Bull or Bust

a bull's view

WESTERN DIGITAL (WDC) BUY

WESTERN DIGITAL (WDC) BUY

Unfortunately, we could not get stock quote wdc this time.

The chart tells me it could retrace back to mid-60’s if it really wanted to. However, it is currently sitting dead on the 200 day moving average of $79.16 and I do not see it going under $70. I very much consider WDC best-of-breed in the storage industry.

Therefore, I highly recommend selling the JAN 70 PUT @ $4.33 each. Return will be roughly 1.2% per month and break-even would be around $65.67 using Thursday pricing – which is perfect.

It should open lower on Friday making this trade even better. If it keeps falling simply sell more PUT’s for more premium. Remember market 12 month PT is around $110 average with $140 upper-end. I consider this N. Korea bullshit a buying opportunity.

Worse-case you own it at $65 and you can sell calls against it…

THURSDAY, AUGUST 10, 2017

THURSDAY, AUGUST 10, 2017

Hello everyone! Hope this earnings season has made you rich! The market has been somewhat boring this week, but keeps clawing its way higher. I was having a great day on Tuesday until Ping-Pong N. Korea dude ruined the momentum. Luckily, I have been extraordinarily busy with my day job so I’ve let things sit. I believe this has helped and allows me to clear my head with work before deciding on trades. Always a good thing…

Remember: as long as you hold strikes you’re willing to exercise you can never get truly burned. My current WDC holding is a prime example. I’m getting burned, but I knew $80 would be close to the bottom if it dipped so I bought the 70 and 80 calls for Jan. Some of them before earnings and some after to lower my cost basis. I’m ok with holding all until expiration and making my decision. I already know I’ll call if necessary.

WHAT I’M WATCHING

I have a core group I’m holding in the options (trading) portfolio for now. I trade options on equities that pay no dividend (for the most part) and invest in equities that pay dividends (separate portfolio). This has always been my strategy and it works very well. My core options (trading) group consists of the following:

Nvidia Unfortunately, we could not get stock quote nvda this time. EARNINGS AFTER THE CLOSE TODAY! This is a big day for NVDA and I’m all excited! I am holding roughly 700 shares through options including long positions and spreads. I believe we’re going higher, but have enough cash to catch another dip. Should be interesting!

Western Digital Unfortunately, we could not get stock quote wdc this time. WDC pays a dividend, but it’s just too risky currently (and not a good enough dividend) to hold in the other portfolio. As stated above, I’m holding the Jan 2018 70 & 80 Calls and plan to exercise.

Pandora Unfortunately, we could not get stock quote p this time. Suppose I should have closed my spread right before earnings, but regardless I’m still profitable $40.00 and holding. It’s starting to inch back up. I’m staying positive.

Dominos Unfortunately, we could not get stock quote dpz this time. Again, this one pays a dividend as well, but rather volatile currently and not a large enough dividend to make it worth it. I’m holding the Sept 200 / 210 Call Spread and I’m down.

Rite Aid Unfortunately, we could not get stock quote rad this time. You’ll be seeing this one on the list until Jan 2019 (yes, that’s correct). I hold 125,000 shares worth of LEAP long call options on this puppy and I’m actually profitable 3.88% currently (if you can believe that). The 2019’s have always been profitable. It was the 2017 July and Aug that ate my lunch. The 2019’s were my original trade and I should have stuck with my gut! I need $4.50-$4.85 per share to clear roughly $30,000.00.

MARKET IN THE FALL

Let’s face it…this is the beginning of the end of 2017. It’s been fun! It’s been exciting! It’s been highly lucrative! I am currently up 35% or so on the trading portfolio and 12.5% on my stock portfolio. Not too bad. I consider everything after Labor Day risky and the time to sit back and watch the market (and college football!!). I have no regrets (except maybe 3D Systems that I lost $3700.00 on last week – ouch!). I calculate had I not executed 3D and Rite Aid I would probably end the year up over 50%.

I figure it’s worth a few risks here and there if you can remain up over 35% for the year. I mean really? My professionally managed portfolio is up 8%…I win!

I like to wait until after Thanksgiving and Christmas to scoop up some good deals so I’m looking forward to that. My point is: if you haven’t made your money for 2017 you’re probably not going to. I anticipate a rally during October, but that’s it. If you have made money and you want out I would wait until mid-October.

MORE TO COME…

THURSDAY, AUGUST 3, 2017

THURSDAY, AUGUST 3, 2017

stocksMan, time really is flying this year. I just realized how long it has been since I created a post and cannot believe it! So what’s been going on? Well, a little bit of this and a little bit of that, but mostly work. I have been watching the market close and I must say I’m proud of my recent trades.

MY 2017 YTD MISTAKES

I was discussing this with someone yesterday and explained my opinion on how very easy it is to jump off the rails at any given moment. This is precisely why (I have determined) most people cannot manage their own money. I have a fantastic strategy that works very well, but it is my own greed and risk tolerance that creates problems.

