Philstockworld Mid-Year Portfolio Review (Members Only)
by phil - July 4th, 2019 9:36 am
$2.1 MILLION Dollars!
$2,093,568 to be exact in our primary portfolios, the paired Long-Term Portrfolio (LTP) and the Short-Term Portfolio (STP) whose job is to protect it. It's really nothing to crow about as we're actually DOWN $40,487 since our June Review (through mid-May) though these numbers are only through mid June and the month finished with quite a bang. We close our months on option expiration day, of course, so we won't really know how the first half went until after July 19th and, by the time I consolidate that into a review it will be August and it would sound silly to call that a mid-year review – so that's why I'm calling this one a mid-year review.
While semantics are fun, let's get back to talking about trading strategies: Our intention over the summer was to lock down our portfolios in neutral as $2.1M is up from our Jan, 2018 start with $500,000 in our LTP and $100,000 in the STP so, overall, we're up $1.5M (250%) in 18 months and, with China Trade still up in the air, I'd rather protect my $1.5M in gains than risk them trying to make another $150,000 (10%). That's one of the problems you have as you make more and more money – you spend a lot more time protecting your wealth, rather than concentrating on making more wealth.
That's why we like to have multiple virtual portfolios at PSW. The LTP/STP is where we keep the bulk of our investing capital and they follow a strategy that is constantly hedging to protect what we started with. Nonetheless, they can still make spectacular gains but this cycle we have a very odd situation in which we have usually guessed correctly when we have added and removed hedges in the STP, causing an unusual $600,000 gain in a portfolio that usually loses money while the LTP gains.
It's been a very unusual market with lots of dips and recoveries and that kind of suits our trading style perfectly as we tend to scale into positions, buying small, conservative spreads to begin and adding more and widening the spread on dips. Another strategy we use is rolling our profits and the leads to a lot of our big gains. For…
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Philstockworld April Portfolio Review (Members Only)
by phil - April 30th, 2019 9:03 pm
Your love (your love keeps lifting me)
Keep on lifting (love keeps lifting me)
Higher (lifting me)
Higher and higher (higher) – Jackie Wilson
Up and up the markets go, where they stop — well, they don't seem to be stopping, do they?
Last month we couldn't believe we were already close to $2M in our primary paired portfolios. The Long-Term and Short-Term Portfolios stood at $1,990,381 as of about the 15th of March and, although we played cautiously and added more hedges, the LTP has marched on to $1,429,270 by itself (as of the 4/18 review) while the STP took a $36,413 hit but that still left it at $704,785 for a combined total of $2,134,055 – up $1,534,055 (255%) from our original $600,000 start on Jan 2nd, 2018 and up $143,674 for the month, which is 24% of $600,000 but "just" 7.2% higher than where we were in March.
I hate to be in this position as we're clearly benefitting from RIDICULOUS market conditions and I know from experience that, no matter how many times I say it, people won't believe how quickly we can give back a big chunk of these profits. Just this morning, GOOGL went down 8%, INTC is down 13% in the past week… If that can happen to big blue chip stocks – what can happen to the other crap?
We've been purging things we think are overvalued and we keep hedging but, when you make 255% in less than 18 months you have to KNOW that there's something wrong with the markets and, eventually, things may normalize on you. I've discussed FOMO (fear of missing out) a lot lately and sure, we'd hate to have missed another $143,674 in gains and now those gains are a buffer against future losses but $2M is A LOT of money to risk and we're getting to the point where I'd rather cash it and start again with a fresh $600,000 – locking $1.4M away in a safer place.
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Philstockworld March Portfolio Review (Members Only)
by phil - March 31st, 2019 12:57 pm
And the madness continues.
We just finished the best Q1 in 10 years and, keep in mind, we're at the top of a 300% rally from the 2009 bottom so we're accelerating, not decelerating. The Fed is keeping their foot on the gas and the economy isn't showing the usual signs of overheating (inflation, rising wages, rapid housing increases, commodity shortages) so they don't have a compelling reason not to boost the economy further – despite the stock market inflation that's causing the largest wealth gap this country has ever seen since the start of the Great Depression.
It's very simple really, the Fed and the Government have boosted the market 300%, which has greatly increased the wealth of the investing class but none of that wealth has trickled down so demand for goods, services, housing and even labor remains restrained. In other words, the rich get much, much richer and the poor barely hold their ground.
