PhilStockWorld March Portfolio Review
by phil - March 24th, 2020 9:43 pm
What a crazy fist quarter it has been!
We cashed out our last set of winning portfolios back in September, as I did not trust the market into Q4 but the market kept going higher so we had too much FOMO (Fear of Missing Out) and we started playing again in October – albeit with much smaller amounts. Our Long-Term/Short-Term paired portfolios had hit $2.6M after starting at $500,000/100,000 on Jan 2nd, 2016 and it was becomming too difficut to hedge so I said at the time:
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.
Well, here we are, at the bottom of that 40% sell-off and, as expected, we're having to pull a bit more cash off the sidelines as some of our new portfolios got crushed. This is going to be an odd review because we made more than one adjustment in the past two weeks on some portfolios and I'll do my best to consolidate all the moves here. The bottom line is we got a lot more aggressive around March expirations (20th) and yesterday (23rd), as the market hit rock bottom, we went gung-ho bullish in our LTP and Butterfly Portfolios in anticipation of a massive Congressional Bail-Out Package.
Hopefully, that provides a catalyst to form a floor at the 40% off line and we can consolidate between here and the 20% off (the top) lines, which is where the market should be in the first place – the rest was just fluff – that's why we cashed out in September – at S&P 3,000!
Short-Term Portfolio Review (STP) (3/19): $282,168 is up 182% so…
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PhilStockWorld January Portfolio Review
by phil - January 27th, 2020 7:25 am
$644,380!
No we didn't make $500,000 – we actually lost about $9,000 in the past month as the TSLA trade blew up on us but that's our grand total now as we finally started a new Long-Term Portfolio (LTP) with $500,000 along with our Short-Term Portfolio (STP), that was at $144,380. Generally, we've simply changed the STP to the LTP and moved the hedges out of the new LTP to the STP and added $400,000 in virtual cash to the LTP and NOW we are ready to get serious playing the market with our main, paired portfolios.
Essentially, we made $44,380 while we've been waiting around for a good time to deploy more cash. Of course we cashed in $3M last year so we're only re-deploying a small portion of it but that's appropriate for the still-uncertain market we're in now and, anyway, we started with the same $600,000 back in Jan, 2018 so it's much more fun to build it all up again, isn't it?
Last month, we were worried about Iran and, frankly, I don't even remember why anymore as it's all about Coronavirus now although Trump's Impeachment still looms large in the background. Still, it's earnings season and we've already fired off 4 Top Trade Alerts in January and last week we added a few early trades to the New LTP already.
Here's this month's collections of our trade reviews from last week's Live Member Chat:
Short-Term Portfolio Review (STP): This is now the Long-Term Portfolio (LTP) and we'll make a new STP to cover these positions. Mechanically, we're moving $400,000 into this portfolio and making a new $100,000 STP whose main function is to protect the new LTP (so looking more for bearish opportunities than bullish ones).
The STP is at $144,380 and that's down $9,118 from our last review, pretty much entirely due to TSLA going off the rails on our short calls. We'll deal with that and decide which positions stay and which ones go in our new LTP:
- CBS – Keeper
- CSCO – Keeper
- M – Keeper
- CMG
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Working it Out Wednesday – Is the Trade Deal the Beginning or End of the Rally?
by phil - January 15th, 2020 8:37 am
Today is the day!
Trump will sign a deal today (11:30) with China that puts off the new tariffs he threatened them with until "after the election" and China agrees to buy $200Bn in US Goods and Services over 2 years, which is double their normal pace so, in theory, it could add 0.5% ($100Bn) to our GDP, assuming we actually produce more Goods and Services and don't just end up selling China things we would have sold to someone else. Boeing (BA) has several hundred grounded 737s China can have – that's a good start!
It's onlly a start though as the deal does not address Cybersecurity or China’s tight controls over how companies handle data and Cloud Computing. China rejected American demands to include promises to refrain from hacking American firms in the text, insisting it was not a trade issue. The Chinese have also rebuffed requests for broader changes to the structure of their economy. That includes a pattern of subsidizing and supporting key industries, like solar and steel, that American firms say have allowed China to dump cheap products it makes into the United States.
