Archive for the ‘Phil’s Favorites’ Category

You’re a Liar

 

You’re a Liar

Courtesy of 

Brendan Mullooly asked a bunch of people the following question:

What do you consider to be your biggest behavioral bias (as it pertains to investing or personal finance) and how do you work to control it?

My answer:

Hindsight bias was my biggest hurdle to overcome.

Hindsight bias makes one part of our brain lie to another part without even realizing it. The way I conquered my internal liar was to write down all of my trades and why I did them. Once every few weeks I would read what I wrote in order to check myself. If I knew Amazon was going higher, why did I short it 5 times due to valuation concerns?

This is a fool proof system. I mean, it takes a real fool to think they knew what was going to happen when their own words prove otherwise.

My favorite answer came from Jim O’Sam:

“What do you consider to be your biggest behavioral bias?” Being a human being.

“How do you work to control it?” Being a quant.

Hit the link below for the whole shabang.

A MIRROR ONTO OURSELVES





Jamaica leads in Richard Branson-backed plan for a Caribbean climate revolution

 

Jamaica leads in Richard Branson-backed plan for a Caribbean climate revolution

File 20190313 123554 xyvvxv.jpg?ixlib=rb 1.1

Turbines in Manchester Parish, Jamaica, the English-speaking Caribbean’s first wind farm. Debbie Ann Powell

Courtesy of Masa? Ashtine, University of the West Indies, Mona Campus and Tom Rogers, Coventry University

After hurricanes Irma and Maria tore through the Caribbean in 2017, devastating dozens of islands – including billionaire Richard Branson’s private isle, Necker Island – Branson called for a “Caribbean Marshall Plan.”

He wanted world powers and global financial institutions to unite to protect the Caribbean against the effects of climate change.

Branson at a Climate-Smart Accelerator event. Adrian Creary/Studiocraft, CC BY

That hasn’t happened. So Branson and his government partners from 27 Caribbean countries hope that his celebrity, connections and billions will prod local politicians and the financial community to act.

In August 2018, at a star-studded event at the University of the West Indies in Mona, Jamaica, Branson helped to launch the Caribbean Climate-Smart Accelerator, a US$1 billion effort to kickstart a green energy revolution in the region.

Its aims include convincing global financial institutions to fund ambitious climate mitigation efforts in the Caribbean, upgrading critical infrastructure across this vulnerable region.

Well before Branson’s arrival, however, some Caribbean countries were already working to break their dependence on fossil fuels.

Jamaica’s modern energy grid

Even prior to the debilitating 2017 hurricane season, polling showed that a strong majority of people in the Caribbean see climate change as a very serious threat.

The region – where we study renewable energy and climate change – is home to 16 of the world’s most climate-vulnerable countries.

That’s because the stronger and more frequent storms, extreme droughts and coastal flooding that result from rising global temperatures hit rural island nations hard.

Before Branson took up the cause, several Caribbean nations were upgrading their electric grids to improve energy independence and better prepare islands for the impacts of storms that…
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How Is JPMorgan Chase Expanding While It’s Still on Probation for a Felony?

Courtesy of Pam Martens

Jamie Dimon, Chairman and CEO of JPMorgan Chase, Testifying Before Congress

Jamie Dimon, Chairman and CEO of JPMorgan Chase, Testifying Before Congress

On April 19, 2018, JPMorgan Chase announced it would be opening “up to 70 new branches and hiring up to 700 new employees” in northern Virginia, Washington D.C. and Maryland.” In the same announcement, the bank said it currently had “5,130 branches in 23 U.S. states and plans to open up to 400 new branches…”

At the time of that announcement, the bank was under a deferred criminal prosecution agreement with the U.S. Justice Department and on probation – a probation which continues to this day.

Being prosecuted multiple times for felonies by the Justice Department does not appear to have clipped the wings of JPMorgan’s expansion plans under the Trump administration. According to current data from the Federal Deposit Insurance Corporation, JPMorgan Chase’s domestic bank branches have already grown by 8 branches to a total of 5,138 since the end of 2017.

