Juggling With Knives: Profits, protection and planning for volatility in stocks, bonds, real estate, and real life.
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This website is based on my book, Juggling with Knives. Both the book and website are about volatility in everything from stocks and bonds to real estate, and real life topics such as jobs and education.
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Microsoft soars on earnings, so I’m selling the shares I bought for my Volatility Portfolio
Back on March 24, I added shares of Microsoft (MSFT) to my Volatility Portfolio on the thinking that in a quarter when earnings were projected to be down for the Standard & Poor's 500 as a whole, reliable technology growth stocks such as Microsoft would outperform....
Gold pushes toward all-time high
Gold for June delivery closed at 2039.00 an ounce on the Comex today. That’s not too far away from the all-time record high of $2,070 an ounce. The move above $2,000 an ounce and any breach of the record at $2070 could trigger a rally as traders short gold buy to cover positions. That could well be true, but I’d note that this forecast of a gold rally is coming from traders long gold who are trying to talk a rally into being.
Oil rallies, finally
Oil rallied today, Monday, March 27, for the first time in, well, quite a while. Oil is likely to finish with a loss in March, for a fifth monthly drop. So today’s move, which saw West Texas Intermediate jump by almost 55, marked quite a shift in direction.
Please Watch My New YouTube Video: Quick Pick KBE Bank Stocks ETF
Today’s Quick Pick is SPDR S&P Bank ETF (NYSEARCA: KBE). I’m not suggesting buying this now: I’m suggesting you watch this and buy Put Options on this ETF when the time is right. The SPDR S&P ETF is approximately 80% regional banks. As you can imagine, it took a huge hit during the recent banking scare and would have been a great Put Option last week during the plunge in the sector. Options are a way to leverage the volatility of this market. The recent exit of my VIX Call Option resulted in a 100% gain in about a week. For KBE, I’d look at Put Options that climb in value as the price of the ETF sinks. At the time of recording, KBE was selling at about 37. I’m looking at the June 16 Put at a strike price o 38. At the moment, the Put is deeply underwater but I’ll continue to watch this rally to see when it’s worth it to jump in. At the moment, I suggest you watch this one: Don’t buy just yet but wait for the next shoe to fall in the banking crisis.
Adding Equinor as another energy play to my Jubak Picks Portfolio tomorrow
Today, Wednesday, February 8, Equinor (EQNR) reported a record $74.9 billion adjusted operating profit for 2022. That more than doubled the previous record. If you’re looking to add an energy stock to your portfolio ahead of a year that looks likely to be a good one for energy stocks, I’d suggest Equinor. I’ll be adding it to my Jubak Picks Portfolio tomorrow with a target price of $40 a share.
Is the VIX volatility index “broken” or is this a trading opportunity?
I vote for the latter–even though I acknowledge that the VIX, the CBOE S&P Volatility Index (VIX), which is supposed to track expectations for short-term volatility in the market, is behaving very strangely lately. The VIX is supposed to climb along with fear in the market as investors and traders step up to buy options and futures, even at higher prices, in order to hedge risk. But even as stocks have struggled in December the VIX has tumbled. It was down another 5.01% today to just 20.87.
AbbVie raises dividend again–but only by 5%
Once a company has put in the time and money to make the Dividend Aristocrats list, the company isn’t likely to squander that investment just because a recession looms. To make the list–and garner a big chunk of cash from conservative dividend investors–a company has had to pay a dividend for a least 25 consecutive years and has had to raise that dividend every year. A company like 3M (MMM), which owns a 64-year record of paying and raising its dividend payout, is as close to a dividend sure thing as exists. Which is why it’s not surprising that AbbVie (ABBV), which owns a 50-year record of paying and raising its dividend, announced that it would raise its dividend in 2023 to $1.48 a quarter with the February 2023 payout. That would bring the annual dividend yield to 3.5% But…
Please Watch My New YouTube Video: Trend of the Week Seasonal Trends in Energy
Today I posted my one-hundred-ninety-sixth YouTube video: Trend of the Week Seasonal Trends in Energy. This week’s Trend of the Week: Seasonal Trends in Energy. There’s a predictable pattern in oil and natural gas prices. In late fall, October to November, you can expect a deep dive to begin and carry on through the winter, with a sharp rise in March and early spring. You can see this trend looking at previous years in the United States Oil Fund (NYSEARCA: USO) and the United States Natural Gas Fund, LP (NYSEARCA: UNG). Right now, we’re heading into that dip in energy prices but you should not sell – in fact, you should be adding to these positions. This seasonal fall in energy prices will allow you to get ahead of the spring bounce. Europe’s energy supply is enough to get through the upcoming winter but, in March, as they look toward next year’s supply, they’ll need to start rebuilding inventories in a market strained by the war in Ukraine, cuts in production, and a hostile OPEC. Stateside, the US Energy Information Administration is projecting record production from the Permian Basin of Texas and Oklahoma, as well as record production of natural gas this year. Even though we’re not seeing a whole lot of capital expenditure, they’re uncapping wells and pumping them harder. Look at USO and UNG as ETF oil and natural gas buys For individual stocks I’d look at Pioneer Natural Resources (NYSE: PXD), ConocoPhillips (NYSE: COP), and EQUINOR (NYSE: EQNR)–all of which I own in portfolios and have no intention of selling anytime soon.
Selling Tesla tomorrow out of the Volatility Portfolio on China slowdown and trade war uncertainties.
Even before the Biden administration launched a new U.S./China trade war by imposing restrictions on U.S. exports of advanced chip technology, Tesla (TSLA) was facing a sales slowdown in China. Now, with what I regard as the near certainty that Tesla will be one of the choice targets in any Chinese retaliation, I think it’s time to sell Tesla and get out of the way of what looks like a truly nasty tit-for-tat war of sanctions and restrictions. Tomorrow, October 12, I’m selling Tesla out of my Volatility Portfolio with a loss of 63.74% since I added it to the portfolio on November 10, 2021, near what would turn out to be the high before the onset of today’s Bear Market for technology stocks.
Please Watch My YouTube Video: Quick Pick JO
Today’s Quick Pick: JO (NYSEARCA: JO) otherwise known as Barclays iPath Bloomberg Coffee Subindex Total Return ETN Series B. As I’ve shown you in the video, I’m growing my own coffee plant to head off the coffee shortages we’re seeing now (first beans projected in 2028; enough for a cup? 2032), and will likely continue to see long-term. Brazil is the world’s largest producer of coffee but its inventory is projected to drop to about 7 million bags by March, (well below the comfort level of about 9-12 million bags.) A long-lasting drought is to blame for the shortages–and that dicey weather is likely to be with us for quite a while. Meanwhile, global coffee consumption is going up by 1.5% projected this year (2% last year). While JO is volatile since it trades on the commodity price, what interests me about it at the moment is that it’s NOT correlated to anything else like interest rates or inflation (though it definitely contributes to inflation as coffee drinkers well know.) This ETN will continue to go up, even if the market goes down. (JO is a member of my Volatility Portfolio on my subscription JubakAM.com site.)