It’s a good thing Sage told us how to manage a $1M Portfolio last weekend, because if we have another few weeks like that, our $10K Portfolio could end up at $1M!
This week we closed 61 positions with a crazy average gain of 366% but that includes a few ridiculous gains from BE Aerospace, Inc. (BEAV) (13,900%), PetroChina Company Limited (PTR) (800%) and Titanium Metals Corporation (TIE) (1,525%) as we had sold positions against them and reduced the basis followed by huge gains. Taking those out lowers the average gain to "just" 109%, but the cash gain on these positions was a very healthy 214% so I’m very proud of that. Our average hold time this week was a healthy 24 days but the remaining positions have been open days, indicating they are getting a little long in the tooth.
Let’s remember that this started out as a week I was trying to get out of. We tossed 17 positions on Monday alone, but in the end, we finished the week with 80 open positions in our Short-Term Portfolio as new plays just kept popping up! Tight stops all week are the reason we closed so many big winners and there are 14 puts and 10 hedges leaving just 24 uncovered Short-Term calls. (Then again, there are 18 Jan ‘08 and ‘09 positions auditioning for our LTP). That means I must be shot-term bearish again - but I was last weekend and I was dead wrong, so we’ll continue to go with the flow as logic has simply gotten us nowhere in this market.
The 80 remaining open positions have an average gain of 36%, but a cash loss of 6.6% as our
Diamonds Trust, Series 1 (DIA) $132 put covers are now a net loss against much less gains, but it will all work itself out at the month’s end. There are only 16 May positions left. Seven are calls we sold against longer positions and four are puts, another indication of my short-term outlook!
The Long-Term Portfolio picked up 14% in value for the week, now with an average gain of 188% on 44 positions after 77 average days open. That portfolio would be in much better shape without my huge loss on the ExxonMobil Corporation (XOM) ‘08 and ‘09 $75 puts. It’s my bad for not selling closer puts against them, as we would have cleaned up!
Our $10,000 Portfolio is now the $18,262 Portfolio, and the consensus of the members is we will do a reset at expiration. My solution for this is to move the open positions we want to keep into the STP and start with a fresh $10,000, which frankly keeps it more interesting for me as I have to perform every month under changing market conditions. We only have $5K invested at this point as I haven’t felt very safe about small opportunities this week. A $1K gain on $5K is pretty good for the week, however, and we will be doing a very nice ka-ching when the Dendreon Corporation (DNDN) calls we sold expire.
Our 19 position Stock Portfolio had a good week and is up and average of 28% after 62 average days, but our cash gain there is just 3.3% as the Tesoro Corp. (TSO) shorts continue to kill us. There are also the DNDN $17.50s we sold there against our existing $16.40 position that are hitting us for $5K on paper, but will become a net win at expiration.
With all this good news in the portfolio and all these great levels being made in the markets, why am I still bearish? Well, while the Global economy is still going like gangbusters, I just don’t like the larger economic picture in this country. We are pursuing a very irresponsible fiscal policy and, rather than doing its job, the Fed has taken on the role of economic cheerleader, assuring us that everything is fine and urging us to pay no attention to the debt behind the curtain.
This is a great plan, as long as our foreign friends are willing to look the other way and ignore the sound of our printing presses which have to run day and night in order to pour an additional $100Bn a month into the Global Marketplace. My gal Abby Cohen of Goldman Sachs Group, Inc. (GS) has moved into my Dow 13,500 camp, not particularly brave now that we crossed 13,250. It’s nice to get some "official" support, though.
Without the massive decline in the dollar, our markets simply wouldn’t look so hot. Floyd Norris hit the nail on the head by measuring the 88-month recovery in the S&P (finally back to the 2000 highs) against several other indicators:
• Changes in the S&P Index
• We are up 18% against the Yen (our only win).
• We are down 35% against the Euro
• We are down 25% against the Pound
• We are down 70% against the price of Gold
• We are down 35% against a barrel of Oil
• We are down 50% against a bushel of Corn
• We are down 60% against the price of a Home
My glass half full scenario we’ve been pursuing is that this means the S&P still has a tremendous amount of catching up to do, but a pessimist may say that U.S. stocks have not been such a hot investment over the past seven years, and we are still a long way from proving the absolute value of equity investing.
