Update: November 2, 2015

| November 2, 2015

November 2, 2015

 

Portfolio Update

It took a while, but the US stock market is back to pre-correction levels.  Basically, after the 10% plunge in the S&P 500 in August, the benchmark index has almost fully recovered.  It’s up roughly 3% for the year.  It took a bit less than 3 months to recover, but recover it did.

In the meantime, tech stocks have done quite a bit better than the broad market, up over 10% for the year.  Small caps are still down about 2.5% on the year, suggesting not all investors have bought into the stability of the US stock market just yet.

The Fed did decide to make things interesting by suggesting a rate hike will occur in December.  Given the recent run of worse than expected economic reports, it seems a bit surprising.  What’s more, a strong dollar (further made strong by a rise in interest rates) is not good for emerging markets.  That’s important because we’re used to having moderate to strong demand for US goods from these countries.

On the other hand, having a good idea for when rates will go up does ease the uncertainty of the situation.  And, there’s nothing US investors like less than uncertainty.

Once again, don’t forget the holiday season tends to come with an uptick in stocks.  We could see another strong fourth quarter this year and a relatively calm last few months of 2015.

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.

  • Rackspace (RAX) December 28 Calls – RAX hadn’t done much since our trade last week…until today. The stock jumped over 7% today and has pushed our high mark to 42% gains.  We’re still over $2 away from our first exit point, so plenty of upside left.

 

  • Capital One Financial (COF) December 77.5 Calls – We pretty much nailed the financials theme from a couple weeks back. As I predicted, financials would eventually make a run – especially now that rates are supposed to go up starting in December.  COF hit our first profit/exit point and has a high mark of 216% gains!

 

  • JPM Morgan Chase (JPM) December 62.50 Calls – JPM also benefited with the surge in financials, which makes sense. This position has also crossed the first profit-taking point, and is within striking distance of the next exit point at $67.50.  The high mark in JPM is 95% gains.

 

Category: AOA Updates