PhilStockWorld September Portfolio Review – Cashing out of this Crazy Market!
by phil - October 2nd, 2019 6:50 am
And we're out!
$2,606,756 is up $2,006,756 (434%) from our $600,000 start of our Long-Term/Short-Term paired portfolios back on Jan 2nd of 2018. The STP was the real star, turning $100,000 in to $881,976 due to some very good timing as we flipped our hedges almost perfectly several times over the past two years. That's very unusual – as was the huge $1,124,780 (245%) gain from the LTP's $500,000 start. We were very close to $2.5M in June but then had a rocky summer – to the point where I said I'd cash out if we fell back to $2M so getting back to $2.6M is a gift horse we dared not look in the mouth – so back to cash and we'll start fresh in November is the plan.
Hedging a $1.7M LTP would be very expensive and what if next time we didn't time the turn in the STP and instead blew the turn and lost money there as well as the LTP. Then we'd be back to $2M and needing to make 30% to get back to $2.6M and what if it's hard to make money next year or what if we have another crash and the market is down 40% – it's just too much to risk vs. putting $2.6M safely on the sidelines and simply looking for new opportunities.
As I noted in Member Chat last night, in anticipation of getting back to cash, I wrote up "5 Trade Ideas to Make $25,000 in 5 Months" on August 29th, to demonstrate that we didn't need to be massivly invested to make good money. Those trades are on track for a $33,603 gain in January from a $6,565 cash entry (and $26,659 in margin) and that's 33% for the quarter against $100,000 of sidelined cash – without risking it all to get there. That's as good as any of our portfolios have done – but with just 5 positions!
We officially cashed out the week of Sept 16-20th (and these reviews are from those dates – this is just a summary), into options expirations and we did so because we get much better prices
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Hemp Boca Portfolio Review – 9-17-2019
by admin - September 17th, 2019 12:29 pm
OK, so let's see if I can actually bring myself to shut down the portfolios. We'll start with the Hemp Boca Portfolio as it's small and I should go on the show this afternoon (haven't decided yet).
Hemp Boca Portfolio Review: This portfolio is not as constrained as Money Talk as there's a show every Tuesday and I can go on when I want (PSW Investments owns 20% of Hemp Boca). We started back on May 21st so it's 4 months old and we're up 8.2% but we were down about 20% at one point (same positions) so I'm not sure I want to risk Q4 in such a small and new portfolio.
The question is, as it will be with EVERY position in EVERY portfolio this month – do we, right now, want to be in this position if the market drops 20%?
- IMAX – Worst case is owning IMAX for $20 and I'm generally fine with that but you have to keep in mind it's a $50,000 portfolio with $100,000 in ordinary buying power (we're assuming not IB as those guys are crazy!). It's a conservative position that's in the money and we should have good support at $21 and $20.50 held on the last dip so hard to kill – especially as I expect Q4 to be huge box office for IMAX. Max possible on the spread is $4,000 and now net $2,325 so $1,675 (72%) left to gain by Jan seems like
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PhilStockWorld August Portfolio Review (Members Only)
by phil - August 27th, 2019 7:33 am
$2,075,462!
That's down $209,538 since our July 28th review and back to where we were at the beginning of July so, as we expected, a bit of a wasted summer as we've had a hard time gaining advantage in the market chop. The challenge has been protecting the positions we have while trying to position ourselves to take advantage of a China Trade Deal that never actually comes.
As you know, I'm very skeptical of a deal getting done and I wanted to cash out as even $1.4M (233%) is a silly amount of money to gain in less than 2 years in our paired LTP/STP portfolios. Our aim is to make 60-80% in two years and we usually cash in and reset our portfolios when they are up 100% so we're miles ahead of our normal pace, thanks to the huge rally and also to our timing which turned the STP, which usually treads water when the LTP does well, into a bigger winner than the LTP.
Since we are "going for it" and not cashing out (and see last week's webinar where I made an impassioned case for cashing out), we made a lot of aggressive moves this month to take advantage of the recent sell-off and, though we did add another hedge, I think our risk to the downside is substantially higher now so I'm setting a stop at $1.2M in the LTP (now $1,283,604) as it would be idiotic to let these gains slip away – I'd much rather cash in the whole thing and start from scratch. And yes, if we're cashing in the LTP, we'll cash out the rest as well.
CASH!!! is a valid position. In fact, since early July, the US Dollar has gained 2.5% so, had we cashed out early in the summer, we'd be better off than we are now. I know that, as traders, you feel like you're not doing your job if you are not trading but WAITING is part of trading – or at least it should be. We wait, patiently, for better prices on stocks we love – there's always something going on sale.
As much as I love our LTP positions,…
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Philstockworld July Portfolio Review (Members Only)
by phil - July 28th, 2019 8:54 am
$2,285,000!
That's up a very healthy $191,432 from our Mid-Year Review just 3 weeks ago so I guess we're positioned a bit more bullish than we thought though we have added to our hedges since then. There was also a bit of a bounce back as that review had us down $40,487 from the June Review but we knew that was simply a poor time to take a snapshot and was likely to come back on its own. Actually, to check in (since these reviews were as of around July 19th) as of Friday our main, paired portfolios were at $1,598,911 on the LTP and $703,510 on the STP for a grand total of $2,302,421 so up another $17,421 with the S&P up very slightly means we're still a little bit net bullish, which means, next week, we'll lean towards finding some downside plays as we want to be very neutral into the Fed Meeting on Wednesday.
In perspective, $191,432 is only up 9.1% for the month and that's about what our audited Hedge Fund did so, on the whole, we simply did a good job of caputring a 3% up move in the S&P getting our usual leverage from our option positions. Once again, I want to emphasize our very important strategy of LEAVING YOUR POSITIONS ALONE (for the most part) as we only adjusted 8 of 80 positions in the Long-Term Portfolio in our last reveiw and mostly that was just housekeeping as July puts and calls expired and had to be swapped out for longer-term ones (Sept or Jan).
As we began 18 months ago with $500,000 in the Long-Term Portfolio and $100,000 in the Short-Term Portfolio, we're up combined $1,685,000 (280%) while our more conservative Options Opportunity Portfolio has gone from $100,000 to $336,374 (up 236%) and even the restricted Money Talk Portfolio has gone from $50,000 to $136,583, which is up 173% while the Butterfly Portfolio, which is not meant to make too much money (or lose it) is up from $100,000 to $187,736, which is up 85% over the same period.
We just began our Hemp Boca Portfolio with $50,000 (see our Virtual Portfolio tab for all of them) and that's at $52,923 (up 6%) after two months…
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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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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