While my liberal heart bleeds for them, we are running portfolios for the Top 1% and our two paired portfolios (LTP and STP) are now just under the $2M mark at $1,990,381 – or they were back on the 15th, when we did these reviews. That's up $1.4M (233%) since our 1/2/18 inception at $600,000 so it's been a very good year for long-term investing, although the STP has actually outperformed the LTP by a wide margin in this crazy market. It's an odd kind of rally indeed when your hedges outperform your longs – but that's the way it's been for the past year or so.
With the market topping out again, we haven't found too many bargains recently but that doesn't stop our portfolios from making money as we make quite a lot of money by the very reliable method of time (theta) decay from the options we sell – the system we call "Being the House – NOT the Gambler".
Options Opportunity Portfolio Review (OOP): $283,465 is actually DOWN $3,622 from our 2/14 Review but was closer to $300,000 a couple of days ago – so luck of the draw as to when I do a review. ALK took a big hit, BHC was better, CHK went our way, GNC got hit,…
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Monday Market Movement – Reviewing Last Year’s Top Trade Alerts
by phil - January 28th, 2019 8:29 am
Not much happend over the weekend.
That being the case, I'm going to take the time to catch up on our Top Trade Reviews, as we haven't done one since Sept 13th, which closed out 2017's trade ideas at 54 winners and 9 losers for an overall 85.7% winning percentage for the year. This is why Top Trades is such a successful part of our subscriber base while, in fact, Top Trades only represent a small fraction of the trade ideas we discuss in our Live Member Chat Room – which you can SIGN UP FOR HERE (subtle marketing ploy).
Of course, one of the reasons we like to do reviews is to look at the losers, as they are often the ones that offer great new entries with a chance to turn around. As Fundamental Investors, we are more likely to be wrong about our timing than wrong about a position in general so a stock that goes the wrong way after our pick can be a great opportunity to jump in for a better price.
Top Trade Alerts are sent out from our Live Member Chat room and are usually the trade of the week that I think has the highest likelihood of being successful. We are developing a platform called "Trade Exchange" that will roll out this year to make our text alerts actionable so the pressure will really be on to perform in this segment.
Our first Top Trade Idea of 2018 came right on Tuesday, Jan 2nd with Chipotle (CMG), which had been crushed on another food poisoning scare but we thought the damage was overdone but, as noted, I didn't expect the kind of rebound we had – we played it conservatively, though we did play it more aggressively later in the year.
MG/Streth – It's tricky as sales are up 10% from 2016 but profits ($187M) not even half of what they were in 2015 ($475M) and they are getting, at $292, $8.2Bn for the company so at POTENTIAL profit, it's a very reasonable 17 p/e but, at actual profit, it's a
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Philstockworld January Portfolio Review (Members Only)
by phil - January 21st, 2019 3:07 pm
What an amazing first year!
As of Friday's close, the LTP alone is at $1 Million, finishing the day up 101.1% from our Jan 2nd, 2018 start date. We've spent a lot of time in December discussing our system as we had a lovely real-World situation to see how it works in action in a market reversal that occurred in weeks, rather than months.
The way our system is designed to work is to force you to buy low and sell high through the discipline designed into our trading pattern. First of all, we SCALE into our positions, usually starting with a short put sale and then, if the stock gets cheaper – we initiate our initial long position but it's usually just a 1/4 allocation and we don't get to a 1/2 allocation unless the stock gets EVEN CHEAPER as we roll and scale into a larger position.
That means we are buying when things are low – that's the plan from the minute we buy and we don't buy unless we think we have a bargain in the first place. If we get our Fundamentals right and the stock does turn back around – the rewards can be incredible – especially as we're using option positions to greatly leverage the stocks bullish recovery.
But, in order to ride out a 10-20% market correction, you have to have CASH!!! and you have to have margin in reserve and that means you have to NOT over-extend – even when things are going very well and that means we are also forced to cash in our positions when the market goes too high as well. So, following our system simply forces you to do the most basic thing any stock guru tells you to do (more or less) – buy low and sell high! What can be simpler than that?
As you can see from the S&P chart for this year, we've had 3 times when the market has fallen 10% along with one 6.66% correction so it's not at all rare that we get a chance to add to our positions on dips. Also you'll note that the 2,600 line on the S&P (…
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PhilStockworld November Portfolio Review (Members Only)
by phil - November 27th, 2018 7:54 am
$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 September Portfolio Review (Members Only)
by phil - September 24th, 2018 5:59 am
$1,140,516!
