LOL!'s Market Timing Newsletter

[LOL!]

With equities up so much today (and since the last post in this thread) and bonds down about half a percent this morning, I did some rebalancing: Sold Total US Stock Market and bought Total US Bond Market. 935

 

[LOL!]

818 Seems like a good day to sell some bond ETF shares and buy some stock ETF shares, so sold a Total US Bond Index and bough MTUM (US Large-cap momentum) which is trading almost 4% lower than yesterday's close. I do not intend for this to be a long-term holding.

 

[LOL!]

Sold the MTUM shares bought late yesterday for a nice little gain. 938

 

[LOL!]

It seemed like a good day to buy back some MTUM. 123

 

[LOL!]

Submitted a limit order to sell the MTUM bought yesterday and went for a dog walk. 227 While away the order was executed for a tidy gain.

 

[Huston55]

Bought TQQQ a few days ago on the big dip. Nice little profit so far. Have to decide on my exit strategy. Input welcome.

 

[Exchme]

Submitted a limit order to sell the MTUM bought yesterday and went for a dog walk. 227 While away the order was executed for a tidy gain.

LOL!:
I read several pages of the thread and it looks like your efforts to show us your trades go back for a decade. That's a lot of dedication! This is the first I've noticed the thread, so may have missed it, but are you doing well with your approach?
Have you done any sort of scorecard? I would think your approach has more risk than broad market index buy and hold strategies, can you share your best and worst year/month, best and worst trade?

 

[LOL!]

LOL!:
I read several pages of the thread and it looks like your efforts to show us your trades go back for a decade. That's a lot of dedication! This is the first I've noticed the thread, so may have missed it, but are you doing well with your approach?
Have you done any sort of scorecard? I would think your approach has more risk than broad market index buy and hold strategies, can you share your best and worst year/month, best and worst trade?

Sorry, just checked in. I guess I wasn't dedicated the past 6 weeks. This thread has basically been my trading diary / investment notebook. 890

I keep exquisite track of portfolio performance, so yes I have a score card.

Basically, the portfolio mimics a blend of about 50% DGSIX (small-cap and value tilted 60/40 fund) and 50% VSMGX (60/40 total market weighted portfolio). In 2020, VSMGX did better than DGSIX, so the portfolio total return was in-between. But in 2021, DGSIX has done better than VSMGX because small-cap value has gone up 20% or so YTD, so the portfolio is once again in-between DGSIX and VSMGX, but handily beating a total-market weighted portfolio represented by VSMGX.

In other words, I am not hurting myself and if the portfolio trails the benchmarks, then it is only temporary and has always caught up ... so far. In the past 12 months, the portfolio is up more than one million dollars, so it is quite a serious thing.

For more insight, please read the 3 posts starting at this one:
https://www.early-retirement.org/forums/f44/lol-s-market-timing-newsletter-57042-65.html#post1787189

 

[LOL!]

I submitted a limit order to buy some shares of AVUV (small-cap value). I currently own no shares of this ETF. If the limit is not reached by end of day, I will probably change to a market order unless the price pops up from here. 425 I intend to sell the shares if they go up more than 1.5% or so tomorrow or the next day. I'll post an update later today.

Update: It does not appear that my limit price will be reached unless something unusual happens in the next 10 minutes. AVUV is trading now about 0.9% above its low today. I decided to let this one go and not buy shares today.

 

[LOL!]

As expected small-cap value ETFs are up today, so I should have bought yesterday anyways. I missed it. 668

 

[NW-Bound]

In the past 12 months, the portfolio is up more than one million dollars, so it is quite a serious thing...

Made me look. A big 7-figure gain here.

But, but, but from 4/16/2020 to 4/16/2021 (the day of your post), the S&P was up almost 50% with dividends included. So, the above is to be expected.

My own portfolio is up 57.5% beating the S&P, despite being only 55-75% in stocks. This by itself may not mean much. Goes down a lot, then goes up a lot. It's the long-term performance that counts, and I can never be sure of that.

 

[LOL!]

Made me look. A big 7-figure gain here.

