LOL!'s Market Timing Newsletter

[LOL!]

I sold VCSH and BND (bond ETFs) today to get the cash to buy. They were both up a little bit today.

Also, I can unwind the VBR and VXF positions without "free-riding" nor wash sale possibilities at any time because I own them in other accounts from way back, so I have positions with long-term gains that I can sell. When I do realize the gains, I will offset them with my carryover losses, so I will not have taxes to pay.

And if they go down, I have more bond fund shares to exchange into equities, but VBR is up almost 1% from where I bought already. There, I've jinxed it.

 

[papadad111]

This volatility is awesome "fun" for trading. The 100-200 point daily swings are a better buzz to me than even the finest (pick your poison). ...

 

[Fermion]

Yes but my fun is crimped because my favorite trading stock, Gilead is down hard at the beginning of the year and I cannot buy it because of wash sale rules. I traded it up for a profit in 2015 but had a slight loss in the last trade on December 21. I need that loss to stay in 2015 for ACA reasons so if I buy Gilead now it will wash out that loss and move it to 2016.

Stupid wash sale stuff. I hate hate it. I could make a ton o money in Gilead right now.

 

[NW-Bound]

Just bought a bit of a 3x leveraged S&P ETF.

And for a longer-term holding, also a bit of a US telecom ETF which is a mixture of ATT, Verizon, T-Mobile, etc... This has a dividend yield of 3.55%, which falls short of those from Mulligan's preferred stocks but I expect to get nice cap gains when the market is back to normal.

 

[papadad111]

Good suggestions NW. I'll have a look. I bought more vanguard dividend VYM yesterday just before the close too...

Been trading KMI calls this morning for a quick 1200 profit. Gas Grass and Ass money as we used to call it ...

 

[NW-Bound]

Stupid wash sale stuff. I hate hate it. I could make a ton of money in Gilead right now.

Perhaps you can get another biotech or an ETF instead. The whole sector has been beaten up.

 

[papadad111]

Fear my onion. Why not go long a few far out dated options on GILD as an alternative ?

I gave up trying to manage our MAGI for ACA as a reason NOT to at least try to make some shekels in the markets.

In a few trades I figure I can cover all the family's ACA subsidy ( even after paying short term cap gains taxes) so why not do that. By March or April Ive covered the subsidy and back to working for myself again so to speak.

 

[Fermion]

I don't know if the call options on Gilead might be considered similar enough to the calls I sold in December to trigger a wash sale. I don't think different expiration dates would be enough to make them not "substantially similar"

The reason I like Gilead is it has a PE of 7.5 and a cash flow of around $30B a year.

 

[papadad111]

Don't let the tax tail wag the dog. Get in there with some moolah while GILD and rest of the market is on sale.

One for u and one for the tax man is better than none for you ... Gotta be in it to win it.

Upside in options right now may be the way to play for gain-max ... Or get the biotech ETF or options in that as alternative.

 

[Fermion]

If I lose the 2015 slight loss on my last Gilead trade to a wash sale in Jan 2016, I will go over the 400% cliff for ACA and lose about $2000 of subsidy that is coming to me.

Thus I would need to manage an option play this week that would net me more than $2000. Not an easy task without putting a lot of money at risk.

But I should have purchased the IBB, which has a significant exposure to Gilead. It is up 4% today. Oh well.

It does not have good options though....too thinly traded.

 

[papadad111]

Ok. Fair point.

But ... The way I see it, You could take the full year of 2016 to make that $2000 dollars that you have coming from ACA subsidy by way of trading ( ok. Call it 3000 because there are taxes etc) or more ....

I have confidence that 1. You're smart enough. 2. Disciplined enough and 3. know what you are investing in - the one or two companies, to spot opportunities.

Could you maybe manage that in a few trades spread over several months? Doesn't have to be a one time trade !!!

I bed you could easily do that. Maybe more !

I always find 4 or 5 " thousand dollar" days across the year where i can get in and really do ok on some quick trades... Well enough to not care about the ACA subsidies being my decision maker on a trade !

 

[Fermion]

Sure I can trade, just have to wait until Jan 23 for 31 days to have passed.

