PhilStockWorld December Portfolio Review – Phil Davis
3 min read$1,535,280!
That is up a lovely $48,402 from our November Review for, which is very nice for a month we played very cautiously, We’re up 155% for the year in our paired portfolios (LTP/STP) but the STP is, at the moment, down 42.5% as the market has been all uphill since we rebooted our hedging portfolio on October 28th.
We reviewed the Long-Term Portfolio in yesterday’s Morning Report. Well, not a review as we didn’t change anything but, at the moment, I’m not inclined to. The market keeps rising and our long positions are doing extemely well so now it’s time to put some of that $48,402 in profits to work adjusting the protective hedges in our Short-Term Portfolio. This locks in the gains of the LTP and allows us to leave those positions in play – even though we are unsure the rally will keep going. We’ve been nervous since September – the hedges are what let us keep participating in the upside – they are the cost of insurance.
Short-Term Portfolio Review (STP): $114,960 is down $76,885 from our Nov 18th Review but the gains in the LTP more than made up for it. As noted yesterday, we cut about 1/3 of our LTP long positions on 11/17 and that left us leaning much more bearish – now we are too bearish if the market keeps going higher but we do have tons of cash in the LTP ($800,000) to deploy on longs. Meanwhile, we’ll maintian our hedges over the holidays – just in case.
- FXP – This is our new hedge on China (ultra-short) maybe not being as strong as people think. It’s alreay up so that’s a good sign for us – not so much for China….
- TQQQ – Still has that new trade smell. In this case, we are shorting the ultra-long ETF for the Nasdaq as we think the Nasdaq is toppy and the 3x Ultras tend to decay over time so we think this could be a nice winner – even if the market stays flat.
- CMG – This one is killing us. We knew it was more of a gamble but holy cow! The $1,300 puts lost a surprising amount of money and not much offset by the short puts (half-cover). It costs $45 to roll the 2022 $1,300 puts up to the 2022 $1,400 puts, so that would be $27,000 and we could sell 5 of the Jan $1,250 puts for $10 ($5,000) so, effectlively, the 2022 roll will be paid for by a series of short sales so we may as well make that investment.
- SQQQ – Overall, it’s about even so a good hedge. We’ll have to roll the short Jan $21 puts along but no hurry. The June $18 puts are $5.50 and SQQQ is at $16 so we’ll be fine and we’ll sell more short calls when the Jan $25s expire but also no hurry.
- TZA – In this case, there’s no point in the April $25 calls as they only have 0.13 left to give us over the next 4 months so let’s buy those back. We don’t need to buy back the Jan $40 calls as there is no chance they won’t expire worthless. The April $10 calls are just 0.75 so we can roll those to the 2022 $5s at $3 for net $2.25 ($45,000) and pay for that by selling 200 2022 $15 calls for $1.40 ($28,000) so we are investing net $17,000 more in the trade to be $40,000 in the money on a $200,000 spread. Realistically, a 20% drop in the Russell would be a 60% gain in TZA to $11.20 so we’d get about $120,000 on our $47,000 insurance policy (including what we paid before).
Money Talk Portfolio Review: We had a bit of carnage on the 8th as we cut positons in Ford (F), Barrick (GOLD) and Viacom (VIAC) as they made TOO MUCH MONEY and they weren’t worth keeping. We added our 2021 Trade of the Year, Intel (INTC) just in time for them to take off (or maybe it took off because we announced it) and now we stand at $151,058 – up 51.1% for the year, which is fantastic on a portfolio we only adjust once a quarter.
This portfolio is protected by having $124,275 (82%) in CASH!!! Of course the positions have leverage but there is plenty of money to adjust with and there’s not a position there we wouldn’t be happy to own more of so now we can just wait and see what happens over the next few months (next time I’m on the show).
IN PROGRESS…