I will feel much better after a correction, but until then, I will probably end every good week still worried about the week ahead, as I can only manage to go with the flow so far without feeling the need to grab a life preserver. One market positive I see is that a lot of people are still worried about the market, so I wouldn’t classify the exuberance as irrational just yet (only for certain sectors). I’m very excited that we held up so well with Asia closed, but now I’m concerned that their open next week will cause those markets to play catch-up and suck Euros away from our market.
I already feel much better moving us to well over half cash as we have plenty of great plays to make if this rally continues and not too much to give up if we do get a correction as we have very few front-month positions remaining:
|Symbol||Strike||Type||Date||Qty||Price Paid||Price Sold||Date Sold||P/L||Profit % |
|AAPL||5/1||$ 100||C||4/27||50||$1.50||$ 2.50||4/30||$ 1.00||67% |
|AAPL||10/1||$ 100||C||4/25||20||$7.65||$ 9.70||4/30||$ 2.05||27% |
|AAPL||5/1||$ 100||P||4/26||50||$1.60||$ 1.80||4/30||$ 0.20||13% |
|AMZN||6/1||$ 45||C||4/24||50||$2.25||$ 16.75||5/2||$ 14.50||644% |
|BEAV||7/1||$ 35||C||2/5||20||$0.05||$ 7.00||4/30||$ 6.95||13900% |
|BIDU||5/1||$ 115||C||4/26||-5||$3.60||$ 7.70||5/1||$ 4.10||114% |
|CME||5/1||$ 520||P||4/23||10||$4.00||$ 9.50||4/30||$ 5.50||138% |
|COP||5/1||$ 65||P||4/3||100||$ 0.50||$ 0.30||5/1||$ (0.20)||-40% |
|COST||5/1||$ 55||C||4/27||20||$ 0.70||$ 0.50||5/1||$ (0.20)||-29% |
|CVX||5/1||$ 75||P||4/10||10||$ 0.80||$ 0.50||5/1||$ (0.30)||-38% |
|CY||6/1||$ 23||C||4/25||5||$0.90||$ 0.85||5/1||$ (0.05)||-6% |
|CY||1/1||$ 20||C||3/30||5||$3.05||$ 5.10||5/1||$ 2.05||67% |
|CY||1/1||$ 23||C||2/26||5||$2.40||$ 3.60||5/1||$ 1.20||50% |
|DIA||6/1||$ 124||C||12/18||160||$4.00||$ 8.40||4/30||$ 4.40||110% |
|DNDN||5/1||$ 20||P||5/4||20||$6.00||$ 6.60||5/4||$ 0.60||10% |
|EBAY||5/1||$ 33||C||4/24||-20||$1.75||$ 1.40||5/1||$ (0.35)||20% |
|EBAY||6/1||$ 35||C||4/18||30||$1.20||$ 1.30||5/4||$ 0.10||8% |
|EBAY||6/1||$ 33||C||4/24||30||$2.00||$ 2.40||4/30||$ 0.40||20% |
|FDG||1/1||$ 25||C||4/23||10||$1.30||$ 2.25||5/3||$ 0.95||73% |
|FHN||8/1||$ 40||P||2/27||30||$0.80||$ 2.10||5/3||$ 1.30||163% |
|FXI||5/1||$ 110||C||4/20||-60||$1.00||$ 1.00||4/30||$ -||0% |
|FXI||5/1||$ 106||C||4/30||-60||$2.80||$ 2.80||5/1||$ -||0% |
|GE||5/1||$ 35||C||4/25||100||$0.55||$ 2.25||5/4||$ 1.70||309% |
|GOOG||5/1||$ 470||P||5/2||-30||$8.20||$ 7.25||5/4||$ (0.95)||12% |
|HAL||5/1||$ 33||C||4/25||40||$0.50||$ 0.60||4/30||$ 0.10||20% |
|ICE||5/1||$ 130||C||4/1||-60||$3.00||$ 4.00||5/3||$ 1.00||33% |
