TIB - An Investors Journal #632 - Europe (Banks, Industrials, Utilities, Airlines, Oil Services), UK Telecom, ASX Stocks, Lithium, Altcoins (AAVE) + more

Markets had a steadying week around the US holiday. My focus was replacing stocks assigned in previous week's options expiry - mostly in Europa and tweaking my new ASX strategy

Portfolio News

In a week where S&P 500 rose 1.59% and Europe rose 2.45%, my pension portfolio rose a more modest 0.61%. The drags were Australian resources (again), another ugly drop in Credt Suisse down 18% (CSGN.SW), and a slice of US themes (shipping and lithium and electric vehicles)

Big movers of the week were Bod Australia (BOD.AX) (+46.5%), EML Payments (EML.AX) (+32.6%), Beamtree Holdings (BMT.AX) (+30.4%), American Eagle Outfitters (AEO) (+22.3%), Delivra Health Brands (DHB.V) (+20%), Elmore Limited (ELE.AX) (+15.8%), Ramelius Resources (RMS.AX) (+14.9%), American Rare Earths (ARR.AX) (+13.2%), 88 Energy (88E.AX) (+11.1%), Mamiya-OP Co. (7991.T) (+10.9%)

Hard to read any themes from this list - it all seems deal or news specific other than gold miner Ramelius Resources strengthening as US Dollar weakens. Hidden in the list are two cannabis related stocks - one in Canada and one in Australia

The big move in BOD Australia came the day after they released clinical trials results on their Novel softgel delivery format being used in Bod’s clinical trial to progress Schedule 3 (pharmacist only, over the counter without prescription) Cannabidiol (CBD) product shows superior bioavailability and faster maximum concentration in clinical pharmacokinetic (PK) study

EML Payments move comes after their AGM and appointment of David Liddy as Chairman - he was CEO of Bank of Queensland (BOQ.AX) and has a solid track record.

Maybe the surprise move of the week was the bounce in American Eagle Outfitters on results - jumping 18% in one day. Bad news for me is this drags price just above my covered call strike on a badly losing holding - maybe I should celebrate exiting some 20% above week ago price.

The main news in US markets centres on the Federal Reserve with several governors issuing statements sort of pointing to slower rate of hikes while still holding hte recession fear club in the open.

Credit Suisse Outflows

Credit Suisse announced big losses for the quarter which prompted a massive selloff of the stock to a record closing low of SFr 3.37.

Saudis look like they want to grab control of the bank with a now 9.9% stake. My holdings are looking sick and I have an ugly short put position. Work to be done to get out of that mess. Disappoinitng as I spent a solid 6 months as a consultant here in the 1990s fixing the systems architectures in the domestic bank.

https://www.wsj.com/livecoverage/stock-market-news-today-11-25-2022/card/credit-suisse-stock-tests-record-lows-even-as-bank-secures-4-billion-from-investors-Xvuou1RpoK8kCfUyuTy2

Crypto Busts

Bitcoin price could not hold the consolidation zone and pushed lower below the last two lower lows to start the week. Trough to peak range was only 8.13% with price ending the week 3.4% higher than the start.

Ethereum trough to peak range was nearly double at 14% with an 8% move up for the week. Support is around the $1100 mark

Chainlink (LINK) found buyers with a move of 31%. I have been looking at those charts and chose not to buy just yet. They look a bit sideways to me. Note the chart is Daily and my last entry is 34% above current levels

Litecoin continued its moves with a 39% trough to peak range vs USD and price has moved above the spike exit vs ETH I got a few weeks back

Binance Coin (BNB) also moved 29% - so there are buyers out there off the lows. But this is not translating into bigger moves for Bitcoin and Ethereum which suggests to me it is the small end of town buying.

Bought

ABB Ltd (ABBN.SW): Europe Industrials. Replaced stock assigned at 2.56% premium to assigned price. Wrote covered call at 0.75% premium with 4.3% price coverage. 3 months and the premium is fully recovered. I replaced half the parcel - will average down if price drops. ABB is a large player in power banks for electric vehicles. Dividend yield 2.74%

Deutsche Bank AG (DBK.DE): German Bank. Replaced stock assigned at 1.76% premium to assigned price. Dividend yield 1.92%

ENGIE SA (ENGI.PA): French Utility. Replaced stock assigned at 4.85% premium to assigned price. Dividend yield 5.89%

Deutsche Lufthansa AG (LHA.DE): German Airline. Replaced stock assigned at 2.1% premium to assigned price. Wrote covered call at 1.24% with 7.6% price coverage. One more like that and the premium is recoverd

Banco Santander (SAN.MC)): Spanish/UK Bank. Compared the components of Eurostoxx Banks ETF (EXV1.DE) and added in Santander as an under-performer. Part of the under-performance comes from the weakness in UK and British Pound. Santander is 6th largest bank in UK and largest in Spain ranked by assets. Dividend yield 3.88%

Vodafone Group plc (VOD.L): UK Telecom. Averaged down entry price as chart is showing signs of bouncing off an earnings smackdown. Dividend yield 8.31%

Plexus Holdings plc (POS.L): Oil Services. Averaged down entry price on a pending order as stock did make big movers list a few weeks back. Liquidity is a challenge for buyers.

