England wins a penalty shootout!! I buy a worried (maybe worrying) German Bank. 56 percent Club update highlights the rise of oil prices into club winners and there is a new leader on the options boards - not an oiler.
<h3>Portfolio News</h3>
**Market Jitters - Tariff Tantrum** US markets wobbled lower on a holiday shortened day. Big portfolio news was what was happening to the Chinese currency.
The currency has been in free fall for a while now. Tuesday trade saw it make a strong reversal with 500 pips improvement in a session. That can only come from intervention from the Peoples Bank of China.
At the start of days trade one of my call option trades was close to 100% profit (that is where I planned to exit). By the end of the trading day it was back to unprofitable, though it remains in-the-money. This is a snippet I grabbed during the trading day (Tuesday July 3).
https://www.reuters.com/article/us-china-markets/chinas-yuan-gains-on-pbocs-calming-words-stock-markets-unconvinced-idUSKBN1JU0SC?il=0
The tariff situation evolves with China's retaliatory tariffs due to begin 12 hours ahead of the US on July 5. Separately, a Chinese court has (temporarily barred) the sale of Micron Technology (MU) memory chips. This is key for MU as China makes up 50% of its markets. I hold MU in one of my portfolios.
**Resource Investing** Two items of news demonstrate the challenges of investing in resource stocks.
Glencore (GLEN.L) gets hit with US Department of Justice subpoenas relating to activities in Africa and Venezuela going back as far as 2007. Stock price collapsed in London to close down 13% for the day (Tuesday - July 3) and dropped more in early Wednesday trade. The size of the drop is bigger than any fine ever levied by the US Department of Justice.
<blockquote>The possibility that the US Justice Department would add to the dizzying array of regulatory and legal headaches the Swiss company is facing around the globe -- from Russia to Africa and South America -- has been a major worry for both executives and shareholders for months</blockquote>
My holding in Glencore is modest and is still profitable. It is however the world's largest producer of cobalt.
https://www.smh.com.au/business/companies/glasenberg-s-6-8b-horror-day-us-corruption-probe-rocks-glencore-20180704-p4zpc9.html
Talking of cobalt, Cobalt Blue (COB.AX) announced the results of its pre-feasibility study on its Thackaringa cobalt holdings near Broken Hill.
The words and the numbers are a little at odds. The study confirmed the initial views about the deposit - a good deposit. Share price collapsed by 25% which tells me about the numbers (and the investors). This is a typical early stage resource stock. Price gets driven up by the excitement and the resource size estimates. Then the reality of how much capital is needed sinks in - $550 million in this case plus $25 million pre-strip costs. All that for a mine with a 10 to 12 year life - say $50 million a year has to be recovered through profits = $13,672 per tonne. With a forecast price of $62,660 per tonne in 2019, the numbers look fine. The market was not happy though.
https://tradingeconomics.com/commodity/cobalt/forecast
In my portfolios, Cobalt Blue dropped 25%. Broken Hill Prospecting (BPL.AX) which owns 38% of Cobalt Blue dropped 10% = close enough as 38% of 25% is 9.5%. Neighbour, Alloy Resources (AYR.AX), also dropped 10%. This is going to take patience to ride out. It is also going to require a few capital calls before the mine is fully operational. A 25% drop in price might be a good late entry point - maybe via BPL.AX.
**World Cup** Russia headlines gets back to the real business of media coverage about Russia and even some economics.
The winner is not football but Vladimir Putin. My friends who have travelled there say Russia is also a winner.
https://www.news.com.au/sport/football/world-cup/russia/forget-the-action-on-the-field-putin-is-the-real-winner-from-the-world-cup-in-russia/news-story/2976c4b4636b04eab8a5027ea59f68a1
There are winners on the fields too
Japan lose but win by cleaning their locker room before they left. England wins its first knockout penalty shootout after 6 losing ones. And Sweden do not get a mention - though Ed Kavalee, who knows nothing about football did mention them.
http://www.abc.net.au/news/2018-07-04/world-cup-wasteland-of-world-beaters/9931602
<h3>Bought</h3>
**Commerzbank AG** (CBK.DE): German Bank. Commerzbank has been the most laggard bank amongst the leading European banks, until of course Deutsche Bank hit its trouble spots. In two of my portfolios, I am currently only holding call options. I felt it was time to add some stock to allow for a time independent longer ride. I have been patiently watching the price slide. On a horror Monday for European stocks, Commerzbank was one of the few stocks to rise. It followed that move up in early trade on Tuesday.
I added a small holding to two of the portfolios. I already hold the stock in my main pension portfolio.
