The Trading Desk: 2011

Sunday, December 25, 2011

Sunday, December 18, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Pandora Media Inc (NYSE: P) - Our Dec '11 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 7/7/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending December 16, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, December 11, 2011

Sunday, December 4, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Western Digital Corp (NYSE: WDC) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 2/28/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending December 2, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, November 27, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Covered Calls

1) Blackstone Group LP (NYSE: BX) - Our Jan '12 calls reached 80+% of their maximum value, so we closed them out.

The date we opened the trade was 11/17/10.

Option Strategies - Naked Puts

2) Intel Corp (Nasdaq: INTC) - We sold July $15.00 puts.

3) DuPont (NYSE: DD) - We sold April $23.00 puts.

4) Comcast Corp (Nasdaq: CMCSA) - We sold July $13.00 puts.

Option Strategies - Collars

5) Bank of America Corp (NYSE: BAC) - We bought Bank of America shares and collared them with Jan '14 $12 calls (sold) and Jan '14 $10 puts (bought).

The reward-to-risk ratio of the investment is 7.7:1, among the highest we could find for BAC. The analysis is as follows.

Bought shares @ -$5.20
Bought $10 puts @ -$5.55
Sold $12 calls @ +$0.52
Total debit @ -$10.23

Maximum reward = $12 - $10.23 = $1.77
Maximum loss (risk) = $10 -$10.23 = -$0.23

Reward/risk = $1.77 / $0.23 = 7.7

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending November 25, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

1) Bill Gross, co-chief investment officer at Pacific Investment Management Co., and Laurence Fink, chief executive officer of BlackRock Inc., discuss the European sovereign-debt crisis, the U.S. economy and investment strategy.

2) Bill Gross and Larry Fink run very different operations, but they share California roots and other similarities.

Sunday, November 20, 2011

Sunday, November 13, 2011

Sunday, November 6, 2011

Sunday, October 30, 2011

Sunday, October 23, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Intel Corp (Nasdaq: INTC) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 3/10/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending October 21, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, October 16, 2011

Sunday, October 9, 2011

Sunday, October 2, 2011

Sunday, September 4, 2011

Sunday, August 28, 2011

Investors & Friends:

There is no new investment activity to report since our last weekly update.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 26, 2011.

Click here for upcoming IPOs.

Lead Fund Manager

Investrio

Sunday, August 21, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Covered Calls

1) General Electric Company (NYSE: GE) - Our Jan '13 calls reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 3/16/11.

Option Strategies - Naked Puts

2) Blackstone Group LP (NYSE: BX) - We sold Jan '13 $5.00 puts. We currently hold BX long. If the puts are ultimately assigned, it will double our BX position.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 19, 2011.

Click here for upcoming IPOs.

Lead Fund Manager

Investrio

Sunday, August 14, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week. The theme for the week turned out to be global stalwarts, specifically wide moat companies deriving 50-75% of their sales from outside the U.S.

Option Strategies - Naked Puts

1) Proctor & Gamble Co (NYSE: PG) - We sold Jan '13 $32.50 puts.

2) Coca Cola Co (NYSE: KO) - We sold Jan '13 $35.00 puts.

3) Johnson & Johnson (NYSE: JNJ) - We sold Jan '13 $35.00 puts.

Long Stocks

4) We bought ProShares UltraShort 20+ Year Treasury (NYSE: TBT) on 8/10 @ $24.89, doubling down on our position, reducing our cost to $38.38. The last time the yield on the benchmark 10 year Treasury note was getting down to the 2% range and falling below the dividend yield on the S&P 500 was during the ’08 financial crisis and ’09 stock market bottom.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 12, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera
Currently the 10 largest M&A deals are averaging about an 11% spread between the announced acquisition price and the current market price. The most interesting one, to us, is the deal between Medco Health Solutions Inc. (MHS) and Express Scripts Inc. (ESRX), a 23% arbitrage opportunity. Here's the deal specs.

