TIB: Today I Bought (and Sold) - An Investors Journal #497 - Japan, Oil Services, HR Services, Marijuana, US Retail, Europe, Network Equipment, TV Streaming

US markets smash records in Friday trade despite the impeachment vote. Updates on two other portfolios show strong pain in Europe with options trades running out of time.

Portfolio News

Market Rally - as of December 23

US markets continue to feast on good economic data and positive news on China trade.

Bought

Redeployed proceeds on one Japanese stock to average down 3 other positions, chosen from worst performers.

Nippon Steel Corporation (5401.T): Japan Steel.

Sharp Corporation (6753.T): Japan Electronics.

Mitsui Engineering & Shipbuilding (7003.T): Japan Industrials.

Schlumberger (SLB): Oil Services. Replaced holding from covered call assigned the prior week. Wrote covered call against this.

Randstad NV (RAND.AS): Europe HR Services. Replaced holding from covered call assigned the prior week. Wrote covered call against this.

Aurora Cannabis Inc (ACB.TO): Canadian Marijuana. CEO departs. Price tanks. I averaged down entry price despite talking heads suggesting that marijuana is like the Dot.com bust - nobody has found a winning product model and it has become an agriculture commodity bust. I am looking very long term across a few names.

Sold

Nichimo Co., Ltd (8091.T): Japan Fishing. Been actively taking profits on Japanese stocks between 10 and 15%. 10% blended profit since December 2018/September 2019.

Rite Aid Corp (RAD): US Pharma Retail. Assigned on covered call for 51% blended loss since August 2018/December 2019. I must say I was surprised to see price more than the 16% coverage I had in place for this covered call. Price has since passed $20 vs the $9.50 I was assigned at. Covered call provided 1.32% income.

Shorts

Vanguard FTSE Europe Index Fund ETF (VGK): Europe Index. With price closing at $57.91 strike 54/52 bear ratio put spread expired out-the-money. 10% overall loss on a hedging trade is OK by me.

Expiring Options

Eni S.p.A. (ENI.MI): Europe Oil Producer. With price closing at €14.02, strike 16 call warrants bought in December 2014 expired worthless - 5 years is a long time in the oil business = not long enough for this trade. Trade was in positive territory twice - in early 2015 and again in 2018.

Europe Muddles

The grand thesis for Europe was that it would follow the US out of recession and start to grow. It did start to do that but that move was derailed by the start of the US-led trade war, initially on steel and aluminium. While the US has come through with the trade dispute with China getting to a Phase One deal, Europe has not recovered in the same way. The biggest blockage was the use of negative interest rates, first in Switzerland and then in Europe, and the reticence of Mario Draghi to normalize rates. The expiring options tells the story harshly. The shift to negative markets took the markets by surprise and took away any chance to minimize trade losses.

Credit Suisse Group AG (CSGN.SW): Swiss Bank. With price closing at SFr 13.07 strike 26.26 strike call options expired worthless. Trades set up in 2015

UBS Group AG (UBSG.SW): Swiss Bank. With price closing at SFr 12.24 strike 19.41 and strike 23.29 call options expired worthless. Trades set up in 2015

Aegon N.V. (AGN.AS): Dutch/US Insurer. With price closing at €4.09 strike 5, 5.6, 7, 7.2 and 8 call options expired worthless. Trades set up in 2015. Overall the sequence of trades show only one third closing profitably with last rollup in mid 2015 profitable.

Commerzbank AG (CBK.DE): German Bank. With price closing at €5.58 strike 14, 12, 7 and 8 call options expired worthless. Trades set up in 2015. Overall the sequence of trades have been profitable with income trades contributing 25% of overall profits.

Deutsche Bank AG (DBK.DE): German Bank. With price closing at €7.07 strike 24.99 and 28.56 call options expired worthless. Trades set up in 2015. Unprofitable series of trades with only trades in 2014 ending profitably. Covered call writing has been more challenging with only one trade in this portfolio.

ING Groep N.V. (INGA.AS): Dutch Bank. With price closing at €10.92 strike 15, 16 and 20 call options expired worthless. Trades set up in 2015. A profitable series of trades with only 10 losers out of a series of 28 going back to 2013 and some winners of 400 and 500%. The updated chart shows the nature of the Europe cycle - collapse - recover - collapse - go sideways - run out of time.

The 2015 entry looks just fine and then along came negative interest rates.

Deutsche Telekom AG (DTE.DE): German Telecom. With price closing at €14.80 strike 20 call options expired worthless. Trades set up in 2015. A profitable series of trades with only 4 losers out of 14 trades going back to 2012

Koninklijke KPN N.V. (KPN.AS): Dutch Telecom. With price closing at €2.68 strike 3.62 (was 4) call options expired worthless. Trades set up in 2015. Strike 3.62 call options issued as part of 2016 and 2018 distributions also expired. A breakeven series of trades with 3 winners and 3 losers.

Eurostoxx 50 Index (ESTX50): Europe Index. Strike 4000 index call options expired with price closing around the 3750 level.

Electricite de France S.A. (EDF.PA): French Utility. With price closing at €9.96 strike 16 call options expired worthless. Trades set up in September 2018. A losing sequence of trades with only 2 winners out of 7 trades - this has been a tough business to follow.

Income Trades

Cisco Systems, Inc. (CSCO): Network Equipment. Short term strike 46 naked put ahead of earnings expired in my favour. Sold a January 24, 2020 strike 46 put option in another portfolio.

Roku, Inc. (ROKU): TV Streaming. Strike 85 naked put expired. Replaced with January strike 95 naked put (0.5% premium)

Naked puts on Honeywell (HON) and McDonalds (MCD) expired in my favour.

61 covered calls written for December expiries at average net premium of 0.89% (after buybacks at average coverage of 8.98%, with 8 bought back and 9 assigned - = 44 expire in my favour.

Will report the January expiries in next update.

Cautions: This is not financial advice. You need to consider your own financial position and take your own advice before you follow any of my ideas

Images: I own the rights to use and edit the Buy Sell image. News headlines come from Google Search. All other images are created using my various trading and charting platforms. They are all my own work

Tickers: I monitor my portfolios using Yahoo Finance. The ticker symbols used are Yahoo Finance tickers

December 20-23, 2019