You would have if you read yesterday's morning post (subscribe here), where we picked the Russell Futures (/TF) short at 1,160 saying: "If the Russell FAILS 1,160, we'll be happy to flip short for another ride down to 1,150." As you can see, we had plenty of time to get our planned entry at 1,160 and, as we expected, Yellen's speech disappointed and the markets sold off a bit – easy money!
This morning, news of a deal between AAPL and IBM has both companies showing 2% gains pre-market. For IBM, that's $5 and that's adding 40 points to the Dow Futures (/YM) pre-market and for AAPL, that's $2 and AAPL is 20% of the Nasdaq so 20% of 2% is 0.4% added to the Nasdaq from AAPL alone pre-market plus a nice effect on the S&P from both of those heavyweight stocks.
"This is just the beginning," said Ms. Rometty, citing a statistic that most smartphones inside companies are used only for email and calendar. She said the companies hope to create new, serious business applications.
The companies said Apple and IBM engineers are together developing more than 100 new apps for various industries. The first batch of apps is expected to be available in the fall when Apple releases the next version of its mobile software, iOS 8. "Apple is not an enterprise company, but that's not their DNA. It is IBM's DNA and IBM has had those relationships forever," said Gartner analyst Van Baker. "It's an unlikely combination but a very strong one if they can pull it off."
The rest of the trade (see video) was the (adjusted) $64.29/85.71 bull call spread at $9.28 and we proposed 10 contracts, now 70 contracts, for net $24,000. The bull call spread is already at $15.70 so 70 of those is $109,900 (100 unit contracts) less the $11,900 we'd have to pay to close out the short puts is net $98,000 – up 308% already (4 months after that TV appearance)!
See, you don't need to read Philstockworld every day to make money – you can still make 50% in 18 months just picking up our scraps!
Maybe it's a bit early but that makes us 3 for 3 with our Picks of the Year since we started them in 2012 (with BAC). Last year it was also AAPL and we hit our 600% profit target on that one. BAC paid 300% so $10,000 invested in our Trade of the Year in 2012 turned into $40,000 in 2013 and reinvesting that turned into $280,000 this year and, if we flipped all that into AAPL again, that would already be $1,120,000, with another $555,000 expected. Nice work if you can get it!
At no point was more than 10% of the starting cash at risk (though margin is required and there's the downside risk of owning the stock) yet we are able to turn $25,000 into $2.1M in 4 years by compounding the returns (and making good picks, of course). We don't expect to ALWAYS have a winner but you don't need to go all in to generate some pretty fantastic returns and the rest of your portfolio (90%) can use our more conservative strategies, aimed at getting those consistent 20% returns – as calculated above.
Please keep that in mind before you chase the current rally. We don't NEED to play that game. We can use much more conservative strategies and put up CONSISTENT market-beating returns, year after year. Not only is it profitable – it's much more relaxing!
Tags: AAPL, Apple, BAC, Futures Trading, IBM, IWM, Option Strategies, Portfolio Management, Russell 2000
This entry was posted on Wednesday, July 16th, 2014 at 7:21 am and is filed under Immediately available to public. You can leave a response, or trackback from your own site.
Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!