Update: June 23, 2014

June 23, 2014

 

Portfolio Update

Geopolitical events are becoming increasingly volatile, but US investors continue to brush off any serious concerns. The S&P 500 is up nearly 4% for the month and 7% for the year. Meanwhile, volatility continues to run at very low levels.

Even the Iraq situation and subsequent rise in crude oil prices hasn’t seemed to really faze US investors. Although, oil and gas companies have definitely caught a bid. Speaking of commodities, between the FOMC meeting, Iraq, and higher than expected CPI numbers, precious metals have been on a tear lately.

However, despite the higher CPI results, inflation isn’t really a concern. We need larger wage growth in order to spark inflation, and that’s still not happening. CPI’s rise is most likely just a blip. More importantly, the Fed didn’t seem overly concerned, and that’s what really counts.

I continue to expect a relatively calm summer. Economic news should remain strong overall, and so far, the geopolitical risk isn’t causing a significant amount of concern among investors. In the meantime, our portfolio continues to shine, with several more big winners – including a 400% gem!

Now, on to the 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.

• Solar City (SCTY) July $55 Calls – Wow! What a move by SCTY! The company announced it will be building a plant to manufacture its own solar panels (and subsequently lower prices). Investors loved the news as the stock easily shot above our aggressive exit point of $65. During the rally, the calls reached an impressive high of $13.95, or a whopping 407% in gains.

 

• Noble (NE) September $31 Calls – The boost in crude oil prices has turned out to be a good thing for many oil and gas drillers, include Noble. The stock has climbed above our conservative exit point of $34. Moreover, the calls have been as much as 123% winners during the climb. Aggressive traders can continue holding the calls for further upside.

 

• Barrick Gold (ABX) August $17 Calls – As I mentioned in the summary, precious metals have gotten a nice boost recently. The rally in gold has definitely benefited ABX. The share price has climbed above our conservative exit point, and the calls have been as much as 87% winners. Aggressive traders can hold to $20 per share.

 

• Keurig Green Mountain (GMCR) July $100 Puts – Despite the lack of fundamentals, GMCR continues to be an attractive momentum stock. Investors keep bidding up the share price based entirely on speculation and not results. As such, the stock climbed above our exit points for both conservative and aggressive traders. You should have closed your position by now in order to control risk.

 

Category: AOA Updates