At one beautiful moment I was up over 41% YTD after commissions and I would be much higher had I kept my train on the rails. This sounds fake or like bs, but it’s true. Most settle for 4% a year and hope for 8% maybe? Even after all of my mistakes, if they all go to zero I will still finish the year up over 8%.

However, the houses money was calling my name and I took a few risks I shouldn’t have…mainly Rite Aid Unfortunately, we could not get stock quote rad this time. which really and truly is not down that much (roughly a grand right now), but it cost me a fortune in commissions. I still own 125,000 shares worth of call options until January 2019 so I have some time on that one. In fact, it jumped nearly $2,000.00 today and then went right back down. I need $5.00 a share sometime in the next few months and I’ll clear something like $100,000.00 haha.

LOST MY ASS LAST 30 DAYS

Twitter Unfortunately, we could not get stock quote twtr this time. I am done with Twitter. I like the platform, but the stock just doesn’t like me. I have tried and tried, but I’m out for good.

Pandora Unfortunately, we could not get stock quote p this time. I still own the 10/12 call spread for Jan 2018 and plan to hold until expiration. I was profitable more than 30% before earnings, but now I am negative 5% or so. Not a bad place to be, but I would prefer to be positive. I own 2000 shares worth of calls.

3D Systems Unfortunately, we could not get stock quote ddd this time. What can I say…OUCH! Got nailed for the tune of around $3,600.00 on this one. Owned 5000 shares worth of the Aug 19 call’s and earnings ate my lunch. I suppose I have no choice but to hold until expiration to expire worthless. Sure would be nice if it would pop back to $18.00 before the 18th, but that’s wishful thinking.

This is where I jumped the rails. I should have stayed away from 3D. Too risky. I should have at LEAST put half on 3D and kept half on TTWO. What really, really, pissed me off was the fact I owned a ton of the Jan 70 calls of Take-Two Interactive Unfortunately, we could not get stock quote ttwo this time. and sold them profitable last week to buy the 3D, but holy cow they would have more than made up for the 3D loss today. I picked the wrong horse for sure and I knew better. TTWO knocked earnings out of the park! Congrats to anyone smart enough to hold their position.

Western Digital Unfortunately, we could not get stock quote wdc this time. Here’s a good example of a great company that reported pretty good earnings (lowered forward guidance) and got crushed. I don’t care, I plan on calling the shares. I own the Jan 70 and 80 calls and have no problem owning the stock at those prices.

PROFITABLE LAST 30 DAYS 

Domino’s Unfortunately, we could not get stock quote dpz this time. I waited until after earnings with this one and executed the 200 / 210 call spread for Aug around $190.00 a share as it was coming back up. Doing well up 31%.

Nvidia Unfortunately, we could not get stock quote nvda this time. Still own a large position in the Jan 2019 125 Call’s and doing very well. Buying more on each dip.

Intel Unfortunately, we could not get stock quote intc this time. Own a 1000 shares worth of the Sept 34 call (have for months) and doing very well. Plan to call the shares.

Verizon Unfortunately, we could not get stock quote vz this time. This one was great. I owned the Jan 40 and 45 calls purchased when it hit near rock bottom and doubled down on the 40’s thankfully. Came out very profitable and sold it all. I am waiting for a little more of a pullback and I’m getting back in the stock for the long-term.

Autodesk Unfortunately, we could not get stock quote adsk this time. Own the Jan 100 purchased when it hit bottom (around $100 per share) a few weeks ago. Plan to call shares. They report earnings on Aug 24th and I expect good things!

ADDED TO THE FOLLOWING

Ford Unfortunately, we could not get stock quote f this time.

American Eagle Unfortunately, we could not get stock quote aeo this time.

Cisco Unfortunately, we could not get stock quote csco this time.

GE Unfortunately, we could not get stock quote ge this time.

 

TUESDAY, JULY 18, 2017

TUESDAY, JULY 18, 2017

So much has been going on and I apologize for ignoring my blog, but my regular “day job” has been taking up all my time. This is a good thing because it just gives me more money to invest / trade! ha!

nvidiaLET’S TALK ABOUT NVIDIA!

Unfortunately, we could not get stock quote nvda this time.

What can I say…I mean wow. There were many people on twitter screaming it was overbought and it was going back to $100.00 (I wish). I ignored them all and kept buying on any weakness. I even purchased a short-term trade with the AUG 145 CALL a few weeks ago and sold today for a 135% gain! I was going to hold through earnings, but it’s hard to pass up such a great return.

EARNINGS SEASON WHOHOOO!

My favorite time of year! Earnings season officially kicked off when a few of the banks reported last Friday. Then Netflix Unfortunately, we could not get stock quote nflx this time. reported last night. Wow!

Congratulations to anyone holding Netflix call options today. I, unfortunately, do not hold a position in Netflix because I sold too soon and I have been waiting for a market correction to scoop some up. Oh well…

I strongly believe the remainder of earnings over the coming weeks will be positive and paint a picture that is better than most have believed. This entire year has been like that. At the beginning we were heading into a recession and the world was coming to an end, but as the year has moved forward things are really looking good.

