Archive for the ‘Members Only’ Category

PhilStockworld November Portfolio Review (Members Only)

Image result for one million dollars animated gif$1,186,527!  

That's up just under 100% on our STP/LTP combination, which started with $100,000/500,000 on Jan 2nd so, all in all, it was a good year – as of 11/16 anyway.  Now it's Nov 27th and I haven't updated the positions on the spreadsheets yet due to the holidays but, in the exact same positions after a couple of wild weeks, the LTP now stands at $894,878 and the STP is at $354,962 so that's a combined $1,249,840 as the STP got bigger and the LTP didn't lose too much ground.  

That's for the UNTOUCHED positions but, as you'll see below, we did a lot of touching so it remains to be seen whether we made matters better or worse.  Meanwhile, $1,186,527 was up $46,011 from our September Review (I never collected the October reviews into a single post) so we're chugging along pretty much as expected now and what really saved the LTP was all those short-term trades we made back on Sept 26th (see Top Trade Alert) that are indeed giving us a $100,000+ pop into the Jan expirations on all those short calls we sold in anticipation of a correction.  

It's always a good idea to go back and read the logic we had at the time in retrospect so that, next time we have a similar situation, you'll have the experience of having gone through it before and you'll have a better idea of what to expect.  As a bonus – those 9 positions we picked are mostly still good for new trades as they pulled back as expected, so now we wait for the next bounce to sell more calls.

Meanwhile, the summary of our Reviews is as follows:

Options Opportunity Portfolio (OOP) – Part 1:  Don't forget, this is a quick review just highlighting changes.  Image is from 11/2, not the current but I'll note any adds if I can and please ask about anything I may have missed where action may be required.

  • BJO – is now JO, apparently and on track at $42.81.
  • TZA – Hedge is doing it's magic, now up $8,000 but


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Philstockworld July Portfolio Review (Members Only)

Image result for one million dollars animated gif$847,359!  

Now we're up $247,359 (41.2%) in our paired Long-Term and Short-Term Portfolios and that's up $29,398 from our last review.  We keep trying to cash out but, when push comes to shove, we have so many well-balanced positions that we love in our paired LTP/STP portfolios, we end up keeping almost everythign and, so far so good as the bonus money pours in.  As I said last month, as long as the indexes are holding their 50-day moving averages, we're not in immediate danger and this market seems to shake off everything that's thrown at it – so far.

Once again we tried to cash out some winners from the LTP/STP but still so much money to be made and working so well – we don't want to screw it up.  So we doubled down on some of our STP hedges (using about 1/3 of the LTP profits) but we are keeping one hand firmly on the exit at all times as there is far too much uncertainty this month (Aug) to risk what anyone would say are already a nice year's gains.

We still have $297,758 in cash and about $1M in margin remainin in our Long-Term Portfolio, so we're very flexible and that portfolio is our MOST invested.  I'm still very risk-adverse in this market and yes, we could be making more if we were more aggressive but then again, we could blow it too – and that is what we're trying to avoid. 

In fact, people wonder why, in our Hedge Fund, we're "only" up about 10% in the first half but that's because we are making sure we don't LOSE money in our first year – or we'll start with a poor track record and that's death for the fund.  So, playing the longer game – we make SURE we make 20%, which makes us one of the best performing funds in America and THEN we get more money and THEN we get a bit more aggressive but, for our first year – it's all about not losing money. 

Over the long run – 20-40%


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Philstockworld June Portfolio Review (Members Only)

Image result for one million dollars animated gif$817,961!  

Now we're up $217,961 (36%) in our paired Long-Term and Short-Term Portfolios and that's up $44,185 from our last review, when I said I'd rather cash out than continue to risk our, at the time, 28.9% gains.  Since we didn't cash out, we pressed our hedges AND since the market kept going up, we added more longs and, so far – it's all working out.  As I said last month, as long as the indexes are holding their 50-day moving averages, we're not in immediate danger and this market seems to shake off everything that's thrown at it – so far.