In the interim, the remaining tariffs will continue to inflict financial pain on American businesses that rely on Chinese imports and the consumers who buy their products. Is that going to be good enough to continue to boost the market or will the reality of the trade deal's mediocrity begin to weigh on forward-looking sentiment. Pay close attention to Corporate Guidance, now that they are taking the signed deal into account.
Earnings have been going well so far but Goldman Sachs (GS) missed this morning by almost 20% – that was a surprise. BAC, BLK, PNC, USB and UNH all beat along with WAFD last night and only WFC screwed up yesterday so it's so good, so far in the Financial Sector but, of course, shouldn't it be with the market up about 30% in 2019 and up another 2% in the first two weeks of 2020?
The Producer Price Index came in weak this morning at 0.1%, half of what was expected and that indicates that, despite "strong" retail sales, the Consumers are unwilling…
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Philstockworld December Portfolio Review (Members Only)
by phil - January 7th, 2020 1:21 pm
$153,498!
Not much action (up $1,445) since our last review on the Short-Term Portfolio and there is still no Long-Term Portfolio at the moment so the march to $1M is going very slowly at the moment. Still after being up 53.5% in 3 months – our primary goal shifted towards preserving our gains over the holidays and now we're just waiting to see if the markets hold up into earings and we can start buying again.
With the Iran situation and Trump's Impeachment and do we really have a China deal – it's hard to commit more cash into these overpriced stocks but we'll have to if they don't show any signs of slowing by the end of this month or we may miss the next ridiculous leg of this rally.
Short-Term Portfolio Review (STP): $153,498 (53.5%) is flat to the last review as our hedges killed us and so did TSLA. Still, I'd rather lock in a $50,000 gain over 3 months than risk giving it back so we got cautious after making ridiculous 2-month gains. Next month, we can start an LTP by simply renaming this one and removing the short-term plays and the hedges and putting them in a new STP – see how easy that was – we already started our LTP – and it's our STP!
- Short puts – All on track with $8,710 of additional potential.
- SQQQ – The December spread was a bet, not a hedge and offset by the CSCO puts – though it's a long time before we get this loss back. Just dead money here.
- BKNG – Very nice as we bought back the short calls and now we can sell them again. Unfortunately, we shorted BKNG over China Trade issues affecting travel (it did) but that's over now and they really aren't that expensive at $2,000. Also, I no longer feel strongly about the bear put spread so let's just cash this one in – it's been very good to us.
CMG – Meh
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Philstockworld November Portfolio Review
by phil - December 6th, 2019 6:14 am
$152,053!
That's right, after closing our our last STP/LTP paired portfolios in September, 2019 with over $2.6M from a $600,000 start in Jan 2018, we decided to put $100,000 back to work in a new Short-Term Portfolio on October 1st. We haven't started a new Long-Term Portfolio yet, but our STP is already up 52% in just 2 months and, if we average 26% a month for 24 moths – that's $25,638,527 (compounded) so I'm not at all worried that we won't make enough money if we don't deploy our other $500,000 re-starting cash to the LTP right away as 26% a month is not likely to keep going but, if it does – than $100,000 is all we'll need to be very happy!
52% in two months is a silly amount of money to make and we have to keep that in perspective because we could have just as easily have lost 52% so I'm only comfortable with the relatively small risk in the closely-watched STP – where we can take advantage of long and short positions over varied time-frames.
We still have our Butterfly Portfolio and our Hemp Boca Portfolio from 2018 and 2019 respectively but Money Talk, Dividends, Earnings are also new portfolios – all started with $100,000 of virtual cash in October and November.
As it's early in the cycle, I don't have a lot to say so we're just consolidating our first round of Portfolio Reviews here:
Short-Term Portfolio Review (STP): Doing way better than planned but mostly due to BKNG working out perfectly (even a broken clock….) but also as there is only MJ on the losing side and not too much damage there. While the Portfolios are small, it's a good time to practice the expectations game.
Overall, I'm worried we turn down next week on low volume but, then again, they aren't done beating the dead horse of "China Progress" so this drift may go on for another month – into the year's end. Keep in mind I didn't WANT to have money back in play – it was just so boring to not play….
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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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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.