Financial Letter - February 24th, 2019
212th Issue (since 01/24/2015)
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.
The short book on the Put/Call ratio is now 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.
Market Risk (Systematic Risk)
The SPY sailed the eighth week of 2019 with weak tailwinds that ended the (4 sessions) week with a gain of 0.6%. Since the beginning of the year the gain of SPY is 11%. The SPY is now at the same level as it was on October 17th, November 7th, December 3rd: indicating a solid resistance. The VIX (see charts 3 and 4) is at 13.5%, a level that is positive but still not ideal for trading comfortably. The ideal level for the VIX is at about 10%. We are gradually entering the market, as the volatility decreases.
A private indicator (CKL21) shows the market in the short term is due to a correction, even if it's a small one.
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 DOO (stock closed Friday at $39.05) April 18/36.00 @ $4.15 whose delta is 0.74 and gamma 0.06 (accelerator of delta). This call will offer a profit of 74% of the stock increase at a cost that is about 9 times lower than the present price. If the stock goes down, the maximum loss is the premium.
SPY - Daily - 2019/02/22
SPY - Weekly - 2019/02/22
VIX - Daily - 2019/02/22
VVIX - Daily - 2019/02/22