Phil, i wanted to thank you again for helping me protect future stock allocations at work - finally, i feel like i am owning my own destiny with stocks vs. letting the market dictate what you get – thanks again.
Nramanuja
Phil - Your logic not only makes sense, but it made a lot of premium profit for me over the past 12 months. I have recovered much of the massive equity losses of last year. My Monday play is the sale of long term puts on FXI. Love the premium!
Gel1
Phil// Cashing out of my LT holdings have been going on for over two weeks. However, I have elected not to cash all of the holdings including my AAPL, Jan 16 Short Puts at $470 and $480. Plus, I am being opportunistic in selectively putting on those positions for beat down stocks by selling 2016 Puts. That said, YTD harvested profits now stand at $135k on a current account balance of $683K or a 19.81% YTD return. Thanks for your expertise in teaching me how to be patient, be the banker, but also not being greedy, cashing out and harvesting profits.
IHS4GOD
This site, for me, is where I have learned how to use options & futures. It is also where I get a constant flow of new ideas. In addition, it's great to know that I have many sources, mostly Phil, if I get lost in a trade. I have been here for 8 years, and am grateful to PHIL and fellow members. I manage about half a million, and although I may not always achieve what Phil does, I am not complaining. I have learned so much. Thank you Phil!
DClark41
PSW AC Conf: For those who may be on the bubble, I attended my first PSW LV in November. It was a real eye-opener. What I accomplished in a couple of days of exposure to Phil, Pharm, Craig, et al made my previous couple of years of hanging around the web site seem silly. If you are inclined in the slightest, you really should go. Just rubbing shoulders with other PSW members proved to be really valuable. Strictly on the basis of value, it's a great deal. You will have real time conversations with Phil and the gang and they will get to your questions and agenda items.
Mjjwo9b
Hi Mr. Phill, I am a Venezuelan lady tormented by our politicall situation, who use to be an emerging market trader, and many other executive positins in the finance "arena" and now is trying to built a new concept and service for asset management for clients on my own, I am in the trial and learning process at the moment, I also invest for some friends and myself. I want to congratulate you , because reading you fill my days with a touch of irony (besides ,of course the spectacular market insight) that happens to give me energy, its a joy the remarks and comments even the pictures used, sometimes I just read it for the fun, I completily agree with your thouhts, though we belong to totally different cultures and enviorements and certanly realities Your readings is like a little hand helping me out to be in the market and fight for my devastated country where every single day we looe inches and yards of liberty. You shoul try to writte a book!
Mindeyes
Happy holidays to all members of PSW. Just completed my 6th year and still my favorite site to read. Thank you all for your contributions and support especially you, Phil!
DClark41
Oxen (directly) and Wilkinson (indirectly) are making me a great day trader! Props to Andrew for another little nugget last night: HIG. $20 Dec calls paid 6% quickly this morning. And helloooo STJ - a few days, but nice pick nonetheless - esp with early cover premium.
Dstillwe
Peter D: great write-up for Short Strangles, Part 1, looking forward to Part 2, particularly the adjustment part.
RMM
thanks for the DNDN recommendation last week phil. that was moneeeee….
Kwan
Being on this board is better than successfully completing the Times crossword. Phil's panoply of comments manage to excite, illuminate, frustrate, exasperate, confuse, enlighten, outrage, invigorate and stupefy (and that's par for the morning session only!). But goddammit, it's addictive, informative and when it all goes right extremely profitable.
Winston
I cannot believe the success I have had in the last 6 months because of what I have learned here! It has been truly life changing. It's like the old adage about teaching someone how to fish instead of just giving them a fish. Thank you Phil, I am forever grateful and hope I have helped someone else along the way.
Craigsa620
Way to go Phil! Have I said how much I appreciate your site lately! Your ability to teach and your willingless to give others a forum to demonstrate their own skill sets makes your site remarkable. I got great help from you, jmm1951, and Iflantheman (special thanks!) today. Hell, if I have many more days like this I may even be able to sign up for a full year rather than doing it just quarterly. Tomorrow is another day but, fabulous job today!
dclark41
I have been around for many years now, was a modest inexperienced investor when I started, and I can honestly say I would not be at the point in my portfolio I am today without the guidance of Phil and JeanLuc and Yodi and all the others I've had the pleased of learning from and, on a few occasions meeting, over the years. Truly been a great experience.
