Tesla Tuesday – Musk does the S&P 500 and our long-term portfolio review
Tesla (TSLA) has been added to the S&P 500!
The stock is taking off like a Space X rocket in futures trading, up around 15% and I’m glad we stopped shorting them! Of course, now they’re going to make a tempting short sale as $ 500 is clearly ridiculous as that represents a valuation of around $ 500 billion for an auto company with $ 25 billion in sales and around $ 2 billion in profit, so call it 250 times the profit at its highest..
Being in the S&P doesn’t make you more valuable, but it does force the index fund managers to buy your shit stocks and it will give all the hedge fund manipulators who have been playing with TSLA for years a chance to head for the exits. in the volume buying frenzy as index fund managers (the guys who use YOUR retirement funds) are forced to buy TSLA at ridiculous prices. See what a big scam this is?
It is one of the best ways for the rich to force the poor to give them money. Other fun ways are payday loans, payroll taxes, unemployment insurance, social (in) security, ETFs, rental properties, leases, church…. (see: “Dooh Nibor’s economy“). We’ve done extremely well during this pandemic as the market has gone up, but, a week before Thanksgiving – I think the party is really over for the year, so I INVITE YOU TO CASH any positions you don’t. don’t want to see through a 20-40% correction – because that’s a very likely thing over the next 3-6 months.
Our last Long Term Portfolio Review (LTP) was back on October 16 and, at the time, we were at $ 1,070,623 in very good health, up 114% for the year. We got very aggressive with SKT and I discussed SPWR, T and WBA as always being great new trades and everything went really well:
Other than that we left the portfolio alone and it was a great move because with the market it exploded and we are now at $ 1,295,033 – up 159% for the year and up from 224,410 $ (22.4%) for the month. That’s why we just can’t leave our LTP – these positions are just too good! Yet if it wasn’t a teaching portfolio I would ABSOLUTELY go TO CASH – that’s way too much money to be made in a month or a year and there will be an account – mark my words …
We are already at $ 498,750 in cash and we have eliminated most of our naked puts to reduce our downside risk and we have the protection of our short term portfolio of $ 200,000 which is expected to earn around $ 300,000. if there is a 10% correction but – if we can gain 20% in a month – we can lose 20% in less time than that, so big gains like this make me more cautious, not less.
We’ve never had a lot of tech stocks so that’s not the issue and we have a vaccine – so hopefully the economy improves, but we still have a long way to go to recovery and recovery. market ignores it completely – and also ignores that these actions are already too expensive, removing the virus that we ignore anyway is not going to solve this problem….
- HMY – Who doesn’t want a net $ 2 HMY? It’s almost $ 5 now and, if there is a market crash, gold might do well anyway so isn’t going to kill that one.
- KO – We’re only going to kill this one because it’s 2/3 already with a year to go, so why risk it?
- MU – Same as KO, it’s too much not to kill.
- MYL – I don’t love them enough to risk it so let’s kill.
- BRK.B – That’s a spread of $ 30,000 to $ 25,200 net – kill. Keep in mind that we don’t NEED to get out of these, so the way out is to offer to sell 5 of the June 2022 $ 170 for $ 72.50 and offer to buy 5 of the $ 190 from June 2022 for $ 55 and after they fill out ask for good prices for the next 5 etc. Don’t take a bad price unless you really, REALLY, REALLY have to – and we’re clearly not in such a deep financial position.
- CAT – Another gap of $ 30,000 to $ 25,762 net – kill. Of course, you know what happens when you try to kill CAT…
- PAA – Now I see no reason not to own the pipeline company when Biden takes over and clean energy becomes a priority. In addition, they just paid us 0.18 / share on the 29th ($ 1,440). Guess we can kill short selling to eliminate the risk and sell more if it goes down.
- AVGO – $ 95,000 out of a potential of $ 120,000. Might as well kill him.
- BRK.B – We’re running this one as a revenue game, so we’ll keep it. If the market goes down 20% BRK.B will go down 20% but it’s only back to $ 180 so I’m not worried about short selling and we can make the short calls to get everything is going well here.