- Premium offered: $12.62 or 23.64%
- Acquirer: ESRX
- Target: MHS
- Offer per share: 0.81 share and $28.80 cash per share
- Value of offer per share: $65.99
- Value of outstanding common equity securities: $29,812,971,780
- Acquirer share price: $45.91
- Target share price: $53.37
- Expected closing: 1H 2012 3/31/2012
- Annualized gain: 36.95%
- Note: After the transaction closes, MHS shareholders will own about 41% of ESRX.

Sunday, August 7, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Joy Global Inc (Nasdaq: JOYG) - We sold Jan '13 $40.00 puts.

2) General Motors Co (NYSE: GM) - We sold Jan '13 $15.00 puts. It's our view that GM is better positioned than other automakers in the key areas of labor cost, sales outside U.S., and management. Also, the close proximity to the recent IPO is still influencing options pricing, with the options premiums staying elevated relative to the options of other stocks.

3) Pfizer Inc (NYSE: PFE) - We sold Jan '13 $12.50 puts.

4) AT&T Inc (NYSE: T) - We sold Jan '13 $17.50 puts. We also considered Verizon. We kept Verizon on our watchlist pending resolution of the wireless workers' strike.

5) Exxon Mobil Corp (NYSE: XOM) - We sold Jan '13 $35.00 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending August 5, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, July 31, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

Last week the political uncertainty over the debt ceiling and credit rating caused volatility and option premiums to spike. We took advantage and sold several put option contracts.

1) Berkshire Hathaway Inc (NYSE: BRK/B) - We sold Jan '13 $42.50 puts.

2) United Parcel Service Inc (NYSE: UPS) - We sold Jan '13 $37.50 puts.

3) Medtronic Inc (NYSE: MDT) - We sold Jan '13 $20 puts. Note - We also looked at Stryker (SYK), which is also a wide moat company. We selected Medtronic. It's our view that Medtronic has an opportunity and room to trim its work force and boost productivity, and improve its bottom line and margins.

4) iShares Russell 2000 Index Fund (NYSE: IWM) - We sold Jan '13 $35 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending July 29, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

Steve Forbes' interview with Joel Greenblatt on Forbes.com... the interview centers on Joel’s recent book, The Big Secret for the Small Investor, and Joel’s new concept of “value weighting” a portfolio of stocks. Click here.

Sunday, July 24, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) J.P. Morgan Chase and Co. (NYSE: JPM) - We sold Jan '13 $20.00 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending July 22, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, July 17, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) United States Steel Corp. (NYSE: X) - We sold Jan '13 $22.50 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending July 15, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, July 10, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Target Corp. (NYSE: TGT) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 1/6/11.

2) Noble Corp. (NYSE: NE) - We sold Jan '13 $20.00 puts.

3) Pandora Media Inc. (NYSE: P) - We sold Dec '11 $9.00 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending July 8, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, July 3, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Berkshire Hathaway Inc (NYSE: BRK/B) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 3/1/11.

Long Stocks

2) We sold iShares Barclays 20+ Year Treasury Bond Fund (NYSE: TLT) on 6/30 @ $93.60 for a negligible 0.3% gain. We sold TLT to eliminate our exposure to the impact of the Fed's quantitative easing (QE2) program coming to an end.

Return calculation = ($93.60 sale price - $93.30 cost basis) / $93.30 cost basis x 100% = 0.3%.

The date we opened the trade was 4/26/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending July 1, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

If real interest rates remain negative, "that will continue to be a green light for money to go into gold."
-- John Hathaway, Managing Director of Tocqueville Asset Management

Sunday, June 26, 2011

Sunday, June 19, 2011

Sunday, June 12, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) BHP Billiton Ltd (NYSE: BHP) - We sold Jan '12 $35.00 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending June 10, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

1) What U.S. Economic Recovery? Five Destructive Myths. Click here.

