As advertised late last night, I’m here to talk about stocks this evening. Let’s get right to it by taking a stroll through some thoughts regarding my portfolio.
We’re 11 days into the month (roughly the mid-point), so now is an apt time to provide an update about my initial foray into the seasonality strategy outlined here. 10% of my account equity was spread evenly among three stocks. Those stocks (cost basis) are listed here:
- $CVD (46.36)
- $ETP (43.45)
- $ICLR (21.49)
As of the close on Friday, all three were under-performing the MTD performance of $SPY, so that is a little discouraging, but I’m not going to start hastily instituting changes after 11 days.
I’m holding all positions until they appreciate 3% from my basis or the last trading day in June, whichever happens first. Obviously the idea is to create consistent 3% monthly returns, with the realization that over time they will be more in the ballpark of 1.5-2%.
A personal goal of mine is for 2% monthly returns on total account equity, so anything I can do to contribute to that effort is fantastic.
In other news, I currently hold the following positions (by size): $MO, $THLD, $SAVE, and $XLF July 14 calls with a 22% cash position.
$MO is currently (and will always be) a runaway winner for me. Right now it constitutes close to 25% of my assets. After going ex-div last week, my cost basis is down to 23.95.
Nevertheless, I’m at a crossroads with this position. There are a number of stocks that I like and am watching pretty closely, therefore I need to either a) raise more cash to buy them or b) go on margin. I’d like to avoid the latter if possible. Every time I have thought about selling some of this position to raise cash, my reluctance has been rewarded.
This recent move does seem to be a little overdone, especially if money is going to start flowing into riskier securities in the coming days.
Or maybe this thing going ape is a ‘tell’ for where the money is actually going. We will see.
I have been on and off the $THLD train for the past few months, building a position near the bottom of the range, selling out of 2/3 of it near the top of the range, then repeating that same process. As of last week, I’m on round three of this adventure with a current cost basis of 5.96. My stop is right around 6, so this trade is going to be somewhat successful even if this latest round of buying flops.
Over time, I have learned to be weary of the long consolidation pattern that seems to be forming right now. Breakouts are beloved by many technical traders; however I have found that breakouts from these long consolidation patterns often are initially in the opposite direction of the eventual move. Since my buying strategy is more anticipatory in nature (versus reactionary), I usually get shaken out of these trades even though I was properly speculating the eventual direction of the move.
I opened a position in $SAVE right before the close on Friday. This trade was based on a pattern being formed on the weekly chart of this stock. There are others that I am/was keeping an eye on, but I kept coming back to this one. My stop is below the lows of last week (17.30′s), and I’m taking a 1.5% portfolio risk with this position. I’ll be watching to see what prices do as they approach the 20 week MA around 20.25, but I’m in this with the expectation that it goes to new highs (25+).
As for the $XLF July 14 calls, this trade was made based upon an oversold condition flagged in The PPT last week (with favorable results). I took a flier on these contracts with a 2% portfolio risk. I’d really like to see a pop over the 14.50 level as that would make it much easier to take partial profits on this position in an effort to lower my cost basis from it’s current level (0.53).
I wanted to delve into some of the other stocks that I’m keeping an eye on based on the weekly charts, but that’s going to have to wait for another post. Hope everyone had a good Father’s day…I did.
My best to you all.
9 Responses to Thoughts on Seasonality and Other Items
EM – What strategy are you using or considering to diversify?
This represents 1 of 3 strategies that I use. Basically, this is my “trading” account and represents less than 30% of my investment funds. I also have a strategy that goes long $SPY when an indicator I use is “green” and goes to cash when “red”. It’s been red for a while now. The other is a large portfolio of dividend stocks with the goal of producing income after a long period of time (30+ years).
Those two strategies are fairly simple and are the equivalent of watching paint dry, so I don’t talk about them here.
“I’m holding all positions until they appreciate 3% from my basis or the last trading day in June…”
This is a PERFECT EXAMPLE of somebody who is gonna get their ass kicked by the markets.
THE MARKET DOESN’T GIVE A CRAP WHAT YOU PAID!
Stay long MO. Always let winners run.
Losers are not tolerated in my accounts. All positions have an appropriate stop loss and if they do not perform as expected, they are cut from the team immediately.
Using time stops in conjunction with price stops is effective, especially with options, but without a price stop, you are opening yourself up to horrific losses.
Yeah, I’m going to give $MO some room to breathe and let it go. I have been rewarded thusfar for that philosophy.
All of my positions also have defined stop losses with the exception of the seasonality strategy I have in place here. Of course I think it is risky to go into these without any semblance of an exit point, but the amount I’m risking is so small, that it wouldn’t be “horrific” if things went completely awry.
If that were to happen, it would give me a frame of reference and could help me determine where an appropriate stop point would be for positions in the future.
Listen. I’m all for intelligent discourse and encourage disagreement with my thoughts and opinions.
That said, don’t come here to my blog and with your first fucking comment start yelling and linking to some fucking condescending post as if I have no fucking clue what I’m doing here. Yeah yeah yeah, I know, you’ve been doing this for a long time and I’m just some simple asshole. I don’t give a shit how old you are, show some fucking respect.
Oh, by the way, even if the positions in question lose 30 percent it will still be roughly 1% of my total account equity. This is for experimental purposes only, using a small chunk of account equity.
OH THE FUCKING HORROR!
I love your anger, short-timer. Redhead?
Hah…no, but redheads do tend to be fucking nuts.
PS, $ICLR was closed this AM at 22.30, +3.8%