Weekly Results – Feb 03, 2018


Weekly Results
 

With one of the largest selloff in recent few years our Net liquidation values (Net-Liq) got obviously a hit. Great gains (on paper) turned down in a day. But it happened only due to a spike in volatility. As of now many of our trades are still in good shape thanks to trading our 16 delta options. Yes the stocks dropped but many are still above the strike and if the market settles down next week, those trades will be great and many probably close for a profit. There are only about two or three trades which will need attention.
 

However, on the “slump day” we could trade frequently to the downside and we were selling many credit call spreads on SPX bringing in nice profits as the market continued lower. You can review those trades on our Facebook Page.
 

What to do next?
 

I recommend staying cautious and don’t be aggressively bearish nor bullish. We need to see what this market wants to do next. I will be most likely staying aside unless I see a great opportunity and just keep managing the existing trades. I may enter a few short term trades on SPX but I cannot say as of now. I do not think this selling was a beginning of a bear market as there is a lack of catalyst to it, so this may be just a correction or a bit deeper dip.
 




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Posted by Mark Pokorny February 02, 2018
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Five “Bad” Home Investments That Are Actually Good

Five "Bad" Home Investments That Are Actually Good

As a homeowner, have you ever made an investment or upgrade to your property that others seem to question? Your home is your castle to do with what you want, but in making the right upgrades and investment choices for your home, you won’t just enjoy short-term benefits. You’ll be adding to the resale value of your home as well. Some of these upgrade choices that can increase home worth aren’t immediately obvious. Some may even seem counterintuitive. Read on to learn how to pick investments that everyone considers a winner.

 

 · Have Your Home’s Interior Professionally Painted

 

Yes, it’s a good deal cheaper to buy the supplies and paint those rooms yourself, but despite those hardware store commercials that make DIY painting look fun and effortless, most efforts look fairly amateur. And even if rooms are painted in neutral colors, potential buyers can be turned off by the appearance of a home in general by badly painted rooms. Other advantages of working with professional painters include speed, avoiding damage, and getting guidance on paint choices that are easy to maintain and durable.

 

 · Professional Landscaping Services

 

No, you’re not lazy in seeking the services of a professional landscaping company. Regular attention from the pros means a healthy yard that discourages invasions from undesirable plants and prevents erosion. The assistance of landscapers means that planted trees and newly established gardens are more likely to survive and flourish, providing an attractive outdoor eyeful to prospective buyers. It’s a good start to help your home for years to come.

 

 · Installing A Home Security System

 

If you live in a quiet and crime-free neighborhood, there may not seem to be a practical need to install a home security system. But unfortunately, these neighborhoods are very popular with thieves. And in addition to deterring or catching burglars, home security systems have features that detect and report fires as well as summon emergency services for impaired members of the household in an emergency. Some even have added head sensing smoke detectors that can alert you before a fire starts.

 

 · Simple Upgrades

 

If you’re planning to invest in remodeling in order to sell your home, you might as well go big, right? Actually, a 2015 study conducted by Remodeling Magazine revealed that prospective buyers found smaller upgrades more attractive than large ones. So before installing that granite kitchen island, perhaps consider simply repainting those kitchen cabinets instead.

 

 · Professionally Refinished Floors

 

Wall to wall carpeting is so 1980s. And if refinishing floors wasn’t easy, why do those stores rent sanders? But it should be noted that work done with this equipment by DIYers has resulted in everything from badly uneven surfaces to house fires. Not only do professionally done floors look fabulous, they guarantee floor preservation for decades, not to mention protecting the rest of the house.

 

“Bad” home investments are ones that threaten lives or property. They are ones that drain bank accounts without offering returns or pleasure. Otherwise, well-educated homeowners should be willing to boldly explore a variety of investment options for their property.




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Posted by Martin January 30, 2018
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Trade safe and preserve capital


This was an ugly day today. But honestly this is good for the health of this bull market as we were pretty much in a parabolic move and correction is needed. It would be nice and healthy to retreat all the way down to 2700.

 
SPX
 

Sometimes people ask me why I am selling 16 delta puts (or calls in that matter) and not higher delta and collect more premium.

