OptionSage submits:
Well I thought that my greatest challenge for the week would be navigating the stock markets successfully but that all changed early Sunday morning as Phil sent me his spreadsheets documenting how his trades performed while he was on vacation! If you have ever tried to puzzle through a 3-dimensional maze blindfolded and with only a sniffer dog to help guide you through impenetrable darkness then you will know how I felt when I first looked at the positions he has open!
I can only say that I have new found respect for his ability to stay on top of these positions and still make money! And indeed Phil did make money! We’ll come to that in just a moment. But before I attempt to highlight the details I should point out that where information is not to the standard that Phil presents, the failure lies solely with me – and thankfully Phil will be back next weekend to detail his positions!
I suppose it’s no surprise that Phil made money last week. No matter whether he has 5 screens in front of him monitoring every movement in the market or when he is enjoying the European sunshine, the money rolls in. I think I am going to start calling him Midas because he sure has the Midas touch. Based on what I see in the short-term virtual portfolio, if Phil continued making as much money every week as he did this week he would be on course for $1,000,000+ per year in the short-term virtual portfolio alone! [What’s really striking is I believe he is on course for much more than that!]
Before delving into the positions – or attempting to do so – I’d like to take a moment out to discuss some of the movements that happened this past week. Many of you may have noticed some fundamentally strong stocks got punished over the past few days while some fundamentally weak stocks rose significantly (just look at some of the homebuilders!). Why did this happen? A strong possibility is that, in an effort to raise cash, funds were forced to sell fundamentally strong stocks and cover short positions on fundamentally weak stocks.
The reason that they have been forced to raise cash is that it has been proven so hard to get access to capital recently. The tightening credit has been apparent as overnight lending rates skyrocketed due to the reluctance of banks to lend to each other since losses from subprime loans were unknown. Banks across the world injected liquidity in order to alleviate or offset any potential escalation in tightening credit since the probability is, if banks were reluctant to lend to each other, then businesses and funds would certainly have a harder time!
Bottom line: It’s probably not a prudent move to jump onto the bandwagon that says the weaker stocks have bottomed just yet. Although some weak stocks may have risen, I’d much rather see them rise because of strengthening fundamentals than from the reasons cited above!
Enough of the commentary, let’s get to the numbers!
Short-term Virtual Portfolio
The short-term virtual portfolio was initiated with a basis of $400,000. By last week, the virtual portfolio had ballooned to a whopping $2,100,000 (and change!). And this week with Phil away on vacation it increased another $30,000 (plus change!). This was even more impressive because approximately 80% of the virtual portfolio is in cash. So, the week-to-week gain on cash was approximately 7.5%. If you’re not a subscriber of Phil’s Stock World or on the waitlist, I think it’s worth asking yourself WHY NOT?!?! How many traders do you know made 7.5% on invested capital last week when enjoying the rays in Europe?
Long-term Virtual Portfolio
The long-term virtual portfolio is relatively unchanged (down $95!) from last week with about a 65% cash position but is up a whopping 174% since inception. Probably the most notable stock of the week in the virtual portfolio was SBUX that made a move up 4 of the last 5 days from around $26 to close Friday at $28.04.
$10K Virtual Portfolio
The $10K virtual portfolio sits with about $9K in cash. Last week Phil had just under $4K worth of positions but the gain on investment this week was over 25% as his positions increased to over $5K resulting in an increase in overall virtual portfolio value from $12,981 to $14,366.
Complex Spreads Virtual Portfolio
The Complex Spreads virtual portfolio began with a basis of $150,000. By this weekend that number had increased to $385,750. Although down almost $15,000 for the week, the cash position lies at just over $300,000! Effectively Phil has made a double and is playing with the house’s money – about $86,000 of it. This is worthy of comment: After you have made a lot of money you can shoot for higher gains by being a little more speculative. The possibility of achieving even higher gains is worth the risk of greater fluctuation in the account in the short-term.
Stocks Virtual Portfolio
The stocks virtual portfolio gained about $4,000 for the week and sits with about 75% of its starting capital of $200,000 in cash. The overall gain since inception increased from 31% to 33% this week while the gain this week on invested positions was approximately 4%.
Free-Picks Virtual Portfolio
And finally the Free Picks virtual portfolio climbed $1,616 this week from $31,352 to $32,968. Having started originally with $25,000, Phil sits with almost $100,000 in cash.
Well this week Phil was engaging in an experiment to see how he would perform without taking action in the market so I can’t give you a blow-by-blow as usual but it is self-evident that even while not participating, Phil has managed to do very nicely this week! I will bid you Bonsoir for tonight in honor of Phil but please expect to see next week’s wrap-up performed by the maestro himself!
Until then, I wish you a safe and profitable week ahead.
Trade Safely!
OptionSage