But, but, but from 4/16/2020 to 4/16/2021 (the day of your post), the S&P was up almost 50% with dividends included. So, the above is to be expected.

Right. One had to lose a million dollars first, too.

 

[NW-Bound]

Right. One had to lose a million dollars first, too.

Well, if one keeps winning and losing the same million dollars back and forth, how does he make headway?

That's why I try to be a bit more active, by selling covered options, both puts and calls. I am sure other active investors have other techniques, but that is my way.

 

[NW-Bound]

Today's a bad day in the market. Nearly every stock is down, except for Target which just reported a wonderful quarter. But so what? What about other stocks that reported nice earnings just a few days ago? Nope, that's old news. That's how the market acts.

Usually, I would sell out-of-the-money put options to offer to buy some stocks even lower, but looking across my portfolio, I already have the stocks that I want to own. And with stock AA at 76%, I do not want to go more gunho.

But I feel like I need to buy something, in order to show myself that I am willing to buy low.

So, I bought 2/3 of 1% of S&P. I have not bought the index for a while, preferring to do individual stocks or more targeted ETFs.

 

[aja8888]

Today's a bad day in the market. Nearly every stock is down, except for Target which just reported a wonderful quarter. But so what? What about other stocks that reported nice earnings just a few days ago? Nope, that's old news. That's how the market acts.

Usually, I would sell out-of-the-money put options to offer to buy some stocks even lower, but looking across my portfolio, I already have the stocks that I want to own. And with stock AA at 76%, I do not want to go more gunho.

But I feel like I need to buy something, in order to show myself that I am willing to buy low.

So, I bought 2/3 of 1% of S&P. I have not bought the index for a while, preferring to do individual stocks or more targeted ETFs.

Sell a cash cover put way OTM of more that you would like to own.

 

[NW-Bound]

Sell a cash cover put way OTM of more that you would like to own.

Well, I did that and it brought my AA from 60% to 75%. I guess I did not set the strike price low enough.

I guess I could keep doing it. What's the worse thing that can happen? My stock AA going to 100% or something? That's not a bad thing, is it?

What then happens next? I have to claim my SS before 70? It's still not the end of the world.

 

[NW-Bound]

OK, aja8888 twisted my arm into it.

Just sold a single put contract on NUCOR (steel maker), strike price at $96, expiry May 28 next Friday. NUE is trading at $101.74 right now.

I only got $101 for this contract, by committing $9600 in cash. If Nucor holds up and I do not have to buy the stock, that's equivalent to an interest of 1.05% over 10 day, or 38%/year.

And that's how I made about $100K last year on just put options. Heh heh heh...

PS. Call options got me more than $200K last year.

 

[aja8888]

Well, I did that and it brought my AA from 60% to 75%.

I guess I could keep doing it. What's the worse thing that can happen? My stock AA going to 100% or something? That's not a bad thing, is it?

What then happens next? I have to claim my SS before 70? It's still not the end of the world.

Well, if you load up with too much in the way of acquired stocks, sell covered calls to get rid of some! I've done that with GM and T a few times this year!

Or take that SS and get what's owed to you! Get it while you are young enough to enjoy spending it. Bigger motorhome? Better whiskey? Go to Vegas and see a show and gamble?

 

[NW-Bound]

Well, these are the stocks I like, and I set the strike price too high on covered calls because I value them, and nobody bought them.

That's why my stock AA went from 60% to 75%.

But, but, but I made more than $100K YTD on call options, so I should not complain. Heh heh heh...

 

[NW-Bound]

As mentioned earlier, the market started out this morning with the entire S&P in the red, except for "Tarjay".

But the semiconductor segment recovered, and many of the members in this group turned green. I have sold 6 covered-call contracts on this group, netting $570 for the premium. This is about my usual level of daily activity. Yesterday, I did not sell anything, not finding anything worthwhile.

Right now, I counted about 45 contracts about to expire on Friday 5/21, two days from now. Most are going to be worthless. The premium from them totals a bit more than $4K.

 

[aja8888]

As mentioned earlier, the market started out this morning with the entire S&P in the red, except for "Tarjay".

