December Open Thread

If you have a burning question you’ve wanted to ask me for awhile – or one that’s gotten buried in a long comment thread on Sure Money – comment below to leave it where I can see it.

As usual, I’ll choose the best and most insightful questions to answer.

Watch for that article next week.

And comment below to leave your question now.

57 Responses to “December Open Thread”

  1. Hi Michael, l was thinking with the rise in the market at unrealistic values and believing that there is a correction on the way, wouldn’t it be a responsible idea to buy puts on the indexes say six months out to gain some profits on a pull back?
    Thanks Dave

  2. Given the Put-to-Call ratio (as published by IBD in Big Picture chart) is a contrarion indicator with high ratio being bullish and low ratio bearish, is it likely that your Put recommendations may become contrarion indicators as well for specific stocks?

  3. says I got a rewrite my comment it’s going to be the same the hell within political correct you keep giving us trades to the best of your ability it’s up to us to make him or not now you made his money make us a more thank you thank you thank you thank you

  4. I very much enjoy your articles. You have made several recommendations for companies to buy long-dated dated puts on. However, there is no quid ancestors as to which specific put to buy. You gave us valiant and deutsch Bank with very specific instructions. It seems like now that you have the zenith circle we are being alighted that valuable information that you once gave so freely. Are you going to continue to give us specific recommendations or is the only way to get what you once shared with us so passionately going to be by paying you for it? What are the specific puts to purchase on Sears or Chipotle?

  5. Concerning your put recommendations via the Zenith Trading Circle- how much leeway should I allow myself when attempting to buy your recommendations. I have been shut out off several opportunities, even attempting to trade within an hour of notification. I realize the higher the “bid” price goes, the more $ the transaction cost me. Just wondered if there was some “general rule of thumb” to follow in these cases. Thx, John

  6. In your February 8, 2016 post you predicted a Super Crash in June, and to “sell the equities you have and move into cash”. Can you try to explain how markets have defied your expectations at this point. Thank you. PS excellent calls on Gold Miners, Valeant, and FitBit year to date.

  7. Sent yesterday. As time moves on the value of the Invested dollar falls, as does the return on investments. Is there away to guard against this, i.e. A currency we can use, I don’t have a pocket full of Chinese money. Is there a plan to insure the Americans have a spendable currency that isn’t in the toile☠️☠️☠️

  8. Mr. Lewitt: First let me say THANK YOU for the opportunity in Zenith Trading Circle and especially the education that comes along with it, not to mention the already realized portion of profits, realizing there is much more to come. Everything you show and teach makes so much common sense to me. However, Gold has me scratching my head. I have read what you and many others have said regarding Gold. Yet, I see what is going on with a very strong Dollar that had been beat up for decades, now on a tear to the upside against all other currencies, of late. As we all know, the Dollar pretty much is the inverse of Gold. And that is exactly how this is playing out.. Dollar Up… Gold Down. Looking at a Month chart on the GLD (Spider Gold Trust), I see the Month chart rolling over as the Week chart and Day chart show a relentless drive in the southward trajectory. I am no “expert”, and therefore, am a student of yours, as you will, seeking what your viewpoint is as I clearly see I am getting one heck of an education from a master at his skill at a very fire-sale price. And again, I thank you for your generosity in sharing your very valuable knowledge. Could you please explain how it is that Gold is viewed as a Currency? I mean, I cannot imagine if all paper money is done away with, how Gold can possibly be used in an effective manner to purchase goods from food,to clothing to homes. How would one get “change” when say, buying a good for, say, $17.50, and you hand the cashier a $20.00 gold coin? What form of change would be given in the transaction?
    Please explain the logic in this.
    Ever grateful for your knowledge sharing.

    Paul

  9. If I buy Gold from a reputable company like JM Bullion, how easy or difficult is it to Sell the Gold. Do I sell it thru JM Bullion also? What are the Fees charged for selling? I always hear how to Buy Gold, but have not heard any discussion about Selling Gold. Thanks!

  10. 1 – While I agree that gold is going to resume its ascent in due time, I guess it is going to go down over the short term as the dollar goes up! I reduced my holdings and will reduce again next week. What’s your take?
    2 – Any new comment with regard to Deutsche Bank? It looks like Germany is not going to let it go under.
    3 – Not a question here but a thank you for the heads up with regard to Sears (SHLD), which I’m shorting, and which I believe will let me make money.
    4 – In general, stock-markets-wise, what’s your take going into 2017?
    Thanks again,
    Giancarlo

  11. I have been buying Physical precious metals for the past three years. Todate I have a minor loss to show for these efforts. I am starting to feel like boy that cried wolf around my friends and associates. Should I keep buying for the oft suggested massive payout?thanks in advance.

