PhilStockWorld July Portfolio Review – Part 2

Down and down we go!

The S&P 500 is down 20% since April and the Dollar is up 10% since April. Is that a coincidence? Not only does a rising Dollar push down the price of stocks and commodities but it also lowers the revenues collected from devalued overseas currencies and that impacts earnings. That is even worse for companies who pay their workers and expenses in expensive Dollars - it's a double hit to the bottom line.

Silver (/SI) has dropped down to $18.50 this morning and we are thrilled to take a long here (with tight stops below that line) and Oil (/CL) can be played long at the $95 line, looking for a re-test of $100 and a $5,000 per contract gain (tight stops below). I also like the Russell (/RTY) long at 1,700 - a good support line.

This morning's dip (and Dollar spike) is caused by Europe cutting their 2023 GDP forecast from 2.3% to 1.4% - indicating a long, lingering Recession. Well, not a recession as 1.4% is growth - just not a lot of it. This year, in fact, is still at 2% so thing are nowhere near as bad as they were in 2020 - despite the war raging on their boarders.

Still, when I was being interviewed on Bloomberg last night, Kim closed by saying how optimistic I was, which was very funny as I was the pessimistic one most of last year but she's right - 99% of the guests on Bloomberg, CNBC, etc are telling investors that the World is going to end - and I'm seeing bargains.

I don't think I'm crazy but I may be early and we don't mind being early because we are well-hedged. If the market drops 50% from here, like they did in 2008/9, then our hedges will provide us with enough cash to buy 2 or 3 times the amount of shares we have now - and then we wait for a recover (or the actual end of the World). That's our backup plan!

For the moment, however, we are sticking to our plan to get a bit more aggressive at what we HOPE is merely a re-test of the June lows - and not a prelude to a break below them. Keep a close eye on EuroStoxx at 3,400 - below that is a new low for them and Germany's DAX has already broken below their June lows - it will be bad if the close there today.

Future is Looking Bleak Portfolio Review: It used to be called the "Future is Now" Portfolio but things have sure changed since we started it! $190,367 is up $6,620 from our last review but, overall, the portfolio is still down 4.8% from our 12/12/19 start - our worst performer by a mile. An optimist might say you are getting in on the ground floor!

Only two adjustments and very little money spent - I'm happy.

Long-Term Portfolio (LTP) Review: We made a lot of adjustments last Thursday and we're down about $100,000 since then at $1,481,934 and we used $220,000 of our cash on the adjustments but we still have $1,056,055 left - so we COULD do more - but I want to be cautious.

• Short Puts - This is where it gets dangerous as we can't REALLY afford to own all these but we do have another $1.2M in the STP so the loss is not a big deal vs the gains over there. We're not going to worry about them until the 2025s come out and then we will decide who to roll and who to buy back. It would cost $440,000 to buy them all back with a net loss of $110,000 - not terrible - therefore we can afford to wait.
• WPM - These are going to annoy me so let's close them out . Just the two at the top and we'll stick with the lower play.
• APO - I don't want to risk the short Jan $65 calls so let's buy them back .

• CIM - My favorite REIT is way too cheap at $8.85. Let's buy back the short Jan $100 calls for 0.43 .
• CLF - Let's buy back the short 2024 $22 calls for $2.38 as they are up 60% and I think $15 should hold (even though it isn't).

COIN - We'll see how earnings go.

CROX - Here's a great example of how you can't take your portfolio balance for granted. It's ridiculous that we're losing money on our long 2024 $50 calls AND our short 2024 $90 calls - it's a function of the VIX and really tells us we should be selling more short $90s but it's a big enough position as it stands.

• DOW - Down and down they go! If the market wasn't so shaky, I'd double down on the longs. Let's buy back the short $65 calls with a 56% profit .
• EBAY - Are people not using EBay anymore?
• GILD - On track and it should be - it's a cash machine.
• GLW - At the bottom of our range.

LOGI - Love these guys, stupidly cheap.

• MT - Another one I love.
• MU - Way too cheap.
• NFLX - I think their ad model will work so we'll have to wait and see.
• PAA - Right on target.
• PARA - I can't get over this one. $24 is $16.2Bn and they make $1.7Bn even in a spending cycle. When they are done spending in 2 years, more like $3Bn to the bottom line.

• SBUX - On track
• SKT - Got cheap again. Let's buy back the short $15 calls for $9,000 and give them a chance to recover.

• SPWR - You know I love them.
• SWK - Waiting for 2025's to roll the puts.
• T - Nice and bullish.
• TD - So stupidly cheap we have to double down on the calls . If they go lower, we then roll those calls down and, if they go lower, we DD again and then roll. Early innings...

• VTOL - Another one I'd add to if the whole market wasn't so iffy.
• WPM - This is what's left after killing the ones on top.
• WSM - On track and good for a new trade.
• X - Should have quit when we were ahead. Now we have to wait for them to cycle back. Let's buy back the short $27 calls .

Just 10 adjustments is good for the LTP and we still have tons of CASH!!! to deploy. At a certain point though, if we get a pop we take in a lot of cash re-covering our open long calls. For now - we'll be reacting to earnings as they come across the desk.