April 25, 2020

Disappointed but moving forward


As always, I am not recommending anyone purchase any particular stock. However, interest rates at banks are far below the rate of inflation. Keeping large amounts of money in your local bank causes the value to decline dramatically, even though the numbers grow ever so slowly. Therefore, I am recommending downloading Robinhood and investing in your favorite company, or perhaps companies. As a small incentive, if you use my link to download Robinhood, open an account, and deposit some money, you and I will both receive one free share of stock worth about $4. Here's my link:

https://join.robinhood.com/brianm3790
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Unfortunately, I was forced to end the experiment I started on December 19th. I held onto it as long as I could, but COVID-19 and my former employer have forced me to sell off stocks in order to keep my pantry full. It started almost three weeks ago when my former employer reported to Ohio Department of Jobs and Family Services that I had been "fired for failure to meet job requirements." That was not the reason they gave me. I was told, "we are letting you go to pursue other opportunities." I am not sure what happened in the background, but OJFS reported to me that my unemployment insurance compensation was being canceled as a result of the report from my former employer. It wasn't much, $184 a week, but it kept the lights on. This meant I needed to get some cash into my bank account to cover automatic deductions for utilities and so on. This is why I sold off most of my 5G holdings a couple weeks ago. I locked in profits and prepared for the inevitable need to withdraw cash. I also experimented with Call Options on the hope I could turn them around quickly for another $20 or $50. That did not work, either. Life is like that sometimes.

Way back in December, when this experiment first started, my account was worth $539.40 and looked like this:

Over the next month I added cash and made additional purchases until I reached a peak of $932.94 on January 17th:

At that moment I was very enthusiastic. I felt I had made solid purchases. I had a reliable income from my job. The market was stronger than ever. The FCC had announced auction dates for 5G bandwidth. Rumors of a weird pneumonia in the Wuhan City, the heart of China's technology zone, were just beginning to percolate but no one was really worried about it.

A month later the market crashed and despite another cash infusion of $200 my portfolio had fallen so far it was worth only $866.29:

On March 1st I woke up with a sore throat and fever. As far as anyone knew, COVID-19 had not reached Ohio except for a handful of cases in Cleveland. My job required someone be present, no exceptions. There was no one to replace me if I called in sick. So I took some cold medicine and went to work. On March 2nd I woke up feeling even worse. Early in the day, about 10 or 11, I called in and started the elaborate process of notifying everyone important that I would not make it into work. At 4:15pm they called me back to inform me, "we are letting you go to pursue other opportunities."

A very strange way to fire someone, I think.

All that week I was terribly sick. Looking back now, I cannot help but wonder if I had COVID-19. There were no tests available, but many of my symptoms were consistent with published symptoms of the disease. I didn't go to a doctor, so it could have just been a seasonal flu. It was mostly in my throat and sinuses, not my lungs.

Once I got better enough to realize what had happened, I was very angry with my former employer. Not only had I cooperated in everything and learned an entirely new set of skills, the Friday before I had finally finished all the coursework to apply for a CDCA certification. The last requirement for the job was completed. All I needed to do was fill out the paperwork and pay the licensing fee. I had never in my life desired to work in recovery, but I had done the preparation work, done the job, and completely reorganized my life. Once I was well enough to think straight, I felt very cheated. Everything I had done and none of it mattered. For a company based on compassion it was a very cruel way to treat a reliable employee.

Ohio had not yet declared a quarantine, but I knew it was coming. I sold my truck and stocked up on food. I got all of my bills caught up. I added another $1000 to my Robinhood account. The bottom had fallen out of the market. On March 17th, after the deposit cleared, my Robinhood account looked like this:

Within days, Ohio was put on quarantine along with everyone else. I had high hopes. My pantry was full. My brokerage account was low, but stable. I applied for unemployment and received my first check. President Trump announced his stimulus package. I was not happy to be trapped at home. I was not happy with people suddenly depending on me to do their shopping and provide them a place to sleep. I was not happy with the string of automated replies from companies where I sent applications. Nonetheless, I rolled with the punches, spent a lot of time watching television, spent a lot of time studying the market, spent a lot of time trading stocks, and even bought a couple of Call Options.

Unfortunately, my former employer somehow managed to get OJFS to cancel my unemployment compensation. I don't know who I angered, but clearly someone at the company has decided I am scum of the Earth and is determined to do everything in their power to attack me. I don't think I'm being paranoid, but I suppose that's always possible.