On the whole, we haven't made too many adjustments to any of our portfolios this month as they are on a very good track and fairly well-balanced.  Do keep in mind that we are failing (so far) at the lower high of 2,800 on the S&P (/ES), but once we're over that line – we have to seriously consider a whole new leg of the rally may be forming.

We still have $369,258 in cash and about $1M in margin remainin in our Long-Term Portfolio, so we're very flexible and that portfolio is our MOST invested.  I'm still very risk-adverse in this market and yes, we could be making more if we were more aggressive but then again, we could blow it too – and that is what we're trying to avoid.  

Long-Term Portfolio Review (LTP) Part 1:  $643,761 is up an embarrassing $45,252 (9%) since our 5/17 review where I said I'd rather cash out ahead of the summer and come back in the fall.  Luckily, you guys didn't let me take a nice vacation and we still have all these positions, which we hedged more heavily in the STP (see earlier review).  Overall, we're up 28.8% for the year but that's 2% lower than yesterday – so it's a very volatile number and shouldn't be taken too seriously.  

Since we decided to stay in and since we had a lot of hedges, we picked up a bunch of new trades in the past month (always try to balance longs and shorts while selling premium). …
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Philstockworld May Portfolio Review (Members Only)

Image result for one million dollars animated gif$773,776! 

That's up $173,776 (28.9%) in our paired Long-Term and Short-Term Portfolios.  30% is a healthy goal for an entire year (and Berkshire Hathaway averages 16.3% per year) so I really, Really, REALLY would love to cash out at this point and take the summer off.  As I have said for the past two weeks, if it wasn't my job to teach people how to trade – including running portfolios during downturns – I would absolutely be cashing out and, to that point, both of my kids' college accounts are in CASH!!! and our Hedge Fund is 90% CASH!!! at the moment so, yes, that is what I would do with my own accounts!  

As long as the indexes are holding above their 50-day moving averages, we're not in immediate danger so, with what we're playing, I'm not going to hedge too heavily either – unless we get signs of a deeper breakdown.  This market seems to bounce back from everything but so did the market in 2007 – until it finally didn't.  It sure would have been nice to be sitting on the sidelines with 128.9% of your money back then, right!

As it stands, our Long-Term Portfolio has 62% of it's cash on the sideline while the STP has 90% on the sideline so we've got plenty to deploy in a downturn.  We just finished our reviews and, in the LTP, there was only one adjustment to make so we like all of our positions and are happy to add more to them if they get cheaper and there were no adjustments to make to the STP, so we're happy with our hedges as well…

Also, these are new portfolios, started Jan 2nd this year as we decided to cash in after our November Portfolio Review last year but we did follow through with my plan, which is why we're doing so well after just 4.5 months of trading in the new portfolios:

Really, I am sorry I've been so cautious but I could not, in good conscience, risk those spectacular gains into Q3 earnings and the Holidays.  We have a lot of open positions and they'd be difficult


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Wednesday Watch List Update – Stocks We Like for 2018

Related imageIt's very important to have a Watch List.

I like to have about 24 stocks I keep a close eye on so that, when something happens and they go on sale, I'm ready, willing and able to pull the trigger in an instant.  We did that in November, when Macy's (M) announced their earnings and we thought they were just what we wanted yet the market sold them off after the opening pop.  That gave us a window to act and, because we follow M closely – we KNEW it was time to act and I issued a Top Trade Alert, identifying it as our top contender for Stock of the Year for 2018 (replacing LB, another retailer who has already flown higher).  

We issued our 2017 Watch List back in March and in May we picked 13 out of 24 for action, including M as well as BMY, ESRX (still cheap), FCX, GE (cheaper), GILD, LB, PSA (still cheap), QCOM, TGT, GCI, FMCC and SEE (still cheap).  So, out of 13 picks we had been watching and pulled the trigger on, 10 are winners, 2 are flat and one (GE) is down.