There was an aside comment from one of the talking heads commenting about French bank, Societe Generale (GLE.PA) buying a financing unit from Commerzbank that intrigued me. Maybe this is the start of cross country consolidation in European banking that will build proper scale. That could be a good thing especially with Brexit likely to reduce the power of London-based banks - though there are still 50 banks going through EU passporting applications to allow them to operate in Europe.
<h3>56 Percent Club</h3>
Another month passes and it is time to report on the stocks and options that have done better than 56 percent up. Each month, I review all my portfolios and tabulate the 56 percent movers from all time and highlighting the ones from the last 12 months. I review stocks and options separately.
First is the table of stocks. I have highlighted ones that are new to the club in Yellow. I have also marked up whether they have gone up or down since last time.
What stands out?
- The list is the same length as last time (19 vs 19). There were no sales in June though I did sell VMWare (VMW) this week.
- No change in leadership with Cobalt Blue (COB.AX) dropping another 96% points and now only up 400%. I am pleased I did sell some in May given the news today.
- There was one new entrant to the list, midstream US oil producer, Chesapeake Energy (CHK) only bought in May 2018.
- In a challenging month, only 5 of the list were risers in gold, technology, US banks, Russian gas and lithium. Biggest mover up was Lithium explorer Birimian Ltd (BGS.AX) on the back of increased resource estimates at its Mali mine.
- Dropping off the list are European steel maker, Arcelor Mittal (MT.AS) on the back of the US steel tariffs.
- Sliders on the list are resource stocks, Cobalt Blue - cobalt and Galaxy Resources (lithium) and also banks and financials.
- With Chesapeake Energy (CHK) joining the list, there are now 2 of the 19 positions bought within the last 12 months (Broken Hill Prospecting (BPL.AX).
On the options side
What stands out here:
- The list is the same length as last time (14 vs 14) with no sales or roll ups.
- With the sale of my best Cisco holding, there is a new leader in US regional bank, ZionBancorp (ZION). Cisco is still on the list.
- New entrants to the list are two oil stocks bought in the last month, US Oil Fund - an ETF that tracks oil prices and Chesapeake Energy (CHK), and a Consumer Staples ETF (XLP).
- The oil stocks are no surprise given a rising oil price - 7 out of 14 holdings are in oil.
- Consumer Staples is a surprise as this was a defensive investment looking at the possibility of rotation away from technology stocks. It is working as planned.
- Off the list are US Regional Banks ETF (KRE) and US retailer, Dicks Sporting Goods (DKS) and Delta Airlines (DAL). I do have a sell order out on DKS - not yet hit.
- Europe remains in the dog box with only oil giant, Royal Dutch Shell (RDSA.AS) represented.
- Fastest riser is offshore oil driller, Transocean, from a sector given up for dead some 18 months ago. Gulfmark Offshore (GLF) is also from this sector.
- 8 out of 14 positions were bought in the last 12 months.
<h3>Cryptocurency</h3>
**Bitcoin** (BTCUSD): Price range for the day was $202 (3% of the high) with price poking its head above the resistance line for a second day and closing near the day's low.
**Ethereum** (ETHUSD): Price range for the day was $28 (5.7% of the high). Price had its first look above the resistance and decided to retreat to safer places.
<h3>CryptoBots</h3>
**Outsourced Bot** No closed trades (212 closed trades). Problem children was unchanged (>10% down) - (18 coins) - ETH, ZEC (-48%), DASH (-50%), LTC, BTS, ICX (-46%), ADA (-42%), PPT (-53%), DGD (-50%), GAS (-64%), SNT, STRAT (-54%), NEO (-58%), ETC, QTUM (-46%), BTG (-62%), XMR, OMG.
SNT is close to dropping off the problem child list at -10.3% - still some way to go to be profitable. GAS remains the worst coin.
**Profit Trailer Bot** No closed trades. Trading bot taken offline while Binance exchange changes trading API's. They are also doing system maintenance.
**New Trading Bot** Positions dropped 1 points to -52.8% (was -58.91.6%)
All coins dropped 1 or 2 points.
<h3>Currency Trades</h3>
**Forex Robot** did not close any trades and is trading at a negative equity level of 3.6% (lower than prior day's 4.1%).
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. Cobalt Blue comes from ASX.com.au announcement site. 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
Charts: http://mymark.mx/TradingView - this is a free charting package. I have a Pro subscription to get access to real time forex prices
Crypto Trading: get 6 months free trades with Bitmex for leveraged crypto trading. http://mymark.mx/Bitmex
Bitcoin: Get started with mining Bitcoin for as little as $25 http://mymark.mx/Galaxy
July 3, 2018