Lacking any other options, I liquidated much of my portfolio and started the time-consuming process of returning cash to my bank account. In total, I have withdrawn $880. This leaves the current state of my account looking like this (April 25th, 10:08am):

Overall, I think the past four months have been a successful adventure in investing. Altogether, I profited about $220 from a cash infusion of $1535. Even now, after selling off all of my most promising stocks, my account balance is roughly twice what it was when I started on December 19th. Perhaps most important of all, I have cash back in my bank account to keep food in my pantry and the lights on. Clearly, I will never get rich trading stocks and options. Nonetheless, in a time of extreme risk and through one of the worst market collapses in history, I pocketed a small profit and kept my pantry full. I still need to find work after the quarantine ends. I still hope to add more money to my account and profit from 5G. I won't enjoy anything near the kind of success I had hoped for because I had to sell off the stocks I bought at rock bottom prices. This was a once in a lifetime opportunity and while I wasn't able to exploit it to the full advantage, I was able to get out with a small profit and positive balance in my account.

I hope everyone reading this did even better.


Amazon has canceled all Print On Demand services.
Therefore,
If you want to read my books you will need an Amazon Fire:


April 17, 2020

Call Options


As always, I am not recommending anyone purchase any particular stock. However, interest rates at banks are far below the rate of inflation. Keeping large amounts of money in your local bank causes the value to decline dramatically, even though the numbers grow ever so slowly. Therefore, I am recommending downloading Robinhood and investing in your favorite company, or perhaps companies. As a small incentive, if you use my link to download Robinhood, open an account, and deposit some money, you and I will both receive one free share of stock worth about $4. Here's my link:

https://join.robinhood.com/brianm3790
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This has been a very interesting week. Volatility in the market remains high, disguising a very slight but very definite upward trend in my meager portfolio. I moved some cash around, selling off stocks in a profit position, increasing my holdings in a couple positions, and buying my first two "Options". Late Friday night, long after the market had closed, I ordered Robinhood to transfer $600 back to my bank. There is a certain irony here. Back on December 19, 2019, when I began this current series of trades, my Robinhood account was just under $600. Through December, January, and February, I deposited $1535 in total, including $1000 from the sale of my truck. On February 20th, the market began a sharp decline that lasted just about one month. This was the sharpest, deepest percentage decline since 1929. This was my account on Friday, April 17, 2020 at about 10:00 in the morning:

At the very top of the screenshot above you will notice two Options. After some study, I decided to jump into the Option market and see how it goes. An "Option" is a contract to buy or sell 100 shares of a given company at a given price on a given date. A very simple explanation for a very complicated financial product with a whole host of laws and regulations governing its creation, the responsibilities of the person who creates it, the responsibility of the person who sells or buys it, and the responsibilities of the person who finally completes it. All of these regulations give rise to many different variables that must be considered when dealing with Options. For example, here is the complete data associated with the first option I purchased.:

There are two types of Option contracts. A contract to buy 100 shares of stock is a "Call Option". A contract to sell 100 shares of stock is a "Put Option". Every Option contract has a fixed price for the stock being offered. This price includes the premium associated with buying or selling the contract itself. The total of the agreed price plus the trading value is called the "Strike Price". When I purchased the option above, the premium for the expiration date I chose was $1.25 per share and the fixed price for the stock was $5.00, therefore the strike price for the Option at the moment I purchased it was $6.25. For as long as I own this Call Option, my breakeven point is a market price of $6.25 per share. This is the price I must receive in order to buy the stocks and then sell them without losing money or making money. Naturally, if the market price rises above $6.25, then I can make a profit by completing the contract and selling the stocks. This is called, "In the money". Below the Strike Price would be, "Out of the money," and at the strike price would be, "At the money".

The Option itself has a market value determined by a variety of different things. The time remaining until the expiration, the stock price obligated by the contract, the popularity of the company, and so on, are all different things that determine how much the Options Contract itself is trading for at any given time. This price is not as consistent as prices of normal stocks because volume in the Options market is usually much lower than the normal stock market. Most often, this price exists as a spread dependent upon the existing bids. The current market value displayed at the top (in this case, $1.33 per share) is the median point between the bids and offers currently existing in the market. For example, if you slide down the screenshot above to the section labeled, "Stats", you will see the current spread for this Call Option is $1.31 to $1.35. At the moment this screenshot was captured, there were 7 bids with a median value of $1.31 per share and 3 offers asking $1.35 per share.

