Top Trade Tuesday – Q3 2020
by phil - August 3rd, 2021 8:22 am
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Our Top Trade Alerts are very popular.
That's not surprising since, in the first half of 2020, we had 27 out of 28 winning trades that made $503,547 as of our last review. That's a very successful set of trades and that is, of course, completely untouched as we don't go back and adjust Top Trade Alerts – they are high-value plays that are meant to stand on their own – though many of them do go into our Member Portfolios, of course.
Top Trade Reviews are very useful when you are looking for trade ideas to fill in portfolio gaps. Looking at the last review, I see IMAX has sold off again (Delta virus), HMY (Gold pullback), BBBY, CAKE (Delta) and ALK (Delta). PRESTO! We have a new watch list. Now we can go back and see if the Fundamentals of our recently-winning stocks have actually changed or it's just the sentiment.
As you know, we've been very cautious with our picks in the past month as we have been worried about the Delta Virus (and all the other varients still to come). Covid may be like the Flu, it will hit us year after year and we'll just get used to 0.1% of our population dying each year – as opposed to 0.02% currently killed by the flu. It's still a lot less than Cancer or Heart Disease as a cause of death – and people still smoke, drink and eat bad foods..
Top Trades for Thu, 23 Jul 2020 10:19 – T
Finally a Top Trade Alert! T pays a $2.08 dividend at 0.52/quarter so it's great to own the stock but it also means we can just be aggressive in establishing a position since we'd be happy to own it, right?
- Sell 10 T 2022 $28 puts
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Top Trade Tuesday – Q2 2020
by phil - June 29th, 2021 8:32 am
Another low-volume week, so a good time to review.
Last Tuesday, we went over our Top Trade Ideas from Q1 of last year and we had one loser and 15 winners with a net of $271,087 in profits over the past 18 months (or less). A few of them are even good for new trades – even now – like Viacom (VIAC), which had another 100% left to gain as of last Tuesday at net $10,100 and now it's $13,800 so up $3,700 (37%) in a week is not bad for a leftover, is it?
Again, you don't need to make short-term trades in dangerous momentum stocks to make fantastic short-term money. Using our system, it's just as exciting when a value stock pops – even when we have long-term contracts on them.
The difference is we aren't taking those huge short-term risks that can damage your portfolio. When something unforseen happens, we can ride it out. Remember, Top Trade Alerts are trades we feel have a very strong chance of success. Generally we pick them because they have both a long-term macro trend in their favor as well as upcoming catalysts and, as alwasy – first and foremost we're looking for VALUE.
Top Trades for Thu, 02 Apr 2020 12:58 – CMCSA
For the LTP:
- Sell 5 CMCSA 2022 $30 puts for $5 ($2,500)
- Buy 15 CMCSA 2022 $30 calls for $8.25 ($12,375)
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Tuesday – Top Trade Review – Q1 2020
by phil - June 22nd, 2021 8:37 am
Not much is happening so let's review our Top Trade Alerts and see how they're doing.
Top Trade Alerts are trade ideas I feel have an excellent chance of success. Usually they are news-driven – trades on stocks I expect to make a move in the near future – not just a simple value play. Nonetheless, we set them up as long-term value trades as we don't need to make short-term bets to get great short-term results. However, we do need a few months so we're not going to look at the most recent trade ideas.
Since January of 2020 there have been over 60 Top Trade Ideas, not quite one per week. The secret to the success of our Top Trade Alerts, which historically have an 70%+ win rate, is that we DON'T just pick trades because we feel we have to. We try to pick one a week but some weeks we pick 3 and some we pick none. Forcing trades to fulfill arbitrary expectations is the downfall of many market newsletters.
We don't make our Top Trade Alerts complicated (and you can sign up here to get them fresh), they are generally "set and forget" trades for the less active traders, who just want to build a good portfolio one trade at a time. We won't get this review done all at once but let's start getting through our trades starting in Jan of 2020 – as it will be interesting to see how we rode out the crash and recovery.