RPeri
Phil - It is nice being more discipline with my trading. Generally, I am out earlier than most, but my results, overall, are much better than they were when I was trying to squeeze 80 cups of lemonade out of one lemon! On the other side, I am learning the value of rolling and turning losses into non-losses or small gains. I so appreciate the time you have spent with me and others who have benefited greatly from your knowledge. Thank you!
Dclark41
The strategy you have laid out pretty much mirrors much of my trading activity. I also mix in some momentum plays and "drop dead" bargains that come across my radar. My YTD trading profit is 63%. Back in March when Phil said "unless you think the world is coming to an end, then NOW is the time to start taking positions in Buy/Writes with the VIX so high." I jumped in with both feet - ( thanks, again Phil)
Chaps
Phil,
3 for 3! Sold on initial excitement and made a double on USO, 70% on AMZN and 70% on SPY options from Friday.
Thanks and much appreciated for the suggestions.
Gingbaum
Happy Thanksgiving Phil and to your family and associates. Also to all of the other fellow citizens of Phil's Stock World. I am particularly happy and thankful that I clicked on your article in Seeking Alpha a number of years ago. That opened the gate to Phil's Stock World and "being the house". My wallet thanks you as does my peace of mind in trading options, stocks and rarely futures. Your liberal views opened up my views—being a boot strapper (pulled myself out of a poor background) I was a CONSERVATIVE—cynical of others who weren't as driven. Now, I am much less so; you have taught me more than how to make money and manage risk. So, again I give thanks to you and the others of PSW!!
Newthugger
Don't expect to get rich quick here, but you can get easy 30 - 50 % per year, just by buying good stocks at discount (as we often discuss), selling monthly premiums of calls and puts.
Tchayipov
Phil – Not that you dont usually, but you have DEFINITELY earned your money this week. THe recommendations have been PERFECT. Selling into the initial excitement (MULTIPLE TIMES), hedges, everything. Im reading this when I get home from work and want to cry b/c I cant trade at work! I might have to start getting up at 3 AM though to catch those trades bc youre killing it then too! May you and yours have a blessed weekend!
Jromeha
Thank God for Phil.
A few months ago (April) I didn´t even know what hedging was, and someone recommended I should check out some of Phil´s plays, especially on the retirement portfolio. When I first started to read it, none of it made a blind bit of sense to me, but I stuck with it and gradually began to work through some of the trades to see how it worked. Now I am putting on 5:1 SPY backspreads combined with bear put spreads, entering and leaving positions after consulting the VIX, and engaging in other esoteric maneuvers that are keeping my portfolio above water.
jmm1951
Phil - I followed your great pick re F and sold short the 1011 2.50 puts (200 contracts) and paid for the next 10 years of membership fees…. Thanks!
Gel1
Phil/ I hope the next 5 year bear market will be as much fun and as profitable as this 5 year bull market. For those who survived 2008/2009, and who imbibed the wisdom of PSW, what a time it has been. Good to have you by my side. I think you are selling yourself short – you need to triple your prices :)
Winston
Nice intraday trading calls this week Phil. You have me hooked on trading SPY options analogously to your DIA moves. I paid some tuition the last few weeks but I think I have the hang of it. Don't be greedy and be happy with 0.05 to 0.10 and sometimes you're lucky with much bigger moves. Thanks for the training!
TmDecay
Blessings, ALL: So we have completed two months of 2015. So far it has been a good ride with my PSW all short put portfolio showing a 15.73% gain with $83K in profits harvested in 2015.
IHS4GOD
I have been a member for over six years and I still learn something new every day. This site gives you the skills to trade without having to be spoon fed. More importantly it teaches you about risk which is WAY more important than profit. Honestly, it is not a get rich quick scheme!
Malsg
You guys gotta give it to phil–the voice of reason yesterday, last nite and this morning.
Corleone
I have been a member off and on for years. Using these techniques I do consistently beat the S&P 500. Phil's Stock World has been the most important site in my financial life. It's impact on me over the past years has been huge. As have my tax bills!