At the bottom of every Option display in Robinhood is a section labeled, "The Greeks". I have not finished researching exactly how to interpret these figures, so I will try to go into them in detail at a later date. Basically, the four are statistically derived numbers indicating factors such as expected volatility, expected price movement, and so on.

Some quick references:
myStockOptions: Options 101
Robinhood: Investing with Options



April 11, 2020

One last reorganization


As always, I am not recommending anyone purchase any particular stock. However, interest rates at banks are far below the rate of inflation. Keeping large amounts of money in your local bank causes the value to decline dramatically, even though the numbers grow ever so slowly. Therefore, I am recommending downloading Robinhood and investing in your favorite company, or perhaps companies. As a small incentive, if you use my link to download Robinhood, open an account, and deposit some money, you and I will both receive one free share of stock worth about $4. Here's my link:

https://join.robinhood.com/brianm3790
----------

A week ago yesterday I reorganized my portfolio. This past week, I reorganized it again. I keep doing more research. I keep reading more newsletters. I keep modifying my existing strategy for long-term growth. On April 4th, my top priority was locking in existing profits, grabbing some cheap stocks with solid upward potential, and holding about $400 cash in my account in case I needed it. The end result looked like this:

More research last week indicated that a couple of the companies I had chosen did not have the upward potential I expected. Either their market was too limited or their balance sheet carried excessive debt coupled with insufficient genuine revenue. In one case, both situations existed. So I dropped several stocks on Tuesday, managing to lock in a small amount of profit on each. Altogether it came to less than $10, but at least none of them left at a loss.

On Wednesday I found a newsletter specifically focused on high-dividend stocks. Even better, the editor and founder of that newsletter had just published a report on the potential of certain 5G related stocks to pay good dividends far into the future. Notice the word, "potential". Naturally, neither the editor nor myself would ever imply unequivocal future growth. No one knows what will happen in the future. After all, just consider the huge and fast market drop experienced after February 20th as a result of the COVID-19 quarantine. No one except a few members of a select committee in the U.S. Congress saw that coming. Those committee members took advantage of their early knowledge to liquidate their stock holdings on February 14th, the Friday before the February 17th announcements of the majority of state quarantines. A month later, March 17, almost all of the quarantines that would go into effect were in effect. The imposition of nationwide quarantine guidelines caused every investor, whether institutional or individual, to scramble for safe cover. We were not quite at the level of Revelation Chapter 6, but the amount of desperation felt far and wide certainly approached it.

Then the kings of the earth, the princes, the generals, the rich, the mighty, and everyone else, both slave and free, hid in caves and among the rocks of the mountains. They called to the mountains and the rocks, “Fall on us and hide us from the face of him who sits on the throne and from the wrath of the Lamb! For the great day of their wrath has come, and who can withstand it?”
----Revelation 6:15-17

On Friday, March 13th, Marc Lichtenfeld of The Oxford Club had this to say:

Stress about financial matters breaks up marriages, causes health problems and is miserable to live through. We've all been there.

So if knowing that your time horizon is long enough to make back potential losses and that trailing stops will protect your capital isn't enough to keep you calm, don't expose yourself to the market or that stress.

Having a plan in advance of a bear market will make it much easier to withstand when it finally arrives.

Even the experts with decades of experience were expecting stocks to come crashing down and never hit bottom. Fortunately, about two weeks ago they did start recovering. I was satisfied with my initial reorganization, but something felt off. I couldn't quite stomach having sold out of Marvell Semiconductor, for example, even though I cleared nearly $50 just from that one sale. About 25% of the profit I secured the first week of April was from that one stock. Nonetheless, I was looking around for something just as good, but hopefully a bit cheaper. After searching around awhile, subscribing to another newsletter, and selling off the companies with structural flaws my initial research had not revealed, my portfolio now looks like this:

Every single stock pays a dividend of some kind, although most of them won't return to paying dividends until after the COVID-19 crisis finally burns itself out sometime in June or July. Almost all of them are linked to the coming surge in 5G construction and use. Some are REITs controlling land and towers, some are makers of tower components or router components, some are industries certain to benefit from massive improvements in communication. I can honestly assert that no one alive knows how high or how quickly these companies will grow once we exit the COVID-19 crisis. Granted, it is entirely possible that COVID-19 will be even worse than expected, Anuk Karakatoa and her sister volcanoes might detonate triggering another ice age, or whatever. No one can predict the future, either good or bad. However, if things do get worse and modern civilization faces a complete collapse, everything including gold will become worthless and we will all be bartering vegetables for bread in order to survive. The stock market is still has more potential for growth and profit than precious metals, and far more potential than time deposits at your local bank. If you can afford to invest in the stock market, even $20 or $50, now is the time to do it.