This is the key to understanding our system.  GE was our only non-winner out of 13 picks (the flat ones make money too using our "Be the House – NOT the Gambler" system) and is still very manageable but, since they cut the dividend, we're not jumping back in yet – other than short puts.  

Image result for real investingIn order to become a real investor, you have to break out of your "winning" and "losing" mind-set and that's very difficult because your broker – who wants you to TRADE, not INVEST, gives you a daily scorecard with minute-by-minute updates to encourage you to thing of your portfolio as something that should constantly be fiddled with to improve your "score".  They even highlight your losers in red – so they bother you and further encourage you to dump slumping stocks by raising the margin requirements on them – making them even harder to hold onto.  

Imagine if you ran a baseball team that way – constantly cutting players who were having a bad month and hiring
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PhilstockWorld May Portfolio Review (Members Only)

$1,800,221 – that's up 300% from our $600,000 start on our paired portfolios back on 11/26/13.

We haven't made too many changes in the past 30 days but we still gained a very nice $47,535 since the April Review ($1,752,686) on our paired Long and Short-Term portfollios.  While $47,535 is 8% of our original, it's "only" 2.7% of our April total so yes, we are playing a bit too conservatively for this market – despite putting up some very impressive numbers.  

The S&P 500 was at 2,360 on April 9th and now 2,433, so it's up 3.1%, which means we're now one of those funds that is underperforming the S&P 500, right?  But that's not the purpose of our portfolio strategy – clearly we outperform the S&P over the long haul and that's because our hedges keep us (mostly) from losing money in the downturns.  Being safe from downturns has a price though, when the market is gaining at an 18% annualized pace – we aim for a more conservative average than that.

Since April 9th, we've added new longs on ABX, DIN, EWZ, IMAX, SEE, SKT, TLRD and VZ and, if you are having trouble recognizing some of the symbols – well that's my point – we're running out of cheap stocks to buy at these days, so we either have to drink the Kool-Aid and buy high and hope to sell higher or we can wait PATIENTLY for a pullback that gives us better entries on better stocks.  

Going back to last July's review, when at S&P 2,120 I asked "Are We Too Bullish?", we were at $1,519,454 so we're up about 20% from that total but keep in mind we still trade the LTP like it's a $500,000 portfolio with 80% of our money in CASH!!! and gaining $300,000 on $500,000 is 60% – that's why our growth is slowing now, the way we're plaing it, 20% a year is just fine!  The key is to learn how to CONSISTENTLY get those 20% returns, so they can compound over time.  $500,000 compounded at 20% for 20 years is $19,168,799 – that should be enough to paper anyone's retirement, right?

The trick is to
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Philstockworld April Portfolio Review (Members Only)

What a first quarter!  

When we last reviewed, back on Jan 22nd, the S&P closed at 2,271 and we were generally playing for a flat market and worried that we might be a bit too bearish but, now that the S&P is at 2,362 (up 4%), we're a lot more comfortable with a more bearish stance – albeit after adding a few bullish positions along the way.  

Before we get into a review I want to make a very important point.  Our Options Opportunity Portfolio (OOP) was last reviewed on March 15th, and it's a self-contained portfolio, with the hedges right alongside the long-term positions.  As I've noted on many occasions, when you have a well-balanced portfolio and you are practicing our system of BEING THE HOUSE – Not the Gambler, you shouldn't have to do much from month to month (see last year's Forbes interview for a good explanation).

We did add 4 bullish trades in the last two weeks (ATI, CDE, CHK & NLY) and, on the 15th, we called for 2 of our positions to be adjusted and one was closed (SONC) – that's it.  On March 15th our OOP was at $270,475 and, as of Friday's close, we're at $278,177 – up $7,702, which is 7.7% of our original $100,000 start (8/8/15) and that's just fine for two week's "work", isn't it?