Well, today’s market price action is a perfect answer to that question. In A bull market with a lot of complacency it may pay off to go closer to the fire and collect more premium but in a normal and volatile market, it can burn you alive.

1% or more drops are nothing unusual (recently see 2015 market behavior). If I was selling delta 30 puts, today I would be toasted already while my 16 delta trades are still OK. They are not anything I would be dancing of happiness about but they are still in good shape.

Just a year ago I myself was chasing premiums too. I was trading options against stocks which offered great premiums and I was pretty much at the money ATM all the time. It wasn’t unusual for me to collect $400 per contract or more. I made tons of money. Until one day, I had to give it all up.

I forgot one thing when trading – safety.

You trade to make money, but it is not the goal. The goal is to preserve capital, save the money and not lose them by reckless trading. Remember Buffett? He says – “Never lose money, and second rule, never forget the first rule.” Why should options trading be any different?

If you remember the first rule and preserve your capital when trading, the money will come. And once they come, preserve them.

Chasing premium is like chasing yield. I once did the same mistake as a dividend investor and bought stocks which were paying great yields. Until one day they cut the dividend and I got nothing and lost money on a stock which dropped. High premiums are not necessarily safe as well as high dividend yield.

Stay safe and preserve capital!!




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Posted by Martin January 28, 2018
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Are you a trader or loser? Check for yourself!


I noticed many people searching for a holy grail of trading (or investing) and many fail. I was one of them a few years ago too. In fact, I was a loser even a year ago! And loser not by having losing or winning trades but a loser of how I was approaching the market.

Just recently, I was browsing Amazon (Nasdaq: AMZN) bookstore to see what audible books abut trading I can purchase to listen to when traveling and one thing got my attention about one book: users’ comments.

I always read what other have to say, but this comment literally hit me:

“I’ve read tons of books on trading. There is nothing in this book… no insider secrets, no real strategies, just very, very basic info…

Here is the point: There is no secret, no wonder strategies, no miraculous ways to become suddenly rich, no wonder oscillators, studies, predictions, insider secrets, or anything which will turn your unsuccessful trading into successful money making machine! Sorry I had to break your day.

 

 · Say Hello to a Loser

 

Hello Loser How do you tell that you are predestined to lose? Look at the list of trait of an unsuccessful trader or investor. If you find a single statement listed below that you personally do or think about then you need to work on your state of mind and break the bad habits. You must work on attaining the right mindset of a trader.

It is easy said than done because we are humans and we have emotions. And we also have certain beliefs and habits. And beliefs and habits are the hardest to change.

If you have any of the habits you are predestining yourself to lose and your trading will never be successful. I can say this with a 100% certainty although you may be successful now as a novice investor or trader. I have seen this happening with recent cryptocurrency mania where people who started investing into Bitcoin six months ago and considered themselves trading gurus. They started writing books on how to invest into Bitcoin and become millionaires. When other warned them that the markets do not work the way they think and the way the Bitcoin acted these people acted angrily or laughing at you. Today, I want to see what those who bought Bitcoin at $19,000 dollars per coin are doing and whether they are still laughing.

At some point a beginner’s luck will be replaced with a sober reality and not so rosy trading days and that will be the time where you can lose all your money. I was myself very successful but I also wiped out my account three times. The first time, when the beginner’s luck ended, the second time when I stubbornly believed I could manage my trades and fight the market. But trading and investing is about your mind! Only your mind. It is a psychology stuff. no secrets, no luck, no skills, no extraordinary knowledge. All you need is basic info of how options work, have a few simple but solid rules about trading and money management (remember Buffett’s rules – rule #1 don’t lose money, rule #2 don’t forget the rule #1) and execute them. It is psychology first, the rest is just mechanics.
 

