Weekly Update Ended Nov 18, 2017
Last week was another week where the indices were basically flat to slightly higher on continued fallout from the mess in Washington. The Nasdaq finished higher on the week thanks to that spectacular rally this past Thursday but the Dow and S&P were lower on the week.
For the week among the FAANG names:
Apple finished lower by $4 and change;
Bezos was up $4 and change;
Googly was down about $10
Zuck was higher by a few dimes
Flixsta was up a buckeroo.
However as all of you know a flat week plays havoc in options-land and so it was gratifying to see that our portfolio hung in there, thanks to gains in the smaller Chinese companies. I am thrilled that our mini-account is now up 30% in two months and while the absolute dollars is not much to write home about, its the returns all of us should be focused on. To be up 30% in a month and a half is not easy. Take a look at the performance of 95% of the mutual funds out there.
Moving on to the China basket:
Within the BATS quartet:
Baidu was up a couple of bucks on the week;
Jack (BABA) was down a buck and small change,
Tencent (TCEHY) added about $2.50/share
and SINA was higher by half a buck or so.
With ER season now mostly behind us wth the exception of a couple of names in our China basket, the focus will now turn to Holiday sales and of course the political mess in Washington and across the pond with Brexit and German political issues.
Our futures are indicating a lower open, as usual, with e-mins down 2.25 and Nazz futures off by 2.
The jaysomaney.com account ended slightly higher on the week and is now up 244% year-to-date versus 243% from a week ago and 234% two weeks ago. The liquidation value as of this past Friday is now at $905,246 (plus the $6,483 in the min-account) which gives us $911,729 in net liquidation with $671,915 of that in cash (includes cash in the min-account), up quite a bit from the prior week.
Cash in the account is admittedly high and I am still looking for optimal deployment of that cash. Given the fact that not only are our indices at all-time highs but so are global indices at all-time highs, a bit of caution might not be a bad thing at all. However, having said that, there are still a few stocks that are still cheap despite their absolute performance.
The moment I find an opportunity that I like, I shall do so. If not, then not, I guess. 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.
The markets backed off all-time highs last week and I expect that they will continue to stutter step higher going forward. My goal is to finish the year with a sharp move higher as well as far as our portfolio is concerned.
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.
THIS NEXT SECTION IS FOR THOSE OF YOU WHO WISH TO HEDGE YOUR PORTFOLIO-- I WILL MORE THAN LIKELY ALSO LEAVE THIS SECTION IN PERMANENTLY.
Use the same hedges as last week as these hedges should provide you the most bang for your money all things being equal. Buy any one or buy them all depending on the size of your account and the extent you wish to hedge your account(s).
Go Long SQQQ or buy SQQQ Calls (SQQQ is proshares ultrashort QQQ-leveraged 3x)proshares ultrashort QQQ-leveraged 3x)
Buy QQQ Puts
Buy Puts on any of the FANG names (most volatile) or short the names individually if you prefer
Go long SDS or buy SDS Calls (SDS are the proshares ultrashort S&P500--leveraged 3xproshares ultrashort S&P500--leveraged 3x
PLEASE NOTE THESE HEDGES ARE JUST MY SUGGESTIONS. AS SUBSCRIBERS VERY WELL KNOW, FOR ME, CASH IS (and has always been) THE BEST HEDGE. IF NOT CASH, IT'S EQUITY SINCE THAT CAN BE CONVERTED TO CASH IN SECONDS.
Remember, it is you who hits the buy button or sell button each and every trade and there are no exceptions there at all.
We are light on the economic data front this week as well on the ER front too and thankfully we have zero scheduled Fed speeches this week.
Leading Index (): 0.6% expected
Chicago Fed Nat Activity Index ()
Existing Home Sales (): 5.41m expected
MBA Mortgage Applications ()
Initial Jobless Claims ()
Continuing Claims ()
Durable Goods Orders (): 0.3% expected
Durables Ex Transportation (): 0.4% expected
Cap Goods Orders Nondef Ex Air (): 0.3% expected
Cap Goods Ship Nondef Ex Air ()
Bloomberg Consumer Comfort ()
U. of Mich. Sentiment (): 98.0 expected
Markets Closed for Thanksgiving
Markit US Manufacturing PMI ()
Markit US Services PMI ()
Markit US Composite PMI ()
? Mon 11/20
? Open: Bitauto Holdings (BITA) Already declared and in our lttle chat room
? Close: Vipshop (VIPS), ZTO Express (ZTO), Agilent (A), Urban Outfitters (URBN), Intuit (INTU), Palo Alto Networks (PANW)
? Open: Lowes (LOW), Medtronic (MDT), Dollar Tree (DLTR), Jacobs (JEC), Analog Devices (ADI), Burlington Stores (BURL), Dycom (DY), DSW (DSW), Daktronics (DAKT)
? Close: HP (HPQ), Hewlett Packard Enterprise (HPE), Salesforce (CRM), GameStop (GME), Baozun (BZUN), Guess? (GES)
? Open: Deere (DE)
Until next week, may the trading Goddesses and Gods smile on all our tradesm investments and dice throws.