In closing, it was a pretty good week, despite volcanoes, viruses, and wildfires. My portfolio is once again above my breakeven point and I have about $400 cash sitting in my account to either spend on groceries or invest in bargain-priced stocks.


Weekly

Monthly

April 05, 2020

Reorganizing My Portfolio


As always, I am not recommending anyone purchase any particular stock. However, interest rates at banks are far below the rate of inflation. Keeping large amounts of money in your local bank causes the value to decline dramatically, even though the numbers grow ever so slowly. Therefore, I am recommending downloading Robinhood and investing in your favorite company, or perhaps companies. As a small incentive, if you use my link to download Robinhood, open an account, and deposit some money, you and I will both receive one free share of stock worth about $4. Here's my link:

https://join.robinhood.com/brianm3790
----------

On Friday I made a bold and somewhat risky decision. I decided to lock in the few profits I had made over the past three months and wait until Monday to re-evaluate the current market. I sold every stock in my portfolio currently in a profit position, except for Marathon Petroleum (MPC). Over the past two weeks my meager portfolio regained many of it losses, but only a handful of stocks were consistently rising. All through Friday, everyone who is anyone, including all of the editors of the investing newsletters I receive, predicted another precipitous drop next week. Part of the problem is those 90% of institutional investors now completely dependent on AI were all issuing more sell orders than buy orders. It never pays to bet against the house. If the bots are moving into precious metals and bonds then the next couple weeks are going to make thousands of Doomsday Preppers very happy.

I sold off five stocks, Veon (VEON), GoPro (GPRO), Energy Transfer (ET), Limelight Networks (LLNW), and Marvell (MRVL). This gave me a new cash balance of $663.70. When the market closed I received an interest payment of $0.03 from Robinhood based on the cash balance held during the month of March, bringing my total cash balance to $663.73, with $660.42 immediately available. My current breakeven point is still basically $2100. I'm not going to worry about three cents. I do have a dividend payment from Marvell coming worth $1.20. I will probably receive it next week sometime. Everyone else has temporarily suspended dividend payments to cover debt servicing during the COVID-19 pandemic. The profit from those five sales is about $180, plus or minus the price of a good cup of coffee. Doubling everything in my portfolio immediately after selling my truck helped put all five of these stocks into the profit position. Receiving one free share of GoPro from a referral also helped. My current portfolio value looks like this:

Naturally, I am hoping that this week everyone's gloomy predictions will come true and I will be able to buy back all of these stocks at even cheaper prices than I sold them, thus increasing the number of shares in each. However, my personal bank account is hovering very near zero and there is no hope of finding a new job until the COVID-19 "shelter-at-home" order ends at 12.01am on May 1st. This puts me in a very difficult position. Do I use the $660 in cash to buy groceries and pay bills? Do I risk starvation and losing my home by putting that cash back into the market at the earliest possible moment? Do I just let everything sit exactly the same way for the next two weeks and watch what happens? Everyone's life has this moments of high suspense and stress. I am not lying awake at night worrying about it, but it is a very tense situation.

In military circles everyone knows, "the best strategy never survives the first moment of contact". I cannot predict the future, no one can. If the market rebounds next week the five stocks I sold are one hundred percent certain to be leading the pack and I will have lost out on the possibility for huge profits. "A bird in the hand is worth two in the bush," always, so I took my profit and let the potential for even greater profits escape. If those two birds fly off, then I will have made the right decision. If they hang around and watch me nibble on the one bird, then I will just have to grin and bear it. On the other hand, if the market continues collapsing, that cash will come in very handy for snatching back those stocks at bargain prices, or even investing in new ones. In closing, here is my current portfolio:



April 03, 2020

Throw everything in a big pot and boil it up


A long time ago, before much of the world today was even born, I was watching an aunt with vivid memories of 1931 make soup from scratch. First, she made a thick broth by boiling down chicken and ham bones in a pot of water until the smaller bones all dissolved and the larger ones were soft as sponges. Then she started grabbing meats and vegetables she had canned herself the year before and tossed them into the pot.

