TIB: Today I Bought (and Sold) - An Investors Journal #217 - Europe Insurance, UK Retail, Solar, Oil Services, US Banks, Bulk Shipping, Lithium
Three weeks away and wondering how unattended portfolios go. They did a lot better than the media would have you believe. Some trading activity mostly taking profits in a number of arenas
Portfolio News
Crypto Crash Bitcoin tested the lows while I was away and made its recovery dragging all the altcoins along with it. 3 weeks is a long time in crypto markets. It seems that the tax selling panic went past and the regulatory pressure eased off a little and Wall Street remains interested.
Market Selloff I did watch a little of the news headlines. Each day seemed to be another story of a sector under pressure - technology stocks one day, chip stocks the next, retail stocks then US Defense. A snippet from Google news tells the story from yesterday.
The 3 week snapshot of my portfolios tells a different story with overall performance across all my portfolios up between 2 and 4% in aggregate. Market fear is still lurking and I totally disagree with David Solomon, Goldman Sachs CEO, saying that Greed is currently more dominant than Fear.
Bought
Swiss Re Ltd (SREN.VX): Swiss Insurance. Added to December 2021 strike 92 call options after share price had pulled back. While the premium was at a price I like (8.3% to strike price), it was higher than my previous purchase = a strange decision.
Sold
J Sainsbury plc (SBRY.L): UK Supermarket. UK market has been lacklustre as GDP stops growing in the face of Brexit changes and market uncertainty. J. Sainsbury has been typical of this. I decided to lock in the small profit of 3.9% since January 2018 and move on. I was surprised to see the bid for ASDA Supermarkets as I did not think the regulator would allow a merger among the top 4 supermarkets.
First Solar, Inc (FSLR): US Solar. 199.9% profit since May 2017. Shares assigned on covered call income trade. Income trades added a net 3.56% income to capital profit.
Halliburton Company (HAL): US Oil Services. 15.8% profit since July 2015. Shares assigned on covered call income trade - partial sell of position. Income trades added a net 2.8% income to capital profit.
SPDR® S&P Bank ETF (KBE): US Banks. I decided to lean my US banking investments towards the regional banks some weeks ago - selling the overall ETF is consistent with that thinking as it is dominated by the big banks. 58.7% profit since April 2016.
Safe Bulkers, Inc (SB): Bulk Shipper. I wrote in TIB215 that bulk shipping was a potential victim of any China-US trade war. I set price targets for two holdings (SB and SBLK) to take profits and they were taken up. 129.8% blended profit since Nov to Jan 2016/17
Star Bulk Carriers Corp (SBLK): Bulk Shipper. 213.8% blended profit since Dec to Jan 2016/17
Sociedad Química y Minera de Chile S.A (SQM): Chilean Lithium. 123.6% profit since August 2016. Shares assigned on covered call income trade. Income trades added a net 13.05% income to capital profit. This was a great investment in salt brine lithium production which can come on stream faster than hard rock. I remain well invested in Lithium in other areas - mostly hard rock
Whiting Petroleum Corporation (WLL): US Oil Explorer. This trade was identified on a Price to Book Valuation screen. It was time to take profits on a dip in oil price for 37.7% profit since March 2018.
Aegon N.V (AGN.AS): Dutch/US Insurance. Sold December 2020 strike 5.6 call options for 25.7% blended profit since March and May 2016. Price has been holding above this strike price for some time and not really keen to move to the next (6.4). I sold this holding as I am exposed to 2021 expiries at 4.8 strike and 6.4 strike.
Expiring Options
Invesco Ltd (IVZ): US Investment Management. Trade set up for short term cycle profits expired worthless. The trade idea is to trade continuing cycles (either up or down). This trade was running a lovely cycle - follow the red uptrend line. It completed 2 mini cycles after the time I entered and then price broke the uptrend line.
The strategy calls for closing out the trade at 50% loss, if price falls that far. Price fell sharply below the 50% options premium loss in a few days in February and only made a partial recovery.
Pfizer Inc (PFE): US Pharmaceuticals. Trade set up for short term cycle profits expired worthless. I write in TIB205 my thoughts about short term options trading
The net outcome of the trade is I have still to recover $0.50 premium to reach breakeven. Short term trading using options is not easy in a volatile market
Time to review this trade idea - I do like the concepts. Maybe it needs longer timeframes than 45 days.
