As Promised – An Update On All Our “Bonus” Plays

I hope you had a great Labor Day weekend, far away from your desk, and that you completely missed my Saturday update. Yes, really.

That Saturday update was to let you know I’ve been working on an article on our “bonus plays” – MDM, ANGL, short mall REITs, and all the others that I’ve recommended since the beginning of the year. These plays are not included in our official portfolio, and I have heard from a number of readers who are afraid that I’ve “forgotten” them.

Not so.

Most of these plays still have quite some time to mature, so don’t be surprised that we haven’t seen many big moves yet. But we’re going to…

One recommendation needs to be adjusted because (in my view) it is too long dated.  And on the bright side, several of our long plays have begun their long, slow ascent.

Here’s what’s happening…

Our Bonus Short Plays

First, a note on VRX. I first recommended this play on October 15 of last year, so it is not strictly one of our “bonus” plays, but I feel it deserves an update. Since that time, I have suggested several rounds of puts. The earlier ones did very well (making some readers as much as 700%), while the later ones have been disappointing. The stock continued to fall, but the options did not. I think this happened because my latest puts are too long-dated – there was too much time-value embedded in the options, so the puts did not fall when the stock did. Stay tuned for a new recommendation.

Now, a brief note on each of our true bonus plays. As always, I recommend puts as a less risky way to play the short side.

  • Short Citi: Recommended August 18. Up about 1.4% since then. No change to this recommendation. Citigroup Inc (NYSE: C) is a derivative-riddled monster that has bitten off more than it can chew.
  • Short Mall REITS: Recommended May 10. Simon Property Group Inc (NYSE: SPG) is up a little over 1% and General Growth Properties Inc (NYSE: GGP) is down a little more than 1% since then. No change to this recommendation. Retail is getting worse.
  • Short HY Bonds: Recommended July 26. iShares iBoxx High Yield Corp Bond ETF(NYSE Arca: HYG), and the SPDR Barclays Capital High Yield Bond ETF (NYSE Arca: JNK) are each up about 2%, while iShares MSCI Emerging Markets ETF (NYSE Arca: EEM) is up about 6%. No change to this recommendation. The high yield sector is getting more overvalued while defaults continue to rise rapidly.
  • Short Euro Banks/Euro: Recommended June 16. Since then, Vanguard Total International Bond ETF (NASDAQ: BNDX), iShares International Treasury Bond ETF (Nasdaq: IGOV), and SPDR Barclays International Treasury Bonds ETF (NYSEArca: BWX) are all up 1 to 2%, while ProShares Short Euro (EUFX) is up 0.85%. No change to this recommendation. The Euro will weaken long-term.
  • Short China/Chinese Stock Market: Recommended January 29iShares MSCI Emerging Markets ETF (EEM), iShares China Large-Cap ETF (FXI), and iShares MSCI Singapore ETF (EWS) are up 25%, 24%, and 18% respectively. No change to this recommendation.
  • Short Yen/Japanese Stock Market: Recommended May 6. Since then, CurrencyShares Japanese Yen Trust ETF (FXY) and iShares MSCI Japan ETF (EWJ) are up about 4.8% and 8.6%. No change to this recommendation.

A note on short platinum, which I recommended February 24: I am not particularly interested in this metal, to be quite honest. I don’t care what it does. I believe it will go down long-term, but I have better things to do than track it. If you would like to continue following it, be my guest.

Our Bonus Long Plays

  • Buy CZR: Recommended April 13.  Caesars Entertainment Corporation Common Stock (NASDAQ: CZR) is down 11% since I recommended it, but this is a longer-term play that will take some time to mature. Over time, I expect Caesars stock to rise sharply as the company’s value is shifted from creditors to equity holders. No change to this recommendation.
  • Buy ANGL: Recommended May 3. MV Fallen Angel ETF (NYSEARCA: ANGL) is up 6.4% and will continue to rise. I have heard from a number of people who are making money on ANGL. No change to this recommendation.
  • Buy MDM: Recommended July 28. Mountain Province Diamonds Inc (NASDAQ: MDM) is up 5.5% since I recommended it, and 73% since the beginning of the year. No change to this recommendation.
  • Buy UUP: Recommended February 3. PowerShares DB US Dollar Index Bullish (NYSEARCA: UUP) is down 2.8% since I recommended it, but bear in mind that the US Dollar strengthened a bit in August with the US Dollar Index (DXY) closing the month around 96 after drifting down near 94 at mid-month. No change to this recommendation.

Sincerely,

Michael

Editor’s Note: An earlier version of this article mistakenly stated that we were pulling our short yen recommendation. This is incorrect. 

