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PhilStockWorld April Portfolio Review

Image result for one million dollars animated gif$1,967,325!  

We're going to need 2 Dr. Evils soon to equal our paired Long and Short-Term Portfolios, which began with $500,000 + $100,000 back on October 1st of 2019 (seems like forever, doesn't it?).  So we're up over 200% and that makes $1.8M our stop if the market turns lower faster than we can cover it but we're very well-hedged (see yesterday's Short-Term Portfolio Review) and we actually were pretty aggressive this month ADDING positions to the LTP and those positions have helped bring the LTP to $1,811,018, which is up $109,075 since our March 18th review.

Other than the new trades, we only made 2 adjustments last month – we doubled down on WPM and rolled our short Berkshire March calls to short June calls – very low-touch but, at the time, I said about our positions:

16 trades in this section are good for $357,000 in future profits so, adding up the other half we're projecting $671,000 in future profits between now and Jan 2023 if the market simply maintains these levels (or at least our stocks do).  As noted above, some of these stocks are so good we'd almost rather be assigned than make the rest of our money and some of the spreads are so good that it's hard to find a reason to do anything else but sit back and let them make us richer.  

As usual, this portfolio is too good to dump so we're going to have to take a licking to motivate ourselves to walk away.  As noted before, we have about $600,000 worth of protection in the STP – so we don't think we'll take too much damage on the way down – lots of time to decide to bail and the profits are already built in if the need never comes.  


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Phil’s Stock World’s Weekly Webinar – April 14, 2021

 

For LIVE access on Wednesday afternoons, join us at PSW! 

Phil’s Stock World’s Weekly Webinar – April 14, 2021

 

Major Topics:

00:01:54 – Checking on the Market 
00:02:37 – Jerome Powell
00:06:44 – Health and Services Human Budget
00:09:45 – Trading Techniques
00:11:00 – EIA Report
00:19:32 – JPM | GS
00:24:49 – M
00:29:21 – IMAX
00:31:32 – Phil Stock World YouTube Channel
00:34:13 – LYG
00:35:08 – PFE
00:46:22 – UBS
00:50:00 – CS
00:53:08 – More Trading Techniques
01:04:00 – Beige Book
01:15:25 – $SPX
01:31:30 – Fairway iQ
01:33:33 – Property Taxes
01:39:08 – Lincoln Tunnel Collapse
01:40:37 – Global Warming
01:41:27 – Greta Conference Environment
01:46:23 – XLF

 

Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – join us at PSW!

Subscribe to our YouTube channel and view our past weekly webinars here.





Thrilling Thursday – Up and Up We Go!

Retail Sales are Up 10%.

Isn't that exciting?  9.8% actually but close enough.  In a typical month, Retail Sales average $550Bn so up 10% is $55Bn and we only had to distribute $300Bn worth of Stimulus Checks to get it (not to mention March has 10% more days than February, but who's counting?).  Aren't economics fun?  You can manipulate the data to get any result you want if you plan ahead!  

It's my job to cut through all the BS and tell you  what is really happening.  You have to look behind the data, like the price of gasoline rising 10% in February and Gasoline Sales contributed $10Bn (20%) of the $50Bn bump.  Restaurant Sales were up 13.4% as restaurants re-opened and clothing stores jumped 18.3% as people went to malls for the first time in a year.  

This is, generally, good news but to get all excited about a report that, in effect, shows that 20% of the stimulus checks were spent by the people who got them – is not really a solid premise for forecasting future growth.  Nonetheless, the Dow is making new highs and the S&P is near them as it's a good headline to start the day with in the markets.

Earnings have been good so far and continue this morning.  Delta was a big miss, losing $1.85/share – 50% more than expected and we'll see if they get a pass at $48, which is only $30Bn in valuation and DAL, in a good year, makes about $4Bn but last year they lost $12.4Bn and this year a good $2Bn will fly out the window so it's hard to get excited about paying $30Bn for a stock that's made net $0 in the past 5 years.  