LOOK AROUND AND WATCH

I watch things carefully and I’ve noticed new clients coming in, new constructions projects, new employees and overall growth across the board. It’s a good feeling and a good sign of things to come.

My point is: look around and watch what’s happening. I do not believe it is a bad time to get into the market. I do not believe the market is “overpriced” or “overbought” especially with tech. I would be a buyer of Intel Unfortunately, we could not get stock quote intc this time. during this recent weakness and Cisco Unfortunately, we could not get stock quote csco this time.. I would be a buyer of any real large cap company and a long-term holder.

THE BEATEN DOWN

Intel comes to mind when I think beaten down. American Eagle Unfortunately, we could not get stock quote aeo this time. is another. Anything close to retail should have Amazon Unfortunately, we could not get stock quote amzn this time. built-in to the price by now. I do own Amazon as a hedge against my other retail holdings and that seems to work well. I even bought the JAN 6 CALL on freak’n Sears Unfortunately, we could not get stock quote shld this time. the other day and sold at a nice 50% profit today.

There is money to be made out there, all you have to do is be comfortable with what you’re buying. I bought the JAN 2018 6 CALL on Sears because I watched the chart, I’ve been watching Sears for months and I knew that $6 was reasonable. I accepted my worse-case scenario would be I’d call the shares at $6.00 and wait. Therefore, I took the chance and it paid well.

Same goes for Pandora Unfortunately, we could not get stock quote p this time.. What a trade! It was severely beaten down a few weeks ago and when it changed direction and started heading back up to $8.00 I purchased the JAN 2018 10/12 CALL SPREAD and it has been a very nice winner. I’m up 25.26% as of close today. Pandora is headed higher and I just might make my 10/12 range by January.

MY LOSERS

My two losers (can’t win them all) are Verizon Unfortunately, we could not get stock quote vz this time. and 3D Systems Unfortunately, we could not get stock quote ddd this time.. I’m getting slaughtered on both down 12.61% and 28.16% respectively. It hurts to watch, but I own the JAN 40 CALL’s on Verizon so I’m holding strong. If it dips to $40.00 I’m doubling down.

3D Systems is another story entirely. I took a bold risk trying to make up for my Rite Aid Unfortunately, we could not get stock quote rad this time. disaster (I suppose I never explained that one) and own the AUG 19/24 CALL SPREAD. I almost became profitable today when 3D decided to jump to $18.40 per share before selling right back off again. I was all excited for just a brief minute! Earnings is Aug 2 and I believe I’m holding through earnings unless it makes a run back to $22.00 soon (like very soon), otherwise, THETA (time decay) is killing me.

MORE TO COME….

 

 

RITE AID EARNINGS & MORE

rite aidRITE AID
EARNINGS DAY!

It’s the day we’ve all been waiting for! The day Rite Aid shows the world it still has life and isn’t going down without a fight! This could be wishful thinking on my part, but I believe there is value in what remains of this 4 Billion dollar market cap company.

Today will be a big day…Rite Aid will report earnings before the market opens which will set the tone for the rest of the session. At 9 AM CST the FTC will meet to discuss (we hope) the Walgreens and Rite Aid merger. We could literally have a decision on the merger today?! Do I believe this will happen? No.

FTC DECISION

The idea that the FTC would choose earnings day to decide on this merger after nearly two (2) years of delays just doesn’t seem logical to me. I’m not saying the FTC can be considered “logical” most of the time, but damn this would be just cruel and unusual punishment don’t you think?

However, one might think maybe that’s exactly what they’re doing? Waiting for earnings to see what condition Rite Aid is truly in. If earnings are good will they decide to kill the merger and let Rite Aid stand on its own? If earnings are bad will that be the final nail in the coffin and provide FTC basis for approving the merger? All great questions…

It is a common belief the FTC will simply decide to say nothing at all and allow the July 7th deadline to come and go. This could provide them the ability to handle the merger in a few different ways and could create some distance between the FTC and a very public merger. A merger that has been mishandled and pure chaos for the FTC in general.

BOTTOM LINE

The bottom line is simple: it’s midnight and I’m sitting here thinking about earnings and FTC decisions instead of enjoying a good nights slumber. Am I worried about losing money? No. Why am I not sleeping? Because this is going to be like Christmas morning! You’re either going to love it or hate it! Will I be upset if I’m wrong? No. Why? Well, if you read this blog and keep up then you should know…I plan not to care.

HOLDINGS

The tech dip yesterday presented a good buying opportunity. I opened long call spread positions in the following equities (all of which are already profitable):

Pandora Unfortunately, we could not get stock quote p this time. This one I have to include because it’s been great. I didn’t open the position yesterday, but it was within the past few days. I cannot remember exactly. Regardless, I bought the Jan 2018 10 call and sold the Jan 2018 12 call to open. I am doing very well with this transaction.