In the interest of space, I'm just going to reprint the actual trade and the chart, not the commentary, which you can see by following the links. We're going to assume no adjustments were made and just see how the positions performed.
Top Trades for Mon, 06 Jan 2020 14:53 – HRB
I guess it would be a good Butterfly candidate but it stays down too long so we generally just play it bullish into April. March earnings are not likely to be exciting but, for the Earnings Portfolio, let's play HRB like
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PhilStockWorld June Portfolio Review
by phil - June 18th, 2021 8:30 am
$2,147,243!
That's actually DOWN $5,530 since our last review as our Short-Term Portfolio (our hedges) took a pretty good hit on the recent rally. That's fine as I'd rather have a relaxing summer not worried about losing these ridiculous gains so parking the portfolio in neutral into earnings was a sensible way to play.
We gained $186,448 (almost 10%) in the previous month so locking that in was a good goal but now we're past earnings and past the Fed and we'll have to decide what to do next. We're already 50% in CASH!!! and we love our positions and we even added a few new ones to the LTP over the past month as we have that Fear Of Missing Out disease that's rampant among the investing population.
Still, our overall portfolio performance is a barometer and we can sense changes coming when we can't make money but, as I said, the LTP itself gained $38,000 over the past month, it's the STP that dragged our paired portfolios lower – but that's what it's supposed to do in a bull market – this just indicates we played the month a bit too bearish so we can either hedge less (no way!) or add some more longs. That's a work in progress.
In our last review, we got more aggressive on BABA and SKT and, since then, we added new trades on AFL, CIM, FNF, HAL, MO, RIO, SC and VLO – so it's been a pretty busy month – even though it seems pretty dull day to day. Here's the LTP update:
- TTE – Was TOT and they haven't fixed the options yet so those are missing. Love this company but currently toppy.
- Short Puts – These are essentially a watch list of stocks we'd like to buy if they get cheaper. We just pulled the trigger on RIO, turning it into a full spead from a short put. We have collected $117,050 for promising to buy 17 stocks if they get cheaper and, if they don't get cheaper, we keep the money. The remaining net is $76,368 so that's what's left to gain if
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PhilStockWorld February Portfolio Review – Part 2
by phil - February 19th, 2021 8:36 am
Does trading have to be exciting?
While the market remains at all-time highs, I remain skeptical and a lot of that is because I allowed myself to become complacent in 2007, after having missed the rally of 1999 because that, too, was ridiculous. In retrospect I was right – but not until March of 2000 and I could have had some fun betting on anything with a pulse in 1999 so, when 2007 came along – I finally went with the flow and, while we had pretty good timing in 2008 getting out on top – a lot of people didn't. So I guess, this time around, I just want to make sure nobody gets burned when this thing collapses.
We are all shaped by our past and we all run our own gauntlets to become the people we are today. I know I trade like an old man because I learned from my Grandfather, Max Davis, who was born in 1903 and, in 1973, 10 year-old me laid on the floor on Sundays with the stock section of the paper laid out on the floor (you only got stock reports on Sundays back then), circling companies that made new highs or new lows so we could later investigate why it was happening and then Grandpa would do his Fundamental Analysis of the companies (often including actually visiting the company) to decide if there were any hidden values there.
Having lived (in England) through World War 1, the Pandemic that followed, the Great Depression and World War II, Grandpa Max had seen a lot of shit – and he was very good at conveying his experiences to me from both a Social and Economic perspective. Though he never went to college, Grandpa Max was a voracious reader and a very sharp businessman. Learning from him always gave me a long-term and patient perspective on stocks and, since we only got stock news on Sundays anyway – you learn to be patient by default.
So of course, growing up, I gravitated to books by Jeremy Grantham (also British) and Warren Buffett and that's my "style" – value investing but my twist on it (as I'm 30 years younger) is to use options for hedging and leverage – rather than just trying to…
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PhilStockWorld February Portfolio Review
by phil - February 18th, 2021 8:57 am
$1,766,591!
