I did finish that November Portfolio Review, by the way.
Minimum Wage/StJ – I had a paper route in 1973 and I made about $20/week (good for a 10-year old!) and that was probably about $2/hr and, on the highway near where I walked was a billboard for a VW Beetle at $1,999 and my realistic plan (not imagining I was going to get better jobs at the time) was to save half my wages for the next 5 years so I could buy a new car as soon as I got my learner's permit.
Even at that level, making sub-minimum wage in a part-time job, it was realistic for me to plan on owning a new car – that's certainly not true for people making $7.25 today!
That paper route, by the way, is how I became so political when I was young as I used to read the papers I delivered and it was during Watergate and I found the whole thing fascinating.
Why/StJ – Well, it's an election year, they will do whatever it takes to keep the economy going – and that includes incumbent Democrats who also want to keep their seats.
Kudlow/Tommy – See above – CNBC.
OK, you guys know how I feel about CMG over $820 so it's time for another short in the STP as $820 is $23Bn and EVEN CMG doesn't think they are going to make more than $500M in 2020:
|Year End 31st Dec||2013||2014||2015||2016||2017||2018||TTM||2019E||2020E||CAGR / Avg|
So 46x earnings is kind of steep for a restaurant stock and any misstep can send them flying over and I see no way people will pay 50x so 10% higher would be extreme so we can do something similar to our BKNG spread, that's been very good to us for the STP:
- Buy 2 CMG 2021 $920 puts at $150 ($30,000)
- Sell 2 CMG 2021 $820 puts at $95 ($19,000)
- Sell 2 CMG March $900 calls for $22 ($4,400)
- Sell 2 CMG March $750 puts for $22 ($4,400)
That's net $2,200 on the $20,000 spread that's 95% in the money to start and, of course, we will have 3 more chances to sell $8,800 in premium ($26,400) so the profit potential on this spread is over $40,000 (1,818%) if all goes well (it rarely does). Still, so many ways to win in between makes it a great play while we have $500,000 of LTP money sitting around doing nothing.