Update: August 3, 2015

| August 3, 2015

August 3, 2015

 

Portfolio Update

Another couple weeks passed, and another period of mostly sideways action in US equities.  The S&P 500 seems to be range bound, although the range is big enough that we’re seeing semi-big moves in either direction.  Overall, the benchmark index is up just under 3.5% on the year.

Meanwhile, the Nasdaq 100, a tech heavy index, is up closer to 9% on the year.  This index does have the benefit of not having much, if any, exposure to energy and raw materials.  Both sectors have gotten hit fairly hard this year.  In years like this (with a lot of sideways action), the sectors and industries you invest can make a big difference.

The biggest issue facing the market is probably still China and its slowing economy.  China has been such a big consumer of US goods, the lack of demand from the region is posing a major issue to several companies.

On the other hand, the US economy continues to show signs of improvement.  Second quarter GDP grew at 2.3%.  That’s nothing to get excited about, but it’s a big improvement over the first quarter.  More importantly, personal consumption is increasing, which is an excellent sign for future growth.  The economic improvement may be enough that we’ll see the Fed hike rates in September.  Even if rates do increase, it’s going to be very minor to start.

Now, let’s take a look at some portfolio highlights…

 

Portfolio Highlights

Just a quick note:  We won’t update every open position every update.  I try to focus on the positions that have some significant news or price movement.

  • Avent (AVT) August 41 Calls – We got a nice jump higher from AVT, which moved past our call strike for the first time. We haven’t yet reached a profit-taking exit point, but it’s definitely within reach with three weeks to go until expiration.  The calls have gained as much as 47% for us so far.

 

  • Franco-Nevada (FNV) September 40 Puts – One of our most recent positions, FNV has started off nicely for us. The stock has already closed below $40, so our conservative profit-taking point of $37 is well within reach.  The puts have gained 21% at their peak so far, not bad for just having the position for a few days.

 

  • Cheniere Energy (LNG) September 70 Calls – Another recent position, LNG has been quite volatile in just a week of holding the calls. The stock jumped from about $63 to $70 in just a couple days, and has already pulled back to $66.  LNG can definitely be volatile, so keep an eye on it.  Meanwhile, our calls were briefly as high as 120% winners.  Stay tuned.

 

Category: AOA Updates