Income Trades
Of the 10 income trades written for April expiry, 3 were assigned with the remaining 7 expiring worthless. As I was on the road travelling, I have written only two new contracts (see below). I will set up the US trades tonight.
Commerzbank AG (CBK.DE): German Bank. Sold May 2018 strike 11.5 calls for 0.77% premium (1.97% to purchase price). Closing price €10.80 (lower than last month). Price needs to move another 6.5% to reach the sold strike (easier than last month). Should price pass the sold strike I book a 62% capital gain. Income to date amounts to 24.8% of purchase cost.
Deutsche Bank AG (DBK.DE): German Bank. Sold May 2018 strike 11.65 calls for 0.78% premium (0.97% to purchase price). Closing price €11.65 (lower than last month). Price needs to move another 6.4% to reach the sold strike (easier than last month). Should price pass the sold strike I book a 7% capital gain. Income to date amounts to 17.8% of purchase cost. Deutsche Bank is under-performing its peers with a change of CEO adding to the woes. The income trades percentage shows the power of this strategy for stocks that are going sideways like Deutsche has been.
Cryptocurency
Bitcoin (BTCUSD): Price range for the three weeks was $3144 (32% of the high and 47% of the low). The chart shows a classic bottoming - now we wait for the retest and break up.
CryptoBots
Outsourced Bot With the resurgence of Bitcoin price, this robot has been active with closed orders now reaching 182. Closed trades now account for $402.90 which is 80% of what I paid for a one year subscription.
There are still a bunch of problem children (>10% down) - ETH, ZEC, DASH, STRAT, NEO, ETC, BTG, ENG, GAS (9 coins)
The following coins have moved off the problem child list last reported -EOS, XLM, ADA, QTUM, ARK, OMG with EOS, and QTUM trading back into profit.
New positions have been created in XRP, DGD, and LTC. There is some way to go to trade off the problem children totals.
Profit Trailer Bot: I changed the bot over to trading Ethereum pairs when I went away. I was operating with 3 levels of Dollar Cost Average (DCA) (-3.25, -5.25, -7.75) with a stop loss set at -14.75%. My thinking was to limit losses using the stop loss. The trading was restricted to trading pairs over a certain limit and excluded trading in coins that had been listed within the last 60 days. The challenge is finding ways to avoid pump and dump schemes. I let the robot run. Overall the bot closed 194 trades for a net loss of ETH 0.05 based on 7 stop loss trades which had disproportionately high losses because they had been through 3 levels of DCA each (bar one).
The coins that went through stop loss were EVX, SUB, MCO (3 times) and ADX (twice). All 4 of these coins were subject to pump and dump which took them over normal volume levels and into the screen. Here is an example chart for EVX
Of note is that of the 8 coins that went to 3 levels of DCA - i.e., to -7.25%, only 2 recovered before hitting stop loss at -14.75%.
There are a few ways to mitigate pump and dump schemes
- Run a volume screen. I would like to be able to add a change in volume screen too
- Avoid newly listed coins
- Blacklist specific coins that have been prone to pump and dump in the past.
OR
- Run a whitelist of proven coins.
OR
- Do not do DCA and run a stop loss.
Closed trade analysis shows 135 trades with no DCA, 40 trades with one level, 11 trades with 2 levels and 8 trades with 3 levels. This suggests to me the next test is to run 3 levels without stop loss for a while.
Dollar Cost Average (DCA) list is currently 8 coins of which three (OAX,BTG and KNC) are pump and dumps.
New Trading Bot Manual trades for Bitcoin Cash (BCC) were closed out at a 24% profit after a strong move ahead. Overall trade positions are down 19%
I will close out each of the losing positions when they pass breakeven manually.
Currency Trades
Forex Robot closed trades on 4 days (0.82% profit) and is trading at a negative equity level of 16.1% (higher than prior report (13.3%). This is an uncomfortable level.
Outsourced MAM account I run an outsourced forex trading account with Actions to Wealth. They closed out trades on several days for 0.11% profits - a hard way to earn $14.
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. David Solomon image comes from Bloomberg.com. 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
Charts: http://mymark.mx/TradingView - this is a free charting package. I have a Pro subscription to get access to real time forex prices
Bitcoin: Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
April 10-27, 2018
Nice post about investing......
Thanks
@carrinm You have earned a random upvote from @botreporter because this post did not use any bidbots.