Get ready for some ACTION!
Earnings season kicks off on Tuesday morning when the Big Banks start reporting and we also have CPI (Tues), PPI (Weds), NY & Philly Fed Reports and Friday we have Industrial Production AND Consumer Sentiment AND Options Expirations. It will be an exciting, and telling, week so come back from wherever you are and get ready to do some work!
We had some action in our Live Member Chat Room yesterday with 4 new trades for our Long-Term Portfolio (LTP) and 2 for the Short-Term Portfolio (STP) – taking advantage of some of the bargain stocks we’ve been watching this month including Cognizant (CTSH), who went out as a Top Trade Alert for our Members and you can see the buying volume we kicked off into the close:
That’s the most volume they’ve had since June 18th, when Berenberg reduced them from a Buy to a Hold but, as I often remind our Members, algorithms misinterpret these things because the stock was at $40 and the Hold had a price target of $59, NOT $39. This is the difference between AI and AGI as Warren was immediately on that one for our Members with his morning stock pick on July 7th (Monday) – as soon as he had confidence the sellers were out of gas.
Penny and Roy discussed it in the Commuter Podcast yesterday evening:
Also, for those of you too cheap to subscribe – we posted Wednesday’s Webinar, where we reviewed our $700/Month Portfolio, which has been averaging 80% per year and is currently sitting at $136,700 after depositing $700/month for the past 47 months ($32,900) so that’s a gain of $103,800 (315%) using NO MARGIN and we have posted EVERY SINGLE REVIEW – FOR FREE since day one because we don’t want you to spend money you don’t have on our Memberships – so we give you the means to MAKE MONEY – so you can afford us.
In fact, we got a very nice compliment from one of our Members, Marco, who said just yesterday in chat:
“I love the philosophy. I like to tell people that instead of me working for the money, the money is working for me“
And THAT is what PhilStockWorld is all about: “Be the House – NOT the Gambler” – we even have a video for that:
For more details on this strategy – check out my 2016 Forbes interview.
Our example in this 2014 video was Trans Ocean (RIG), which got called away with a profit before crashing but the crash is interesting as it’s been flat between $5 and $10 for a decade and, although there was no profit in owning the stock – if you had sold options like (currently), the October $5 calls for 0.55 ($55 per 100 shares), you would have collected $2,200 in options premium over 40 quarters and you would STILL have $2,500 worth of stock that have now cost you net $300.
Of course, that’s not terribly exciting for us and we would not/DID NOT continue playing RIG because the returns are not exciting enough – although NOW it’s getting interesting again as long-term oil prices above $70 will create more demand for off-shore oil (RIG rents the platforms) and the company should be heading back to profitability.
So, if you want to pay for our $2,499 ANNUAL Trend Watcher Membership before the rates go up (end of summer – inflation!) you can play RIG as follows:
-
-
-
- Sell 20 RIG Jan 2028 $5 puts for $1.10 ($2,200)
- Buy 20 RIG Jan 2028 $3 calls for $2.60 ($5,200)
- Sell 20 RIG Jan $2028 $5 calls for $1.55 ($3,100)
-
-
That’s a net $100 CREDIT on the $4,000 spread that is 100% IN THE MONEY to start! As I said above, it’s not worth selling short calls and this trade has an upside potential of $4,100 (4,100%) on cash and the puts obligate you to own 2,000 shares of RIG for $5 ($10,000) if it goes lower but, if it doesn’t. If it simply is over $5 in January of 2028 – you will have made more money than it costs you to be a Member for that ENTIRE 18 MONTHS!
Cyclical companies are the market’s biggest bargains. They used to be the bread and butter of a Fundamental Investor’s playbook but I’m an old man (63) and I grew up without smart phones and I learned from people who remembered trading before electricity so we were PATIENT and we understood long-term market cycles.
These days, everyone looks for a quick fix and the average trader UNDERPERFORMS the market by a wide margin – because they are GAMBLING, not INVESTING! I’ve been teaching trader to become investors for 20 years now – trying to get them to give up their gambling habits and start OWNING THE GAME!
And, by the way, if you were a Member and had access to the chat room – you would also have access to the AGI Round Table, as I do and I just asked Boaty (AGI): “Before I publish – are you on-board with my RIG premise?” and his response is:
🛳️ Yes, I’m on‑board with your RIG premise — with the explicit understanding that this is a cyclical, high‑volatility cash‑machine trade, not a sleepy bond substitute. At current prices and with oil structurally supported above $70, the logic behind your spread is sound.
Let me sanity‑check the key pieces you’re hanging it on.