"Aunty," I asked innocently, "How do you know what to add?"

"Sometimes," she replied, "you just have to throw everything into a big pot and boil it up."

So there I was on a slow Thursday morning. The day before the governor of Ohio had announced that the current "stay-at-home" order would remain in effect until May 1st. I never imagined I would live to see the day millions of Americans would be denied the freedom to assemble, the freedom to conduct business, and the freedom to worship. A simple virus originating from a wet market in China has discarded our Constitution and put us on Martial Law without any real debate or challenge. Fortunately, I had just enough warning to stock up the pantry, so I have plenty of food that will remain edible even if the power fails.

What does a country boy do when trapped at home with a pantry full of canned food?

"...throw everything in to a big pot and boil it up."

In this case, "everything" includes:
32 ounce package of pre-made chicken broth
12 ounce bag of tricolor, Fusilli noodles
14 ounce can of salmon
14 ounce can of seasoned cabbage
14 ounce can of squash with Vidalia onions
1/2 teaspoon of clove
1/2 teaspoon of coriander
1/2 teaspoon of cardamom
1/2 teaspoon of garlic pepper

First grab a big pot! Pour the pre-made broth into the pot, fill the package with water and add it to the broth. Put the burner on high. Open, drain, and then add the canned salmon, cabbage, and squash. Add the spices. Bring everything to a boil while stirring slowly but constantly. When the mixture begins to boil, turn down the burner to about half or a little lower. Rinse and drain the noodles then add them to the pot. Continue cooking and stirring for at least 15 minutes. 20 or 30 minutes might actually be better. The important point is to give everything time to blend together while the noodles soften. The cabbage will probably dissolve and the salmon will break up into tiny flakes. This is a good thing.

Turn off the heat and serve! Should easily feed a family of four or five. For couples or singles, add one cup of water and reheat to a rigorous boil every time you have a bowl.

I don't really have a name for this concoction. It's a variety of Mulligan Stew, of course. Like any proper Mulligan Stew, it is both filling and nutritious. The spices are delicate but clearly noticeable, the combination of salmon and chicken broth is very interesting, and the noodles help provide bulk to make it filling.



April 02, 2020

Is COVID-19 a Weaponized Virus?



Image Source: Wikipedia Image Library

There are numerous videologgers and bloggers posting wild speculations concerning the possibility that COVID-19 is actually a bioweapon. For evidence they like to cite television dramas, movies, novels, or psychic predictions about pandemics featuring the coronavirus family. Any decent science fiction writer who takes on the task of writing about bioweapons has spent many hours researching viruses. The examples these "social critics" are pulling from fiction and speculation simply reflect diligent writers who have done their homework and understand a few basic concepts about immunology and epidemiology.

The "coronavirus" is a family of viruses common to reptiles and smaller bodied mammals. It has a certain genetic similarity (thus it is a "family" of viruses) and attacks a similar portion of the body. Normally it attacks the lungs, causing them to fill with mucus. It has been labeled "coronavirus" because the virus itself is covered in spikes resembling the coronal surface of the Sun.

Swine flu and Avian flu have properties that make it easier for them to mutate in a way allowing them to jump into a human host. Coronavirus has a difficult time mutating in a way that makes it viable in large-bodied mammals or humans. However, when it does make the leap it can be particularly deadly, such as in the SARS and MERS outbreaks over the past couple decades.

COVID-19 stands for "coronavirus disease 2019". This particular variety of coronavirus made the leap to humans in November or December 2019, possibly at the Huanan Seafood Wholesale Market where wild animals are butchered and sold for meat. Wet markets are filthy, blood-soaked places, making it easy for viruses and bacteria to pass through multiple generations in a very short time. Whether weaponized or natural, a virus is a living lifeform and like any lifeform it mutates constantly. Since a virus is a very simple lifeform, mutations can occur very rapidly with each mutation either helping or hindering its survival.

Yes, there is always the possibility that COVID-19 was weaponized in a lab somewhere, but it is extremely unlikely. As a weapon, this virus has only limited effectiveness because it is least effective in young adults and adolescents, the group any genuine bioweapon would be specifically designed to target.


Some useful links:
CDC: Human Coronavirus Types
ASM: 2019 Novel Coronavirus
Wikipedia: Coronaviruses
NIH: Coronavirues
WHO: COVID-19