TIB: Today I Bought (and Sold) - An Investors Journal #122 - Global Payments, French Banks, Investment Banking, Bitcoin Cash
Bitcoin Cash makes its debut and I score a handful from my broker - it feels like free cash. More work on breakouts in Global Payments, French Banks and Oil Investment Banking. Never a dull day.
Bought
Earthport plc (EPO.L): Global Payments. Earthport provides payments solutions for cross-border payments. It is aiming to act as a disrupter technology. The chart tells a story of a crash in the GFC followed by a steady rebuild for a few years and a strong spike in 2014 and an equally strong collapse in 2016. Price has been recovering in 2017 and then fallen back to test the support level (the dotted green line). It is the jump up off this level that attracted my attention.
The chatter on the forums is not flattering though it is from the dark days of late 2016. Interim results issued in March 2017 for December 2016 point to some solid revenue growth numbers and high gross margins (69%). A caution: This sector is ripe for disruption and the risk here is the dusruptor could be disrupted by cryptocurrency solutions as soon as the mainstream banks (which are Earthport customers) get into the act.
Credit Agricole (ACA.PA): French Bank. Share price has been holding above €14 for a few days - I added the next strike up call option (16) to start a staircase of options. I am already holding December 2021 strike 14 call options. Premium was higher (15.9% to strike) than I paid for options in Deutsche Bank (DBK.DE) last week. I wanted to diversify my European Bank holdings a little more - Credit Agricole still has a Price to Book Value ratio of less than 1. When you compare it to Deutsche Bank and Commerzbank you will be asking why?
The chart shows Credit Agricole (black bars) significantly outperforming Deutsche Bank (orange line) and Commerzbank (red line at the bottom). BUT it is at -59% compared to pre-GFC highs. Close half that gap and my trade will make 100% profit (shown) and I am protected to a degree from the German Elections coming up
Leucadia National (LUK): Investment Management. Leucadia is an investing banking business that also invests directly in things like beef processing and in oil exploration. I wrote in TIB116 about closing my profitable trades in Leucadia. Price has kept its upward course and I could get options a bit further out in time. I added strike 27 call options for a 5.5% premium to the strike. Closing price $26.37. One of the important investing areas for Leucadia is oil.
What do the charts show? Share price (black bars) has diverged from oil price performance (orange line) during 2017 - my investment thesis is an improvement in oil price performance will give a big jump to Leuacadia performance. We can see how Leucadia held its own when oil price collapsed in late 2014 - the reverse can happen if oil climbs.
Expiring Options
EURCHF long. I have 2 year call otpions on EURCHF expiring on August 11. The idea was to trade a breakout from the 1.10 level 2 years ago. The chart tells a story about long dated options - you can be WRONG for a lot of the time as long as you are RIGHT some time before expiry. This might just be one of those.
Cryptocurency
Bitcoin (BTCUSD): Bitcoin is making mainstream media here and in the US (underlined) - always good to see mainstream media getting onto an idea I am investing in.
Bitcoin price traded an inside bar yesterday [Means: Price was fully contained by the high and low of the previous day]. The high of $2760 was $169 lower than the previous day's high. We can attribute this to be the price for Bitcoin Cash split out. I have now drawn in a new Fibonacci retracement for the last cycle to identify possible turning points (the rainbow). I have marked in the 0.382, 0.618 and 0.786 levels as blue arrows. Price tested the 0.5 level yesterday (which is the level it turned on last time). Today it is testing 0.382. I will be waiting for reversals around those levels once my broker re-opens trading.
Bitcoin Cash (BTCUSD): Not all exchanges were prepared to support both Bitcoin and Bitcoin Cash. My open Bitcoin trades are traded as CFD's (Contracts For Difference) and not directly on a Bitcoin exchange - the broker deals with that side. My broker had not communicated what their stance was going to be. I discovered when I logged in this morning that I was the proud owner of 10 BCC. My guess is the exchange that my broker had used was supporting Bitcoin Cash. As I write this the current price of BCC is $539.73. The snippet shows the two holdings I have side by side.
I bought the Bitcoin holding at the top of the market and am currently down around $2500 and the 10 BCC are worth over $5,500 - that tells me I got $3000 for doing nothing - feels like cash for free. I am wondering when my broker will allow me to sell the BCC. The X next to the name on the left tells me the market is not open = phone call needed. Now the talk is, there is going to be a big dump before the dust settles. Time will tell.
The Forbes article has the background and some solid data - always good to see mainstream media getting onto an idea I am investing in. It also poses ideas about what Bitcoin Cash would need to do to be a success. The key quote is this
There’s too much effort to go through to do what they’ve (Bitcoin Cash) just done with no strategy for the aftermath. Don’t underestimate your opponents. They could have been front running, buying up a bunch of Bitcoin a year ago with these plans at cheap prices
Vinny Lingham, the chief executive of blockchain identity startup Civic
Currency Trades
Forex Robot did close trades (0.09% return) and is trading at a negative equity level of 6.7% (higher than prior day's 5.7%). You can follow the robot live at http://mymark.mx/LiveUSITech
Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas..
Images: I own the rights to use and edit the Buy Sell image. News headlines come from Google Search. All other images are created using my various trading and charting platforms. They are all my own work
Tickers: I monitor my portfolios using Yahoo Finance. The ticker symbols used are Yahoo Finance tickers
Bitcoin: Now the fork business is over, Bitcoin activity is back in business If you want a low cost way to enter Bitcoin, you can buy a package for as low as €50 (in Bitcoin) and earn Bitcoin at a rate way better than your bank could offer - think weeks instead of months. http://mymark.mx/USIBitcoin
Forex: You can start your own forex robot trading if you have a reasonable amount of capital to start (I recommend $5,000 or more as that gives you more trading pairs and lower negative equity). Software is a one-off lifetime fee of €600. Register at http://mymark.mx/USITech
August 2, 2017
Tweeted
https://twitter.com/profits_bitcoin/status/892952000664436736
Great read as always @carrinm. Yeah the BCC situation is interesting, there will likely be a dump initially when people can sell (as is human nature to cash out) but what happens in the weeks after will really tell us if the new coin has staying power.
new coin is here to stay imo!
Forbes article makes that point too - they have a lot of things to do right but I agree that they would have had all the action steps mapped out before they decided to make the split choice. It is going to be an interesting time.
Nici post @carrinm i like it