You know I prefer to play based on Macro News and we're not sure how travel will pan out in 2021 but we do know that the housing market is 4M homes short of demand – almost 3/4 of annual sales and that means we need to look at the builders and find some to add to our portfolio.  Our favorite builder, Hovnanian (HOV) has gone to the moon since we played them last and they'll probably justify $100 – but it's hard
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“Money Losing Companies Hits Record High”

 

“Money Losing Companies Hits Record High”

Courtesy of 

It seems corporate America has adopted MMT. At least that’s the conclusion you could draw by looking at this chart below.

And if that was your conclusion, then the implications are clear; The stock market is a house of cards.

Thanks to a new report from Michael Mauboussin and Dan Callahan, we know that there is more to the story than meets the eye. What’s really going on in this chart is the rise of intangible investments, which show up on the income statement and not the balance sheet. These “expenses” make more companies appear unprofitable.

Just how big are intangibles that they’re impacting the net income of a company? Very, very big. Here are Mauboussin and Callahan:

Investments in intangible assets were roughly $1.8 trillion in 2020, more than double the $800 billion in capital expenditures. These data put the lie to the assertion that companies are investing less than they used to.

Data without context can be worse than no data at all. The whole thing, as with all of their stuff, is worth taking the time to read. Hit the link below.

Source:

Market-Expected Return on Investment

 





Record-High Wednesday – Dow 33,600, S&P 4,140, Nasdaq 14,000

Bank earnings are good.  

Well, Goldman Sachs (GS) and JP Morgan (JPM) are good, Wells Farge (WFC) – not so much.  And I'm not sure I'd call JPM "good" as $5.2Bn of the quarter's $14.3Bn in profit came from the release of loan reserves that were set aside last year to cover anticipated loan defaults.  Since the Federal Government threw $6Tn at the economy since then – it turns out they didn't need the $5.2Bn to cover bad loans so now the money (which was always in the bank) is moved to the income side of the ledger.

I have always objected to Loan Loss Reserve accounting because it allows a bank (and many other companies) to take profits that have already been declared (and already moved the stock) out of Cash (showing a loss on demand for taxes, housecleaning, etc.) and then back to profits when they feel like it (to boost the stock price or save a quarter).  Especially for Businesses that are able to buy back their own stock when the price is depressed due to a loss they purposely caused and then, when they want to sell more stock or take bonuses – they simply re-recognize the earnings on demand.  What a scam!

So what we have at JPM is a huge "beat" as profits were projected to be $3.10 per $154 share for the quarter and now it's $4.50 – almost 50% higher than projected.   Even if we assume the bank goes back to "normal" $8Bn quarters, we're still looking at a $40Bn year and you can buy the whole bank for $473Bn – not bad.  We already have Goldman Sachs (GS) in our Long-Term Portfolio (LTP) so we're not going to add JPM and GS also knocked it out of the park.  We were worried about JPM because they have ordinary banking (chase) and we didn't count on those stimulus checks to generate so much business but they did – mainly because the Government wired the money to your bank and didn't just send you a check to spend.  We were far too conservative with GS when we made it a Top Trade Idea for our Members on October 14th:


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Johnson & Johnson vaccine suspension – what this means for you

 

Johnson & Johnson vaccine suspension – what this means for you

Vials of the Johnson & Johnson vaccine to prevent COVID-19. The use of this particular vaccine has been halted temporarily. Justin Tallis/AFP via Getty Images

Courtesy of William Petri, University of Virginia

The Centers for Disease Control and Prevention and the Food and Drug Administration on April 13, 2021 halted use of the one-dose Johnson & Johnson COVID-19 vaccine that has been given to 6.8 million people in the U.S. The pause is due to reports of blood clotting in six people who have received the vaccine. One woman died, and another has been hospitalized in critical condition. Dr. William Petri, an infectious disease physician and immunologist at the University of Virginia School of Medicine, answers questions to help put this development in context.

What is this potential side effect of the J&J vaccine for COVID-19?

The potential side effect is a blood clot in the veins that drain blood from the brain. This is called central venous sinus thrombosis. In the vaccine-associated cases of this, platelets in blood, which are important for making clots, have been lower than normal. While researchers do not know for certain why this is so, platelet counts could be lower perhaps because they have been used up making these clots.

