Philstockworld June Portfolio Review (Members Only)
by phil - June 17th, 2018 11:28 am
$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)
by phil - May 19th, 2018 12:51 pm
$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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Philstockworld April Top Trade Review
by phil - April 16th, 2018 8:24 am
Yes, this is Monday morning's Report.
I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter. What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.
We did our last Top Trade Review in March, so it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time. As of the March review, we had looked at Top Trades that were initiated through July and, out of 32 trade ideas in 30 weeks, we had 24 winners and 8 losers but 2 of the winners turned around by Sept and that left is with 26 wins and 6 losses for a very solid 81.25% winning percentatge.
Our Top Trades are what we think are our best trade ideas of the week with the highest chances of winning and we send out Alerts to our Members via Text and Email but we don't have a specific portfolio for them as they ofen ended up in one of our 5 various Member Portfolios already.
There's a bit of randomness to the reviews in that we check in on trades after roughly 6 months so they are usually in progress and may be randomly up or down at the moment but that's why these reviews are so great for identifying bargains that simply haven't made a move yet. These are the Top Trade Ideas for August and September:
Tuesday, Aug 1st: Teva (TEVA) – We felt TEVA has bottomed out in early Aug but we were wrong and it did go a lot lower before bouncing back. Our trade idea was:
As a new
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Philstockworld Top Trade Review
by phil - March 12th, 2018 6:43 am
Yes, this is Monday morning's Report.
I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter. What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.
We haven't done a Top Trade Review since the end of Sept so it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time. As of the September review, we had looked at Top Trades that were initiated in the first half of the year and, out of 27 trade ideas in 26 weeks, we had 21 winners and 6 losers but 2 of the winners turned around by Sept and that left is with 28 wins and 3 losses for a wonderful 90.3% winning percentatge.
Let's start by taking a look at our two losers and see how they are doing:
Tesla (TSLA) had jumped to $390 in Sept and though it was back to $340 by the 30th, we were worried about the 3 short Oct $300 calls we had sold for $30 were $43.50 so we rolled them ($13,050) to 4 short Jan $340 calls at $31.20 ($12,480) for net $570 less than the $9,000 we collected and THOSE short calls expired at $10.02 ($4,080) so we ended up with a net profit of $4,350 on that "loser" trade.
Chesapeake Energy (CHK) is still a big loser and we still have the adjusted position (30 2020 $4 puts at $1.25 (now $1.56) and 20 short 2020 $2.50/5.50 bull call spreads at $1.25, now 0.85) so we are still down on them and I would now double down on the 2020 $250 calls at $1.35 and wait for a bounce to sell 20 more $5.50s for $1 (now 0.40).
IMax (IMAX) is running out of time to…
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Wednesday Watch List Update – Stocks We Like for 2018
by phil - January 3rd, 2018 8:21 am
It'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.
In 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 November Portfolio Review
by phil - November 22nd, 2017 5:48 am
$2,121,342!
Not bad for the 4th Anniversary of our Primary Portfolios. We began this lesson on November 26th of 2013 and allocated $500,000 to our Long-Term Portfolio and $100,000 to our Short-Term Portfolio with the intention of demonstrating our balanced, paired portfolio tactics over time. Now, 4 years later, we're up $1,521,342 (253%), which is right at the top of our 40% annual compounded gains we can expect from this strategy when it goes very well.
You can't double up in a year playing a hedged strategy like this because we're constantly betting against ourselves but by "Being the House – NOT the Gambler", we are able to CONSISTENTLY make 20-40% returns and, in this non-stop bull market – it's been more like 40%. Well, a bit under 40% as $600,000 at 40% compounded for 3 years would be $2.3M but that's my fault, not the system's – as we got so close to goal back in October that I put the brakes on and shifted to a more neutral stance and, in our last review, we "only" made $14,565 for the month and, since last month, we've "only" made another $12,867 – it's like it's hardly worth getting up in the morning, right?
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 to adjust quickly in a crash so I've been erroring on the side of caution but I promise to drink heavily over the holidays and come back all gung-ho bullish if this rally is still going in January.
This too, is part of the lesson though. Go over the last couple of reviews (archives here) and see how we went from very bullish in August, where we added $133,849 for the month, to lockdown mode in September and my reasons for being cautious were laid out in that review (9/29). The S&P was at 2,519 at the time and, despite the "rally" – it's only just now testing 2,600 – two months later, so I don't regret missing out on a 3.2% rally. If…
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PhilStockWorld 2017 Watch List Update – Rolling into 2018
by phil - November 11th, 2017 8:03 am
It'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 just did that this week 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 and the one that's down is the one we like most at the moment. Our "too early" entry on GE was:
GE (3/5) – Forever $30 but talk about a safe place to park your money! They even pay a 3.2% dividend (0.89) while you wait for something to happen – and it won't. GE is a $262Bn company that pays no taxes ($464M refund last year on $9Bn in earnings!) and has tons of money overseas – what's not to love? Even better, you can sell the 2019 $28 puts for $2.50 and use that free money to buy the $25 ($6.10)/30 ($3.05) bull call spread for $3.05 and that's net 0.55 on the $5 spread for a near 10-bagger if GE simply holds $30. There's anothe interesting way to play this one and that's to effecively buy it by selling the 2019 $32 calls for $4.40 for a net $27.60 entry and then buy the $28 calls ($4.20) for a net 0.20 credit and then just sell 1/2 of the April $30s (0.75). That way, you are collecting 0.375 per long and each time you collect $1.70 (4-5 quarters)
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Philstockworld October Portfolio Review
by phil - October 28th, 2017 5:25 pm
$2,108,475!