Microsoft Unfortunately, we could not get stock quote msft this time. I bought the Jan 2018 70 call and sold the Jan 2018 80 call to open.

Oracle Unfortunately, we could not get stock quote orcl this time. I bought the Jan 2018 50 call and sold the Jan 2018 60 call to open. This one is funny to me. I have never liked Oracle, but I do see what they’re doing and they’re coming back strong. I also like companies that find a way to fight!

Western Digital Unfortunately, we could not get stock quote wdc this time. I bought the Jan 2018 87.5 call and sold the Jan 2018 100 call to open.

Notice a pattern? Maybe it’s not that obvious, but the lower strikes are all at prices I would certainly pay for the stock in January.

For example: if Western Digital remains below $100 per share until January, I will collect the entire premium for selling the 100 strike and I will have the ability to call the shares at $87.50 per share. Best case: WDC is hovering around $98.00 in January and I call…

SUNDAY, JUNE 25, 2017

SUNDAY, JUNE 25, 2017

Hello everybody! Whoohoo the trading week is about to begin! The week ahead is going to be exciting! I’m sure I will laugh and cry and probably drink, but no matter it will be a week to remember. It’s going to be one of those weeks I look back on in years to come and say man what a ride! One way or another a move will be made and it will be good or it will be bad, but either way I am prepared. I have strategically planned not to care

YES, AGAIN, PLAN NOT TO CARE

How many times must I say it! I should rename this site to Plan Not To Care! The trick to investing is planning not to care. You should not watch the market every minute of every day. You should not be concerned if a stock you hold drops 7%, in fact, if you truly believe in the company you should consider that moment a great buying opportunity! I continue to stress a few points over and over in my posts because it took me years to figure this shit out. Emotional discipline is crucial and you must hold a long-term viewpoint.

MSN ARTICLE

I just read the below article on MSN and I rarely like any of the articles I find on that site, but this one was actually dead on. Everything that was said was absolutely the truth and even the five (5) things to watch out for were perfect. Worth a read anyway…

The dangers of being an overconfident investor http://a.msn.com/00/en-us/BBCCSbo?ocid=se

PROFITS COME AND GO

I use the image to the left as an example of how things can go really crazy. Yes, that’s a 40,000% return on LinkedIn the day it took a nasty tumble last February. It lost half (50%) of it’s value that day and people thought it would never recover. Those that bailed are probably wishing they hadn’t because it’s right back where it was that very day. Around $195 per share. Talk about a great buying opportunity!? Of course, I hate LinkedIn so I skipped it.

I suppose it’s due to running my own business for twenty-three (23) years now, but I am programmed to go with the flow when it comes to cash. Money comes and money goes (mostly goes) throughout the life of a business and certainly my life. I have always dealt with large “chunks” and I don’t live like most people with a set paycheck every two (2) weeks. I have a tiny little W2’d salary that covers some basic expenses, but the majority of my money comes from the chunks randomly during the year.

My point is: I am used to watching large sums come and go. It has literally become just digits on paper to me so I do not get emotional about it. Most retail investors I talk to cannot control their emotion especially when things are going against them.

Stay calm. Relax.

You must understand terrible things will happen. There will always be somebody out there trying to drag your favorite company down. As they say stocks take the stairs up and the elevator down and that’s the truth. Investing requires patience, confidence and common sense. My best friend has a hard time trusting herself especially when it comes to making decisions about money. She’s been trying to invest in a few ETF’s since January and has yet to pull the trigger. She is missing the ride and I have tried to explain that there is no “good” time to get in. You just have to do it and ride the wave. Go slow and be careful. Accept the fact you’re going to be wrong sometimes and as long as you’re ok with what you own you things will work themselves out. Invest in good companies and stay away from “lottery stocks”.

YTD GAINS

Recently I was up more than 40% YTD and I was feeling pretty good about 2017. The thought crossed my mind to sell everything and watch from the sidelines the rest of the year. I mean, damn, 40%? Who can argue with that!

Today I think I’m around 26% and needless to say I was pretty bummed out about it over the weekend. Hillary noticed and laughed about me being bummed saying things like “26% really? That’s just terrible”. I know, I know, but I feel I lost my grip on emotional discipline last week.

For a brief moment, I went back to my old strategy and began “trading” more than “holding” and it was burning me. You cannot time the market nor can you “know” what a particular equity is going to do at any given moment. This has been my point to my best friend for months: there is not timing the market.

After trading for years I can tell you there is no way to know and every day will surprise you. It’s the main reason I love it so much…you just never know what’s going to happen! I feel it’s the last place where you can truly get spontaneity.

I digress. I quickly realized what I was doing and did the most important thing I could have done: I walked away.