Related imageInvesting doesn't have to be stressful – certainly not if you are on the house side of the table.  Mostly it's a matter of keeping ourselves well-balanced and letting the premiums we sold run down over time – that's what casinos do and they seem to do very well for themselves!  

You just need to accept the fact that betting on the markets is no better than betting on casino games – you may win or you may lose but, over time, the odds are rigged against you – especially with options so, logically, if we SELL options to suckers who think they can beat the house – we'll do very well!  That's it – that's the whole secret to our success.

Our last major Portfolio Review was back on Jan 22nd and, since
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Philstockworld 2017 Watch List – 24 Stocks to Keep Our Eye On

Image result for stocks to watchTwo weeks ago we began compiling our 2017 Watch List.

A Watch List is not a Buy List, a Watch List is a list of stocks we'd LIKE to buy – IF they get cheaper.  Of course that's true of every stock but these are stocks we consider good values where they are now and are ALMOST cheap enough for us to want to get in and we want to be ready when they do give us a good entry – so we watch them!  

I like the Finviz charts because they constantly update, so any time you refresh this post, the charts will be updated to the day.  I've also put dates on the last round of picks because we've had a lot of movement since 2/17 and some of the stocks have gone higher (we are not chasting) and a couple have gotten cheaper and those we are likely to move on. 

The trading notes are the best idea we have AT THE TIME the stock is added to our list – our goal is to get a BETTER trade set-up than the one we highlight, NOT the one we are discussing – those are for reference purposes.  For example, Target (TGT) took a nice dive on earnings and are much cheaper now ($57.35) than the $65.55 we were watching them at.  $55 was our target for short puts but NOW you can sell the 2019 $55 puts for $7.25, $2 (40%) better than they were pre-earnings.

Even better, we can collect the $5.20 we wanted by selling the 2019 $50 puts and we will sell 10 of those in the LTP (buying back our 5 short Jan $67.50 puts) and now we can add 10 2019 $55 ($7.60)/65 ($3.60) bull call spreads for $4 which, as a new trade, is a net credit of $1.20 per contract ($1,200) which means the worst case is owning TGT for net $48.80 – THOSE are the kind of trades we love to be in!  

"The best thing that happens to us is when a great company gets into temporary trouble…We want to buy


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Rigged Game: Ever Wonder How Wall Street Analysts Are So Good At Forecasting? Hint, It’s Not Their Excel Skills

Courtesy of ZeroHedge. View original post here.

Our readers should have little doubt at this point about our view on the integrity of wall street and equity markets.  In fact, we just spoke yesterday about all the little accounting games that companies play to "beat" earnings estimates in a post entitled "Mind The "GAAP" (Or How The Game Is Really 'Rigged')." 

Well, CFOs can't bear the full burden of earnings management, they need complicit "independent" counterparts on wall street as well.  A recent article in the Wall Street Journal points out how public companies use wall street analysts to manage quarterly earnings expectations and ultimately their stock prices.  The article summarizes the quarterly dance played out between wall street analysts and investor relations teams to "manage" earnings down to a level that is ultimately "beatable" and thus produces a nice stock bounce on earnings day.  Analysts, of course, are willing partners in the game because being a "team player" means better access to management teams, better attendance at bank-hosted conferences and the added benefit of very "accurate" forecasting for hedge fund clients that pay handsomely for their efforts.  As the WSJ points out:

Analysts whose forecasts are far from what companies end up reporting risk losing credibility with clients and could get less access to company management. Those are reasons to listen if a company calls with a suggestion, according to analysts.

Roger Freeman, who left the stock-research industry in 2014 and now works at a technology startup, says: “If someone is trying to get your numbers down, they will highlight all the negatives and not positives, and you’ll come away thinking: ‘Gee, that sounds pretty bad,’ and sometimes take your numbers down.”