- CHL – Brand new business, always good for a new one.
- CSCO – I told you last week – they were way too cheap and I still love them.
- FL – People have to wear sneakers, right? In this case, $ 16,455 of a potential of $ 37,500 is worth keeping as this is a relatively small position (easily adjustable) and I think the short sell price ($ 25) is a good deal as I wouldn’t mind owning them so there is no real risk on this net credit trade other than owning cheap FL stocks for the long term.
- GILD – Back in the basement of good deals so we’re going to roll the 30 calls 2022 to $ 55 at $ 9.60 ($ 28,800) over 50 of the bullish buy spreads at $ 45 ($ 17.25) / $ 65 ($ 7.25) from 2023 to 10 $ net ($ 50,000) and they pay $ 100,000 if all goes well. So we spent $ 21,200 to hit $ 28,000 in cash and we’ve already redeemed the first short calls, so our cost base is better than it looks.
- DG – The bullish buy spread is $ 30,500 on a potential of $ 35,000 and the puts, by themselves, would be called out, so the two independent decisions mean we should kill the trade.. We can definitely earn over 20% using $ 30,500 in cash, so there’s no reason to hang in there and risk anything.
- GS – A net of $ 6,000 (ish) out of a potential of $ 40,000 is worth keeping and the puts are nice and conservative. Good for a new profession, in fact.
- IBM – I just don’t see them as risky here. Glad to be “forced” to own them at $ 100 which would be about 11 times the winnings.
- IMAX – I told you! In fact, it’s grown so fast that we’re now burnt on the December $ 15, but we’re just going to keep it going.
- INTC – On the verge of being an “I told you so”, so we’re going to stick with that and, in fact, we can spend $ 7,000 to roll the 50 calls 2022 $ 45 to $ 6.35 ($ 31,750) to 50 2023 $ 35 ($ 14) / 50 ($ 6.25) bullish call spreads to 7 , $ 75 ($ 38,750) so we invest $ 7,000 more to go to a $ 75,000 spread which is mostly in the money.
- LABU – Who is not a fan of Biotech this month? $ 36,150 net on the $ 40,000 spread means we have to say goodbye though.
- M – Did I tell you ??? Maybe too early but wait.
- MIDD – Wow, they got away from us! $ 35,400 net on the $ 40,000 spread means a sad goodbye to this one.
- MJ – Yet another “I told you“- this game is fun!
- MMM – Has enough room to function and enough company to be ready to leave. Very low risk of cession on a share that we have no objection to owning.
- MO – Nice comeback. So glad we bought up short calls! There is no penalty for selling 10 (1/3) March calls of $ 42.50 for $ 1.50 ($ 1,500) in the meantime because it is easy to ride and protects us a bit.
- PFE – Always has that new smell of commerce and is already doing well.
- SKT – Another “I told you so” – could be a new record for a month! This business was making $ 100 million a year and you can still buy the whole thing for $ 856 million. Just silly!
- SPG – Two REITs in a row! Another “I told you“too! Back in the malls, we’re going to…
- SPWR – Not my baby !!! At $ 37,360 net of a potential of $ 56,000, I think we can hold SWPR a bit longer.
- T – Another new (ish) game and already launched, but we have an aggressive spread of $ 80,000 + and it’s still only $ 35,425 net so I guess that’s good for a new trade even if you missed the net entry of $ 28,425.
- SMS – At the money but $ 50,000 net on a spread of $ 68,750 it’s hard to justify the risk, especially since they were only $ 32.50 so let’s kill it.
- WBA – Yet another “I told you so” maybe premature! We’re very aggressive on these, but we just (wisely) half-covered the calls because IT’S OUT OF WORK – SELLING PREMIUM !!!
Hope this shows you how serious I am about going to CASH !!! We rarely take such an ax for our LTP positions and, of course, since we still have our STP hedges for a $ 1.2 million portfolio (as well as our other member portfolios, of course), we are now extremely bearish. during the holidays..
As I predicted, Black Friday will be a disaster and Christmas is still canceled – how is that a bullish premise?
Be careful there!