For the record, I’m not at 26% because of my trading losses from last week. I’m at 26% because I am holding a great deal of Nvidia Unfortunately, we could not get stock quote nvda this time. calls and Nvidia is consolidating right now. It will probably continue down (I hope) to the lower 140’s again. Notice how I said “I hope” in that last sentence? I hope it will go down? WTF? Yes, I do hope it goes down so I can buy more. That’s having confidence in a stock or company you like. Just because it’s pulling back is no reason to panic or bail out. You will always lose money panicking. That I can guarantee.

I’m also down from 40% because I have a secret trade going that I will not explain until later in July. It is down, burning me bad right now, but I’m using the “houses money” so I was willing to sacrifice some gains. The risk-reward was just too high. Hopefully, if the universe aligns, I’ll be right…and at least break even!

PANIC AND LOSES

Something I said above made me think of my worst panic moment. I remember it like it was yesterday. It was September 2015 and I was holding 1000 Ford 14 December Call’s (yes, I had several months before expiration, but this was the equivalent of 100,000 shares and would have cost me over a million to call so I was nervous to say the least) and VW happen to announce their emissions scandal which rocked the auto industry.

It was a rough Friday for Ford and the following Monday was even worse. That following Monday I lost $42,000.00 in a single day when Ford hit $12.50 I believe. It may have even gone lower it was all a blur. I lost nearly a third of my trading portfolio and I remember the moment I capitulated…selling every last call for $0.38 per contract to try and salvage what was left. I almost cried. I had not planned not to care. I cared a lot and so did Hillary!

It was a devastating moment and it taught me many hard lessons. The most important being: never hold more options than you can afford to exercise and never, ever, place huge bets with your own money. Always use the houses money and if you don’t have any gains to use, then you don’t need to be placing huge bets. See, most of this is just common sense!

Regardless, I lost the money and bailed. In my defense, I was in the middle of a Real Estate class and I had fever, but I will not use that as an excuse for allowing my fear and emotion to overwhelm me. How did the trade ultimately work out? Well, six (6) business days later Ford decided to skyrocket to $14.76 per share and my calls would have made a profit of more than $240,000.00. It took me months to recover from this one event. I had lost tons of money and I had watched it come right back and skyrocket. I remember standing in the shower for days wondering where I went wrong and how I could have done it differently.

I remember I kept thinking I was missing something and if I were a professional trader or money manager I would know how to pull myself out. The funny thing is…I am now glad I lost that money. It truly kicked my butt and made me sit down, study and really learn how the option world works. I became determined not to be that sucker again. It literally made me a better investor and I owe my gains and all future gains to that one moment.

During that time I also heard one sentence Guy Adami (CBNC Fast Money) said over and over in my head: learn to play the game and the money will come. I knew I didn’t know how to play or I would have known what to do and had more confidence. I decided to devote my life to learning the game…

IN THE END

It was really simple. I let emotion and fear drive my decisions. I was playing a dangerous game I wasn’t prepared to play and I cared too much. It occurred to me during that debacle that I have made most of my money and picked up some of my best clients during those times in my life when I just didn’t care. The less I care the more confidence I have. Strange, but true. Everything, at least for me, is very much tied to my opinion of the situation. If I care too much I will fail every time…

I was gambling, not investing and that my friends will destroy you. I believe it took until January of 2016 before I started easing back into the market. Having learned a valuable lesson.

Today, I hold a primary portfolio full of stocks I love. I hold big names and a diverse group. I accumulate shares on any weakness and I always have a shopping list ready in case of a flash crash. I love dividends and selling PUTS and CALLS to subsidize my annual returns. I play it smart and it’s much more fun this way. I have my little “mad money” portfolio that I use primarily for options and that’s the portfolio I use for this blog.

Do I still speculate? Of course! I allow myself one (1) true gamble each year…and 2017’s is in play as I type.

MONDAY, JUNE 19, 2017-TECH

MONDAY, JUNE 19, 2017-TECH

What can I say…thank you Nvidia? Again? Let’s be honest, the huge selloff in tech a week or so ago was typical market bs. It’s the norm these days and if you cannot handle a selloff or a drop of 7-8% in any one holding (or all at once in this case) then you simply don’t need to be in the market. Period. This is my greatest lesson learned over the years – don’t panic! If I can provide any advice at all to beginner investors it is to always plan for disaster. Keep a lot in cash for those special moments such as the tech selloff I am talking about.

Today was a good day, tomorrow may be a bad day. It’s the way the market works and in order to succeed you must understand and accept this fact. Believe in the companies you are investing in and learn to hold strong when everyone else is spitting venom (as an old friend used to say). The masses love to follow each other. If the trend is to hate on Nvidia that’s what everybody will do. If the trend is to love Amazon, then yes, that’s what everyone will do. Honestly, you must learn to do the opposite or at least be able to see when it’s all crap.