In October of last year, Bloomberg News reporter Michelle Davis broke the story that JPMorgan Chase had secretly been under a Federal leash that prevented it from expanding. Davis wrote: “…Obama administration regulators prevented the bank from opening branches in new states as punishment for violating banking rules, according to people familiar with the matter. JPMorgan’s ambitious plan to expand nationally, announced earlier this year, was made possible by the Trump administration’s rollback of those restraints….”

Under the unwatchful eye of Jamie Dimon, Chairman and CEO of JPMorgan Chase, the Wall Street bank has received an unprecedented three felony counts in the past five years, to which it pleaded guilty. That’s three felonies more than the bank pleaded guilty to in its prior 100 years of existence.

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No Free Lunch: Valuation Determines Return

 

Source: Pixabay

No Free Lunch: Valuation Determines Return

By John Mauldin, Thoughts from the Frontline

Last week, I described the enormous challenges retirees face. One reason for that, aside from insufficient savings, is that markets haven’t delivered the returns many experts said we could plan on.

Back in the late 1990s, we were told that the long-term average return (~10%) was a reasonable long-term assumption—even if the market cooled down from the tech boom. Instead, the S&P 500 index gained about 3% annually since 1999 with total return just over half of the historical average. As a result, Baby Boomers are having to work longer and harder to retire, as well as save more of their income.

Nonetheless, hope still springs eternal for historically average returns. In this week’s letter, longtime friend Ed Easterling joins me as co-author to explore the reasons that so many analysts and product purveyors pitch such hopeful expectations. (Longtime readers will know Ed and I do this periodically.) We’ll show how the long-term average is a longshot bet in almost any market environment. Most of the time, returns over a decade or two are well-above or well-below average.

Most of all, it’s fairly predictable which side of average will occur. This has serious implications, yet there’s a lot that you can do to still achieve investment success. This is also something you will not hear from many in the investment business. “Predicting” less than historical average returns in the future is not exactly a great sales pitch. But as I think Ed and I will demonstrate, it is the most honest and accurate way to talk about potential performance of the future.

Ed founded Crestmont Research in 2001 to research and explain secular stock market cycles. You can find a treasure trove of fabulous charts and articles on cycles and market returns at his www.CrestmontResearch.com website. I’m a big fan of Ed’s work and highly recommend both of his books, especially Unexpected Returns.

Before we jump in, let me quickly remind you that registration for the Strategic Investment Conference (May 13–16 in Dallas) closes Saturday night, March 16. As of now, we still have a few seats left, but they are going…
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Marijuana is a lot more than just THC – a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC – a pharmacologist looks at the untapped healing compounds

File 20190311 86693 ga1zx.jpg?ixlib=rb 1.1

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal use and is easy to abuse. In the meantime, medical marijuana dispensaries have an increasing array of products available for pain, anxiety, sex and more.

The glass counters and their jars of products in the dispensary resemble an 18th century pharmacy. Many strains for sale have evocative and magical names like Blue Dream, Bubba Kush and Chocolope. But what does it all mean? Are there really differences in the medical qualities of the various strains? Or, are the different strains with the fanciful names all just advertising gimmicks?

Rafael, a Chumash who shared Californian Native American cultural knowledge with anthropologists in the 1800s. Leon de Cessac

I am a professor in the University of Southern California School of Pharmacy. I have lived in California a long time and remember the Haight-Ashbury Summer of Love. While in graduate school, I worked with professor Alexander Shulgin, the father of designer drugs, who taught me the chemistry of medicinal plants. Afterwards, while a professor at USC, I learned Chumash healing from a Native American Chumash healer for 14 years from 1998 until 2012. She taught me how to make medicines from Californian plants, but not marijuana, which is not native to the U.S. Currently, I am teaching a course in medical marijuana to pharmacy students.

If there is one thing about marijuana that is certain: In small doses it can boost libido in men and women, leading to more sex. But can marijuana really be used for medical conditions?

What are cannabinoids?

