Financial Letter - February 10th 2019
210th Issue (since 01/24/2015)
Due to technical reasons, the Financial Letter will not be published next week. It's publishing will resume on February 24th.
CKL Inc. is presently offering a portfolio to their clients consisting of only one US ETF with options strategies on the US market. This kind of portfolio requires a capital of 250,000US$ and level 4 in options trading.
In February, a short book on the Put/Call ratio will be available on Kindle and other electronic reading platforms . The title is: « L’antagonisme entre les options put et call: l’analyse du put/call ratio ». The authors of this short book are Charles K. Langford and Laurence P. Darveau.
Since the middle of October we started publishing a “Daily Bulletin” with buy, sell and hold signals based on short-, intermediate and long-term signals on five securities in the US and Canadian market. We have decided to discontinue this project due to the small number of subscriptions.
The book “L’alchimie qui crée l’or – Le chasseur de tendances boursières II” is online (Amazon.ca and the title) on Kindle. It is in French. The book is now a “bestseller” in the category of business and finance. It's also available on all other electronic reading platforms (Kobo, iBook, etc.).
A second book is also available on electronic reading platforms like Kindle, Kobo, iBook, etc. Its title is “The Trend Hunter” and it is in English.
In 2016, the average return of portfolios managed by Charles K. Langford Inc. was 10.90% with a standard deviation of 3.75, after trading commissions and ¾ of management fees.
In 2017, the average return of portfolios managed by Charles K. Langford Inc. was 13.50% with a standard deviation of 4.65%, after trading commissions and ¾ of management fees. The larger standard deviation is explained by options strategies that gave higher returns.
The website of Charles K. Langford Inc. is : www.charlesklangford.com
Market Risk (Systematic Risk)
The SPY sailed the sixth week of 2019 with mixed tailwinds and headwinds that ended the week with practically no gain or loss. Since the beginning of the year the gain of SPY is 7.9%, still inferior to the loss of last year. The VIX (see charts 3 and 4) is at 16%, a level positive but still fragile for trading comfortably. We started entering in the market but progressively, as its moment becomes more positive.
A private indicator (CKL21) shows the market is, in the short term, neutral to negative.
The Langford Management
Presently our investments are in ETFs and ETN offering a high return, with a dividend yield between 5 to 10 % per year, at pro rata temporis, monthly. The market has still a strong positive bias. We don’t think for the moment to change the allocation because also the products with higher returns are also bullish.
In the USD accounts, still we have cash, in the form of FLOT, MINT, NEAR. In the CAD accounts, it is PSA or the equivalents. In the average, our portfolios are invested 60% in revenue and 40% in directivity.
In some, more aggressive accounts we have increased the capital synthetically with option strategies to profit of the actual upward strong momentum. In accounts that allow futures markets, we have futures contracts in long position on stock indexes.
Our portfolio management is always ad hoc, for each client. But also, we offer now five standardized mini-portfolios for clients interested:
- Bullish aggressive
- A contrarian as a hedge or profit
- Bullish and dividend oriented
- Against inflation
- Bullish, aggressive on non-traditional assets.
(The portfolio management fees of Charles K. Langford Inc. is 0.9% of assets, per year (equivalent to $900 per $100,000). The capital under management is invested exclusively in ETF, ETN and options)
Among a group of selected stocks and ETFs, the week just ended has given middle- and long-term buy signals for the following stocks and ETFs.
Investors that believe the current Canadian market offers interesting bullish opportunities, they can buy the call XIU (stock closed Friday at $23.52) March 8/21.50 @ $2.02 whose delta is 0.95 and gamma 0.08 (accelerator of delta). This call will offer a profit of 95% of the stock increase at a cost that is about 12 times lower than the present price. If the stock goes down, the maximum loss is the premium.
SPY - Daily - 2019/02/08
SPY - Weekly - 2019/02/08
VIX - Daily - 2019/02/08
VVIX - Daily - 2019/02/08