You are a loser if you do the following:
 

  • Constantly looking for new strategies and secret oscillators.
  • Trying to predict the market next move.
  • Asking people what they think about a certain stock, market, future.
  • Not having a trading / investing plan.
  • Not having a money management in place.
  • Asking others to help you with a losing trade.
  • Trading impulsively or under a sudden pressure caused by a fear of lost opportunity or losing trade.
  • Panicking when the market goes against you.
  • Being overly excited when the market goes in your favor.
  • Adding to a losing trade.
  • Closing winning trades too early.
  • Blaming FED, market makers, big investors, corporations, high frequency traders, company management, or day traders for rigging and manipulating the market.
  • Blaming stocks, market, other traders, company owners for your losing positions.
  • Believing that you do not have enough knowledge to trade successfully.
  • Believing that you need to have enough information to make a proper stock analysis and if a trade fails you blame the analysis.
  • Not knowing your risk in a trade, possible outcomes of every trade an having no plan for those outcomes.
  • The more you think you need to know and learn about the market the more successful you will be.
  • Set your mind on a market or stock behavior and trend unable to change direction although you have a clear signal that the stock has reversed.
  • Ignoring or not recognizing what the market does and tells you and failing to act upon it but rather fighting the market upon your trade conviction.
  • You start feeling like the market, stocks, other traders, investors, market makers are always against you personally and their sole goal is to take your money.
  • After suffering significant loses you hesitate putting on a new trade or invest again.
  • Trading successfully requires luck, a lot of money, and special knowledge which others do not posses.
  • Constantly feeling that you must trade all the time and over trade your account.
  • Changing your attitude based on the market moves – when the trade goes in your favor you feel happy when it goes against you you are depressed.
  • You have or had sleepless nights worrying about your money
  • Not having your trading account separated (physically and mentally) from your other accounts/money/living expenses. Losing money gets you under a panic attack.
  • You feel an urge to have a perfect trade before you place it, perfect analysis, and perfect market conditions.
  • Placing a trade and then looking for posts, articles, and opinions on the website to confirm your trade decisions and views.
  • Looking for reasons and wanting to know the “why” or “what’s going on” about a stock you trade.
     

The list goes on and on. But these are traits I personally suffered from myself before I realized that they many of my beliefs were all false and deceiving me to become a loser trader.

 

 · Say Hello to a Winner

 

Hello Winner To become a winner is a hard work. Trading itself is simple and easy, but being a winner is hard. And that’s what makes trading hard because you are fighting the biggest enemy you ever had – you!

Once you realize that those traits are your enemy along with yourself due to believing to them you will get to a path of becoming a successful trader. And it takes time. I mentioned above that it is very hard to change people’s beliefs and habits. It really is very hard thing to do. You can see this in other people, right? How hard was it to convince your coworker or your friend, or a family member about something you argued about that you knew for 500% that they were wrong? And imagine that they had the same 500% conviction that you were wrong.

The same goes with the market and our trading. We have our own beliefs, views about a market or stock, and our own convictions and we refuse to give them up. We search for more information everywhere to try to find on “what’s going on”.

It doesn’t work that way and it never will. To be a successful trade you must give up those believes and approach the market like a robot.
 

To trade, you do not need:
 

Analysis
Any analysis is about anything what already happened in the past and it may have absolutely no relation to future nor predicting it. It is OK to investigate and see if the company makes money or it is all bogus, whether it pays dividends out of its cash flow or earnings or borrowing, try to assess whether a stock is undervalued or overvalued and that is pretty much all you need. Everything else is a noise. Ballast. BS. It is all past. It all happened and it may never happen again. Do not put your trust and money in believing otherwise.

 
Knowing what’s going on
Nope, you don’t need to know this. Once you find out what’s going on it is usually too late anyway. You can read and search for reasons as amusement but do not trade based on it. some traders trade news but you are not fast enough to find out before everyone else.

 
Others opinion
Run away from opinions of others. Their are biased towards their beliefs and not yours. They are bias towards their strategies and not yours. You can see this on Stocktwits all the time when a day trader fiercely argues about a stock with a position trader both completely ignoring a time frame they both trade in. One is looking at the next ten minutes, the other at the next 10 years.

 
Secret insight or magical oscillator
There is none. Stop wasting your time searching for one.

 
What you definitely need:

 
Trading strategy
Yes you need a plan, a strategy. But there is no magical strategy, miraculous, secret way to riches. It doesn’t exist. But you need a plan to know what you will do. You do not need to know what the market or your stock will do next. You need to know what you will do next. Creating a plan is simple and you must keep it simple. When making a plan think on the following things – how to remove emotions and how to trade mechanically. The plan must look like a manual on assembling a furniture from IKEA. It must be like saying 1, 2, 3, 4, 5,… etc. If you know about programming a bit, then your plans must resemble a simple mathematical and or programming sentences “if then, and if else…”. If you need a guidance visit my Strategy page and read my strategy. It is all I need to know to execute my trades.

