Here is how the market looked on August 1, 2014. As you know, I was buying.
Copy Of Email Transcripts To Clients: Aug 7- Aug 19, 2014
From: Todd Akin <akintodd48@gmail.com>
Date: Thursday, August 7, 2014
Subject: Using A Married Put
I am buying 1 SPY put option (AUG 29′ @ $190.00 strike price ) just in case contagion from Europe & Russia spreads to the US.
I am still bullish; this married put is just for protection, added insurance, if you will. Updates to follow.
-Todd Akin
From: Todd Akin <akintodd48@gmail.com>
Date: Monday, August 11, 2014
Subject: Getting Slightly Aggressive
Get ready for this upcoming week; should be an exciting one. If we go lower, our married put should make us a nice profit and allow us to buy more UPRO on the dip. We will also buy call options and sell puts on UPRO if we get even cheaper, but more on that later.
If we go higher, conversely, our current position in UPRO (50% of the portfolio) will benefit greatly as well as our call option on $SPY. I am doing what’s known as a “straddle”, in case you were wondering about the married put and call option.
A straddle is used when you think a BIG move is coming, but you’re not exactly sure which way it’ll go- up or down. So, you buy a call option and a put option (at the same time) hoping one will make a profit while the other expires worthless.
If we go higher, btw, I will just close the call & put options, and be trimming UPRO on the way up (not much exciting there, just rebalancing). I will keep you posted if we go lower, which I want! We will benefit either way, though. Regards.
-Todd Akin
From: Todd Akin <akintodd48@gmail.com>
Date: Monday, August 11, 2014
Subject: Thought Process Today
I see this market has put in a short term bottom. In the past, we have always held the short term bottom- despite geopolitical conflict. (Remember Egypt, Syria, & Iran?)
So I want to buy something with my large cash position to take advantage of the dip. Tired of being conservative on the dip just to see us climb higher. Will this dip be different?
I know Europe could feel the pain from Russia, and places like Portugal are terrible, but that’s BEEN the case for years (priced in).
I don’t think this dip will be different. But I have a put option on if we do go lower + cash.
With my bullish outlook renewed, I like LEAR (LEA) here. This is an automotive parts company that is not only a cyclical, which we like, but it’s also a top notch company that supplies seats and lighting systems to just about every automotive manufacturer out there. Their sales are booming, taking in over 4 billion in revenues and growing profits over 30% year over year in 2014.
With all of the cars you see nowadays having upgraded interior electronics, seating, and exterior lights (those headlights/taillights you always see on an Audi, for example) Lear makes perfect sense to add to the portfolio.
To top it off, LEA is displaying a strong technical setup on its chart. With the recent bounce off of the 50 day moving avg and then the gap above the 20 day moving average, $100.00 seems easily achievable for Lear, while $95 seems like your support (That’s 50 cents down, 5 points up. Good risk/ reward).
Lear Corp is a fundamentally sound company with catalysts (sales growth) and is displaying strong technical support- BULLISH.
Just one problem, we are not out of the woods yet in the market. While I think this bounce will hold, I would hate to commit long term capital on LEA and we fall. Not having enough cash to buy UPRO and not funding the FCX position would be detrimental to my long term goals with the portfolio and S&P 500. Regards.
$LEA holds support and moves higher. Another Win.
-Todd Akin
Date: Monday, August 11, 2014
Subject: Buying 3 Calls
Pursuing a strangle now as my optimism has improved with the S&P 500 holding support. Buying 3 more SPY calls (already have one put on) to complete the 4:1 strangle. Regards.
– Todd Akin
From: Todd Akin <akintodd48@gmail.com>
Date: Friday, August 15, 2014
Subject: Holy Grail: Trinity TRN
Buying 120 shares of Trinity Industries TRN down 1% here. I closed out our SPY calls out earlier today, but since the market has now pulled back 150 points since the open, I am taking advantage of the opportunity to add more exposure to stocks.
Trinity just reported a blowout number, trades at only 11x earnings (dirt cheap compared to the S&P 500, which trades at 18x earnings), and is in the sweet spot being an industrial/transport play for the portfolio.
Updates to follow.
-Todd Akin
Final Result:
S&P 500 rallies hard off of the lows. Buying into the dip (white circle) pays off again. FYI…Trinity (TRN) is up 4% today.