Our paired Long & Short-Term Portfolios have gained $157,564 since our January Review and that is, of course, ridiculous and reflective of this ridiculous bubble rally. The LTP went up and the loss of the STP went down – even as we increased our hedging. That's because we sell a lot of premium and the premium decays regardless of the market direction. Time is our friend using this strategy.
Also, we have SUBSTANTIAL amounts of CASH!!! across all of our portfolios as we think this entire market is BS and will collapse at some point. At least 2 or 3 days each week I wake up wanting to just cash out and go on vacation – only I can't go on vacation and I'd be bored so we stay invested – but that's a really stupid reason to risk your assets if this is money that is critical to your future.
The S&P 500 is up almost 100% from it's March lows and yes, that was a 35% drop from the February highs but now we're 20% above those (3,393) and it's simply too far, too fast so we're being very careful with our positions and very aggressive with our hedges. In our last STP Review, we determined we had a good $300,000 worth of protection and we only have $551,828 worth of position in our LTP – that is well-covered!
We added new longs however in the LTP on BABA, GOLD, OIH, TOT, VLO, WPM and WU in the past 30 days as we've been enjoying earnings season and the bargains it brings. We still have $1,057,650 of CASH!!! sitting on the sidelines and we've sold very few naked puts so we also have tons of margin to play with. On the whole, we'd love a good crash – so we can go bargain-hunting. I will repeat what I said back on December 16th as the strategy still holds and, after making 10% for the month, perhaps more people will pay attention:
We have 33% less
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Philstockworld January Portfolio Review
by phil - January 14th, 2021 6:48 am
$1,609,027!
Our combined portfolios are up over $1M (166%) in just over a year and the best thing is our Long-Term Portfolio (LTP) is back to about 50% CASH!!! – and you know I love my CASH!!! In fact, we only made a couple of adjustments but let's please consider what happened to the 21 remaining positions since our Dec 16th review, where I said:
We have 33% less positions, so it's easier to adjust if we do have a correction and we have 33% less longs for our Short-Term Portfolio to protect – lowering our insurance costs as well. Those are the "consequences" we've suffered from "missing out" on a fantastic rally. Certainly it's been a lot more relaxing and I aim to keep it that way into the New Year – just in case.
So next time you feel compelled to trade due to a Fear of Missing Out (FOMO) – keep in mind – missing out on what? We already made FANTASTIC returns for the year – why risk it just to make a tiny bit more?
Did we miss out by cutting our positions? No! A month later the EXACT same positions are at $1,513,928 – gaining $113,643 (8.1%) in 27 days – and that's from a half CASH!!! position! People say why don't we do a lot of new trades and I keep saying what trades could possibly be better than the ones we already have? These are the remaining positions that ran the gauntlet of 2020 and were the best of the best of a portfolio that's now up 202.8% in 14 months. Making gains like this with conservative plays in a toppy market is as much as we could ever hope for at this stage of the rally.
And that's not including the $300,000 we took off the table when we closed down our old Short-Term Portfolio (STP) and our new STP is down 52.8% but,…
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Philstockworld November Portfolio Review
by phil - November 20th, 2020 9:03 am
$1,486,878!
Although that's down a bit from our October Portfolio Review, that's only because we cashed out the old Short-Term Portfolio back on October 28th and we didn't carry the gains forward due to a discrepancy arising from the Tesla (TSLA) split so we reset the STP to $200,000 from $620,909 so really, we've made incredible gains in the last month as the LTP was only $974,283 on the day we re-set – as we got heavily bullish during that mini-crash.
As is has been all year, our timing was pretty perfect and the LTP has rocketed back from $974,283 to $1,295,033 as of Tuesday's review, which is up $320,750 (33%) in 33 days as the S&P flew back from 3,250 to 3,600 (up 10.7%). Of course that's ridiculous and of course we were lucky to time it perfectly so OF COURSE we took the money and ran on Tuesday, cashing in 40% of our LTP positions – enough is enough!
