What Comes Next?

The road ahead really is pretty unclear.
The stock market may have been expressing a little of the uncertainty that awaits as we get ready to see the proverbial rubber hit the road.
What may be coming clear to some is that the bluster may not have too much behind it.
Or maybe it will.
That’s the problem.
We are in such untested waters that it may be crazy to actually put anything at risk right now, especially as we still sit so close to all time highs.
As we await Inauguration Day and we will be back to having only a single President at a time, we may get to find out whether words will be finding their counterpart in actions.
What we know right now is that we probably shouldn’t have taken too many words with a literal meaning.
What we also know is that there may not be very much agreement between the President and the other elected officials across from him in the Capital.
Even ones in his own party.
With President-Elect Trump sounding off about the first iteration of a GOP tax plan as being “too complicated,” its hard to know whether they will push back or whether everything the new President will say is just the beginning of a negotiating position.
If the latter is the case and the President-Elect can actually get any movement on anything, he could easily go down as the greatest President of all, at least in the 21st century.
I’m still very hopeful that candidate Trump and President Trump will be very different, even as President-Elect Trump isn’t showing much distance from the candidate himself.
Today, the market was a little squeamish, but not really bad, as it backed off a little further from that 20,000 level.
What I liked and continue to like about 2017, is that it was yet another day with some trades to be made and another day to see net asset portfolio value rise.
That continues from where 2016 left off, even as 2016 didn’t have anywhere near as many trades as I would have liked.
Over the next few weeks, the landscape is altered by earnings, so I don’t think that I want to risk too much capital at a time when there is so much uncertainty brewing and companies have really no clue as to how to really give guidance.
Will there be a border tariff? Will they be able to repatriate foreign funds? Will their tax rates change?
Too many questions with no obvious answers.
For now, I just hope to be able to continue making these small trades, week after week and putting laggards to work.

2 Replies to “What Comes Next?”

  1. I have not been quite as prolific with only the one CSCO rollover trade this year but I do have 11 expirations coming up on Friday, my cash has inched up to 21% and I expect 3 assignments.
    I’ve identified KO as a potential serial put rollover candidate at $41 and it could become a long term holding if assigned. GME is also interesting although I already own one lot at a higher price and already have retail exposure.
    Best of luck to you George!

    1. I think that I have 12 expiring positions this week. That seems like old tyimes, at least for the final week of a monthly option cycle.
      I’m not expecting to see many assigned, but I’m happy with my cash position now and just want to keep positions able to generate some income.
      You do get addicted to the cash stream.
      The only difference for me is that a number of those positions are well below their purchase prices, so I’m selling calls for relatively low premiums at strikes that i would prefer not being assigned. If necessary, I’m happy to roll them over to avoid assignment, but I don’t want to incur the expense of rolling over a position that is going to otherwise expire.
      I think KO has been a good candidate ever since the recent downgrade. It has traded in a real stable way at this lower level. The premiums are never great, but they are also steady and the dividend is something worth capturing.
      I may come to regret the most recent GME short put position, but as long as I can keep rolling it over, I’m hopeful that there will be a little respite from the recent decreased guidance they offered. If the dividend will stay intact, I will probably look to take assignment and start selling calls, if possible, before the ex-dividend date.

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