the past 24 hours, and has been trading in the $47K to $48.6K range since Wednesday.
    • In mid-August, Binance ended South Korean Won trading pairs to comply with regulation.
    • Harmony Gold (NYSE:HMY) has reached a three-year wage agreement with five South African labor unions, the Solidarity union says.
    • The deal is said to include 6% annual salary increases for miners, artisans and officials, as well as a rising housing allowance over the next three years.
    • Solidarity also says the agreement provides for ongoing consultation between the company and trade unions to ensure miners benefit from modernization.
    • Harmony was among many precious metals producers whose shares plunged yesterday, as gold prices fell by the most in six weeks.
    • Jefferies stays bullish on Six Flags Entertainment (NYSE:SIX) after new data shows an overall strengthening in the reopening season. Notably analyst David Katz says Six Flags Q3 visitation is up 5.8% from the 2019 level, despite meaningful precipitation headwinds throughout the quarter.
    • "Although our thesis is primarily centered on execution for 2022 onward, the stronger-than-expected demand profile is supportive. Ultimately, we believe the data update is bullish for the shares," he updates.
    • Jefferies assigns a price target of $61 to SIX to rep 45% upside potential. The average Wall Street price target on SIX is $52.60.

     

     

    • Facebook (NASDAQ:FB) has announced new products and features for businesses in the wake of an Apple (NASDAQ:AAPL) software update that dented the targeted advertising market.
    • The social networking giant is adding new ways for businesses to communicate with customers. The features include the ability to start a conversation with a business by clicking an ad, which launches the chat in either Messenger, Instagram Direct or WhatsApp depending on where the ad was served. Businesses can also set up their Instagram profiles to allow customers to launch a WhatsApp chat.
    • Quote requests on Messenger, currently in testing with select advertisers, let businesses pre-select four to five questions to ask customers prior to starting a conversation.
    • Facebook is also testing Work Accounts, which would allow businesses to log into Facebook without first having a personal account.
    • Read about Facebook's full list of planned updates here. 
    • Earlier this year, Apple updated its iOS software with new privacy features, including one where users have to opt-in to have apps track their data across the internet, a key component in targeted advertising.
    • Earlier this month, Rosenblatt Securities downgraded Facebook from Buy to Neutral, saying the Apple update took away the social network's advertising "trump card." 

  4. 15,400 not even bounce – very bad sign.

    We call this pattern "too far, too fast".


  5. Sorry, may not be obvious to all:

    On the monthly chart, we ran from 8,000 to 12,000 (4,000) with 1,000-point (25%) pullback before going from 12,000 to 16,000 (not yet) so, even in a strong rally, we should get an 800-point pullback as a weak retracement (20% of the run) but, as we haven't had a strong retracement since 8,000 – it's very likely we pull back 1,600 points to 14,400 but 15,200 is the least we expect before rallying over 16,000 – even in a fantastic market.  


  6. Merry F'ing Christmas:

    The recent surge in Covid-19 cases in Southeast Asia has throttled ports and locked down plantations and processors, sparking extended disruptions of raw materials such as palm oil, coffee and tin.28 5 min read

    Some brokerage customers aren’t happy that Robinhood and its rivals sell their orders. Even if regulators ban that practice, there are other ways no-commission brokerages can make money from your trades

    The rise in investors’ fears about inflation in recent weeks is in contrast to the U.S. where a similar gauge has been relatively stable

    Startups are promising to deliver groceries to your doorstep in minutes, stepping up competition in the industry. Their strategy: to operate out of “dark stores.”

    HONG KONG— Zhao Wei spent the past two decades as China’s equivalent of Reese Witherspoon, a beloved actress turned business mogul.

    She directed award-winning films, sold millions of records as a pop singer and built a large following on social media, amassing 86 million fans on Weibo, China’s Twitter -like microblogging site. She also made a fortune as an investor in Chinese technology and entertainment companies.

    Today, the 45-year-old star has been erased from the Chinese internet. Searches for her name on the country’s biggest video-streaming sites come up blank. Her projects, including the wildly popular TV series “My Fair Princess,” have been removed. Anyone looking up her acclaimed film “So Young” on China’s equivalent of Wikipedia wouldn’t know she was the director; the field now reads “——.”


  7. TROX/Phil – you suggested yesterday to roll the 25 long Feb $15 calls to 50 of the Jan 2024 calls for $4,000. Our call spread then will be 50 Jan 2024 $20 calls/25 Dec $20 calls. Assuming the deal with Apollo goes through at $27 (the current proposal), the Jan 2024 calls go up from 5.75 to $7 (so we end up making $3125 on 25 of those, the other 25 cancel out the Dec $20 calls); i.e. less than the $4K it took to roll them. Is your expectation that the deal price will be higher? Or that you are going to roll the 25 December calls to 50 of a later date/higher strike before the deal is announced? Won't it be better to not do anything and just cash out if the deal goes through? 