How many people have experienced this possible reaction?

About one in a million: Six cases out of the 6.8 million doses of the J&J vaccine administered in the U.S. These six cases all occurred in women ages 18-48, and from 6 to 13 days after vaccination. That’s about half as likely as getting struck by lightning in a year. What is being determined now is what is the normal background number of cases we might see in the general population without the vaccine as a factor. This will make it possible to determine if the clotting problem is a vaccine side effect or not.

What do I do if I got the J&J shot?

The CDC and FDA are recommending that people who have received the J&J vaccine within the last 3 weeks who develop severe headache, abdominal pain, leg…
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Troubling Tuesday – Another Shot Bites the Dust

Now the FDA and CDC are halting the JNJ vaccine.

Like the AZN vaccine, blood clots seem to be the issue and, though they are rare side-effects, better safe than sorry – as long as we have two shots left (PFE and MRNA).  The World, on the other hand, doesn't have two shots left – as the US and Europe have already scooped up all the PFE and MRNA vaccines that are out there for their people and that's why India had 161,736 new cases of Covid yesterday and 879 deaths.  

Don't worry, they still have a long way to go before they beat the US as India has had just 13.7M cases to date and only 171,000 deaths while the US has 31.3M total cases and 562,000 deaths – number one in the World by miles thanks to the leadership of President Trump, who came so close to getting 4 more years to finish the job.

See, this could have been us!  Imagine how great America could have been if we had continued to build on our virus cases and death count, rather than tackling the problem and reversing it the way the cowardly Biden Administration has done.  And that's what I mean about the rest of the World – there is nowhere near enough vaccines to go around and the rest of the World is now having 500,000 people PER DAY coming down with a deadly, contageous, mutating disease and we like to pretend everything is better because we got a shot?  Doesn't the S&P 500 derive almost 50% of their earnings from "the rest of the World"?

You can't fix Covid by vaccinating one country – that's like putting out a forest fire by putting water on one tree.  It's up to the G20 to put together a "moon shot" program to stop this virus and that will require a massive effort to get EVERYONE in the World vaccinated in the same 6 month period – only then do we close the window of opportunity for the virus to pull back and mutate in a vulnerable population until it can beat the vaccines and start spreading again – until we invent a new one and the
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Momentum Monday – Return Of The FAANG Gang as Rotation Continues and The Desperate Reach For Yield

 

Momentum Monday – Return Of The FAANG Gang as Rotation Continues and The Desperate Reach For Yield

Courtesy of Howard Lindzon

Happy Monday everyone…

Before I get started mark your calendars for this Saturday’s Stocktwits/AllStarCharts Virtual Chart Summit. It is FREE to register at the link enclosed. I will be doing a few special guest interviews covering markets and crypto.

Onwards…

Another great week for those that own stocks and crypto.

The governments around the world have turned cash into trash (I still love it) and risk remains on. Investors and traders (including me) have continued to add risk on the edges with more crypto.

Facebook is breaking out because it remains relatively cheap and VR is finally showing real signs of life. I know because Tom, Gary and I all ordered our first pair and we are old farts (I own the stock).

Here is this weeks Momentum Monday episode with Ivanhoff and I discussing all of the above and some fresh ideas. I have embedded the episode here on my blog below:

Here are Ivanhoff’s thoughts:

Bull markets digest gains through sector rotations. Small caps and the so-called “back-to-normal” stocks have led the market higher since the first Covid vaccine was approved last November. In the meantime, mega and large cap tech stocks have been lagging for the most part. This changed last week. Maybe it is the approaching new earnings season and the realization that no interest rates spike is going to change the fact that those stocks are highly efficient cash-generating machines with clearly sustainable competitive advantage. Rare assets rise during periods of rising inflation expectations: AAPL, AMZN, FB, GOOGL, MSFT, NVDA, NFLX.

