Weekly: Big Dogs AMZN TSLA

My most profitable two tickers for calendar 2019 are AMZN and TSLA. This week both reported earnings and my big dogs led to another week of profits. I was up a bit over 1% for the week. I didn’t trade all that well, taking some losses in FDX, XLNX among others. My long position in DIS did well, but on that underlying I am still underwater for the year after getting blown out on short calls, on the huge gap up.

For Amazon and Telsa, being way out of the money on sold strangles, was the secret sauce. Overall, I remain relatively cautious, but am willing to make modest amounts of hay while the sun is still shining. Way too many novices fear the bear. We had a bear on QQQ in late 2018. SPY missed by one percentage point. If we count the new bull market as having started on Dec 26, 2018, it is only four months old. Way too many people cite the ten year old bull as a reason for being bearish, when but for a technicality, the new bull is only four months old. It certainly is for QQQ.

Monthly: the train keeps rolling Grade A-

Happy Easter. It was another up week for me. New longs include PEP QCOM. For the April trading month, I made about 5%, now up 23% for calendar 2019. So despite a few big loses such as BA, DIS, UNH my overall profit/loss is in good shape. Self grade is A- as the bull train keeps rolling for now.

A few etfs ytd:

IWM +21.5% Russell 2000 US small cap
QQQ +16.2% Nasdaq 100
SPY +16.0% S&P 500 US large cap

EEM +14.1% Emerging markets equity
TLT +1.1% US 20 year treasury bonds

GLD -0.7% gold
SLV -3.2% silver

So my gain of 23% is really good. Especially because I feel like I being relatively conservative. Biggest winners include Amazon, Tesla, biggest loser Boeing.

I remain relatively cautious. I have been buying some calls in the out months, as a way to offset some delta from sold calls on the front month. This decreases the profit from theta, but reduces tail risk vs. selling more puts to get to the delta I want.

Weekly: Disney plus, Lyft, UNH

It was a tough Friday for me, as I cover positions in sold Disney calls, Lyft puts, UNH. DIS went up, LYFT and UNH went down and all were bad for me.

UNH was down after presidential candidate Bernie Sanders outlined his healthcare plan. A third of the high profile Democrats for president support similar plans. The chances of Medicare for all, or similar passing in 2020 are remote. However, in ten years, I’d give it at least 30% chance. The legislation poses an existential threat to UNH and a host of other companies.

One analogy is to buying coal stocks in 2000. At the time, the coal lobby was strong. By 2012 when Obama ran for reelection, most coal stocks were down 90% off their highs. Similar can happen to UNH.

With the rough Friday, I eek a tiny gain for the week. So a cup half empty kind of week, positive, but could have been a lot better.

Weekly: Taking some off the table

Good news. Market up, my account up over 2% for the week, new record high for my net liquidating value. I reduce my risk profile another small notch. Bought some more BSV (Vanguard short term bond etf). I survive the drop in Tesla because my positions are way way out of the money. The strong rally pressured some sold calls. I continue to rebalance back to slightly delta positive as the rally rolls on.

As I have been writing, a lot of ducks are in place for a market top. The inverted yield curve, weakness in transports, stretched valuations. However, that doesn’t mean the duck will quack soon. A term I used a lot in the past in zombie bull. The zombie bull doesn’t seem to run on logic or food, or need sleep. It just keeps lurching ahead. The market may be entering a more speculative phase. A lot of big IPOs are coming to market, a lot of them are high risk situations. The huge run up in marijuana stocks discount many years of potential growth.

As always, market tops form with a relative maximum of buyers. This means that the majority of all in, all out timers are likely to be wrong at the turn. So where does this leave us? One foot in, one foot out. Options give ways to play this, but the picture is muddy. For the first time in a while, this week, I went long premium in a significant way, for a bit. I closed the positions quickly, because it now feels so weird to be long premium. I’m not saying go whole hog on anything, because it feels like a high risk situation.