Samwise Model Portfolios
The portfolios below are separated by launch dates. Each portfolio is entirely independent and has no bearing on any other model portfolio. We launch entirely new portfolios during each market correction as an illustrative tool for new subscribers who weren't present during...
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NFLX : How about an ITM call spread 860-865 Jan 10, exiting around lunch time Friday should be around 40%. The spread costs 360 $-ish now.
My mistake, cost at ask price is more like 450$ so profit at expiration is not all that great 15%.
Do you have any thoughts on the QQQ coming back down to where it opened?
Or that NVDA has managed to stay above 150 after the first half hour?
Not particularly. So there’s nothing we can really do right now as we’re in an uncertain place as I outlined. It’s not obvious whether the market is going to continue its correction or whether it began another segment.
Obviously, the QQQ pulling back away from $530 cuts in favor of the correction hypothesis. Especially with the SPY underperforming and the Dow straight up in teh red.
NVDA is overbought and depends on the market. If the market doesn’t correct, Nviida will breakout and run to new all-time highs. If the market starts to correct, Nvidia will pull back with the market being overbought.
We’re in an uncertain zone at the moment.
If the QQQ closes where it is right now, it’s a doji indicating indecision. That’s a negative for the market.
So it could be the case that this is a final segmented rally ahead of a correction that was just delayed?
That could very easily be the case. Whenever we get into grey area like “6%”, it’s not always obvious whether the market views that as just a “pull-back” or whether it’s viewed as a full correction.
Notice we’ve seen 6% pullbacks before that were just segmented rally pullbacks. It’s on the list. So this wouldn’t be the first 6% pull-back that is just a pull-back and not a full correction.
That will largely depend on how the market deals with the current trend. If it stalls out, then it’s more likely to be a topping process. A segmented rally should be continuous and essentially uninterrupted. The market should rally 10-15 days and 8-10% straight up. So if we start to stall out here like we saw al little bit today, then it means the market is still on uncertain grounds.
If it continues higher, then we run into the end of the segment at around $545-$555 and the QQQ should pull-back 4% from there. That’s a pull-back to $522-$532 from $545 to $555.
NFLX held better than QQQ for the last two hours.
Yeah I think NFLX is stable where it is now. We just need the QQQ to show signs of a bottom and then we’ll buy. We may buy a single share just to have Netflix exposure as I do think it’s a high probability trade up to $1000-$1200 range.
the market is incomprehensible, particularly NVIDIA, and quantum continues to take off more and more… I fear the worst, this reminds me of early 2021 with AMC and Gamestop… we know the rest on tech stocks
You said you were thinking of selling covered calls again for NVDA. Around what strike/expiration were you thinking and when? I was thinking of selling some today but I wasn’t sure if this could be the start of a breakout to a new trading range, as you had mentioned.
Not sure just yet. Nvidia just had its overbought pull-back. we have to be careful when it does go back up to $150 because if it breaks out, it can very quickly push to $170 in a flash. So we just have to be careful. I’m thinking along those lines though. $170 calls a few months out when Nvidia gets back up to $150 again.
With Nvidia, if I’m forced out at $170, I’d be happy with that result given that most of our entries are near the $100 level.
Hi Sam, Could you provide some insight in the investment basics on why not to invest in stocks that lack fundamentals such as the new quantum hype? It seems to me these stocks are all nascent and will eventually be valueless again after the hype dies down. Also what do you think about cocacola nearing oversold on the daily and chances of Costco revisiting its highs?
Wondering the same about Costco, since it also seems likely to break the $1000 psychological barrier. Sam, what are your thoughts about trading retail stocks like Costco and Walmart?
let me take a look at Costco and I’ll post about it.
Another stock is BRK which oddly seems to trace exactly like Costco both are about 8-9% down with BRK having not tested 500 yet
So I think QC has merit. I think the way to play it is through broad diversification of any stock that plays in the space. Including the large cap companies that are involved.
That’s how to capitalize on QC. The eventual winners will produce returns that far far outstrip the losers. That’s the reality. But it just has to be approached the right way. And that means buying all quantum computing stocks. It’s obvious that QC has a massive role to play in society. So it’s going to do something.
But whether it’s some emerging small cap company or Google that ends up being the winner is anyone’s guess really.
But I actually have a writing already done on this exact issue. Just finishing it up. It will appear in the Samwise Strategy portion of the website under something called the Hi-Pro strategy.