New research is revealing that marijuana is more than just a source of cannabinoids, chemicals that may bind to cannabinoid receptors in our…
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College admission scandal grew out of a system that was ripe for corruption

 

College admission scandal grew out of a system that was ripe for corruption

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Recruited athletes often get a leg up in the admissions process. Catwalk Photos/www.shutterstock.com

Courtesy of Rick Eckstein, Villanova University

As part of the “Operation Varsity Blues” case that federal prosecutors announced March 12, dozens of people – including Hollywood actresses and wealthy businessmen – stand accused of having bought their children’s way into elite colleges and universities.

As a researcher who has studied how young athletes get admitted to college, I don’t see a major difference between this admission fraud case and how many wealthy families can buy their children’s way into elite colleges through “back” and “side” doors.

In my research, I show how most intercollegiate sports are fed by wildly expensive “pay to play” youth sports pipelines. These pipelines systematically exclude lower income families. It takes money to attend so-called “showcase tournaments” to get in front of recruiters.

In many ways, then, those ensnared in the current criminal case – which alleges that they paid for their children to get spots on the sports teams of big name schools – couldn’t have succeeded if the college admissions process wasn’t already biased toward wealthier families.

Bypassing the front door

Even if college sports is taken out of the equation, the college admissions process already favors wealthy families in a variety of ways.

It has long been known that higher family income usually correlates with higher standardized test scores. There are many test prep companies, including some that guarantee higher scores for approximately US$1,000. Taking advantage of test prep may not be “fraud.” But it certainly provides advantages to the wealthy that have little to do with academic merit.

In his book “The Price of Admission,” Daniel Golden highlights a number of other ways wealthy families can buy their way into elite universities. These include large donations, financing new buildings, creating endowments and playing on parents’ celebrity status. These also have little to do with an applicant’s academic merit, but would never be considered criminal.

Sociologist David Karen has documented how attendance at expensive boarding schools gives…
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How to prevent the ‘robot apocalypse’ from ending labor as we know it

 

How to prevent the 'robot apocalypse' from ending labor as we know it

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The future of work could look more like this. BigBlueStudio/Shutterstock.com

Courtesy of Thomas Kochan, MIT Sloan School of Management and Elisabeth Reynolds, Massachusetts Institute of Technology

It seems not a day goes by without the appearance of another dire warning about the future of work.

Some alarmists fear a “robot apocalypse,” while others foresee the day of “singularity” coming when artificial intelligence exceeds human intelligence. Still others warn that income inequality will continue to rise as owners of capital capture more of the benefits of innovations than those who labor for a living.

Yet there is also a counter-trend emerging: Groups as diverse as the World Economic Forum and the International Labor Organization are beginning to argue that it’s up to society to shape the future of work. What’s needed is action today to harness and channel technological changes, prepare the workforce for new demands and opportunities, strengthen their voices and built a new social contract that includes leaders in business, education, labor and government.

These are some of the issues we’ll be discussing in an online course that draws on some of the best experts in AI, robotics, economics and employment relations at MIT and around the world. Our main point is that avoiding apocalyptic outcomes requires bold actions and a collaborative approach.

How to shape change

Virtually every technological revolution has inspired workers to fear for their jobs. And for good reason.

Each one resulted in the creation of new jobs alongside the elimination of others. At the same time, new technologies changed the way work is done within most occupations.

But fighting technology-inspired changes, as the Luddites of the early 19th century did, rarely works – and can in fact have disastrous consequences. The Luddites, textile workers and weavers who feared the advent of automated looms in England, destroyed machines and burned factories, hoping to arrest their advance. The government eventually quashed the unrest, killing some workers and jailing many others.

The new technologies that transformed the textile industry continued unabated. While…
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Is Canada’s Arctic Drilling Ban Hurting Its Oil Industry?

Courtesy of Tsvetana Paraskova, Oilprice.com

Canada is lagging behind other oil producers in tapping its offshore oil and gas resources because of the moratorium on drilling in its Arctic waters in place since 2016 and up for review in 2021, according to Paul Barnes, Atlantic Canada and Arctic director for the Canadian Association of Petroleum Producers (CAPP).

In December 2016, Canada’s Prime Minister Justin Trudeau announced that Canadian Arctic waters are indefinitely off limits to new offshore oil and gas licensing, and this ban would be reconsidered every five years through a science-based review.