|ICE||5/1||$ 135||C||4/20||-60||$6.15||$ 1.60||5/1||$ (4.55)||74% |
|IGW||5/1||$ 65||C||4/26||-10||$1.55||$ 0.90||5/3||$ (0.65)||42% |
|INTC||7/2||$ 23||C||4/17||50||$0.19||$ 0.74||4/30||$ 0.55||289% |
|MA||6/1||$ 120||C||5/1||10||$2.50||$ 10.30||5/2||$ 7.80||312% |
|MA||6/1||$ 110||P||5/1||10||$2.90||$ 0.40||5/2||$ (2.50)||-86% |
|MDT||5/1||$ 50||C||3/26||20||$1.20||$ 3.25||4/30||$ 4.30||358% |
|MON||5/1||$ 60||C||4/24||10||$0.90||$ 1.20||4/30||$ 0.30||33% |
|NKE||5/1||$ 55||C||4/4||20||$0.75||$ 0.55||4/30||$ (0.20)||-27% |
|PBR||5/1||$ 105||C||4/27||10||$1.85||$ 1.85||4/30||$ -||0% |
|PEIX||5/1||$ 15||C||4/16||-10||$1.65||$ 0.30||5/1||$ (1.35)||82% |
|PTR||6/1||$ 125||C||2/27||10||$0.10||$ 0.90||4/30||$ 0.80||800% |
|QCOM||5/1||$ 45||C||4/27||4||$0.85||$ 2.15||4/30||$ 1.30||153% |
|QLGC||7/1||$ 18||P||4/30||20||$0.62||$ 1.45||5/4||$ 0.83||134% |
|QQQQ||5/1||$ 46||C||5/1||500||$0.64||$ 1.05||5/4||$ 0.41||64% |
|S||1/1||$ 20||C||3/22||20||$1.70||$ 2.25||4/30||$ 0.55||32% |
|SHLD||5/1||$ 190||C||4/19||-30||$5.85||$ 0.45||5/4||$ (5.40)||92% |
|SHLD||6/1||$ 185||C||2/12||20||$2.70||$ 11.00||5/1||$ 8.30||307% |
|SLB||6/1||$ 80||C||4/27||10||$1.60||$ 1.25||4/30||$ (0.35)||-22% |
|SNDK||5/1||$ 45||C||4/20||-10||$2.20||$ 0.32||5/1||$ (1.88)||85% |
|SU||5/1||$ 80||P||4/27||80||$0.90||$ 1.70||5/1||$ 0.80||89% |
|TASR||6/1||$ 10||C||4/30||100||$0.14||$ 0.50||5/3||$ 0.36||257% |
|TIE||6/1||$ 35||C||2/1||60||$0.20||$ 2.15||4/30||$ 3.05||1525% |
|TM||6/1||$ 125||C||4/24||-20||$3.85||$ 2.10||5/3||$ (1.75)||45% |
|TSO||5/1||$ 105||C||4/24||10||$6.50||$ 20.50||4/30||$ 14.00||215% |
|TSO||5/1||$ 115||C||4/25||-10||$ 5.50||$ 7.20||4/30||$ 1.70||31% |
|TSO||5/1||$ 105||C||4/24||10||$6.50||$ 14.50||5/2||$ 8.00||123% |
|TSO||8/1||$ 115||P||4/30||40||$ 5.40||$ 8.00||5/2||$ 2.60||48% |
|TSO||5/1||$ 125||P||5/2||-50||$ 6.60||$ 5.60||5/2||$ (1.00)||15% |
|TSO||5/1||$ 120||P||4/2||150||$ 2.75||$ 6.00||5/3||$ 3.25||118% |
|TSO||8/1||$ 105||P||4/26||40||$ 3.90||$ 4.80||5/3||$ 0.90||23% |
|TSO||5/1||$ 120||P||4/2||150||$ 2.80||$ 3.35||5/2||$ 0.55||20% |
|TSO||5/1||$ 120||P||4/2||150||$ 2.80||$ 4.25||5/2||$ 1.45||52% |
|UNH||5/1||$ 55||C||4/30||60||$0.19||$ 0.45||5/3||$ 0.26||137% |
|XOM||5/1||$ 80||C||4/25||20||$1.55||$ 1.90||5/4||$ 0.35||23% |
|YHOO||5/1||$ 33||C||4/16||100||$0.55||$ 1.70||5/4||$ 1.15||209% |
|YHOO||6/1||$ 30||C||4/26||100||$0.40||$ 4.20||5/4||$ 3.80||950%|
The full portfolio will be available for download on the members site and, with just two weeks left to go, it is time for another Long-Term Portfolio review but let’s be ready for anything this week - it should be another good one!
Have a nice weekend,