As the great stock trader, Kenny Rogers tells us:
You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done
S&P 3,600 is certainly enough and certainly too much to risk as we're up more than 50% in 4 years (thank you, Mr. Trump – now LEAVE!) and that's more than double the usual 8% you can expect to gain annually and maybe it will keep going and maybe it won't but we're very confident we can make more money if the bull cycle…
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Philstockworld September Portfolio Review
by phil - September 18th, 2020 8:24 am
$1,199,597!
That is DOWN $195,130 for our paired portfolios for the month, but still up over 100% for the year. We have a very large, very volatile bet on Tesla (TSLA) that we're riding out and that let both to last month's huge gain and this month's huge loss but last month showed us the massive potential the position has as it's currently net -$881,087 so, if TSLA ends up between $300 and $380 in January (now $450), we stand to almost double our entire portfolio on that one position.
I was going to say I don't like the super-volatile positions but that's not true – I do like them as we're selling TONS of premium to people who think stocks go up or down forever and have no rules but I DON'T like them in margin-limited portfolio or in portfolios that aren't miles ahead and can afford to take chances. Not only can we afford to take a chance this year but we're also locking in our 100% gains using TSLA as it pays us almost as much to the downside ($881,087) as our entire Long-Term Portfolio (LTP) is worth ($1,043,965)!
But, spoilers, let's just take a look at where we stand and move on from there. As we expected, the Fed and Congress have fired their stimulus guns this week and the reaction from the market has been a big shrug as evidenced by the shouldering down move in the S&P 500 this week:
While that's going on, Donald Trump's victim count is hitting 200,000 but that's nothing compared to what we're about to see as our kids finish their second week at school as two weeks is just about the time when it's already too late and local Governments realize what a huge mistake re-opening too early has been. While we know Trump doesn't care about California and New York having 100,000 combined deaths this year, he'll be losing 60,000 voters in Florida and Texas as well.
Early indications are that sending the kids back to school is already becoming a "super-spreader" event for the whole country and 50,000…
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Philstockworld August Portfolio Review
by phil - September 13th, 2020 8:21 am
$1,394,727!
That's up $260,972 (23%) since June (up 132% for the year) as of Augst 18th and yes, I've had a very busy summer and haven't kept up on the review summaries – sorry. Honestly, if it wasn't for the virus, I'd be on a cruise this summer – we decided the market was too high on Memorial Day and now it's after Labor Day and we're even higher so yes, we made good money staying home but, on the whole, I would have much rather have spent the summer with my family enjoying Europe, wouldn't you?
That was our plan, we were supposed to go to Scandanavia on a 14-day cruise and I was really looking forward to it but, like most plans this year, they've been cancelled and, like most things this year, the markets have completely ignored it. We've been ignoring the market for the past month and our main LTP/STP combination is pretty rock-steady at $1.4M and we cut about 20% of our positions in August, raising more cash and making our downside hedges more effective (as they are the same but we have less to protect).
We had one nice dip but nothing too exciting and it's back to school I've been worried about as I think it's been a huge mistake but it's only week one – so not too many results are in yet. This week is also the big "Quad Witching" quartely expirations for options and Futures contracts so things could get crazy and we'll be doing our portfolio adjustments this week – probably aiming for even more CASH!!! (have I mentioned how much I like CASH!!! lately?).
Not only that but the Fed makes their announcement on Wednesday and Powell speaks at 2:30 that day AND we have the Retail Sales Report at 8:30 Wednesday as well. Have I mentioned how much I like CASH!!! lately?
So here's what we were thinking 30 days ago and stay tuned this week for our Live Portfolio Adjustments (Member Only):
Short-Term Portfolio Review (STP): No point in riding out the dip if we don't have to so we're going to raise more CASH!!! and there are plenty of great stocks to buy, like WBA, INTC, BA and…
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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.
