Today sees the first rain we've had in Ko Phangan in 3 months or so. It's magnificent when it rains here because it's so rare and it gives me an opportunity to send a free market and portfolio update. First of all January was a stellar month for the stock markets. Record returns all round. Our stocks FF & FNF were highly profitable. The one surprise of the last few months was Apple dropping from a high of 700 in September to 450 as of today. We had a loss on Apple but who didn't. At 500 it was at a very strong support level, represented a massive bargain and still does. It is still a value stock. The fundamentals are incredible. The problem is that value plays can take a long time to mature. Also value investing only works when markets are going up.
The reality is that the stock market following the huge surge in January is currently only 1.5% away from it's all time high back in October 2007 the month I moved to Asia.
The big question I have for value investors is do you really want to be the one holding the largest cap stock in the stock market at an all time high. The value investing case is of course that over long periods of time stocks continue to rise. My argument is that if you were a buyer back in October 2007 it would have taken you until 2013 (5 1/2 years) to get back to break even. In 5 1/2 years you could have easily doubled, tripled or quadrupled your money in more wise investments.
Now, I'm not saying that Apple is a bad buy here. Everyone is confused as to what's going on with the Apple stock. It could turn out to be a safe haven value play when the market corrects. However I don't like to gamble on such long term possibilities. In other words I don't like to be stuck holding an investment for an indefinite period of time. I like to get in take the money and run.
That brings me to our February portfolio. Our bet for February was a move sideways to slightly up. We bought a complex option spread which expires at full profit in March if the market goes down, sideways or up by less than 3.5%. The market added 8% for the month of January another 1.5% and we hit the all time high. Once the all time high gets hit we will get a big correction - Guaranteed. The market never makes a new high without a correction.
So my bet is that the market stumbles along for the next 3 months and we make money selling complex option spreads like the one we have for February. If we hit the all time high sooner then I implement my market short portfolio.
I have been busy for the last few months putting together the perfect market short portfolio. I will be sharing it with my subscribers this coming week. All you have to do is wait for the market to take out the all time high. I will send an email alert anyway to notify you when this happens and you place the trades and enjoy the correction.
In March 2000 I sold 85% of my stock 3 weeks prior to the crash. In October 2007 I sold 90% of my stock and held one discount retailer that would and did thrive in the market correction. I've been in the markets since 1997 and this is my third time seeing this market cycle. I have never been more prepared.
If you would like access to my market short portfolio and get access to my trade alerts you can sign up for a 1 month trial of my trade alert service at half price. Just click the link below.
The reality is that the stock market following the huge surge in January is currently only 1.5% away from it's all time high back in October 2007 the month I moved to Asia.
Now, I'm not saying that Apple is a bad buy here. Everyone is confused as to what's going on with the Apple stock. It could turn out to be a safe haven value play when the market corrects. However I don't like to gamble on such long term possibilities. In other words I don't like to be stuck holding an investment for an indefinite period of time. I like to get in take the money and run.
That brings me to our February portfolio. Our bet for February was a move sideways to slightly up. We bought a complex option spread which expires at full profit in March if the market goes down, sideways or up by less than 3.5%. The market added 8% for the month of January another 1.5% and we hit the all time high. Once the all time high gets hit we will get a big correction - Guaranteed. The market never makes a new high without a correction.
So my bet is that the market stumbles along for the next 3 months and we make money selling complex option spreads like the one we have for February. If we hit the all time high sooner then I implement my market short portfolio.
I have been busy for the last few months putting together the perfect market short portfolio. I will be sharing it with my subscribers this coming week. All you have to do is wait for the market to take out the all time high. I will send an email alert anyway to notify you when this happens and you place the trades and enjoy the correction.
In March 2000 I sold 85% of my stock 3 weeks prior to the crash. In October 2007 I sold 90% of my stock and held one discount retailer that would and did thrive in the market correction. I've been in the markets since 1997 and this is my third time seeing this market cycle. I have never been more prepared.
If you would like access to my market short portfolio and get access to my trade alerts you can sign up for a 1 month trial of my trade alert service at half price. Just click the link below.