The recent moves by the U.S. Administration to re-open Arctic Alaska to drilling means that Canada faces “lost opportunities” in exploring its own Arctic waters, The Canadian Pressquoted CAPP’s Barnes as saying.

The Arctic drilling moratorium creates uncertainties in the Canadian oil industry and deprives the country of the chance to compete for investment in exploration, according to Barnes.

Yet, Canada’s Northern Affairs minister Dominic LeBlanc says that the ban is necessary to allow extensive consultations and ensure development that respects environment, The Canadian Press reports.

Just yesterday, CAPP said in a new report that Canada’s abundance of natural resources can help the country’s economy, but only if Canada overcomes the current market challenges by building new pipelines and other energy infrastructure.

The shortage of oil pipelines and liquefied natural gas (LNG) infrastructure “are crippling our ability to compete for global market share,” CAPP said.

“Global energy demand is growing,” CAPP president and CEO Tim McMillan said.

“However, Canada is losing the race to claim a piece of the high-growth market overseas. Without new pipelines, Canada’s oil and natural gas industry can’t compete for a share of the global market,” McMillan noted.

“Before they will invest in Canada, global investors need to see that the Canadian federal and provincial governments are firmly committed to resource development,” said McMillan.





Automated control system caused Ethiopia crash, flight data suggests

 

Automated control system caused Ethiopia crash, flight data suggests

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Wreckage from Ethiopia Airlines Flight 302 lies near the crash site outside Addis Ababa. AP Photo/Mulugeta Ayene

Courtesy of Timothy Takahashi, Arizona State University

Emerging evidence from the recent crash in Ethiopia suggests that malfunctioning automatic control systems overwhelmed the crew and doomed the flight. Based on my analysis, it appears that the Ethiopian Airlines crew followed the standard procedures found in the Boeing 737 pilots operating handbook and flight crew operations manual.

A typical flight starts with manual control of the plane. The pilot and co-pilot will personally steer the aircraft onto the taxiway, configure the flaps for takeoff, actively control the aircraft as it accelerates down the runway, and smoothly pull back on the control yoke to lift the plane off the ground and into flight. The flight’s altitude and speed data, transmitted from the plane in real time and made available to the public by FlightRadar24.com, shows that happened normally as Ethiopian Airlines Flight 302 left the runway.

Everything appears to have gone as usual on the initial climb away from the takeoff, too. Normally, the pilot will retract the landing gear and maintain a relatively steady speed as the aircraft climbs. The plane might accelerate slightly until it’s going fast enough that the flaps – extended to increase lift at lower speeds – can be safely retracted, letting the wings themselves generate the necessary lift. This process usually takes place in the first minute after takeoff. Once the aircraft has climbed to 1,000 feet above the ground, the pilot will engage the autopilot system.

That’s the point at which the computer takes over – and where, my analysis of the data suggests, things went wrong for Ethiopian Airlines Flight 302. A modern autopilot system gives the computer command of the engine throttles, rudder, elevators and ailerons – basically full control over the aircraft.

Simulating the expected flight

Using modeling tools developed by my research team, I recreated a hypothetical flight profile to simulate the Ethiopian Airlines 737 departure based on the handbook procedure for an identical plane…
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Trade wars are growing over the digital economy – and developing countries are shaping the agenda

 

Trade wars are growing over the digital economy – and developing countries are shaping the agenda

File 20190314 28468 14jz4oo.jpg?ixlib=rb 1.1

Shutterstock

Courtesy of Christopher Foster, University of Manchester and Shamel Azmeh, University of Manchester

At the heart of the current US trade war with China is tariffs on imports like steel, sorghum and silicon chips. But, with the growing role of data and digital technology in the world economy, a new arena of digital trade conflict is on the cards.

Rapid growth in e-commerce, cloud computing, and other parts of the digital economy are driving important shifts in the global economy. Digital firms are today among the leading global companies. Meanwhile, firms in all sectors are incorporating digital tools into their business models.

But the growth and globalisation of the digital economy is still not underpinned by clear global regulatory frameworks. While there are clear rules governing trade in goods such as books and DVDs, it is still not clear what happens when these goods become digital and are transmitted across borders through platforms such as Netflix. Similarly, while we have clear rules on goods like cars, TVs and industrial machinery, we lack clear regulations on the data that these goods increasingly collect and transmit.