 
Money management
This should be a part of your trading strategy. A proper money management will tell you when to trade and how much to trade. There will be times when your trades will not go as planned and you will need to adjust a trade. And the worst thing which can happen to you is not having enough money to do the adjustment. What will you do when you need additional $2,000 dollars to make a trade adjustment and you do not have it because you opened too many trades? You will be closing at a loss.

 
Trading in your comfort zone
You shouldn’t be trading upon emotions so if you see that you do not feel comfortable for any reason such as you are afraid, confused, not sure about the trade, or any reason, do not trade. It can work the other way around too. If you are overly positive, feel extreme happiness about your trading, enthusiastic, and in euphoria of making money you should stay away too. Remember, making money in the market is a business, not your amusement park.
 

Work on your emotions and that you really do not need anything special to trade successfully. Learn the mechanics of options trading, how options make money or lose money, how you open a trade or close it and then set your rules and criteria to trade. The do it. First, trade in a paper account to practice, then trade small trades one at a time to gain confidence and learn how to trade in a comfort zone.

I recommend you to read a good book Trading in the Zone. It is not an easy read but it will help you to attain a proper mind set of a trader. Trust me. It helped me tremendously.
 




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Posted by Martin January 27, 2018
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Weekly Results – Jan 27, 2018


Weekly Results

We decided to eliminate some old and bad trades this week. Trades which were hurting our trading account, with no end on horizon, blocking our cash for trading. We rolled the trades since 2016 and rolled them all the way until 2020. Then, when those trades continued devastating the account we decided to give up and close the trades. There are still a few trades – skeletons in a wardrobe but they seem to be manageable for now. However, this move helped to release cash for trading.




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Posted by Martin January 19, 2018
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Weekly Results – Jan 19, 2018


Weekly Results




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Posted by Martin January 19, 2018
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Consumers are confident and spening; expect the market going higher





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Posted by Martin January 14, 2018
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Weekly Results – Jan 12, 2018


WEEKLY RESULTS




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Posted by Guest January 07, 2018
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Why Bitcoin Is the Most Dangerous Global Scam in 20 Years


When bitcoin inevitably crashes, inexperienced investors who believed the hype could lose everything.
 

Crypto crash
 

Originally published by Vivek Wadhwa on LinkedIn: “Why Bitcoin Is the Largest Ponzi Scheme in Human History

During the late ’90s, Silicon Valley venture capitalists and New York City investment bankers used phrases such as “monetizing eyeballs,” “stickiness,” and “B2C” to justify the ridiculous valuations of internet companies. They claimed conventional methods were inapplicable in valuing the dot-com companies — which had no revenue — because we were entering an entirely new economy.

Believing these people, and afraid to miss out on the gold rush, small-time investors, grandma and grandpa, and barbers and taxi drivers invested their life savings in companies such as Pets.com, Webvan, and eToys. The bubble burst, and they lost everything. Through a transfer of wealth in the billions of dollars from Main Street to Wall Street, VCs, unscrupulous CEOs, and bankers had effectively enriched themselves at the expense of hundreds of thousands of ordinary investors, leaving them to despair about their futures.

History is repeating itself now with bitcoin. This time, it isn’t just Main Street USA that is about to lose its shirt; it is also the developing world. Technology has made it possible for hypesters in Silicon Valley, China, and New York City to fleece anyone, anywhere, who has a bank account and an internet connection.

The story that bitcoin victims are being sold is that, because we cannot trust government-issued currencies, bitcoin is the future of money. One investor calls bitcoin “a gift from God to help humanity sort out the mess it has made with its money.” A PayPal director predicts that bitcoin’s price will reach $1 million in the next five to 10 years; asset managers say it is the new gold.

