The following is a review of open positions, courtesy of Robert Weinstein's Paid2Trade, with values, as of Wednesday's close (with the exception of LULU, which comes from just after Thursday's open):
- Long 200 shares of Amazon.com (AMZN). Short 2 AMZN April $190 calls. Value: $38,346 (+ $1,442).
- Long 2,000 shares of Pandora (P). Value: $21,440 (- $560).
- Long 5 Netflix (NFLX) January 2013 $130 puts. Value: $14,925 (-$2,825).
- Long 200 Wendy's (WEN) January 2013 $5 calls. Value: $13,000 (+2,000).
- Short 5000 shares of Sirius XM (SIRI) (+100).
- Long 5 Lululemon (LULU) September $75 calls. Value: $3,650 (- $350)
- Long 5 Krispy Kreme (KKD) August $10 puts. Value: $1,275 (+ 125).
Coupled with a cash balance of $10,445, the total value of the $100,000 portfolio (excluding the short sale) stands at $103,081. That's far from the somewhat unrealistic goal of $500,000, but it's not an impossible task.
Selling to close the NFLX puts. I do not necessarily want to do this, but, while I fully expect a 2012 implosion or two, I don't feel too confident about the timing. It very well could happen at the same time it did last year. Frankly, in this type of portfolio I just do not want to bide my time waiting. That said, in "real life," I am looking at NFLX ATM puts.
That move brings the cash balance up to $25,370. And I am taking advantage of weakness in LULU at the open and piling into more September $75 calls at $7.30 a pop. I'll take 20 of them for a total of $14,600. That knocks the cash balance down to $10,770.
As I was writing this part of the article, I made the LULU purchase as the stock went on a wild ride just after the open. You'll have to just trust that I am not pulling any funny business and I went into the morning intent on buying more LULU calls on weakness. Here's a Seeking Alpha StockTalk posted shortly after I picked up additional September $75 calls:
As a result of the wild ride, I did not update anything but LULU from yesterday's close. I will post an update later on at Robert Weinstein's Paid2Trade. But, really, the exact totals do not matter here; this market is a real-time wild ride always in flux, particularly on the stocks and options I trade and invest in. Plus, I wanted to focus on LULU in this article.
At least one analyst is freaking out in the aftermath of LULU's somewhat mixed earnings report:
"Why the below consensus guidance for the fiscal year? Sure it may prove conservative given sales trends and the prospect of lower garment costs, but what is this company seeing that the bulls on Wall Street aren't?" says Brian Sozzi, NBG Productions' chief equities analyst.
This type of stuff from the "analyst community" pathetically persists. And it also makes me thank my lucky stars for Seeking Alpha. When Brian asks this question - What is this company seeing that the bulls on Wall Street aren't? - he makes me chuckle. As if anybody on Wall Street truly matters to anybody inside Lululemon Vancouver.
Some guys (and girls) on Wall Street can hardly see past the tip of their collective nose. However, it's abundantly clear, based on how well LULU is holding up this morning, that a meaningful segment of the big money gets it. AMZN and P also provide support for the notion that bulls in these types of hyper-growth companies realize that they're running rapidly-progressing businesses, not conducting well-controlled science experiments.
Despite what so many MBAs will try to tell you, "laws" of business do not exist like laws of psychics. What goes up does not have to come down. And sacrificing this or that (margins, lowering guidance, etc.) does not necessarily equate to long-term doom. It's short-term pressure. If investors listened to Wall Street's bears and did not buy during times of ultimately fleeting weakness, stocks like Apple (AAPL) and AMZN would not have made throngs of folks in retail wealthier and, in some cases, rich.
Like Apple and Nike (NKE), companies such as AMZN, P and LULU will stand the test of time. They'll be here in 2020. And they will have constructed dominant franchises to help another generation of investors build that wealth. It just cannot possibly happen overnight, nor can it occur without myriad obstacles along the way.
Additional disclosure: I am long P, WEN. I am long NFLX June $40 put options.