That's up "just" $14,565 since our September Review on our paired LTP/STP Portfolios, which was our intention after gaining an insane $133,849 from August. Our intent was to lock in our gains into earnings and that's excactly what we did by pressing our hedges, which caused the STP to lose $56,000 as the market kept going higher while the gains in the LTP continued to keep us just slightly bullish and offset the losses on our hedges. Of course, keep in mind that $14,565 is an annualized $175,000, which really doesn't suck considering we began with a combined $6,000 in November of 2013 so Happy 4th Anniversary to our main portfolios!
Read my notes from the last reports – no changes – we're cautious for the same reason but pay particular attention to the kinds of adjustments we made and how they worked out. That's another HUGE benefit of keeping our portfolio well-balanced – the stability gives us lots of time to tinker with and perfect our positions as it's very easy to make a few minor adjustments, when you don't have to worry about having to make a major one…
Short-Term Portfolio Update (STP) – Submitted on 2017/10/19 at 3:20 pm: $430,680 is down $56,347 on our hedges in the past month and that neatly negates about 2/3 of the LTP's gains so we're a bit more bearish than we were last time (in our paired portfolios) after making several bearish adjustments that were intended to move us to neutral.
So, on the whole, we made about $25,000 despite ourselves, which is the strength of our model for selling premium. The primary purpose of the STP is to protect the LTP – it's not supposed to make money in a bull market but it BETTER make a lot of money when we turn bearish. Of course, it always has – that's why it's up 330% in 4 years despite usually being "wrong".
- AMZN – They keep going for $1,000 and keep failing. Our intention was to risk earnings but it's too
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Philstockworld Top Trade Review
by phil - September 30th, 2017 10:01 am
Top Trades has become one of Philstockworld's most popular Memberships and that's a shame because I actually hate trading services that just give out trade ideas. Unfortunately, that's what the market demands and, though Top Trade Members miss out on the trading education and deep discussions we have in our Live Member Chat Room, they usually do get a lot of great trades.
We began Top trades in August of 2015 and year one saw 96 out of 119 Trade Ideas (80.6%) made money immediately (by the first review) and half of the intial losers turned around over time as well. We started year two's first quarter, covering Sept-Dec with 22 of 30 trade ideas (73%) in the green but, for example, one of our 8 "losers" at the time of the review (2/20) was RH – a trade that was in our Long-Term Portfolio:
As of the last review, we only had the short puts, which were down $1,400 (23%) so a "loser:" and, at the time (2/20), I said:
As you can see, they hit our target floor at $25 but we were in Vegas and forgot to add the bull call spread at the time – though I still like the plan. The puts, by themselves, are now $7.40 ($7,400) so down $1,400 (23%) and I still like that sale along with 10 2019 $25 calls $9.75 ($9,750), selling 10 of the $35 calls for $6.20 ($6,200) for $3,550 so we still
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PhilStockWorld September Portfolio Review
by phil - September 29th, 2017 10:48 am
$2,093,910!
That is a LOVELY $133,849 gain on paried LTP/STP Portfolios since our Aug 20th review. I said at the time that it is ridiculous to make this kind of money in a month (6.8%) but I also said we'd be fools not to take advantage of the gift the market is handing to us. The STP, where we keep our hedges, lost $6,813 as of our review date (these reviews are from last week) but that was lucky and now we're down to $460,302 but, on the other hand, the LTP is clocking in at $1,654,569 so $2,114,871 is up another $20,961 since last week – that's crazy!
As I have been emphasizing all week, we are putting 25-33% of our long profits into our short hedges – in order to lock in those long gains. When you are netting 6.8% even after the hedging that insures you will keep that 6.8% (or most of it) when the market turns sour, then you can certainly afford to be cautious. At the end of the year, we'll be up 60-70% whether the market is up or down while, if you let it all hang out and went for 85% – maybe you'll have it at the end of the year and maybe you won't – I'd much rather be sure.
Anyway, read my notes from the last report – no changes – we're cautious for the same reason but pay particular attention to the kinds of adjustments we made and how they worked out. That's another HUGE benefit of keeping our portfolio well-balanced – the stability gives us lots of time to tinker with and perfect our positions as it's very easy to make a few minor adjustments, when you don't have to worry about having to make a major one…
Short-Term Portfolio Review (STP): $487,027 is down $6,813 from our 8/15 review but no apologies there as it's fantastic that that's all we lost while the LTP made 6 figures. That's because we made sensible adjustments back on the 15th but, otherwise, we didn't touch our STP, which has $481,657 in CASH!!! – just in case we ever need some money if things do go on sale.
Despite the mountain of CASH!!! (we started with just $100,000 on 11/26/13), we are…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