MRNA and BNTX – the mRNA vaccine stocks have woken up. Both obviously have remarkable earnings and sales growth but for the past few months, their products have been considered generic – with no longer-term edge. Just a couple of vaccines among many other vaccines that are likely to get approved in the next year


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Mid-April Monday – Earnings Season Begins

GDP estimates are down 40%.

They never should have been at 10% in the first place but we can take the Fed's complete inability to accurately predict what will happen in the economy as a given and just focus on the trends.  Other leading Economorons have been bringing their estimates down as well as the grand re-opening is not going as smoothly as first thought. 

The range of predictions is staggering – from 2% to 7% among those surveyed – leaving a gap the size of Canada's entire economy in-between.  Speaking of Canada, our neighbor to the North has re-locked down their most populous province (and, if you can name 3 you are a leading Canada expert) as their re-opening led to a disastrous resurgence of the virus – particularly the more contageous new strains.  "That's just science" said the mayor of 100 towns and cities as their citizens drove past them on the way in and out of Canada for beer.

Hopefully we'll do better though that's like back last April when we HOPED the virus would stay in China and then we HOPED it would only be a few cases in the US, etc.  Reality can be a real bitch sometimes – good thing we're ignoring it again.  It's the timing of the virus that is killing us – it's too close to Summer to close the beaches again.  Just a few kids eaten by sharks so far – nothing to worry about…

Five states: Michigan, New York, Florida, Pennsylvania and New Jersey account for some 42% of newly reported casesIn Michigan, adults aged 20 to 39 have the highest daily case rates, new data show. Case rates for children aged 19 and under are at a record, more than quadruple from a month ago. There were 301 reported school outbreaks as of early last week, up from 248 the week prior, according to state data.  In addition to school sports, large outbreaks have been tied to the recent Easter holiday and spring breaks.

Driving the overall uptick among younger people in Michigan, and more broadly, is a confluence of fatigue from the pandemic, which is leading some people to engage in more close contact, and the spread
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Pandemic recovery will take more than soaring growth – to fuel a more equitable economy, countries need to measure the well-being of people, too

 

Pandemic recovery will take more than soaring growth – to fuel a more equitable economy, countries need to measure the well-being of people, too

Researchers have long been searching for a more comprehensive way to assess national progress than GDP. erhui1979 via Getty Images

Courtesy of Bas van Bavel, Utrecht University and Auke Rijpma, Utrecht University

Once a country’s economy reaches a certain level of wealth, gross domestic product – which puts a single dollar value on a country’s total economic output – is no longer a good measure of its overall success.

That’s a main finding of our economic research, published in March with the Organization for Economic Cooperation and Development. When we examined the development of nations worldwide since 1820, we found that among rich Western countries like the United States, the Netherlands and France, improvements in income, education, safety and health tracked or even outpaced rising gross domestic product for over a century.

But in the 1950s, even as economic growth accelerated after World War II, well-being in these countries lagged. From the 1970s onward, growth in median incomes slowed down, as did education. Crime rose. In recent years, health outcomes have even declined.

The gap between well-being and GDP became particularly evident after the 2008 global financial crisis. Even as rich countries’ economies recovered, unemployment, poverty and housing insecurity stayed higher for years.

This pattern can also be observed in middle-income countries. In recent decades, countries like Russia, Argentina, Turkey and China have begun to show slower increases in well-being, while growth in GDP per capita – total GDP divided by population – remains high.

These insights validate widespread feelings of people in many Western countries – and the U.S. in particular – that the fruits of economic growth have passed them by. They also raise concerns about how, and indeed whether, policymakers will know when their country has actually recovered from the pandemic.

Rethinking GDP

GDP measures the total economic output of a country, from goods and services to trade, in monetary terms.

Since the inception of…
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Zero Hedge

More States Are Seeing Unused COVID Jabs Pile Up As Poor Countries Shut Out

Courtesy of ZeroHedge View original post here.

The other day, we reported on an interview with from Dr. Scott Gottlieb, a former director of the FDA under President Trump who frequently appears in the press to offer analysis and commentary on the rollout of the COVID vaccine, along with federal COVID policy more broadly.