2) 2010 was the best year ever for the company in the U.S.
-- Marco Mattiacci, CEO of Ferrari North America

3) A lot of cash “that was on the sidelines” is now going into U.S. Treasuries.
-- Jim Vogel, Head of Agency Debt Research at FTN in Memphis, Tennessee

4) It could be a sign of rising dividends... "The payout ratio -- the proportion of earnings paid out as dividend income to shareholders -- fell to 28.9% for the past four quarters. That, says S&P senior index analyst Howard Silverblatt, is the lowest level since 1936."
-- The Wall Street Journal

Sunday, June 5, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Forest Laboratories Inc (NYSE: FRX) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 3/15/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending June 3, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

Alan Brown, chief investment officer at Schroders Plc, says investors remain risk averse “in an era of avoiding losses.”

Sunday, May 29, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Long Stocks

1) We sold our ProShares Ultra Russell 2000 (NYSE: UWM) on 5/23 @ $45.90 for a 9.8% loss.

Return calculation = ($45.90 sale price - $50.90 cost basis) / $50.90 cost basis x 100% = 9.8%.

The date we opened the trade was 4/5/11.

Option Strategies - Naked Puts

2) Rio Tinto PLC (NYSE: RIO) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 3/16/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending May 27, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, May 15, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Straddles

1) Cisco Systems Inc (Nasdaq: CSCO) - We sold our June $17.00 straddles on 5/11 @ $163.00 per contract for a 15.9% gain.

Return calculation = ($163.00 sale price - $137.00 cost basis) / $137.00 cost basis x 100% = 15.9%.

The date we opened the trade was 4/25/11.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending May 13, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

Articles about Federal Debt Limit (Debt Ceiling). Click here.

Sunday, May 8, 2011

Sunday, May 1, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Straddles

1) Cisco Systems Inc (Nasdaq: CSCO) - We bought June $17.00 straddles. A straddle is a long call and long put with the same expiration and same strike. Max loss is limited to the price paid to purchase the straddle, and max profit is unlimited. Historically options for Cisco have underestimated the magnitude of the swing in the stock price around quarterly earnings announcements.

Option Strategies - Covered Calls

2) ProShares UltraShort Russell 2000 (NYSE: TWM) - We closed out our Jan '12 $17.00 calls. The date we opened the trade was 2/18/11.

Option Strategies - Long Stocks

3) We bought iShares Barclays 20+ Year Treasury Bond Fund (NYSE: TLT) on 4/26 @ $93.30. We bought TLT to hedge, short-term, some of our exposure to TBT.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending May 1, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

Investing is like running a marathon or climbing a steep mountain. All you focus on is taking one step after another. When you do this, it is easy to lose sight of the significant progress you are making. As we look forward it is important to look back, review our performance, acknowledge our achievements and identify areas requiring adjustment.
-- Investrio Fund Manager

Sunday, April 24, 2011

Investors & Friends:

There is no new investment activity to report since our last weekly update.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending Month April 22, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

1) U.S. weighs summer GM stock sale. Click here.

2) Myles Zyblock, chief institutional strategist at Royal Bank of Canada, says Main Street missed 90% of the rally and flows of money out of stocks among retail investors continues almost unabated since 2008. This is an excerpt from a Bloomberg Radio Podcast. Click here, and your preferred media player should launch after a second or two.

Sunday, April 17, 2011

Sunday, April 10, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Long Stocks

1) We bought ProShares Ultra Russell 2000 (NYSE: UWM) on 4/5 @ $50.90.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending April 8, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, April 3, 2011

Sunday, March 27, 2011

Sunday, March 20, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Covered Calls

1) General Electric Company (NYSE: GE) - Our Jan '12 calls reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 10/12/10. The next day we sold Jan '13 $25.00 calls.

Option Strategies - Naked Puts

2) Forest Laboratories Inc (NYSE: FRX) - We sold Jan '12 $20.00 puts.

4) Rio Tinto PLC (NYSE: RIO) - We sold Jan '12 $22.50 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending March 18, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, March 13, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Intel Corp (Nasdaq: INTC) - We sold Jan '12 $12.50 puts.

2) AMR Corp (NYSE: AMR) - We sold Jan '12 $2.50 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending March 11, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, March 6, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Berkshire Hathaway Inc (NYSE: BRK/B) - We sold Jan '12 $35.00 puts.

