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Monday, October 23, 2017
Week of October 23rd
Monday & Tuesday
Monday = Good.
Tuesday = Bad.
Starting with the good. This actually goes back to Friday when CVS shot up to $76.49 from an open of $74.87. The big of a jump pushed my option position through the roof! If the roof is at 20%, then through the roof is accurate. Three consecutive up days and my CVS position gained back everything that was previously lost and then some. Monday was their ex-dividend date so the 50 cent fall wasn't actually a fall. Actually pushed my position up another 5% to a total gain of 28.60% (+$102.30). Monday was an even better day because my INFY position was almost at break-even! The stock popped almost two percent and my call saw a likewise jump in value.
Which brings me to Tuesday and the rapid deflation of INFY. It opened down about 2 percent and kept falling. At one point down over 4 percent, everything gained was quickly lost. Take the stairs up and the elevator down. It did recover a little bit by close and finished in the red by a smidgen over 2 percent. My holding, however, fell 50% today. Even though the stock recovered, the option did not. It continued to fall. Currently down 61.09% in all and that's pretty disappointing.
The total cost basis isn't very high so I'm not that worried about it. I realize the mistake that I made, but compared to the rest of the portfolio...peanuts. I have been in the process of beginning my research for my next investment. The preliminary rounds. I have begun making my list after looking at a few basic technical indicators - horizontal support or trend line support - and will dive deeper into the fundamentals and charts once I narrow the list down. I pay less attention to the fundamentals since I am primarily trading using the bar charts, but it is nice to know that in the event that I screw up the short term play there still may be something available in the long term.
What happens when you combine a horrendous quarter AND lowered future growth prospects? Chipotle. You get Chipotle. I completely forgot that we are coming into another earnings season and didn't remember until I pulled up Google Finance (shout out) at 10:30 and my jaw dropped. Picture one of those cartoon characters where they drop their jaw to the floor. To say I am disappointed is an understatement. I probably don't know enough about the business and how they're run, but I still know so many people who get food from them at least once a week. A staple in their diet. Must be hanging with the wrong crowd. I incorrectly predicted the impact of the Queso. I incorrect part is that I thought it would actually have an impact. Spoiler alert; it did not. 4:00 pm rolled around and it closed down -14.62%. So far CMG is only on my wall of shame.
Let's talk about the volatility of Infosys instead. Remember yesterday when I complained that it fell 4% and my holding fell by half? Well LOL to that because the stock made everything back and some today. Rose by 3.37% and closed higher than it has been for the past month. If you have been following along, I bet now you're [hopefully] wondering what my option position did! Well let me tell ya. Good things. My position went up a total of 59.96%! A bigger gain today than the loss yesterday? Yes! ....NOT SO FAST! Yesterday I lost $50.02. Today I gained $29.98.
Cara was down. What's new. It'll rebound. Eventually. Maybe. Hopefully. Please.
CVS put through the ringer today, let me tell ya. Tuesday to Friday marked 4 up days in a row. Needless to say I was feeling good. Monday was little movement, but still closed just a cent or two below close on Friday. Tuesday was very similar. Opened up and finished with little movement. Then today. I clicked on the ticker this morning and saw pre market it was up about 50 cents. I drove to work feeling good and with the intention to sell. Then work happened and I was thrown off. Put on a different schedule and I forgot to check market open. I'd like to think that if I had and seen CVS open in the green I would have sold ASAP. But I did not.
I checked just after 9:45 and saw it down, checked the status of my contract and realized there was no point in selling now. So I held. "The last two days did something similar. Open up, fall, then recover." Today was not quite the same. It plunged, just straight dove down to the tune of -1.83%.
I freaked out and got all nervous that I was going to burn it all down. I got all sweaty and hot and thankfully my boss let me take my lunch early. I rushed home to find my apartment still standing and the coffee only mildly burnt. I was relieved, grabbed a cookie dough ball (important freezer mainstay) and drove back to work. By the time I got back CVS was still hovering around the 1.8% levels and got all sweaty again.
If you're familiar with the stock market and short term trading then know the first hour, maybe two hours of trading are extremely volatile. Usually by 12 or 12:30 the volatility calms and the stocks kind of settle into their daily median levels. At that point I just kept telling myself that there was still a lot of upside on the stock and my contract didn't expire until February 16th. I was fine. Everything is fine.
Turns out it was. My free time today consisted of reading an ebook by Greg Kolod.... Greg Kolodziejzyk called "Disrupting Wall Street" (very interesting, quick, easy read) and Peter Lynch. Effectively keeping me from staring at the CVS tick up and down. I checked back around 3:30 and was able to pull my stomach out of my throat because CVS recovered and was only down like, 0.50%! All told, CVS finished the day down only 0.63% after recovering more than a percent from the daily low. My position reacted very positively to the late rally and only dropped by 1.14%.
-->Download the free ebook from his website HERE to learn a little about automated cloud trading.
Another day of no money being spent, too. Go me.
I lied. I did spend money yesterday. A day of no spending money today! Deserves a pat on the back.
Greed is bad, kiddos. I boned myself today; trying to suckle every last penny out of my CVS contract and then losing my opportunity. And then REALLY losing my opportunity. Let me show a chart of the movement minute by minute today and show you where I almost sold. Then didn't. This will be fun. I promise not to cry.
The steam was never picked up. It was lost by the bucket?full. I take my lunch at 1:45, then leave the building to go on a walk at 2:15. The stock only up 5 cents at that point, I thought my day was over. Was going to be another flat day and missed opportunity. No biggie. Turned into a biggie. I get back to my desk at 2:40, unlock my computer, and my heart drops. Down 3 percent in a matter of minutes because Amazon. Jeff Bezos needs to calm down a minute.
Amazon is actually awesome and a great company, but the timing of the news that they are filing for pharma license in the states is bad. CVS and other like companies tanked. Later in the afternoon, where you see the brief spike up above $76 again was the news that CVS made a $66 billion dollar bid to buy Aetna. Then quickly plummeted again just before market close and finished down 2.93%.
How is my position, you ask? Remember how I mentioned it was up nearly 40%? Well HA. HA. Currently down a total of 8.17%. Equivalent to $29.21 in the red. Compared to what it said at 3:00pm, down about 25%, this seems fantastic.
I understand the volatility and risk associated with options. Don't get me wrong. It just sucks even more when I know I could have and should have sold earlier in the day and avoided this whole situation. I was doing so well in sticking to my "rules". I got greedy and it bit me in the ass. Take note. Keep emotion out of it.
That's all I have for you today. This weekend I am going to get back into single stock analysis for companies I find and like for a long term stock trade. Different than my short term option plays.
Quick note: INFY ended with no movement and my position increased by 8%, so that's tight.