It's been two months since we did our July Portfolio Review as I was on a cruise in August and skipped that review and, in fact, we made very few changes to our portfolios over the summer but that didn't stop them from chugging along to fantastic gains. Most of the changes we made were to get more bullish as, back in June, we cashed out a lot of our winning positions in an attempt to get more defensive into the summer.
As we started the year with $500,000 in the Long-Term Portfolio and $100,000 in the Short-Term Portfolio to protect it with, we're getting very close to an overall double as we're already up $540,516 (90%) but our moves this month have once again led towards taking money off the table and adding more hedges and you may think that's being too defensive in this runaway bull market but it's the same thing we did in July, when we pressed our hedges and cashed in winners as well.
The thing about cashing in winners is, when you do it right, you also improve your losing positions and then, when they turn around, you can really turbo-charge your returns. We benefitted this summer from a rising tide that lifted most ships over the summer – even the ones we had left on the bottom. The S&P, for its part, is up just under 10% since the June dip as we keep waiting for the correction that never comes. Still, that doesn't stop us from adding hedges in the Short-Term Portfolio to lock in these ill-gotten gains in the LTP:
Short-Term Portfolio Review (STP): We added the AMZN shorts, but that's the only change since our 8/27 review, when we were at $225,802 and now we're at $232,125 which is up 132.1% for the year and up $6,323 for the month (6.3%) as our TSLA and AMZN shorts more than offset the losses from our hedges (and we cashed out AAPL too).
Now we have $173,350 in CASH!!! and, as calculated last month, about $200,000 in protection for our LTP – which we only pray is going to…
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Philstockworld September Top Trade Review
by phil - September 13th, 2018 6:24 am
Yes, this is Thursday morning's PSW Report.
We were discussing building portfolios using things like our Top Trade Alerts in yesterday's Live Trading Webinar and it occurred to me that we haven't done a review since July so I think we have some catching up to do – especially as we haven't finished reviewing 2017's trade ideas yet. We're usually about 6-9 months behind because our Top Trade Alerts are usually for long-term opportunities, not short-term set-ups.
So far, through October, we had 40 winning trade ideas and 6 losers for a very nice 86.9% winning percentage and the Sept/Oct trades had made $59,615 by July. As usual, our losing trades tend to turn into winners and one of our losers was Celgene (CELG) but they popped right back from a $425 loss to, currently, a $250 gain but that's only "on track" for our projected $13,000 gain if all goes well so STILL great for a new trade entry – our losers often make the best future winners – that's why these reviews are important!
That brings us up to 41 winners and 5 losers for an 89% winning percentage for 2017 so far and I very much doubt we'll beat that into the year's close – but let's find out together as we review our November and December Top Trade Ideas to finish out the year. Of course, it's a fairly arbitrary snap-shot to see how 2-year trades are doing at any given point in time but I find that 6-12 months is a good time to make adjustments if necessary as you still have more than a year to recover and you have 2-3 quarters of earnings to give us better information to make our decisions on.
That's right, we are FUNDAMENTAL investors so we tend not to pay attention to the day to day BS the market does. Often if a stock we like gets cheaper, we buy MORE because, if you're not going to buy low – when are you going to buy?
Thursday, Nov 2nd was a busy day as we sent out a Top Trade Alert for 3 stocks; TEVA, M & CBI:
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Philstockworld July Portfolio Review (Members Only)
by phil - August 2nd, 2018 12:21 pm
$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 July Top Trade Review
by phil - July 11th, 2018 6:31 am
Yes, this is Wednesday morning's PSW Report.
I don't have much to say about the markets this morning, other than "I told you so" as they give up the week's gains on more Trade War nonsense that we KNEW was coming (see yesterday's morning Report for my warnings about following that idiocy). We'll see what holds today and we'll make adjustments in chat and in this afternoon's Live Trading Webinar – so no need to talk about what an idiot the President is here, right? What we do need to do is bargain-hunt in case it's another shallow sell-off and we need to add more longs 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 April, 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 April review, we had looked at Top Trades that were initiated through last August and, out of 36 Top Trade Ideas in 35 weeks, we had 29 winners and 7 losers for a very solid 80.55% winning percentatge. In fact, our only loser in July was TEVA, who have since recovered completely and turned into a winner and THAT is why these reviews are so valuable – those "losing trades" often turn into the best opportunities:
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…
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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