  12. Ad a Sure Money subscriber I have followed you for over a year and was very interested in investment and very intrigued in your method but I am on a long-term disability, fixed income, never saved for retirement and at present it’s difficult to make ends meet. but I do have a claim for disability benefits and when this entitlement pays out I will be able to live a more comfortable life financially and at that time I would like to be ready to invest but due to some of your remarks I received in my e-mail in-regards to investing now, not following your orders in doing what you say, and you demanding to do things immediately, I guess you feel that anyone following you must have money. In one of my E-mail you I must have money and I was foolish not to invest $2500.00 and make a 500% return just other degrading remarks led me to unsubscribe so when this EMAIL popped up to comment, I decided to comment ,although Im not ready to invest yet it was interesting to follow you and get some insight into posibilites Thank you

  13. Since joining Michale’s network I have followed most of his recommendations and purchased most of his Putt recommendations with the exception of VRX ( away on holidays at time of recommendation, price has exceeded limits so passed on purchase, too bad for me). My portfolio is basically in the red and I lost some sizeable purchases of his recommendations but I still believe in him. I have read every one of news letters and shift the blame onto the 2016 election, Breexit and Italy. I am confident that the Mar Putts will recover some of my losses and I just wanted to state to others not to panic, don’t go jumping overboard and have a little faith. You were warned from the very beginning that nothing is for certain and all investments are a gable but if you believe in Zenith and what Michael reports, have a little patience. I remember a word of wisdom that Shah put in one of his news letters that he learned many years ago….”If there is nothing to do, than do nothing”. I believe that “PATIENCE” is the backbone of successful trading. I have a red portfolio at this time but fully expect the Jan Putts to turn around this bad quarter. I just wanted to thank you Michael and say I believe in you. Wayne Leslie

  14. So I have about 2 positions in mining metal equities and most of your Put picks in my portfolio. Those that I could buy paying attention to your good till cancel limits.Sold the rest of my equities and sitting with 95 percent cash. Question is this a good position to be in at this point. I know you can’t give advice but hypothetically is this a good way for my portfolio at this time.

  15. Why is it that YOU and the stock market are apparently THRILLED with Trump’s plan to get infrastructure bills passed, when for the past 7 years Obama has tried to no avail (and to the screams of your Republican friends about the country being broke)? So your buddies in Congress are going to finally stop punishing us with gridlock for voting Obama President?? Or is it that now Ryan will give us a choice: “either infrastructure improvements or Social Security/Medicare, you can’t have both,” is that it??

  16. Michael
    Trust you can assist with this action.
    As I have only joined Zenith approx 3 months past I have been awaiting my membership to Interactive brokers to be finalized. Am I able to take advantage of those positions that are in a negative balance by investing in those PUTS for a later date.
    Thanks Kevin

  17. Hello,
    So OPEC decided to cut production to raise the price of oil per barrel. This is a catch 22. why am I saying this, well the higher the price of oil gets, the oil companies start drilling for oil. Now we know OPEC are sneaky, so what say Iran or Iraq or even Saudi Arabia doesn’t produce more oil. As for America, just as soon as oil hit $50, oil companies were drilling for new oil. So explain how this is not a catch 22, please.

  18. Hi Michael,

    Are you able to recommend any books or online resources to improve both mine and other subscribers knowledge about options trading? I understand the basic principles behind puts and calls and where duration risk enters the picture. However, as a novice in this area my concerns are over both trade execution and risks I could blunder into that fall under “Unknown Unknowns”.

    Would be great if you could offer any insights or suggestions in this area.

    Thanks.

    James

  19. Regarding the Chipolte debacle, in your view do think we will see some dumb money poring into the stock prior to Christmas, in the
    vien hope of a rebound ? I only ask as following the $30 drop 5-6 days ago, I have already read several blogs/statments re-hyping the company…..

  20. Hi Michael,

    I’ve really enjoyed your writing over the last few years and find your predictions to be, generally, spot-on so thanks for that! My question is regarding gold; I believe it’s the best asset for our current economic outlook, but am concerned about the cartel’s ability to suppress price with naked shorts via infinite fiat creation. The comex send to be leveraged > 500:1. What is stopping this radio from becoming 1000:1?