ChargePoint Holdings (CHPT): Electric Vehicles. Replaced stock assigned in October at 7.4% discount to assigned price. AAPlus just added to their position again as they felt the market over-reacted to Carvana (CVNA) used car sales results.

Sunpower Corp (SPWR): Solar Power. Replaced stock assigned at 16% premium to assigned price. My average cost prior to last week's assignments was higher than this - will average into a full position again.

Regis Resources Limited (RRL.AX): Gold Mining. With the sale of Mineral Resources (MIN.AX), Sharesies portfolio had an open slot. Ran screens and a few new stocks came up on Price to sales.

Did the comparison to an industry ETF (INIF.AX) going back to March 2020. This stock was the laggard. Dividend yield 1.02%

Its chart shows price has broken the long running downtrend again after trying a few months back. Price has also completed an inverse head and shoulders pattern - look at the W on the bottom of the chart. One other headline caught my eye from AAPlus "Gold Still Shines". With the Federal Reserve indicating it might slow the pace on rate increases, yields have softened and USD has weekend a tad. This is good news for gold.

If AAPlus are right on their views on the SPDR Gold ETF (GLD), Regis will bounce even more as they are priced at a big discount to Gold.

ASX Stocks Added a few more stocks to my Sharesies portfolio

One chart from this list for Sandfire Resources (SFR) comparing the stock to a mainstream competitor South32 (S32.AX) and a copper mining ETF (COPX). There is a 3 times multiple gap between this company and the industry

Worked on a rebalancing strategy and set up a monitoring spreadsheet.

Take profits when stock moves 30% from average cost or hits 52 week high.
Redeploy to new candidates from stock screens (if there are any)
Sell stocks that drop more than 25% (still working out a good cutoff point) and redeploy proceeds to leading stocks (say split in two or three tranches). Need to pick stocks to add that are not at or near 52 week high.

Point 3 is a departure for my normal investing approach - I do not normally apply stop losses.

I will need to adjust this strategy as the last topping up put stocks in at close to 52 week high that are some way off reaching 30% target. I might adjust those to a 20% target - i.e., set a target above the current 52 week high.

Sold

Mineral Resources Limited (MIN.AX): Lithium. Closed out holding in Sharesies portfolio for 34.2% profit since April 2022. I had topped this up last week and changed strategy. I will close positions at 52 week high or 30% profit. This stock did both.

Hedging Trades

Not feeling the need just yet as markets tread sideways. Yields move is suggesting that the time might be coming soon to go long US Treasuries. Hedging could well work with ratio put spread - i.e., run the risk of going long if prices drop a bit further.

Cryptocurrency

AAVE (AAVEETH): I noticed this order to add was hit in my Binance account. I do not remember setting it up. As it happens it comes in at the same level as my last averaging down and replaces coin sold in April 2022.

The chart is messy with the moving averages all aiming down. All I can say is price has respected a support level around the reversal point I used to average down last time (the red horizontal line). The fundamentals for lending platforms like AAVE are not great given the FTX debacle - so it looks like a mistake trade. I will put in an exit at the last cycle high (lower than my normal 50%)

Dust Swap In my Gate.IO swept small balances to Gate Token (RDN, ICX, ELF, ETHF). First 3 were from mini portfolios I set up in 2018 - all now gone to less than $1 holdings. Ethereum Fair comes from the Ethereum merge.

Income Trades

A quiet week for covered call writing as I did not write any US calls in my pension portfolio - ran out of time and stayed away in a holiday affected week. Overall 33 covered calls written across all portfolios (UK 1 Europe 11 US 21). I will do the US for pension portfolio this week.

One naked put written on Nokia (NOK). Price has been sitting in a quite narrow band a dollar wide. I wrote this month's naked put in the managed portfolio quite tight to the market.

Let's see the chart which shows price has broken the downtrend - 20 day moving average (blue line) has just crossed above the 50 (red wavy line). I have put in the sold puts from the last 12 months (red rays) - 8 trades and not once assigned. What I like is the small capital required = 10 contracts puts only $4,500 to $5,500 at risk. These trades have yielded enough premium to buy 139 shares. Maybe that could be a new model - buy shares each month with the earned premium. In the same time the covered calls have earned enough to buy 83 shares with only one buy back and only once assigned.

Credit Spreads

With only 3 credit spreads open the risk profile in all portfolios is under control. Naked put exposure with december expiry is troublesome in Credit Suisse (CSGN.SW) and Couer Mining (CDE).

Resources

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. Crypto tickers come from TradingView

Charts: http://mymark.mx/TradingView - this is a free charting package. I have a Pro subscription to get access to real time forex prices

Investing: Interactive Brokers provides comprehensive global markets coverage with very competitive commissions. Open an account to earn up to USD 1,000 in IBKR stock. https://mclnks.com/ibkr

Crypto Trading: Binance offers a wide range of coins to trade, tight spreads and low fees if you use BNB to pay https://mymark.mx/Binance

Kucoin offers a wider range of altcoins than many of the other exchanges. I do like to diversify my holdings in case an exchange gets knocked over. Grab 15% discount on your trades when you open an account on this link https://mclnks.com/kucoin15

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November 21-25, 2022

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