  8. W- would like your take on Wayfair as a continuing short play. I am holding 22-Jan 300/260 bear put spread (cost $20.90), now $ $20.50, so essentially b/e. Fortunately I have sold several out of the money calls (320's and 300's) all to be expired as of today so overall , nicely profitable play. So, my question is your suggestion on holding the bear put position, close it or reposition ?


  9. Snow- Bug question- Is it true that a covid infected/recovered/non-vaxed person has the same ongoing immunity as a non infected vaxed individual? 


  10. TROX/Rn – You are right, that was a mistake.  I forgot they are getting bought.  We need to hold off on that roll in the LTP.  

    W/Pstas – I think they will drift lower.  This is a furniture store with a $29Bn market cap with just $14Bn in sales and $400M in profits and that's only because Covid has closed their competition.  Shopping for furniture on-line is not likely to be a huge trend that justifies $29Bn.  I would simply take the opportunity to roll the long puts out in time when it's cheap and then you can roll the short puts if you have to or, when they expire, the next sale will pay for the roll.  

    Nas touched 15,300 briefly.  

    Blame the Quad witching or blame the Dollar:

    Totally buying /GC off the $1,750 line! 

    /SI at $22.50 too. 


  11. Future is Now Portfolio Review:  $194,472 (up 94.5%) is up $5,245 since our last review and is flat for the day, despite the Nasdaq's steep decline.  That's a good sign and we killed JETS but we loved our other positions and we even added KRBN as a new trade (just the short puts for now).   

    • NAK – Our fun little lottery ticket.  Don't forget to sell half if we get to $1 – then we'll be in for free. 
    • KRBN – Carbon credit ETF.  Brand new and I'm targeting a double by 2023 so this is a very conservative start and we'd be happy to be "forced" to buy 1,000 shares at net $35.10.  

    • CIEN – Way over target.
    • COWN – Back to where we started but I still like the premise and it's a small, entry spread.  

    • IGT – Cheaper than where we came in so good for a new trade.  

    • SPWR – Also cheaper than our entry but notice how ripped off we are on the high price of the short calls.  Those are things that work themselves out over time.
    • WTRH – Very disappointing so far but lots of time.  Waitr: Deep Value In A Frothy Market

    We love these positions but this portfolio requires some patience as we're playing large macro trends – not short-term catalysts.  


  12. Thanks Phil for the updates and the big effort that goes into it. 
     

    I have a starter position on WU of 500 shares + 5 short puts. It is relentlessly going south. What's your take long term for them?


  13. WU/Jeddah – This is their current issue:

    Western Union, MoneyGram estimated to lose $400M/year from El Salvador Bitcoin move

    Sounds worse than it is but absolute nightmare for them if it starts spreading.


  14. Russell pulled it back together and went green.


  15. The Bug/pstas – not sure if the data's solid enough to say, especially on the population level. You'd need a bunch of covid infected/recovered/non-vaxed people to compare to a bunch of non infected vaxed individual for breakthrough infections. Given how rare breakthrough infections are, that's challenging. However, lab data and tentative epidemiologic data seem to say immune levels are similar in those groups. An interesting tidbit, though – apparently if you vaccinate previously infected people, they have a stronger immune response than anyone else. Who knows if that means anything on a population level, though.


  16. Snow-Bug- thx. We have answers which then leads to more questions, rinse and repeat. That's why I still cringe at the "science is settled" meme as challenging convention is the whole point? 


  17. speaking of MGI,  see the unusual activity in the 2023 calls   

    in july there was some talk of a takeover 


  18. I mentioned AES a few days ago.  There was a recent $700K insider buy from a director and the stock has been green since then  


  19. *  I'm not recommending to buy anything. See Phil's note about lines above 


  20. Dividend Portfolio Update:  $394,862 is up 97.4% overall and up $4,810 since our last review where we killed off short puts on F, M and SPG but added more short puts on TWO.  We added full plays on KHC and LYB as well.  This is also a very low-touch portfolio and, in the interest of time, I won't have much to say as we wait for a clear indication of market direction.

    • GILD – On track too far in the money (safe) to worry about cashing in early. 
    • VIAC – We'd love to own 500 shares for net $25.65 so there's no downside to these.
    • ET – We want to sell puts but let's see how low they can go.   The longs will be called away in Jan.

    • TWO – This set will be called away.
    • DOW – Fairly new.  Cheaper than our entry.

    • KHC – Brand new. 
    • LYB – Brand new.
    • MO – Over our target.
    • NLY – Over our target. 

    • PFE – Miles over target but pays a nice dividend. 
    • TWO – We sold 10 more puts on last month's dip.

    • VRTS – Pretty new.
    • FRO – We are aggressively long into earnings.  Will cover at $9.

    • PETS – Aggressively long, waiting for the next spike up.

    • SIG – As long as the short calls are overpriced, there's no sense in selling.  It's a $60,000 position at net $56,170 so why give up almost $4,000 in additional gains if we don't need the money or margin?  
    • T – Another one that could be our Trade of the Year if they are still this cheap at Thanksgiving.   If I were not expecting a correction – I would trade SIG in for more of these!  


