Update: May 27, 2014

| May 27, 2014

May 27, 2014


Portfolio Update

With the market closed yesterday for Memorial Day, we’re sending out the portfolio update today.  As is typical for a week before a 3-day weekend, it’s been pretty quiet in the US equities markets.  Volatility is running at 52-week lows and US-based news has been relatively uneventful.

On the other hand, international news continues to be chalked full of major events.  We have key elections in Ukraine (which Russia promises to honor), a military coup in Thailand, rioting in Vietnam, a bombing in Nigeria, and elections across all of Europe.  That’s plenty to keep track of…

Yet despite all the overseas action, US equities continue to trade sideways.  For US investors, it appears the summer doldrums have arrived early.  Earnings and economics news barely register a blip on many investors’ radar screens, or so it seems.

Overall, it’s been a disappointing but not disastrous year for long equity portfolios.  The S&P 500 is up 3.5% year-to-date, while the Dow Jones Industrial Average is up about a percent.  The Nasdaq-100 has gained ground in recent days and is now up roughly 3% for the year.  The one negative performer of the major benchmarks is the Russell 2000, which is down over 2.5% for the year.

Our portfolio continues to shine as we’ve achieved multiple triple-digit winners.  Let’s take a closer look at some of the more interesting positions.


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.

  • Starbucks (SBUX) July $72.50 Calls – SBUX has pretty much gone straight up the last few days and is approaching our first profit-taking point (for conservative traders).  Already, our calls are 79% winners as of this writing.  That’s obviously a great start for this week-old position.

  • Verizon (VZ) August $47 Calls – As we expected, VZ hit our profit-taking level for conservative traders this past week.  In addition, our calls just hit a high of 185% gains!  We’re closing in on the aggressive exit point of $52 per share, but there’s certainly no shame in wanting to lock in impressive profits right now.

  • Potash (POT) June $35 Calls – One of our older positions, POT, just recently made a nice move higher.  The stock briefly crossed over the $37 level, meaning conservative traders should have exited the position.  At their peak, the calls have been as high as 69% winners.  Aggressive traders can continue holding to $40 per share.  This trade from early March just goes to show how it sometimes pays to wait on your positions.  There are times when you need to be patient and sit on a trade while your thesis develops.


Category: AOA Updates