RIG today vs your thesis
-
-
-
-
Price is around $5.0–5.2 right now, with a market cap near $5.7–5.8B.[robinhood]
-
Over the last year, the 52‑week low is ~$2.53, average ~$4.71 — so we’re in the upper half of the recent range but not at any crazy euphoric high.[macrotrends]
-
As you note, Transocean lives off day‑rates and utilization in deepwater/offshore. With long‑dated oil prices sitting comfortably north of $70, the backdrop supports continued demand for offshore capacity over the next few years. That’s the macro prop under your “heading back to profitability” line.
-
-
-
The trade structure you propose — short $5 puts, long $3 calls, short $5 calls — matches that view:
-
-
-
-
You’re effectively saying: “I’m fine owning RIG at $5 in 2028 and I believe it will be worth more than $5 if offshore demand remains solid.”
-
-
-
The options logic
Net of all legs, you’re at roughly a $100 credit on $4,000 of intrinsic spread (20 × $2 between $3 and $5) — i.e., you start 100% in the money on the vertical, with additional upside if RIG is at or above $5 by Jan 2028.
That structure:
-
-
-
-
-
Caps your upside at $4,100 on the spread (plus the initial $100 credit).
-
Leaves you obligated to buy 2,000 shares at $5 if RIG is below $5, which you’re comfortable with because your effective cost is under $4 and your macro view is “offshore still needed.”
-
-
-
-
Mechanically, it’s consistent with RIG’s current tape and with how deep‑cyclicals often trade over a 2‑year horizon when the underlying commodity is supportive.
Does the premise itself make sense?
Your narrative:
“Long‑term oil prices above $70 will create more demand for offshore oil (RIG rents the platforms) and the company should be heading back to profitability.”
I agree with the direction:
-
-
-
-
Offshore projects are multi‑year, high‑capex decisions; they don’t tend to be made for short price spikes, they’re made when companies believe oil will be robust for years.
-
With the current energy transition dynamics, majors still need deepwater barrels to balance their portfolios; that supports day‑rates and utilization on modern rigs.
-
Transocean has already been working through its balance‑sheet and contract backlog to get back to sustainable profitability; the main risk is always cyclicality, not relevance.
-
-
-
So as a long‑dated, high‑reward trade for someone willing to sit through volatility, the premise “RIG back to profitability + options pay for membership” is logically coherent.
The style / philosophy paragraphs
Your “cyclical companies… bread and butter” and “stop gambling, start owning the game” riff is very much in line with how this trade behaves:
-
-
-
-
You’re explicitly asking people to be patient and let the cycle work.
-
You’re framing the trade as paying for membership via a structured income/return idea, not as a day‑trading ticket.
-
You’re warning them that this is investing, not a quick fix — which is appropriate for a 2028 expiry, a cyclical oil‑services name, and a spread that demands staying power.
-
-
-
From my side: no conceptual red flags. The risk is the usual one — commodity and rate cycles can be cruel — but you’re honest about that and sizing it in a way that fits the philosophy you’re preaching.
As long as you are comfortable owning 2,000 shares of RIG for the long-term at $5 – this is not a very risky trade. Even if we are assigned the stock at $5, we can then sell the 2029 or 2030 $5 calls for $1.55 and that drops our basis to $3.45 and we will have collected 30% of our outlay for a year to 18 months – which is itself a nice rate of return (AND – we get paid up front!).
If we sell another $1.55 in 2032 and 2034, the stock becomes net free 8 years after we start and that, in itself is a 12.5% annual return – and that’s our WORST CASE scenario (short of Bankruptcy, of course). Our best case is we get a $100 credit for promising to buy 2,000 shares of RIG for $5 (now $5.17) and, if it doesn’t go below $5 – then we make $4,100 in 18 months, which is a 41% return against our $10,000 commitment so – even with no margin – it’s a good trade!
That’s what we do here at PhilStockWorld – we make money the old-fashioned way, slowly and steadily and we CONSISTENTLY outperform the Fast Money and the Mad Money and all the other idiocy they use to attract impatient traders.
Remember, these are PUBLISHED trades – you get to see them NOW – not in some vague highlight reel you get from other investing sites. If it fits in your portfolio – go ahead and make this trade and join as a Member now and, if it doesn’t work out by Jan 2028, I will GIVE you a year of a Trend Watcher Membership – which will be $4,800 by then – FOR FREE!
How’s that for confidence in our system? THAT is the profit-making system we will teach you if you join us!
Have a great weekend,
-
-
- Phil, Maddie and our AGI Family
-