  21. Earnings Portfolio Review:  $308,931 is up 208.9% overall and up $7,028 since our last review, so I guess we're on the right track.  The Earnings Portfolio is self-hedging, with the SQQQ position but, wisely, we use it to sell calls against as well.  We are almost all cash, which is fantastic – so we are ready to do a bit of bargain-hunting as we only have 6 positions using net $17,585 in cash – yet still they made $7,028 in the past month.  Aren't options fun?  We cashed out INTC and X positions and short puts on HBI and WBA as they were both too far in the money to keep risking.  

    • SBUX – Short calls left over from a spread we cashed in at the top.  As we expected, SBUX came down nicely but we should now set a stop at $10 as it's not worth risking a rally back

    • GILD – On track.
    • GOLD – Not off to a good start but we love the inflation hedge.

    • PETS – Going nowhere fast on the whole but they do spike up on occasion.  
    • SQQQ – There's no way the Jan $30s won't die worthless so no point in buying them back and this spread gives us a ton of protection.
    • VIAC – We're aggressively long and waiting for analysts to wake up and smell the value.


  22. Butterfly Portfolio Review:  This is what happens when we let our positions run (compound interest).  Unlike our other portfolios, the Butterfly Portfolio has been running since Jan of 2018 and, at $1,240,427, it's up 520.2% overall and up $66,060 since our last review. Flat markets are great for the Butterfly positions, as we sell premium puts and calls and both sides go worthless in a flat market.  We made a lot of moves to sell more premium last month and we're pretty well set into January.  

    • AAPL – This position got SO big but we love it.  It's net $273,580 but we just sold $30,200 (11%) worth of premium against it for the quarter but we're taking a loss and paying back $44,700 on the short calls.  As a new set, we'll sell 40 Jan $145 calls for $9.50 ($38,000) and 40 of the 2023 $125 puts for $10.30 ($41,200).  Our $480,000 bull call spread would be 100% in the money over $150 and it's currently net $273,600 so we have PLENTY of upside buffer to the short calls and PLENTY more short calls we can sell to cover the puts.  Aren't options fun?  

    • AMZN – It's only small in the number of contracts but the shares make it almost as large as AAPL.  In fact, we sold $42,900 worth of premium for the quarter on a 1/3 cover so it's actually more effective than AAPL at generating revenue.  At the moment, the short calls look ugly but we're not even at $3,500 so that whole $38,885 charged against our balance is premium.  

    • DIS – Even this one got large as it aged.  We sold $45,000 worth of premium that expires in January and we're a little higher than we'd like but it's only a 1/3 cover and we're actually thrilled that our longs are in the money already, since they have $187,500 potential vs the current net of $102,375 for the bull call spread.  

    • F – Just  net $13,707 but it will be $37,500 if F is over $15 and, while we wait, we just sold $5,600 (40%) worth of premium for the quarter.  FUN! 

    • GNW – The Sept $4.50 calls will expire worthless but GNW is now too cheap to sell calls so we'll just wait for the bounce.  Let's also buy back the short 2023 $5 calls as it's only $1,800 and we can do better on a bounce.  

    • GOLD – We're getting hammered here so – how can we take advantage of it?  We owe $25,825 to the short puts and the 2024 $20 puts are $4.80 so selling 50 of those ($24,000) should do the trick.  We can also buy back the 50 short 2023 $23 calls for $1.33 ($6,625) and offer to buy 50 2024 $50 calls for $5 and that will allow us to aggressively sell short-term calls when GOLD pops back into the $20s.  

    • IMAX – AMC popped back so why not IMAX?  We'll roll the 10 short Sept $18 puts at $1.20 to 10 more of the 2023 $17 puts at $4.20 ($4,200) and we'll use that cash to buy back the 15 short 2023 $27 calls at $1.55 ($2,325).

    • MJ – Great job selling more short calls last month!  Notice this is a net credit ($1,875) position yet we collected $10,560 selling short calls so who cares about anything else?  IF MJ happens to pop, our 100 x $10 ($100,000) bullish spread will cover us very well – hard to lose….  We didn't play this position because we liked the MJ ETF – we played it because the MJ ETF had ridiculous premiums we could sell!  

    • WBA – We're aggressively long now.

    • WHR – So glad we sold those $210 calls last month!  As long as you remember your JOB is to sell premium  - you will do well with this strategy.  We're also 100% in the money on our spread, so the premium selling is a bonus while we wait.


  23. Wow, missed it by a couple of minutes but we got them all done!  

    Missed It By That Much GIFs - Get the best GIF on GIPHY

    Crappy close – even the Russell fell back to red.  

    Have a great weekend everyone! 

    - Phil


  24. Phil

     

    Are we still in NAK  ?

    Thanks


  25. qc yes still in the lottery of Nak.