Gilead might give yet another opportunity if Merck's Hep C drug is approved. It might dip down for a short time to the high $80s. If I miss this opportunity, oh well.

 

[Mulligan]

Just bought a bit of a 3x leveraged S&P ETF.

And for a longer-term holding, also a bit of a US telecom ETF which is a mixture of ATT, Verizon, T-Mobile, etc... This has a dividend yield of 3.55%, which falls short of those from Mulligan's preferred stocks but I expect to get nice cap gains when the market is back to normal.

Cap gains are great too, NW! Its just sometimes I panic too quickly to stay long enough to recieve those common stock cap gains rewards!


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[NW-Bound]

Yes, cap gains would be great if they were not accompanied by the not-so-infrequent cap losses.

It is never a sure thing, but when the market has been through a bad period, the chance of the former is slightly enhanced. So, I nibbled a bit. The reward is minuscule compared to the PowerBall jackpot, but the odds are a lot better.

 

[Mulligan]

Yes, cap gains would be great if they were not accompanied by the not-so-infrequent cap losses.

It is never a sure thing, but when the market has been through a bad period, the chance of the former is slightly enhanced. So, I nibbled a bit.

Here is how the game is played...You and I both buy stock "A" at $10. I bail when it hits $8, you hang on down to $7, then eventually sell out at $12. NW, files a capital gain on his taxes, while I file the $3k tax loss, and wait until next year to carry over more losses!


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[NW-Bound]

Well, I have hung on to stocks that went down so much they were not worth the commission to sell (I try to not do that anymore). Compare that to Mulligan who buys stocks at $50 which stay at $50 but give him a few bucks of dividend every year, who's to say which is better?

When it comes to investing, a lot depends on execution. Even among people who do indexing/rebalancing, they have different returns. Do they do better than the established balanced funds, whose managers may be more skilled at taking advantage of market fluctuations?

 

[LOL!]

Hmmm, I should've sold yesterday while I was ahead. Now I have to think about buying even more today.

However, typically I don't buy on Friday dips as the following Mondays are usually influenced by people looking at their portfolio losses over the weekend.

 

[papadad111]

One of those days !!!

 

[Rickt]

Hopefully today will be the capitulation day in oil

 

[audreyh1]

Options expiration Friday (I think) - that usually causes a lot of volatility. But $29s50 oil isn't helping. Especially since it had recovered to $31 yesterday.

Well, until oil bottoms.......

 

[audreyh1]

Hopefully today will be the capitulation day in oil

Hah!

Personally, I think it will have to get to $20 or just below. And that will take a while still.

 

[hesperus]

Still sitting on over $400K in dry powder... will continue rolling it in slowly, since I feel this could go on all year.
As far as capitulation, it will be telling if the market recovers and goes positive for the day after falling by more than 400 pts. Then I'd say we might be there...

 

[Fermion]

I bought a few more shares of my cancer drug Powerball ticket Endocyte. Today it is trading for $111 million market cap with $170 million cash on hand, no debt, and about to start phase 2 trials.

I really think they should partner up again but they have enough cash to take the drug through phase 3 trials without a partner. The reason I call it a Powerball is it can go from $2.70 a share to $270 a share just like Pharmacyclics did.

And with a fairly low burn and 69 million more cash than market cap, it shouldn't go to zero in the short term.

 

[hesperus]

I bought a few more shares of my cancer drug Powerball ticket Endocyte.

I've heard about their process, which targets cancer cells with a molecule linked to a potent cancer drug. Very promising research.

 

[Fermion]

I've heard about their process, which targets cancer cells with a molecule linked to a potent cancer drug. Very promising research.

Yes, half of me wants to believe in them just for the cancer cure, not just to make money.

They take a chemo drug which normally is too potent to give to patients (would kill normal cells) and bind it to a molecule which cancer cells need but normal cells not so much (very simplified). Once inside the cancer cell (through endocytosis, hence the company name) the drug is delivered and the cell dies. It sounds simple enough

They have had great results in animal tests 5/5 cures across several types of cancer with the newest molecule EC1456. Fingers crossed not just for my Powerball number, but for the cancer patients in the trials. I hope one day to see the phase II or III study cancelled because all patients are being given the drug.