To prove the point, the WSJ reviewed over 6,000 earnings reports from 1Q13 through 1Q16 to see just how frequently companies manage to "beat" earnings estimates.  "Shockingly" an overwhelming number of companies manage to report earnings that are exactly in-line or slightly above analyst expectations.  But hey, maybe the analysts are just really good at modeling.

Managing Expectations

The WSJ went on to provide a couple of recent examples of "managed" earnings, with AT&T's 1Q16 numbers being the first, saying:


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Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene





 
 
 

Phil's Favorites

The Hardest Problem in Finance

 

The Hardest Problem in Finance

Courtesy of 

It took a little while to dig myself out of one of the deepest rabbit holes in all of finance, retirement spending strategies. William Sharpe calls it “the nastiest hardest problem in finance.”

Retirement, specifically early retirement, has been a hot topic lately, thanks to the FIRE [financial independence/retire early] movement and one of its biggest proponents, ...



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Zero Hedge

Deutsche Bank Raises Odds That UK Government Will Collapse

Courtesy of ZeroHedge. View original post here.

Shortly before the first headlines claiming that the conservatives' 1922 Committee had finally reached the 48-letter threshold to call a no confidence vote in Theresa May hit the tape, Deutsche Bank analysts published an extremely timely update to its projected Brexit outcome odds that featured a decidedly bearish tilt.

In the wake of last week's historic contempt vote that forced May to publish the damaging attorne...



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Biotech

Those designer babies everyone is freaking out about - it's not likely to happen

Reminder: We're available to chat with Members, comments are found below each post.

 

Those designer babies everyone is freaking out about – it's not likely to happen

Babies to order. Andrew crotty/Shutterstock.com

Courtesy A Cecile JW Janssens, Emory University

When Adam Nash was still an embryo, living in a dish in the lab, scientists tested his DNA to make sure it was free of ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

...

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Kimble Charting Solutions

Bear Market Omen? The 'Average Stock' Is Breaking Down

Courtesy of Chris Kimble.

The stock market has been in a corrective sideways move for the better part of 2018. Is it ready to decline even lower?

Well if the “average stock” is any indication, then investors should be concerned.

The “monthly” chart below is of the Value Line Geometric Index (INDEXNYSEGIS: VALUG), which plots the price of an average stock in today’s market. We can see that a bearish wedge pattern has developed in a similar fashion to 2007 and 1999.

It’s notable that in each of the past two breakdowns (1) and (2), the price broke below wedge support and its 10-month moving average.

It appears to be doing the same thing today. Careful here!

Value Line Geometric Chart – Bearish Wedges

...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Surge Ahead Of Producer Price Index

Courtesy of Benzinga.

Related SPY A Peek Into The Markets: US Stock Futures Signal Lower Start On Wall Street Assessing This Week's Technical Damage To...

http://www.insidercow.com/ more from Insider

Digital Currencies

How low will Bitcoin now go? The history of price bubbles provides some clues

 

How low will Bitcoin now go? The history of price bubbles provides some clues

The Bitcoin bubble is perhaps the most extreme speculative bubble since the late 19th century. Shutterstock

Courtesy of Lee Smales, University of Western Australia

Nearly 170 years before the invention of Bitcoin, the journalist Charles Mackay noted the way whole communities could “fix their minds upon one object and go mad in its pursuit”. Millions of people, he wrote, “become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first”.

His book ...



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Chart School

Weekly Market Recap Dec 09, 2018

Courtesy of Blain.

Bears are certainly showing the type of strength we haven’t seen in a long time.   A week ago at this time futures were surging on news of a “truce” for 90 days between China and the U.S. in their trade spat.  But the charts were still not saying lovely things despite a major rally the week prior.   And by Tuesday, darkness had descended back on the indexes, with another gut punch Friday.    A lot of emphasis was put on a long term Treasury yield dropping below a shorter term Treasury.

On Monday, the yield on five year government debt slid below the yield on three year debt, a phenomenon which has p...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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