Update: September 29, 2014
September 29, 2014
Portfolio Update
US equity investors are in ‘risk on’ mode as macro concerns have caused a fair amount of selling over the past few days. The S&P 500 is down about 1.5% over the last week, but is still up around 8.5% for the month. The biggest pullback has been in small caps, which are down nearly 3% this year and can’t seem to catch a bid.
The biggest concerns for investors continue to be on the macro front. While the conflict between Ukraine and Russia has simmered down, the offensive against ISIS has picked up steam. The US and allies are now conducting airstrikes even within Syria. What’s more, for some reason, major protests in Hong Kong (against China) are causing some spillover fear as well.
Some of the selling could just be a factor of timing. The markets have been running hot for some time now. Investors may have been looking for reasons to take some gains off the table. And, it’s not as if we’re seeing a major correction.
Not to mention, the US economy still looks plenty strong and stable. Housing and employment news continues to be positive overall. And, today’s personal income and spending numbers show encouraging gains.
Overall, I remain optimistic stocks will continue in their bull market phase this year. We may take a more defensive position with our next theme to be safe – but conditions still point to further upside in stocks.
Now, let’s take a look at the 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.
- FirstEnergy (FE) October 32 Calls – FE continues to be a solid winner for us. While conservative traders should have already cashed out, aggressive traders are still in the game. Before a recent pullback (along with the broad market), the stock almost hit the aggressive exit price. At the peak, our options were 144% winners!
- Plug Power (PLUG) November 6 Calls – PLUG has struggled lately, but not for any fault of the company itself. As I mentioned earlier, small caps have been getting hammered as investors are playing it safe. There’s still a chance the stock could catch a bid. We do have plenty of time before expiration. Conservative traders should be out of the position.
- Yahoo (YHOO) November 39 Calls – YHOO has already become a solid winner for us since our trade a week ago. As I suspected, there was no reason for the stock to be as cheap as it became. Talks of a potential merger with AOL (AOL) have given a nice to boost to the share price recently. Both aggressive and conservative traders should still be in the trade at this point, which has been as high as a 63% winner for us so far.
Category: AOA Updates