This is complete nonsense. Yes, the price of bitcoin may yet double or even quadruple — because its price is based on pure speculation, and these stories are feeding such speculation. But bitcoin’s market price is almost certain at some point to crash and burn, just as the dot-coms’ did, and for the same reason: because it is all hype. And there will be no one to turn to when it does, because no government or bank is backing bitcoin up; and the people who are hyping bitcoin will have cashed out and be long gone.

Bitcoin’s price is not a reflection of its growing usage as currency; it reflects merely demand for the mirage of its speculative value. Its price is rising only because people all over the world are hearing stories of how others doubled or tripled their money in a short period — and they don’t want to miss out. Unsophisticated investors are taking out loans to buy bitcoins. Those who have spent the currency feel remorseful when they see its price subsequently increase, so they hoard it.

Bitcoin was invented by an unknown person or group to be a digital currency. It allows money to be transferred directly between individuals using cryptography. The bank ledger is distributed to all users, and complex mathematical transactions ensure transaction integrity. Such a system makes it difficult for governments to know the identities of people exchanging money, so it has become a haven for money laundering, drug dealing, and corruption.

Beyond its usability for crime, bitcoin has major design flaws:

Continue reading the story here




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Posted by Christina Moore January 07, 2018
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How To Start Investing


When you work hard, you set the law of cause and effect to work for you. If you work for a corporation, you will slowly start to improve your position within the company; and if run your own business, you will slowly start to generate more business. While working hard will set things in motion, working smart will speed them up. You will produce more and earn more for every hour you work when you become more focused, disciplined, and systematic.
 

Yet despite the merits of working well and productively, this is just the beginning of your wealth journey. Exchanging time for dollars has a serious constraint: your cash-flow will slow as fatigue set in. Additionally, there are only so many hours in a day that you can work. So, at some point, you must learn how to use your money to make money. You must learn to become an investor.
 

3 Basic Steps to Becoming an Investor
 

Step #1: Increase the difference between money coming in and the money going out.
 

Before you learn how to invest, you have to get better at managing your money. Basically, master the art of earning more than you spend.

There are two benefits to learning how to manage your money better: first, you will be able to set aside money, put it in a savings account, and then use this as seed money to begin investing; second, once you learn how to budget a small amount of money, it will be easier to handle large amounts of money–because the principles are the same.
 

Here are some ways that you can get better at money management:
 

1) Bundle your services to save money. AT&T (NYSE: T) provides a good example of how to build a better bundle. AT&T internet plans allow you to stream TV from up to five devices, obtain HD DVR, and get a Wi-Fi Gateway router for less than $100 a month.
 

2) Reduce your daily food costs. You can still eat well without paying as much for it. Simply take your lunch to work rather than eating at a deli and make your own coffee rather than stopping at Starbucks (Nasdaq: SBUX).
 

3) Track all your expenses for a month, and then distinguish between fixed and variable costs. Fixed costs are costs that you must pay for a service that you need. For instance, your phone bill is a fixed cost. A variable cost is a cost that you can decide to pay or not pay. For instance, paying for an online membership for an educational or entertainment program is something you are free to discontinue without serious consequences. Once you have a better understanding of your costs, you can decide if there is a cheaper alternative to your fixed costs and if you really need to keep all your variable costs.
 

Step #2. Increase your knowledge about investments.
 

Although advertising by brokerages might give you the impression that all you need to do well is to find the right adviser, it's not that simple. If you only rely on the financial expertise of others, you will have no idea whether you are paying too much in fees or buying the best investments. However, even if you are fortunate enough to find a good broker, then you are completely dependent on them as your source of wealth. It’s much better to become an expert in your own right and to ask brokers to give you a second opinion and facilitate your transactions.

The reason why some investors become really wealthy is that they are in charge of their own investments. They know what they are doing because they have a deep understanding of investment vehicles and the markets.
 

Step #3. Increase your experience with investments.
 

Once you have acquired a sufficient amount of knowledge with investing, you need to gain experience. Theoretical assumptions rarely match reality. When you begin, start small. If, for example, you are investing in the stock market, start with paper trading; or, if you are investing in real estate, buy a small property before increasing the size of your purchases.

In closing, set goals. If you have clear, written goals, follow these 3 steps, and choose to learn from your mistakes, you will achieve your goals of financial independence and follow your dreams.

 




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