AMAZON AND WHOLE FOODS

For example, let’s take the big news of the weekend: Amazon’s purchase (or pending purchase) of Whole Foods. What a bunch of noise and drama! It’s the death of grocery stores as we know them! People will never shop for food the same way again! Dear God sell Kroger! Poor Kroger…

The bottom line is many of these comments will probably come to fruition. This transaction could very well change how we shop for food forever. I am not arguing with any of this. What I want to do is get you to see the other side of the coin…Amazon has a huge mountain to climb. Grocery delivery will be the largest logistical problem ever solved and the idea of eating sushi delivered by drones may not sit well with most consumers. I sure won’t eat it.

Amazon could, theoretically, spend an absolute fortune trying to find the solution. It can do this because it lives on our Prime Membership dues and, unlike Kroger, doesn’t care about grocery margins. Hell, they’ll just run in the red for years while they figure it out and while they put all the other competition in the ground. Once they accomplish this they can charge whatever they want and shoot straight into the black. I’m sure Jeff Bezos sees this as a huge challenge and if I were him…I would love it.

Regardless, think strategically. Amazon will burn through cash trying to figure this out. This will indeed hit their bottom line in a negative way. I would not be jumping into Amazon right now thinking it’s going to shoot higher because of groceries. I don’t see that…at least not in the near future.

THE POINT

Everyone is talking about King Amazon and I’m with them I love Amazon, but while everyone else is running through the door to buy it up I will probably be watching from the sidelines. At least through a few more quarterly earnings. Nvidia is the ticket and everyone says it’s getting too overvalued. I call bs and say most don’t realize what’s happening in the background. I have a sneaky suspicion we will look back five (5) years from now and wish we had mortgaged the house to buy more. Yes, this can also be said for Amazon, but just be careful.

Listen to your gut. Don’t listen to the television or really anyone else and always be prepared for the inevitable pullback. Read the WSJ and think! When I read the article a few months ago in the WSJ about XPO Logistics Unfortunately, we could not get stock quote xpo this time. and how they are going to provide the last mile for Amazon furniture and appliance delivery I immediately thought it was going higher. That was around a month ago when it was $50.00 per share. Yeah, $50.00! Wish I had gone with my gut on that one!

Keep cash on hand and remember one incredibly important rule: if a stock shoots up really hard (which one you own will do this eventually) do not go nuts and convince yourself it will continue higher. You sell it, take the gain, and wait. Every time I have ever seen anything shoot up hard it fell back down just as hard. Understand if it’s really going to go up it will do it gradually. When it shoots up you can sell it and just buy it back later after it falls back to Earth…

PORTFOLIO HOLDINGS

Below are my holdings as of today. I have trimmed some and added to others (mainly Nvidia). I have ignored the television and what everyone is blabbing about and concentrated on my gut and my gut alone. I love charts and I love analyzing them, but everything I do really comes down to my gut and how I feel about the trade. I am heavy into tech, but that’s my forte and I believe it is the best place to find growth. Amazon has proven this fact. They even made grocery stores part of the tech industry!

Autodesk Unfortunately, we could not get stock quote adsk this time.

Cisco Unfortunately, we could not get stock quote csco this time.

3D Systems Unfortunately, we could not get stock quote ddd this time.

Denbury Resources Unfortunately, we could not get stock quote dnr this time.

GE Unfortunately, we could not get stock quote ge this time.

Intel Unfortunately, we could not get stock quote intc this time.

Nvidia Unfortunately, we could not get stock quote nvda this time.

Square Inc Unfortunately, we could not get stock quote sq this time.

Take-Two Interactive Unfortunately, we could not get stock quote ttwo this time.

Western Digital Unfortunately, we could not get stock quote wdc this time.

RITE AID (RAD) MERGER

RITE AID MERGER NEWS

Unfortunately, we could not get stock quote rad this time.

June 15, 2017 02:31 PM ET (BZ Newswire) — News

A deal announced over 1.5 years ago still hangs in the balance. Whether the deal clears the regulatory hurdle has become a heated debate in itself. With the passing of each day, pessimism is abounding, with the scuttling of a few mega healthcare deals throwing in the possibility of the Walgreens Boots Alliance Inc (NASDAQ:WBA)– Rite Aid Corporation (NYSE:RAD) deal being blocked. For the uninitiated, here are the deal details:

Drug store chains Walgreens and Rite Aid announced on October 27, 2015 an agreement under which the former will acquire the latter for $17.2 billion in cash.

The deal valued each of Rite Aid shares at $9, a 48-percent premium over the closing price on the day ahead of the deal announcement. The companies had said then, the deal would likely close in the second half of calendar year. The deal was expected to be accretive to Walgreens earnings in the first full year after the closing, with synergies estimated to be in excess of $1 billion.Subsequently, on February 4, 2016, Rite Aid shareholders voted in favor of the merger.

The FTC Roadblock

Walgreens was then left with the unenviable task of negotiating with the Federal Trade Commission regarding the potential divestitures both the parties should make in order to secure regulatory approval. Against this backdrop, reports emerged that Kroger Co (NYSE:KR) could lap up hundreds of stores of both the companies that would help them win regulatory backing.

Deadline Extended

A year after the announcement of the deal, Walgreens and Rite Aid pushed back the closure deadline to early 2017 from the previous deadline of the second half of 2016.