2) Western Digital Corporation (NYSE: WDC) - We sold Jan '12 $15.00 puts.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending March 4, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, February 27, 2011

Sunday, February 20, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Infinera Corp (Nasdaq: INFN) - We sold Jan '12 $7.50 puts.

Option Strategies - Covered Calls

2) ProShares UltraShort Russell 2000 (NYSE: TWM) - We sold Jan '12 $17.00 calls.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending February 18, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, February 13, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Aeropostale Inc (NYSE: ARO) - Our Jul '11 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 12/2/10.

2) Goldcorp Inc (NYSE: GG) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 5/19/10.

3) Cisco Systems Inc (Nasdaq: CSCO) - We sold Jan '12 $10.00 puts. On Thursday Cisco was down almost 15% after it reported 2Q profit declined 18%. Higher input costs pressured margins and pricing of its core products. It also reported selling less profitable consumer products. Volatility (CBOE Volatility Index) was up 7 1/2%. Cisco's Great Recession low was $13.61 on 3/9/10.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending February 11, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, February 6, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Intel Corp (Nasdaq: INTC) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 8/19/10.

2) Altria Group Inc (NYSE: MO) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 7/22/10.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending February 4, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

1a) The Financial Crisis Inquiry Commission (FCIC) released its final report. Have fun reading the 662 page report! Click here.

1b) Financial Crisis Inquiry Commission's Greatest Hits. Click here.

Sunday, January 30, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Covered Calls

1) United States Natural Gas Fund LP (NYSE: UNG) - Our Jan '12 calls reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 8/16/10.

2) ProShares UltraShort Russell 2000 (NYSE: TWM) - Our Apr '11 calls reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 12/2/10.

Option Strategies - Naked Puts

3) Berkshire Hathaway Inc (NYSE: BRK/B) - Our Jan '12 puts reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 9/7/10.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 28, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 23, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Qualcomm Inc (Nasdaq: QCOM) - Our January puts, that we sold, expired. The date we opened the trade was 10/1/10.

2) Cisco Systems Inc (Nasdaq: CSCO) - Our January puts, that we sold, expired. The date we opened the trade was 4/22/10.

3) Apollo Group Inc (Nasdaq: APOL) - Our January puts that we sold, expired. The date we opened the trade was 3/24/10.

Option Strategies - Covered Calls

4) Infinera Corp (Nasdaq: INFN) - Our January calls reached 80+% of their maximum value, so we closed them out. The date we opened the trade was 6/17/10.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 21, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 16, 2011

Sunday, January 9, 2011

Investors & Friends:

Here's a summary of our investment actions from the past week.

Option Strategies - Naked Puts

1) Target Corp (NYSE: TGT) - We sold Jan '12 $25.00 puts. On Thursday Target was down almost 7% after it said same-store sales increased only 0.9% in December, falling short of analysts' estimates. Many retailers missed analysts' expectations for the holiday month's same-store sales. Retailers appear to have overestimated the spending momentum of consumers, delivering December sales numbers that show the economy is still in a poor condition, or at best in a slow recovery mode. Target's Great Recession low was $24.40 on 3/2/09.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending January 7, 2011.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Sunday, January 2, 2011

Investors & Friends:

There is no new investment activity to report since our last weekly update.

Click here for the Investrio Stock Selector Fund Bull and Bear Market Indicators Report for the week ending December 31, 2010.

Click here for upcoming IPOs.

Lead Fund Manager
Investrio

Etcetera

1a) Machines have largely taken over stock market trading, creating a new technological order affecting nearly everyone who owns shares of stock or mutual funds. Click here.

1b) Direct Edge Says IPO Possible After Exchange Status. Click here.

2a) "Luck is what happens when preparation meets opportunity."
-- Seneca

2b) "Develop a daily routine, a daily discipline. Write it down, and follow it everyday. This way you won't miss an opportunity, and you will know what to do to quickly capitalize on it. This is how you make your luck."
-- Lead Fund Manager, Investrio