PhilStockWorld January Portfolio Review – Part 1

$2,518,702!  

That's up $309,256 since our last review for our paired Long-Term (LTP) and Short-Term (STP) Portfolios since our December 16th review, where we only made a few small changes.  That's because, at the time, we were down $64,619 from our Nov 18th review and we knew we'd bounce back but this month made up for it in spades and we're now up $1,918,702 (319%) from our $600,000 start back on Oct 1st, 2019.

A flat to down market is just what we've been playing for this fall and, now that we hit our 15,000 goal on the Nasdaq right on schedule (January expirations) we will now have to play a lot more balanced into earnings so we can gather more data.  

We reviewed our Short-Term Portfolio (STP) in yesterday morning's PSW Report and we have $800,000 worth of hedges against a 20% drop.  HOWEVER, we don't expect a 20% drop as we're already down 10% so call it $400,000 worth of protection against a 10% drop but, fortunately, our Long-Term Portfolio (LTP) is sitting on $1,848,403 (78%) in CASH!!! – and that itself is a nice hedge against a drop.  So I THINK we are properly balanced at the moment but we're still going to take a very skeptical view of our current positions – looking to cash out anything we're not HAPPY to double down on if the market does drop another 20%.

After a busy late November, early December adding 19 bullish positions while things were on sale, we added just one new long (MRNA) to the LTP since our last Review.  With 40 long spreads and 22 short puts – we have more than enough to manage at the moment and, like I said, we'll be looking to cut more than add for now.  

Short Puts – This is how we usually initiate a trade in the LTP.  MRNA, in fact, started with the short puts and we just got more aggressive on them last week.  We have collected $208,390 selling short puts – essentially promises to buy stock if it falls below a certain price and, usually, we aim for at least a 20% discount to the current price.  If all goes well, we'll realize those gains over the next two years and, even if it doesn't – with positions like the Biotect ETF (LABU), we're more likely to add than bail out. 

• Notice we sold the LABU 2023 $30 puts for $7 and LABU is now at $21.94 so we're down net $1.06 ($1,590) from our net $23 entry but our portfolio is showing a $10,650 loss at the moment.  Once you learn how the pricing works and then you learn PATIENCE (the hardest thing we have to teach our Members) – this becomes a very relaxing way to play the market.  

• COIN – Also silly as we're in for net $155 and, at $223.40, we show a $4,800 loss.  Very likely we'll be adding to this one once we get comfortable that the sell-off is over.  

• YETI – Another one as it's net $58 if we enter it and the stock is at $68.59 but the short puts show a $3,050 loss.  Love this as a new trade and we are likely to build on it, depending how earnings (2/17) goes.

• TROX – On track, not worried.
• CIM – A dividend play that's over our target so we are well-protected.

• APO – Over target.
• BABA – Worrying but I really think this is the bottom and we got really aggressive so we'll let it play through earnings (early Feb) at least.  

• BIG – We bought it on the pullback so we are on track.  
• BNTX – Unlike MRNA, BNTX is not exclusively an mRNA platform.  They are in a lawsuit that is dragging the stock down and it's down 50% since our last review so, if we are going to stay in, we need to adjust.  We're down about $27,000 and our asset is the 2024 $300 calls, which are still $29.60 ($29,600).  Let's roll those to 15 of the 2024 $150 calls at $67  ($100,500) and roll our 10 short 2024 $400 calls at $18.45 ($18,450) to 10 short March $200 calls at $11.25 ($11,250).  So we're spending net $78,100 but the short March calls are only using 58 of the 730 days we have to sell (and not even a full cover) so 10 more sales like that (580 days) would bring back $184,500 – not an unattractive position.  If it goes lower, we can sell more short-term calls and some puts to pay for the next roll and, if it goes higher – we can always roll the short calls back to a wider spread.  

• BYD – Sports betting does seem popular and BYD is a good casino operator too.  The short $70 calls will expire worthless so let's sell 10 of the March $65s for $2.20 ($1,100) to keep the cash flowing in.  
• CAKE – Very disappointing so far.  We'll have to wait for earnings (mid-Feb) to see what makes sense.  
• CLF – Right on track.  

• DAL – They just had earnings and guided for a profitable year despite Omnicron.
• DOW – On track.
• FB – Funny to invest in as I hate this company.  The short Jan calls are already worthless so let's sell 3 of the April $340 calls for $13 ($4,200) using 85 of our 366 days.  

• GILD – Over our target already.  
• GOLD – We're aggressively long here and OK so far.
• HAL – Milles over target.
• HBI – On track at net $1,100 on the $20,000 spread so it's $6,000 in the money and there's $18,900 (1,718%) left to gain if HBI can make it to $20 by the end of the year.  

• HPQ – Way ahead of target and I'm waiting for them to announce a 3D house printer.  
• IBM – Our Stock of the Year for 2022 – over target already.  

• INTC – Our Stock of the Year from last year and already at target.  
• KHC – On track.
• LMT – Our Stock of the Century is already over target (these things are good to follow!).  

• MO – On track
• MRNA – Our only new trade and boy did we get killed on the calls but, fortunately, the short calls provided some balance.  We're not sure this is a bottom but we do want to keep them so we take advantage and roll the 20 2024 $200 calls at $54.88 to 20 of the 2024 $150 calls at $63 for net $8.12 ($16,240), which widens the spread by $100,000 and drops us $72,000 in the money.  If you're not willing to spend money to do that – then you shouldn't be in the trade!  

• MU – Deep in the money already.  

• PAA – We're in it for the dividend and the short Jan puts are expiring so let's sell 40 of the 2024 $10 puts for $2.10 ($8,400).  We don't need a stock to go up to make good money – flat is just fine using our system!

• PFE – Already at our goal.
• PHM – Also at our goal.
• QSR – We're aggressively long ahead of earnings (2nd week of Feb).  I'm concerned Omnicron is having an impact but I love these guys long-term.

• RIO – I could not believe how cheap they were.  Up more than 10% now and well over our modest target.  
• SKT – We just cashed out our original longs and the 180 2024 $20s are just playing with house money.  Mostly we'll take advantage of selling shorter-term calls along the way, we already collected $24,000 against $54,000 using 1/2 the time with a 1/3 cover. 

• SPWR – Our Stock of the Decade is off to a rocky start though we came in at $5, so we do not care at all.  On THIS trade, however, we are aggressively long and waiting for a nice pop to sell calls.  Earnings are around 2/20.  
• T – Another stock that got stupidly cheap.  The Jan $33 calls will expire worthless (thanks for the $10,500!) and I don't like the prices of the April calls enough to sell them yet BUT that would be irresponsible so let's just sell 50 (1/4) of the April $28 calls for 0.95 ($4,750) as that's at least something towards rolling the long calls lower if 5G becomes a big problem in the rollout (airline issues).  

• TD – These guys have exploded higher and we'll roll the short calls eventually.  
• VALE – Another stock that was stupidly cheap and we were aggressively long.  I'm not inclined to sell short calls yet, we'll see how they handle $16.

• VIAC – The short Jan calls will go worthless and I don't want to cover at the moment so nothing to dow but wait.
• VTOL – I want my flying car!  Already at target. 
• WPM – Kind of lackluster so far but we're making money anyway, so no worries.

• X – Nicely on track already.  

Well, we could not find one thing to cut and I guess that's a good thing.  Not too much to adjust either – a nice, relaxing way to make money while we see how Q4 earnings go.