  21. I’m curious your thoughts on how to best time establishing new portfolio positions – for instance moving cash into equities. As you have laid out in previous articles and in your book “The Committee to Destroy the World,” you recommend that every portfolio have some % allocated to equities. I currently have most of my portfolio in cash (1% yielding saving accounts) but per your recommendation I want to have some type of equity footprint (~20%). However, with equities at all time inflated levels I see way more downside than upside with establishing a footprint right now — I’ve actually used this last month run up to profit take. Is the best strategy to wait patiently on the sideline until there is a pull back and then slowly dollar cost average? Or should I look to establish small positions in sectors that have already gotten thumped on the head (i.e. Biotech, Pharma)? I’m curious your thoughts on how to best approach.

  22. I am always wanting to join your site via zenith yet your cost of joining is steep for a average joe like myself.. I just started doing any investing or stock activity this year and have seen lots of others predictions on how to profit. I feel your abilities to read these failing companies are probably spot on and yet I have to only guess at this due to not having the information you offer because of the big ticket price associated with it.. I know if I was able to make the money on the returns as you say your able to create if one follows your lead , I would be able to join your site in time. Yet not the way it is with your offer.. I would like to see the confidence worked out where your able to have a offer to set up my contract sort of speak to make the subscription cost paid after making the offered guaranties you say you can make if one joined.. I have no issue with taking a leap of faith when I know I can not loose my house by not having to spend what I most likely would like to invest in your trade offers first.. Anyway this is a question and comment site and I know my thoughts are minor to your actual members of zenith. I do ask if able can you share your most recent thoughts on a trade you did suggest that had to deal with Telsa put option. I seen this on a email and jump on it believing it was your skill and one of the companies that was crashing.. Your saying it will go to $100 by Mid January 2017 and I watch it fluctuate everyday and wonder if it will actually drop to the level your thinking in time. So, if able please share your thoughts on this trade if you are able to find time. Much grateful for all your insights via my current Sure Money subscription.

  23. Michael – Through out the year you have predicated that Deutsche Bank would continue its downward trading trend into single digits based on its current financial structure. However, since the election, financial institutions including DB had been on a tear. Has the environment now change to where DB can stabilize and move upward or do you believe this upward momentum will turn and DB will resume its downward pricing spiral toward single digits?

  24. Michael, you express your ideas very clearly. Do you weigh the volatility of the overall portfolio to the general market volatility and factor it in as to buy and sell decisions on the individual positions? (against the SP500 technicals, VIX..)? How to balance this against individual market position movement?

  25. Michael,

    Is there a “sweet spot” for selling OTM options which you previously purchased (and lets call them way out of the money options) as the time value (extrinsic value) begins to go to “zero.”? Is it 30 days before option expiration date, 20 days, 15 days, 10 days, etc.?

    Why would you buy OTM options (and lets call them way out of the money options, again) in the first place? Well, because they are really, really cheap (no present and current, or near current, intrinsic value). [And also the closer to the money you are at the time of the option’s purchase, the more you stand to lose if the trade begins to go against you!!] And as long as you “guess” right on the general trend and the price of the underlying moves in your favor, you can make a ton of moolah!! And, of course what I am specifically referring to here are options where you really are not expecting the price of the underlying to actually reach your option strike price before the option expiration date, you are just expecting it to make a fairly significant move toward that strike price. So, you are not really expecting any intrinsic value (ITM) at option expiration date but you are expecting a pretty substantial increase in premium as the underlying moves in your direction. (These could be calls or puts we are talking about.)

    Here’s a quick numerical example of what I am referring to. Lets say XYZ Corp is currently trading at $100 / share. You think it is going down. You buy a $50 strike put that is about 60 days out (or pick a time frame). At about 45 days out, it is at $90 / share (you’re making money!!) and at about 35 days out is at about $85 / share (you’re making more money!!). You are expecting that, at expiration it will probably be around $75 / share, but the extrinsic value (time value) at that point will, of course, be “zero” and the intrinsic value will also be “zero” because it will still be OTM at that point, so it will, of course, expire worthless.

    Is there a general rule (I know each stock is different and the variables for each trade is different) that will tell you when the best time to sell to close this position is? In other words, is there a rule to figure out at what point does the declining extrinsic value overtake the increasing intrinsic value (because the trade is moving in your direction) and the premium begins to decrease? (It should of course, the premium, end up at zero at expiration because there is no intrinsic or extrinsic value, or am I wrong on that assumption??)

    I hope you understand the question. I usually trade ITM or NTM and have done OK. But lately I have been looking at these OTM’s (and some way OTM’s) and the hangup I have is when to sell???? That is the jist of the question.

    [Yeah, when to sell?? Wow, that is the 64,000 dollar question on just about anything, now isn’t it, whether you’re talking options, the underlying itself, longs, shorts, etc. 🙂 🙂 🙂 ]

    Thanks,

    Paul

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