13 Responses to “As Promised – An Update On All Our “Bonus” Plays”

  1. Review of Michaels Book: The committe to Destroy the World

    As usual, Michael E. Lewitt is always spot on. Dead Right.
    He has a track record second to none.Made Money in every Crash. How many can prove that.?
    As with others they tell you how much they made for you in Percentages. Never tell you any of the losses.
    If your a Trader in the Market, your going to have some losses. Especially when you use Options like Michael does.
    They are not Transparent at all. No disclosure of Dates or Prices bought that can be verified by the charts.
    However with Michael E. Lewitt he provides every detail, Good or bad . I’ve verified everything he has said for years.
    I have complete Trust and Confidence in Michae E. Hewitt and hisl abilities to make Money in any economic Enviroment.
    This book explains in detail the Politicians and people who really created This Financial mess.
    In addition his details of the amounts of the Worlds Soverign debt,The Credit Crisis and most importantantly The Derivitives ability to Bloww Up and destroy the Global Economies all in one default caused by Politicians who wouldn’t listen to Michael E. Lewitt.about this issue..
    In their wisdom, policymakers decided to solve a debt crisis by creating more debt out of thin air, guaranteeing an even more severe crisis in the future.The U.S. is the Worlds largest Debtor Nation. China is our 2nd most Biggest Problem.When the 2 Biggest Economies default it’s a Domino effect with all the other largest Economies to fall down with the rest. Get ready to hold on. Micaels Short trades have made me triple digit returns.
    If you want to Protect Yourself and Profit as these events occur, Then this is the only book that I’ve read that gives good sound advice. And….
    I read about 4 books a month on this subject and I’ve swam with the Sharks on Wall Street for 23 years before retiring and have searched High and low for a real Professional with Michaels Track Record and his genuine compasion for his client Annual ROI.
    My advice is to not only read this book. But read it and take notes after reading it at least 3 times.
    The Committee to Destroy the World: Inside the Plot to Unleash a Super Crash on the Global Economy

    As usual, Michael E. Lewitt is always spot on. Dead Right.
    He has a track record second to none.Made Money in every Crash. How many can prove that.?
    As with others they tell you how much they made for you in Percentages. Never tell you any of the losses.
    If your a Trader in the Market, your going to have some losses. Especially when you use Options like Michael does.
    They are not Transparent at all. No disclosure of Dates or Prices bought that can be verified by the charts.
    However with Michael E. Lewitt he provides every detail, Good or bad . I’ve verified everything he has said for years.
    I have complete Trust and Confidence in Michae E. Hewitt and hisl abilities to make Money in any economic Enviroment.
    This book explains in detail the Politicians and people who really created This Financial mess.
    In addition his details of the amounts of the Worlds Soverign debt,The Credit Crisis and most importantantly The Derivitives ability to Bloww Up and destroy the Global Economies all in one default caused by Politicians who wouldn’t listen to Michael E. Lewitt.about this issue..
    In their wisdom, policymakers decided to solve a debt crisis by creating more debt out of thin air, guaranteeing an even more severe crisis in the future.The U.S. is the Worlds largest Debtor Nation. China is our 2nd most Biggest Problem.When the 2 Biggest Economies default it’s a Domino effect with all the other largest Economies to fall down with the rest. Get ready to hold on. Micaels Short trades have made me triple digit returns.
    If you want to Protect Yourself and Profit as these events occur, Then this is the only book that I’ve read that gives good sound advice. And….
    I read about 4 books a month on this subject and I’ve swam with the Sharks on Wall Street for 23 years before retiring and have searched High and low for a real Professional with Michaels Track Record and his genuine compasion for his client Annual ROI.
    My advice is to not only read this book. But read it and take notes after reading it at least 3 times.
    The Committee to Destroy the World: Inside the Plot to Unleash a Super Crash on the Global Economy

    :

  2. Regarding DB. Is the ECB bond buying program effecting DB stock price. It seems they have been issuing bonds which I believe are being purchased mostly by the ECB. If that’s the case would DB then be buying back stock with the proceeds from those bond sales in an attempt to prop up the stock price. I fear they may run out the clock on the Oct 2016 and Jan 2017 put options if this is the case. Please let me know your thoughts on the ECBs actions and how it effect DB stock price action during the next few months.

  3. Having been a Caesars bond holder for some time, I have been following the legal proceedings between them and us bond holders. Last year they defaulted on their interest payments and filed for bankruptcy. But they recently lost the latest lawsuit and looks like they will be on the hook to make the bond holders whole. The long recommendation for their stock may not work out well.

  4. Another question on DB. I really don’t think this will happen because the economy isn’t strong enough and we have no inflation but if the US CB shocks me and raises rates in September how do you think higher rates would effect DB. Would it help to boost the stock price and run out the clock on those Oct. $11 and Jan $10 strike price puts you recommend?

  5. Hi Michael,
    I’ve read and re-read your “Super Crash” report and it certainly is not for the faint at heart.
    My question is based on your recommendations for protecting equity positions. What percentage of your portfolio would you commit to these short positions?
    Also, how do you protect your 401K holdings if there are little or no options available through your companies plan?
    Thanks for all your insights, though a harsh reality we face, face it we must and prepare as best we can.
    AW

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