Meanwhile, Walgreens and Rite Aid announced in December 2016 that they have agreed to sell 865 Rite Aid stores and certain related assets to Fred’s, Inc. (NASDAQ:FRED) for $950 million in cash. The deal, however, was contingent on the closure of the Walgreens–Rite Aid deal.

Deutsche Bank had commented then Fred’s had taken a giant leap in its transformation from a dollar store to a bona fide pharmacy, with the proposed purchase. The company was seen to transform into a long-term viable competitor in the space, with a more national footprint.

Another Delay, Reduction In Offer Price

Come January of 2017, the prospects of consummation of the deal worsened after Walgreens, citing a further delay, lowered the deal price to $7–$6.50 per share. The price range meant that the price would be fixed at $7 if the FTC seeks divestment of 1,000 or fewer stores, and a lower price of $6.50 would come into play if about 1,000–1,200 stores were to be divested. The companies said the deal would take another six months to close.

The delay prompted Walgreen to slash the upper end of its 2017 adjusted earnings per share guidance to $5.08 from $5.20.
On May 8, the companies said they have certified substantial compliance with the second request from the FTC. As per a January 2016 agreement with the FTC, the companies have agreed not to close the deal before 60 full calendar days following the compliance with the second request, giving the FTC time for either approving or blocking the deal. The 60-day period beginning May 8 would end on July 7.However, there is still no clarity on the status of the deal.

Parties Relay Pessimism

The situation now looks grim, according to a report in TheStreet.com. The report quoted a SEC filing by Rite Aid, which carried a communication from John Standley, the chairman and CEO of Rite Aid, and Ken Martindale, the CEO of Rite Aid Store, to the employees. The tone concerning the completion of deal was somber, as they stated that they expect a decision soon. This is in stark contrast to the company’s earlier statements that an approval is likely.

Walgreens also relayed its apprehension concerning the consummation of the deal by deciding not to issue additional debt securities to replace the notes to be redeemed if the Rite Aid deal did not go through by June 1.

However, if there is one, who is still optimistic, it is Fred’s, which said on its earnings call that it is working collaboratively with Walgreens, Rite Aid and the FTC to win approval for the purchase of Rite Aid stores, earmarked for divestment.

How The Stocks Fared Amid The M&A Drama?

Walgreens shares, which tumbled in the aftermath of the deal announcement, losing over $20 in the process, recouped some of the losses and have been locked in a trading range of $77.50–$87.50 since then. Meanwhile, Rite Aid shares soared about 43 percent on the day of the deal announcement. The rally, however, did not take it past the then-offer price of $9. In anticipation of the deal closure, the stock held between $6 and $8 mark until January 2017, when the companies postponed the deal closure date for the second time and also trimmed the offer price. From a high of $8.67 on January 13, 2017, the stock has come off notably to $3 on June 9, losing 65 percent of its value in the bargain.

That said, the sell-off has made Rite Aid shares an attractive proposition, especially if the deal does go through at $7 dollar per share of Rite Aid stock. The intrinsic value of Rite Aid, according to X-fin.com is $3.13, while GuruFocus estimates it to be $1.89.

The intrinsic value, according to Investopedia, is the actual value of a company, taking into consideration all aspects of the business. It is the value derived out of fundamental analysis of a company.

Given that the current market price is closer to its intrinsic value, there is more upside potential for owners of Rite Aid stock than the downside risk, given the $7 offer price. Even if the stock falls to $1.89 (GuruFocus’ intrinsic value estimate) in the eventuality of the deal being blocked, a person who is invested in Rite Aid stands to lose roughly 40 percent. However, if the deal is finally approved after all the twists and turns, the investor could profit to the tune of 124 percent, as the stock would trade up close to the offer price when the hurdles are cleared.

WEEKEND TO REFLECT

stockWEEKEND TO REFLECT

What a week! Whew!! The high’s, the low’s, the euphoria surrounding the great run of NVDA! Yes, even a veteran such as myself can get caught up in the moment and forget the fundamental rules of the game. The most important being: what goes up, must come down…

THE TOP IS ALWAYS HARD

As they say, stocks rarely give you time to think when they hit the top before they come crashing down. I was too busy Friday morning laughing at the week of gains to realize what was about to happen. Well, that’s not exactly true. I looked at Hillary and said I need to sell it all, but I’m not taking that risk. The risk for NVDA is still to the upside.

Did I sell? Actually, yes. I was smart enough to take my largest gain close to the top. I sold the JAN 145 CALL on NVDA at a nice 70% profit. Did I jump back in too soon? Maybe. Maybe not. I read the chart, watched it revert back to nearly where it opened on Monday morning and I started adding to my JAN 2019 125 CALL’s. Too soon? Maybe…but that happened to be right where it turned around at $142.75 and shot straight back to $151 and some change. That’s a hard pop and obviously a lot of people were waiting on that same spot. I love charts!