Knightpilot
BTW Phil, I wanted to relate a conversation I had with my business partner yesterday. I told him that I have been much more relaxed about my investments ever since I joined your site. It's funny how a 15-20% cushion does to your nerves. My returns have increased dramatically and my risk diminished. Many thanks for the guidance and patience. Good thing I am doing better financially as you might have increased my life expectancy as well!
StJeanluc
Phil/ Thanks to your obsessive bearish anxiety over the last few weeks, I made money on the long side this month, phased gradually to bearish, came in net short today and managed to make money both long and short all week, ending today [and each day this week] in the green. I don't know how you do it, but thank you.
Plunging rents are great news for renters, but they’re lousy news for homeowners. Aaron Task and I discussed this issue on TechTicker this morning:
The vacancy rate for rental apartments in the U.S. is now 7.8% and climbing, says the Wall Street Journal. This is the highest vacancy rate in 23 years.
Worse, the vacancy rate is expected to keep climbing through the winter, ultimately hitting the highest rate on record.
This is good news for renters and bad news for landlords. It’s also bad news for anyone who owns and would like to sell a house.
Why are rising rental vacancies bad news for homeowners?
Because rising vacancies put pressure on rents, as landlords have to cut prices to woo a smaller pool of tenants. As rents drop, meanwhile, one of the key measures of house-price value--the price-to-rent ratio--also changes, and not for the good.
All else being equal, when rents drop, the "Housing P/E ratio" — price to rent — increases as rents decrease. This is the same thing that would happen to the P/E ratio of a stock if the company’s earnings began to shrink.
The more the rent/earnings shrink, the more expensive the house or company is as a multiple of the rent/earnings.
Will people suddenly refuse to pay as much for houses because the price-to-rent ratio rises a bit? No. But they may decide to rent instead of buy, which will remove some demand from the housing market. And, this, in turn, will put pressure on house prices.
The chart below from Calculated Risk illustrates the price-to-rent ratio over the past 15 years. As you can see, it got way out of whack during the peak bubble years and has now fallen back within the realm of normal. As rents fall, however, the ratio will start rising again.
That is, unless house prices fall, too, which is the more likely scenario.
Outside experts hired by Wells Fargo to pour through its books are reportedly shocked at the bank’s exposure to derivatives trades it took on when it acquired Wachovia may trigger huge losses at the bank, Teri Buhl reports at BankImplode.com
It appears that Wachovia wrote credit default swaps on the junior tranches of commercial mortgage backed securities it was selling, which means that it is on the hook for losses in the riskiest CMBS tranches it sold. Wells itself might not even know the size of its exposure, Buhl reports.
From Buhl:
According to sources currently working out these loans at Wells Fargo when selling tranches of commercial mortgage-backed securities below the super senior tranche, Wachovia promised to pay the buyer’s risk premium by writing credit default swap contracts against these subordinate bonds. Should the junior tranches eventually default, then the bank is on the hook. Dan Alpert of Westwood Capital says these were practices that he saw going on in the market at large.
Alpert says in reference to how he saw CMBS trades get done, “These guys would say ‘We’ll just take back that silly credit risk you’re worried about.’ Of course that was a nice increase to earnings when they got the security sold. The bank made money at the time.”
Buhl points out that investors might be caught off-guard if Wells has to start paying out on the swaps it sold. Wells, like most banks, almost certainly holds the credit default swap liabilities off balance sheet and most likely does not recognize them as a loss until they actually have to pay, Buhl writes. Wells says it carefully monitors its derivatives exposure. "We have provided extensive transparent disclosures on our derivatives in our 2008 annual report beginning on page 132,” Wells says.
Here’s Wells own calculation of its derivatives exposure as of the day it closed the Wachovia deal.
But it seems fair to wonder if Wells really understood all of the derivatives exposure it took on when it acquired Wachovia. Buhl wonders if Wells really has enough capital set aside to handle the derivatives liability.
…So could Wells really have enough capital to handle the liability of credit
One year after America’s brush with economic catastrophe, there’s plenty of looking back at the bubbles that caused financial chaos.
