Ok…so in accordance with my May Starting Gate Plan I took the following actions this morning:
Reduced NET slightly - and sorta barely slightly at that.
Demoted GLBE to the Bench
Demoted IOT to the Scout Team
Sold ZS
Added BILL back to the portfolio with a Bench level position. Normally the first buy would have put them on the Scout Team - however, their recent beatdown/slump removed some risk and their recent ER troubles seem more an economy thing than a BILL thing. Sorta.
Things I did not do: I have not reduced MNDY per the original May plan and might not. Thinking about it.
Have narrowed down potential adds to PERI and SCMI while eliminating MBLY and FND at this time. And you know - while HIMS doesn’t appear to be in the High Growth Investing Wheelhouse (HGIW) - that is, except for the blistering, really really hot, exceptionally high Revenue Growth and associated performance results - I think I am going to research it a bit today; although, my delicate, beaten down, Bear market weary psyche is still marginally; albeit definitively scarred from the TDOCS debacle. So theres that to consider.
I’m waiting for SMCI to come out with earnings tomorrow before buying.
Yeah, they warned… and the stock dipped. But ENPH had provided ample warning and got hammered in the market due to what was perceived as soft guidance.
So… I expect to buy back into SMCI (I sold most at the warning) after the earnings call.
I also have a boatload of ENPH. Gradually reducing my effective cost through sales of weekly call options. It’ll take at least a couple months to get my cost down to the current share price. By then, perhaps the share price will have been firming up some. In time… trying to be patient… I expect to do quite well with ENPH. Hard to see some other outcome given it’s growth in sales, profits and cash flow… it’s a little monster!
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
I have adopted your exact same strategy on SMCI - although, had it been more prominent on my mind at the time, I might have started a Scout team position when it pre-announced. We’ll know soon enough.
In the FWIW dept… you might want to wait until the price gets back to its 20 day moving average before committing more $. With the recent pummeling it’s back to where it was 2 1/2 years ago. It likely won’t drop too much further (unless there are serious hidden reducing growth problems that emerge).
Really just depends if the market cooperates tomorrow. I firmly believe that an investor has to be on offense most of the time. Just like in sports, when teams have a lead and start playing not to lose - they lose. Not a specific rule as such and certainly not infallibly so - but, true enough of the time to make one cautious of taking your foot off the gas.
Well… where were YOU when I was making the stupid decision to load up back around $190-$220!!! LOL
At this point, with few other appealing companies on my radar (got any?), I’m resigned to selling calls against my large ENPH position. Making around 2%-2.5% per week on the calls. Might be able to reduce my net cost down to the market value… in a couple months or so.
On April 26, I sold some May 5 $172.50 calls for a $3.80 premium while the stock was at $165. Sold more May 5 calls the next day… $170 strike while the stock was at $164 for $2.55. And more May 5 calls on April 28 with a $167.50 strike while the stock was at $163 for $2.80.
Note the trend… decreasing strikes following an ever sagging share price. My cheapest lot of ENPH has a net cost/share of $190.00. The most expensive lot at $218.64.
EVENTUALLY I expect ENPH to have a MUCH higher share price because the company is doing great. IMO. Obviously my views not shared by the overall investment community. LOL. In the meantime, I hope the option premium stay juicy because the weekly take is pretty good.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
It sounds like you are selling your ENPH covered calls below your cost basis. Curious what you would do if the stock price rapidly rose on you to near or beyond your call strike prices - buy back the calls at a loss? How do you expect to manage these call options in that scenario?
I mostly sell puts. Covered calls, I have a lot less experience with (usually above my cost basis and at a very low delta as I’d rather take the stock gain if it decides to skyrocket and sacrifice on the weekly income). Any pointers?
IMO, the key is to be able to move forward without letting anchoring affect your decision process on STO and BTC. I actually just record my net cost basis as part of a process to enable that.
That being said… we’ll just see how it plays. Note that I didn’t say “how it plays out” because it’s not something that has a finish… but eventually a shift in approach no doubt.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Rob, your call selling strategy is WAY more sophisticated than I have the risk tolerance , or time, for. It’s pretty awesome that you’re at least getting SOMETHING back.
You may be interested in the old 6/3 options strategy from the legacy MI board. But if I recall correctly that expects a rising share price.
I’m just fumbling around in my own peculiar way. What is the 6/3 options strategy? Is this an accurate description? >> Reddit - Dive into anything
I haven’t read it yet, but I will. I’m always willing to learn.
Disclosure:
Today I bought back (to close) all my May 5 calls (cost $0.25-$0.52/share depending on the lot)… and sold more May 5 calls at a lower strike price ($160). Netted about $1.25-$1.50 per share. Cost basis for the largest lot dropped from $193.88 early on April 26 to $188.33 today. Too bad I can’t maintain that pace, but I can continue to drive the net cost down… until the market shows me that it’s time for ENPH to start back up. I figure THAT event is unlikely to be sustained for quite a few weeks. By then, my cost basis will be approaching the market price. I hope.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Here’s some startup information from 1997-9 on the “6/3” options strategy. It seems to involve using stocks from a given MI screen (or any selected stock, but one with positive momentum), buying 6-month out call options, and selling them after 3 months before time decay eliminated whatever remaining profit exists.
Elan (former TMF Elan) still uses this strategy today with a strictly risk-managed fixed percentage of his portfolio and has done handsomely with it.