WHAT NOW

I did purchase another two (2) JAN 2019 125 CALL’s before the market closed Friday. I had to sell some other positions to clear them which I didn’t want to do, but I have a plan. I am now 90% into NVDA which is really stupid. However, as I just said, I have a much longer plan…hence the 2019 calls. Everything I do is strategic in nature and always has been. Most think I fly by the seat of my pants, but I put a great deal of thought into everything I do. Especially when it comes to my f’n money! ha!

I do anticipate the selling to continue next week. As I have said many times before I am trying to accumulate a minimum of 1000 shares of NVDA with a cost basis at or below $125.00 per share. I’m trying hard to do it now before we wake up in 2018 and it’s 200+ per share and $125.00 is just a memory. You laugh, but I remember owning it at $87.00 and selling at $120.90 thinking that was just too high. Should have kept those shares! I also should have kept the 500 shares I owned with a cost basis of $105.86. Ugh! Regardless, $200.00 per share is coming. Fight all you want and short it if you must, but it’s going to continue higher.

PLAN TO NOT CARE

Remember the “plan not to care” post a few days ago? This is precisely what I meant. I plan not to care. I have nearly two (2) years to call the shares and I still own DEC and JAN 110 CALL’s for 2017 and 2018 respectively. I’m covered. I need a measly three (3) more calls to hit my goal and I shall have them. Patience.

How do I plan not to care? The strike prices. I own the $110 and $125 strikes on all calls. That’s why I sold the $145 at the top. I didn’t really want to call those shares anyway because that would ruin my cost basis plan. I was up 70% and it was a strike I didn’t like so I dumped them. Now, I don’t care. No matter what I would pay $110 and $125 per share for NVDA no matter what happens so I’m happy. Let it go to $130…still above my strike and in-the-money.

There is some argument towards break even and what I have paid for the calls, but I’m not really worried if you can’t tell.

Will I buy other stuff? Yes. I plan to start funding this portfolio much more heavily in the coming months and I’ll have plenty to invest. It ususally takes me a few months to recover from tax season and I’m almost there. We have a primary savings goal we must meet before I get to really add to my mad money!

This is another aspect of my longer term goal…I know what’s coming on my side as well which makes all the difference.

WHAT I’M WATCHING OR OWN CURRENTLY

American Eagle Unfortunately, we could not get stock quote aeo this time.

GE Unfortunately, we could not get stock quote ge this time.

Take-Two Unfortunately, we could not get stock quote ttwo this time.

Square, Inc. Unfortunately, we could not get stock quote sq this time.

Verizon Unfortunately, we could not get stock quote vz this time.

Mosaic Unfortunately, we could not get stock quote mos this time.

Intel Unfortunately, we could not get stock quote intc this time.

Cisco Unfortunately, we could not get stock quote csco this time.

US Bank Unfortunately, we could not get stock quote usb this time.

Johnson & Johnson Unfortunately, we could not get stock quote jnj this time.

JP Morgan Chase Unfortunately, we could not get stock quote jpm this time.

 

NVIDIA (NVDA) GO BABY GO!

nvidiaTHANK YOU NVIDIA!

You have restored my faith in growth stocks! You just won’t quit and if anyone else had read their projections for 2018 you would have done what I did and buy, buy, buy!!

Unfortunately, we could not get stock quote nvda this time.

I own the equivalent of 600 shares by way of many CALL options. Below is the list of said calls and I stupidly waited for a dip so I could buy four (4) more for a grand total of 1000 shares. It appears I waited too long for a dip and missed a really good opportunity. Will it pull back? Hopefully. For now…I’ll just sit back and watch.

ONE (1) DEC 110 CALL UP 28.55%
ONE (1) JAN 110 CALL UP 33.09%
ONE (1) JAN 145 CALL UP 47.23%
THREE (3) JAN 2019 125 CALL UP 22.06%

Remember, this is after I cleared 551%, 240% and 206% on three (3) other calls I really, really, stupidly sold profitable a week or so ago. Oh, I wish I had those back!

Why did I move to the JAN 2019 CALL’s? Well, I’m smart enough to know I have to actually have the money to call these shares if I decide to do so and I wanted to spread the load between years honestly. I do plan on calling them ALL. Besides, the faster it goes up the more time value of the option I keep as well.

WHAT TO DO NOW?

I told Hillary (my girlfriend for those of you who are new) yesterday that the problem with waiting for a dip with a stock like this is that by the time it dips or the market crashes it could be $165.00 per share. This means it wouldn’t dip back to maybe $140.00 per share which is where it was last week! Who would have thought it would hit $165.00 in a few days!! So I screwed up…I could have transferred funds to buy more calls, but I was waiting to see what happened.

WILL IT COME BACK DOWN?

I think so…at least a little. I’m preparing to transfer funds over the next few weeks and maybe if I’m lucky it will pull back after labor day. For now…fun times. Has anybody seen it after hours?? Holy smokes…

 

 

Stock and Option Trading