But what’s next?
There are surely dangerous economic bubbles forming as we speak. As Alan Greenspan warned this week, "They [financial crises] are all different, but they have one fundamental source," he said. "That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue."
The trick, of course, is spotting them. By definition, most people don’t spot a bubble before they form and burst.
Good news! The rate of the price decline in the housing crash has finally begun to ease.
Bad news! Prices are still falling 18% year over year.
Specifically, in April, according to the Case Shiller index, the rate of decline in nationwide house prices eased slightly in April--to 18% from 19% in March. The rate of decline has hovered around 19%-20% for the last several months. And prices have now declined a staggering 33%-34% from the peak.
As we’ve noted over this period, before house prices can start recovering, they have to stop falling. And the first step toward prices stopping falling is a decline in the RATE at which they are falling. And we are finally beginning to see that.
But we’re still talking about an astonishing rate of collapse. And we’re still looking at a peak-to-trough decline of at least 40% and probably closer to 50% nationwide, which would be unprecedented. And even today, with prices down 33%-34% from the peak, prices are still above fair value.
So the folks who use this slight moderation in the rate of decline to spin tales of a "bottom" or, worse, a "recovery" are smoking something. Prices have at least another 10%-15% to fall, and they’ll likely be falling for at least another year or two.
Here’s the small uptick in the rate of decline:
Prices have now rolled back to mid-2003 levels. They’ll likely be back to 2000 levels before we’re through.
And here’s the positive spin from the S&P press release (always look on the bright side!):
The 10-City and 20-City Composites declined 18.0% and 18.1%, respectively, in April compared to the same month in 2008. These are improvements over their returns reported for March, down 18.7% for both indices. For the past three months, the 10-City and 20-City Composites have recorded an improvement in annual returns. Record annual declines were reported for both indices with their respective January data, -19.4% for the 10-City Composite and 19.0% for the 20-City Composite.
“The pace of decline in residential real estate slowed in April,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In addition to the 10-City and 20-City Composites, 13
The housing market is crashing, and it’s taking us, our banks, our economy, and our government down with it. Why? Because of the debt! The value of our houses is plummeting, but the value of our debt is staying just the same.
You knew that already. What you didn’t maybe know, or at least fully appreciate, is exactly what’s happening in the mortgage market that’s causing all this hideousness.
Well, thankfully, Whitney Tilson has laid it all out for us. START THE TOUR >
In the book, Whitney lays out the whole mortgage disaster in pictorial form, and he has been kind enough to allow us to reprint some of his charts here. If you’d like to see updated, interactive versions, please visit www.moremortgagemeltdown.com. Or just head over to Amazon and buy the book.
We now have data for last week’s initial jobless claims. The number is staggering. 6.6 million filed for unemployment insurance for the first time last week. During the prior week it was 3.28 million. These numbers take your breath away.
Chart via WSJ
Here’s the even worse news – this only records the people who have successfully filed. Many, many more have been locked out of the system so far due to the overwhelmi...
Amid the chaos of an epidemic, those who survive a disease like COVID-19 carry within their bodies the secrets of an effective immune response. Virologists like me...
Having reached near-record high levels of consumer comfort in late-January, Bloomberg's Consumer Comfort Index has plunged to its lowest since June 2018.
Source: Bloomberg
This is the biggest two-week drop in comsumer comfort... ever...
Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.
What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.
There is only one article in this special supplement, click on the image or link below to download and read it today!
By Jacob Wolinsky. Originally published at ValueWalk.
Below is a statement from the Independent Restaurant Coalition on the start of the Paycheck Protection Program, which comes a day after the Department of Labor announced a historic surge in unemployment claims. In the last week, over 6.6 million Americans filed for unemployment bringing the total people out of work to over 10 million.
“The short-term relief made available through the Paycheck Protection Program in the CARES ...
Global food behemoth Nestle (OTC: NSRGY) is "scrambling to meet demand" to keep the world fed, but doesn't want to take much credit, as "this is our main purpose at this hour," CEO Mark Schneider said Wednesday during a "Mad Money" interview with Jim Cramer.
Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...
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...
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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...
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coordinator for PSW.