The idea is that we can produce the same returns by leveraging large cap and ETFs through teh use of options.
When you compare the two assets — established large caps versus “the next big thing” — here’s what you get. When it comes to the next big thing, there’s an incredible amount of uncertainty as to who will be the eventual winners and losers and whether the sector will even be successful at all. With established large cap and ETFs, you get low returns. That’s the complaint. You get high visibility, but low returns.
What we try to do is take advantage of the high visibility in large caps and then leverage that through options.
Like the Netflix trade for example. The strategy is what? If Netflix goes nowhere at all — it just needs to stay put — and we make 100%. That’s a pretty major return commensurate with what you get in a lot of the “next big thing” stocks. Though some of those do move up 1000%’s of percents. And we can also get that same return in large caps through compounding the returns.
Also, large caps have constant visibility whereas it isn’t always obvious how to find the next big thing. The validity of QC is obvious and so is the nuclear energy derivate play. But beyond that, it always requires a new find to produces returns in this manner.
Whereas the QQQ/SPY/AAPL/AMZN/NVDA et al. Money can CONSTANTLY be made in those assets. You don’t have to go treasure hunting so to speak.
I sort of abandoned that type of trading ages ago. Only very early on did I try to leverage that venture capitalist style of investing. Trying to find stocks ready to run 700% or something.
And that’s becuase we can get that through the market. We don’t go to those crazy levels, but people certainly can right? Anytime the QQQ sustains a correction, there’s a 200% returning trade right there for the taking.
For example, suppose the QQQ were at a bottom today. The March $540-$550 call-speed trades at a $3.32/$3.36 bid/ask. What does that mean? that means in a standard rebound post-correction where the QQq generally rallies 12-14%, that spread will be pretty deep in the money come march. Especially on the segment rally analysis.
At expiration, that spread is worth $10.00. That’s a 200% return. If you put in $1k, you produce a $2k profit. That’s on the QQQ..
if the QQQ bottomed here today, a 10% rally from here at $517, would take the QQQ to $568. That’s $18 in the money.
Obviously, we’re not at some major correction low or anyting like that. But the point is that trade is ALWAYS available. It’s a permanent fixture of the market. We just don’t do it here given the risk. we try to put on trades we feel confident is going to yield a return. But that is not to say that those going after such high levels of alpha can’t produce it through large caps and ETFs. They most certainly can.
That you for the summary analysis it sure looks like that comment (on the Hi-Pro section in investment basics) clarifies the distinction from treasure hunting and leveraging cyclical nature on the high visibility stocks.
https://sam-weiss.com/samwise/samwise-strategies/
Look at the tab called “hi-pro” strategy. The page is done basically. I just need to finish the last section on diversification when investing in the “next big thing” and I can get it up there. But that’s where it will be.
We cover it under investment strategy because that’s what it relates to. Our general strategy. It may not show up if you’re not on a desktop computer. We have to add some elements to make it available in mobile. It’s not available either way, but the submenu is already up in the desktop version of hte website. Just not clickable yet.
So QC as an investment is a very long-term enterprise. It’s an investment in the technology itself, which does have a place. Short term things like negative comments from a CEO might have a near term impact on price. Even negative events, negative earnings or negative news items aren’t generally determinative for the entire sector.
Personnaly, I would scoup them going down with a put or put spread. I am pretty sure that QC stocks are going back with the penny stocks.
@Sam IMO This was hype from the beginning. Science is still pretty far from a viable commercial computer, perhaps even half of a lifetime away.
All three companies (Rigetti, D-Wave and IonQ) were launched public through a SPAC (Special Purpose Aquisition Company) rather than standard IPO. The success rate of SPAC is very, very low. They are also somewhat opaque for retail investors, and benefit most to the original SPAC fund investors.
(10:45) QQQ and SPY filled the Jan 5-6 gap. AAPL is holding pretty well compared to QQQ at the moment.
QQQ and SPY went a little past the gap now, I think they should have bounced by now.
we’re holding the $240 calls for an Apple rebound up to $250. our first position is just that. We’re waiting for a retest to add to it. The plan is to hold $2500 or 25% position in the portfolio for the eventual rebound up to $250. We’ll sell it there. The hope is to sell it closer to $16 x 2 contracts bought in the $12’s.