Where’s the love Mickey asks…what did I do wrong he wonders? Sad to watch him wonder aimlessly through the “Leave a Legacy” attraction hearing him mumbling about the best quarter in company history – Walt Disney’s legacy never stronger.
My objective with this blog when I first started typing was to keep it real. No bullshit about making millions or the fast road to riches. I wanted and had tried to find a real website with real-world experiences. This is why I’m going to use Disney as my “human nature” post this week because, well, it’s human nature to shoot for the stars!
Disney [stock_quote symbol=dis] as you can see did not perform as I had expected. I am man enough to admit I was way wrong. I knew they would beat earnings, but I miscalculated the markets reaction. I noticed the option statistics yesterday were almost 50/50 CALL to PUT meaning half of traders thought it was going up and half thought it was going down. I’m a natural bull (hence the site name) and I’m always thinking when a company makes history their stock should go up. Silly me I suppose.
What you must understand is why it went down.
Disney investors are a little (a lot actually) touchy about ESPN and the dreaded phenomenon of “cord-cutters” – those that are leaving paid cable subscriptions for the new form of television like Netflix, Hulu and pay-as-you-watch platforms. Hulu, by the way, is owned by Disney and has yet to turn a profit. I discovered why just this past weekend when I tried to catch up on one of my new favorite tv shows “The Grinder” with Rob Lowe and commercials kept interrupting! How dare you show me commercials! I did a little research and realized you could buy out of the commercials for an additional $5 per month. This made no sense to me when I could just buy the entire season on Amazon Prime and be done – no monthly fee. I digress…
Disney investors are pounding the stock and fleeing like roaches after turning the lights on because they now believe Disney can do no better. This was it. The grand finale of revenue and profits so they’re out. It’s a good argument and I’m not saying I don’t understand, but really? Of all the media conglomerates you choose to abandon Disney? Foolish at best. I can remember at Thanksgiving when it was $122 per share. It will be there again – guaranteed.
Yes, to keep this site real I will admit I lost money this morning. Not much, I’m not that stupid, but I did put $800 on the FEB 19 2016 110 CALL and I just watched it dwindle to zero. I knew it was a gamble. I knew the risks and I knew it was a 50/50 shot. I understood the risk and I went with it. No reward without risk right?
This is the reality of trading and no book or online course or training video will prepare you for the human factor. Humans are impulsive, greedy and most of all dreamers. We hold little self-discipline in the heat of the moment and with trading you must be rock solid and have no fear at all times – try this when the underlying is crashing hard before your eyes. You will win big on some days and lose big on others and if you cannot swallow this fact you need not try. We as amateur investors far, far away from Wall Street really have a snowballs chance in hell of being correct all the time. We are lacking the most important, fundamental element: information.
Ok, enough with the preaching and negativity. Now for the trades I made this week that kicked ass. This is another part of trading that people find hard to handle: when you’re down and losing money on one you must keep buying and playing the game with others. It’s your choice to keep going or give up and it takes years to conquer this emotional side of trading. But below should make you feel better. Notice most of the below trades are stocks, not options.
Starbucks [stock_quote symbol=sbux]
All I can say is wow. When I saw Starbucks hit $52.63 the other day my neck was tingling and I knew I had to be in on that. It was like time travel – it was March 2015 all over again and I was back! The flux capacitor was firing on all cylinders (or Mr. Fusion) and I was scooping it up like candy. Purchased 1500 shares of stock at $53.00 – perfect. Purchased another 100 of the APRIL 16 2016 60 CALL at .55 cents (currently trading at $1.00). I was a mad man and it paid off. Disney who?
Home Depot [stock_quote symbol=hd]
The sky was blue, the sun was out and Home Depot was hovering at $110 per share. Was this heaven? Did I take stage left and didn’t realize it? No, it was just a down day on the market and yet again, I was scooping it up. Purchased 700 shares at $110.90 and based on the above quote – right on, right on…
McDonald’s [stock_quote symbol=mcd]
Anyone who has been through a McDonald’s drive-thru lately probably noticed it’s better. Not only is the ordering and accuracy better, but the food is better too. McDonald’s is doing well and I respect a company that can turn it around. Therefore, I purchased 100 shares at $115.48 and plan to hold long-term. It was $124 just a week or so ago…
Nordic American Tanker [stock_quote symbol=nat]
Anyone who witnessed the amazing interview with NAT’s CEO the other afternoon at 2 pm on CNBC bought this stock immediately (also why it jumped almost 10% during the interview). I’ve never seen a more amazing interview or inspirational, down-to-earth CEO. I liked him so much I went with my gut and bought 1000 shares at $11 that very minute. Not to mention the dividend is currently yielding 15%!!! This is not a typo – it’s 15%. The CEO made it very clear the dividend was safe, they had paid their dividend for 74 straight quarters at an average of 11% and he enjoyed making his shareholders money. Something he also said that I found very interesting was the fact they hold roughly 5 million of debt on each tanker and the scrap value of each tanker is 12 million. Think about that a minute. If they scrapped it and said screw it, they’re still in the black. He said the number one problem with CEO’s and other companies is they take on too much debt. I’m a firm believer in this and agree completely. He has my support…long-term.
So there are winners and there are losers, but the bottom line is: if you don’t try you will never succeed. Happy trading!