But the semiconductor segment recovered, and many of the members in this group turned green. I have sold 6 covered-call contracts on this group, netting $570 for the premium. This is about my usual level of daily activity. Yesterday, I did not sell anything, not finding anything worthwhile.

Right now, I counted about 45 contracts about to expire on Friday 5/21, two days from now. Most are going to be worthless. The premium from them totals a bit more than $4K.

Nice, you got me off my butt today. I sold two cash covered put contracts (FCX, NUE) for a total of $280. I still have a covered call on GM for $62 expiring soon.

I need to get going on this to generate mad money!

We are in the rainy season here now and had another 6" dumped on us last night so anything outdoors is wet (no golf this week). More inside time for me to sell options.

 

[NW-Bound]

Said I was done for today, but looking at my stocks, the one that got hammered the worst today is AA (Alcoa), down nearly 10%. On what news?

Thought about selling a put on it, but changed my mind and bought some additional shares outright.

I should really stop buying shares or selling put options now. I counted my puts, and if the market tanks further, I will be moving another 4% or so of portfolio into stocks. That would bring it up closer to 80% stock AA. No, a guy needs to know when to stop.

 

[aja8888]

Said I was done for today, but looking at my stocks, the one that got hammered the worst today is AA (Alcoa), down nearly 10%. On what news?

Thought about selling a put on it, but changed my mind and bought some additional shares outright.

I should really stop buying shares or selling put options now. I counted my puts, and if the market tanks further, I will be moving another 4% or so of portfolio into stocks. That would bring it up closer to 80% stock AA. No, a guy needs to know when to stop.

I am just replacing what expired or I closed out cheaply. I'm too chicken to get deep in equities (currently at 30%). At my age (near 78), and a sick wife, I can't stomach a big downturn and loss of retirement funds. Between my 12 or so preferred stocks I have had a long time and option income, I am replacing what I pull out in RMDs each year. And I also pull a Roth conversion to get my IRA funds down.

I have way more cash and municipal bonds fund) than anything else, but "I'm ready to Buy the Dip" if it occurs again! LOL

 

[NW-Bound]

... "I'm ready to Buy the Dip" if it occurs again! LOL

I have heard that before.


PS. Seriously, I need to get my stock AA down to 60% from its current value of 75%. However, I priced the strike price of my calls too high, and of my puts not low enough, so keep getting more puts assigned than calls. I am by nature a stock lover, so it influences my option trading. I like to buy stocks, and hate to sell them.

I will look to sell more stocks, I keep promising myself. Soon. Any day now, starting with semiconductor stocks which I am loaded with.


PPS. But it is my semiconductor shares that brought the whole portfolio up in the green today, compared to the market indices being in the red. It's hard to sell your winners. Very hard. And when you see that they are no longer winners, then it's too late. Stock picking is hard.

 

[aja8888]

I have heard that before.


PS. Seriously, I need to get my stock AA down to 60% from its current value of 75%. However, I priced the strike price of my calls too high, and of my puts not low enough, so keep getting more puts assigned than calls. I am by nature a stock lover, so it influences my option trading. I like to buy stocks, and hate to sell them.

I will look to sell more stocks, I keep promising myself. Soon. Any day now, starting with semiconductor stocks which I am loaded with.


PPS. But it is my semiconductor shares that brought the whole portfolio up in the green today, compared to the market indices being in the red. It's hard to sell your winners. Very hard. And when you see that they are no longer winners, then it's too late. Stock picking is hard.

I've never been a really successful stock picker. Usually after a stock runs up, then I see the value I missed out on. Besides the preferred stocks I have, which are fun to research and play, I just have a few issues like GM, FCX, NUE, OFC, and EPD that I hold or sell options on (not EPD for options though). I also have a load of shares SCHB with Schwab which is practically equal to VTI that I add or subtract to in order to stay 30% in equities. The rest is cash, Muni bond fund, CDs, etc.

I'm not an aggressive investor, as I don't have the guts for it. I hate to lose and that's why I have never been a gambler (grew up poor, had nothing until I got out on my own).