Yesterday, the focus of the interview was a criticism lodged by Dr. Gottlieb against the Biden administration's target of 200MM Americans vaccinated by the end of the month. Hours after our post, Bloomberg News shared a startling piece of analysis: Across the US, unused vaccines ar...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Phil's Favorites

Scorpion Capital Calls a New York Stock Exchange Listed Company a Fraud

Courtesy of Pam Martens

New York Stock Exchange

On April 1 we wrote the following about the sorrowful state of the listing standards at the New York Stock Exchange:

“We rarely make predictions but we’re going to make one with confidence today. The New York Stock Exchange’s efforts to capture more market share of the IPO business by listing highly questionable Chinese companies and blank-check companies (...



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Biotech/COVID-19

Scientists are on a path to sequencing 1 million human genomes and use big data to unlock genetic secrets

 

Scientists are on a path to sequencing 1 million human genomes and use big data to unlock genetic secrets

A complete human genome, seen here in pairs of chromosomes, offers a wealth of information, but it is hard connect genetics to traits or disease. HYanWong/Wikimedia Comons

Courtesy of Xavier Bofill De Ros, National Institutes of Health

The first draft of the human genome was publ...



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Chart School

Money Printing Asset Price Targets

Courtesy of Read the Ticker

The FED giveth and the FED taketh away. Right now the FED is giving a lot into 2022 US Mid Terms. 

Unless the FED breaks the market, here are some BRRRRR asset price targets, not normal price targets but money printing adjusted price targets. 


BITCOIN 175,000 to 500,000 USD

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DOW to 40,000 to 50,000

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More DOW

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Politics

Colombia gives nearly 1 million Venezuelan migrants legal status and right to work

 

Colombia gives nearly 1 million Venezuelan migrants legal status and right to work

Venezuelans wait at the Colombian border to be processed and housed in tents in 2020. All Venezuelans now in Colombia will receive a 10-year residency permit. Schneyder Mendoza/AFP via Getty Images

Courtesy of Erika Frydenlund, Old Dominion University; Jose J. Padilla, Old Dominion University...



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Kimble Charting Solutions

Will Historic Selloff In Treasury Bonds Turn Into Opportunity?

Courtesy of Chris Kimble

Long-dated treasury bonds have been crushed over the past year, sending ETFs like TLT (20+ Year US Treasury Bond ETF) spiraling over 20%.

Improving economy? Inflation concerns? Perhaps a combination of both… interest rates have risen sharply and thus bond prices have fallen in historic fashion.

Today’s chart looks at $TLT over the past 20 years. As you can see, the recent decline has truly been historic. $TLT’s price has swung from historically overbought highs to oversold lows.

At present, the long-dated bond ETF ($TLT) is trading 7.8% below its 200-...



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Digital Currencies

Crypto - The Beginning of The Beginning... and the Coinbase IPO

 

Crypto – The Beginning of The Beginning… and the Coinbase IPO

Courtesy of Howard Lindzon

I am starting to say the ‘beginning of the beginning’ a lot.

Last month I used it in a blog post about active investing.

Bitcoin and Ethereum are a main reason I believe we are at the beginning of the beginning of active investing and the Coinbase ($COIN) direct listing tomorrow [Apr. 14] is likely why we are still just at the beginning of the beginning of crypto and decentralization.

If it was t...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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Promotions

Phil's Stock World's Weekly Webinar - March 10, 2021

Don't miss our latest weekly webinar! 

Join us at PSW for LIVE Webinars every Wednesday afternoon at 1:00 PM EST.

Phil's Stock World's Weekly Webinar – March 10, 2021

 

Major Topics:

00:00:01 - EIA Petroleum Status Report
00:04:42 - Crude Oil WTI
00:12:52 - COVID-19 Update
00:22:08 - Bonds and Borrowed Funds | S&P 500
00:45:28 - COVID-19 Vaccination
00:48:32 - Trading Techniques
00:50:34 - PBR
00:50:43 - LYG
00:50:48 - More Trading Techniques
00:52:59 - Chinese Hacks Microsoft's E...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.