Weekly Update Ended Oct 14, 2017
Last week was another week where all three of our indices saw all-time highs, intra-day and closing as well. There was no respite from the Fedheads, geopolitical issues and the mess that is DC, however, with a global economic recovery tenderly underway, almost all major global markets are trading at multi-year highs if not all-time highs.
I finally found, three names that I like a lot to open up trading in our $5,000 mini-account. Hopefully, over time, I will be able to demonstrate to subscribers that one does not need a fortune to make a nice amount of money. Of course, "nice amount of money" can mean different things for different people. I am talking within reason. IN any case, of the three positions in the mini-account, we are up 33% in one, flat in the second and down 25% in the third. I tried to add to the third position on Friday but was unable to get a fill. We shall see what this week brings us.
Our futures are indicating a flat open for the S&P and slightly higher for the Nazz but we still have over 2 hours before the opening bell. Overseas markets were bullish in Asia but are treading water in the EC as they await our opening cues.
Tonight after the closing bell we will get earnings from NFLX and it will more than likely set the tone for techland, at least for the next day or so. The shares are trading at all-time highs however, they are trading just $7-$8 per share higher (as of Friday's closing levels) than where they traded soon after the earnings report for the June quarter.
We shall see what the day brings us ahead of the report tonight.
The jaysomaney.com account ended slightly higher on the week and is now up 200% year-to-date versus 191% from a week ago and 178% two weeks ago. The liquidation value as of this past is now at $790,402 (plus the $5,045 in the min-account) with $569,022 of that in cash (includes cash in the min-account), up slightly from the prior week. The markets have made all-time highs last week and I expect that they will continue to stutter step higher as well. My goal is to finish the year with a sharp move higher as well as far as our portfolio is concerned.
I remain very high in cash as I have been all year long, however, such high cash levels is the best hedge that one can have as well and prevents panic-induced sell moves when the market seems like the end of the world is imminent.
As is the norm, I received a few emails this past week and over the weekend, wondering when I would use my cash and again, I understand that my cash levels are very high and the account would be worth a lot more (2x, 3x, who knows) if I would be all in. However, I am comfortable with the amount of cash we have right now in the account. At some point, I will find a home for that money. In case I don't, it's not a big deal to me.
For those of you that would prefer to spend the money on hedges, I have my usual suggestion below and you should feel free to buy that protection on the downside if you feel the need.
Ultimately the choice is always yours, long, short or straddling the fence.
Please note that in the fund I maintain hedges and spend about 1% per week on those hedges. I am far more aggressive in the fund and the returns there are able to bear the costs of the hedges that I maintain. Incidentally, 90% of those hedges expire worthless.
As always, please check your inboxes for a list or trades that I made last week.
Here we go with the usual:
Please keep your positions in size with your account size (value). Most importantly please remember that I am running a marathon here and not a sprint. I am in no hurry whatsoever for any position and thus will not enter a position unless I feel the risk/reward is stacked in my favor. Yes, I will occasionally have positions work against me despite the risk/reward prior to the trade but if I was batting a thousand, none of us would be in our little room. We would all be on our own private islands. Even more important for all of us to remember that trades and opportunities will come no matter what the markets are doing.
Please, please don't roll the dice and don't bet on anyone single position without keeping the size relative to your overall account. I promise you even 1 or 2 call options at a time add up to spectacular returns over time.
There is nothing worse than seeing someone (new or experienced) blow up his/her own account by going "all in", long or short. Please avoid those sort of "investments" As my dad used to tell me all the time, "Rome wasn't built in a day".
Remember together we will all get there, wherever that may be for each of us individually.
Not a sprint but a marathon. (This is the most important takeaway for all of us) Will always hold true as far as I am concerned no matter what anyone else thinks on the outside.
Confirmed Fed Speeches:
? Monday 10/16
o Neel Kashkari ()
o Stanley Fischer
o William Dudley and Robert Kaplan ()
o Janet Yellen
o Loretta Mester ()
We are heavy on the economic data once again this week:
Economic Data (*all times ET)
Empire Manufacturing (): 20.4 expected
Import Price Index MoM (): 0.5% expected
Industrial Production MoM (): 0.2% expected
Capacity Utilization (): 76.1% expected
Total Net TIC Flows ()
Net Long-term TIC Flows ()
MBA Mortgage Applications ()
Housing Starts (): 1180k expected
Building Permits (): 1220k expected
Initial Jobless Claims ()
Philadelphia Fed Business Outlook (): 20.3 expected
Continuing Claims ()
Bloomberg Consumer Comfort ()
Leading Index (): 0.1% expected
Existing Home Sales (): 5.30m expected
? Mon 10/16
? Close: Netflix (NFLX), Celanese (CE), IDEX Corp (IEX), Brown & Brown (BRO), Equity Lifestyles Partners (ELS), Sonic (SONC), Badger Meter (BMI), KMG Chemicals (KMG)
? Open: UnitedHealth (UNH), Johnson & Johnson (JNJ), Morgan Stanley (MS), Goldman Sachs (GS), Progressive (PGR), CSX (CSX), Grainger (GWW), Harley-Davidson (HOG)
? Close: IBM (IBM), Lam Research (LRCX), Canadian Pacific (CP), Select Comfort (SCSS), Interactive Brokers (IBRK), Navient (NAVI), Cree (CREE), Hancock Holding (HBHC)
? Open: Abbott Labs (ABT), U.S. Bancorp, (USB), Supervalu (SVU), ASML (ASML), M&T Bank (MTB), Northern Trust (NTRS), UniFirst (UNF), MGIC Investment (MTG)
? Close: United Continental (UAL), American Express (AXP), Alcoa (AA), Steel Dynamics (STLD), Crown (CCK), eBay (EBAY), United Rentals (URI), Crown Castle (CCI)
? Open: Nucor (NUE), Danaher (DHR), KeyCorp (KEY), Taiwan Semi (TSM), Verizon (VZ), Philip Morris International (PM), Travelers (TRV), SAP AG (SAP), Genuine Parts (GPC), BNY Melon (BK), PPG Industries (PPG), Snap-On (SNA)
? Close: PayPal (PYPL), NCR Corp (NCR), Intuitive Surgical (ISRG), Hawaiian Holdings (HA), E*TRADE (ETFC), athenaHealth (ATHN), Proofpoint (PFPT), Del Taco (TACO)
? Open: General Electric (GE), Schlumberger (SLB), Ericsson (ERIC), Proctor & Gamble (PG), Honeywell (HON), Baker Hughes (BHGE), Manpower (MAN), Synchrony Financial (SYF), SunTrust Banks (STI)
Until next week, may the trading Godesses and Gods smile on all your investments and trades.