The desire to put rules in place on digital trade is gaining momentum. This has grown as a number of countries, such as China, Indonesia and Nigeria, which have introduced policies that legislate against foreign data flows and e-commerce, affecting the business models of leading global digital corporations. A new push came during the World Economic Forum in Davos earlier this year when 76 countries announced plans to begin negotiations on digital trade.

Digital divide

Behind the agenda to introduce global rules on digital trade, there are significant tensions that could spill over into conflict. On one side is the US and a number of leading digital nations, backed by the vast lobbying power of Silicon Valley and big business. On the other side, a number of emerging and developing countries are looking to resist new rules that they see as adding extra burden on them, with vague benefits.

Leading digital firms, and other big companies using digital…
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Phil's Favorites

You're a Liar

 

You’re a Liar

Courtesy of 

Brendan Mullooly asked a bunch of people the following question:

What do you consider to be your biggest behavioral bias (as it pertains to investing or personal finance) and how do you work to control it?

My answer:

Hindsight bias was my biggest hurdle to overcome.

Hindsight bias makes one part of our brain lie to another part without even realizing it. The way I conquered my internal liar was to write down all of my trades and why I did them. Once every few weeks I would read what I wrote in order to check myself. If I knew Amazon was going higher, why di...



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Zero Hedge

China Is Spending Billions To Dethrone The U.S. In Race For The World's Fastest Supercomputer

Courtesy of ZeroHedge. View original post here.

China is currently in the midst of a multi-billion dollar investment cycle to upgrade its supercomputer infrastructure in a bid to pass the United States for fastest supercomputer in the world after the United States regained the title for fastest supercomputer in 2018, ending a five-year reign of Chinese dominance.

As SCMP notes, China had been first on the global Top 500 list of supercomputers sinc...



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Kimble Charting Solutions

Germany Breakout Bullish For Stocks In The States!

Courtesy of Chris Kimble.

An important message to stocks in the states will come from Germany in the next few weeks!

This chart looks at the DAX index from Germany over the past 10-years. For the majority of the past 6-years, the DAX has remained inside of rising channel (1). The 2018 decline saw the DAX hit support where a 1-year counter-trend rally started.

Over the past year, the DAX has created a new falling channel (2). It is now testing the top of this falling channel and the lows of last February at (3).

For most of last year, the DAX created a bearish divergence with the...



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ValueWalk

Pension Flows Add 5 More Years To Credit Boom/Bust Cycle

By Michelle Jones. Originally published at ValueWalk.

The pension crisis has been capturing headlines for years, but there’s another layer to the pension issue that’s starting to draw attention to itself. Public pension funds have shown an increasing appetite for credit and related holdings, the latest round of pension flows demonstrates that this trend continues One analyst believes pensions are largely to blame for the extremes of the boom/ bust cycles we’ve seen over the last year or so. He now suggests that the equity bull market could last another five years—thanks to the extremes driven by pension funds.

...

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Insider Scoop

Needham: Facebook No Longer A Buy Amid A 'Negative Network Effect'

Courtesy of Benzinga.

The bullish case for Facebook, Inc. (NASDAQ: FB)'s stock has come to an end, according to Needham.

The Analyst

Needham's Laura Martin downgraded Facebook from Buy to Hold with no price target.

The Thesis

Needham's multi-year bullish stance on Facebook's stock can no longer be justified for three key reasons, Martin said in a research report. These include:

  1. A negative potent...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Chart School

Wyckoff Price Thrust Measure

Courtesy of Read the Ticker.

Richard Wyckoff said in his last days as an educator,'follow the waves'. And an important measure of those waves is the 'thrust'. The thrust of price into new ground, considering price and volume support or lack of it. The price wave thrust is clear visual presentation of the composite man demand or supply characteristics: strong, mild, weak or confused. 

readtheticker.com favored trend tool named RTTTrendStatus sister indicator RTTTrendThrust shows off Wykcoff measure of price thrust. RTTTrendThrust can be used to assist mechanical trading systems...

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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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.

Market Shadows >>