Financial Letter - July 21st, 2019
233 Issue (since 01/24/2015)
CKL Inc. offers presently to his customers a portfolio based essentially on performance (0.9/10): the 0.9 indicates the annual administrative % cost of management; the 10 represents the 10% of management fees on the gains above the high-water mark. The portfolio is made by only one ETF US plus options strategies of the US market. This style of portfolio requires a capital of 250,000US$ or equivalent in CAD and the level 4 in options negotiation.
It is now available on Kindle and on other electronic reading platforms in French a short manual on the Day Trading. The title is: « Le ‘Day Trading’ ou La négociation sur séance (1) », written by Charles K. Langford and Audrey Parent Thibeault.
It is now available on Kindle and on similar electronic reading platforms in French a short manual on the put/call ratio. The title is: « L’antagonisme entre les options put et call: l’analyse du put/call ratio », written by Charles K. Langford and Laurence P. Darveau.
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 business and finance. It's also available on all other readers platforms (Kobo, iBook, etc.).
A second book is available on the reading software like Kindle, Kobo, iBook, etc. Its title is “The Trend Hunter” and it is in English.
The website of Charles K. Langford Inc. is : www.charlesklangford.com
Market Risk (Systematic Risk)
The market (S&P500 Index with its FNB SPY and its derivatives) ended the week with a loss of 1,2% at 2,976.61 points compared to the previous Friday at 3,013.77 points.
A comment from the FED on Friday suggests its intention to cut interest rates at next meeting starting July 30. The reason is an algorithm that gives 32% of probability of an incoming economic recession. This level, in the past, anticipated an economic downturn.
The first week of company earnings declaration for the second quarter has been quite bumpy.
We believe the market is bullish for the medium term because there are no signs in the economy for a downturn and we have increased, where possible, our long positions. We shorted also ATM weekly call options, because in the short term maybe we could see a correction due to some negative surprises on the second trimester of company earnings, that started this week.
In the following P&F chart, we see the SPY slowing down the steep uptrend started at the beginning of this year. It is historically usual to behave in this way and also have some drawdown. Fort the moment the trend is bullish.
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.
TREND FOLLOWING
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Middle-term bullish |
Long-term bullish |
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Canadian Market |
CLM.V |
AMY.V |
About Options
Investors that believe the current Canadian market offers interesting bullish opportunities, can buy the call POW (stock closed Friday at $28.47) Aug 16/26.00 @ $2.61 whose delta is 0.95 and gamma 0.06 (accelerator of delta). This call will offer a profit of 90% of the stock increase at a cost that is about 11 times lower than the present price. If the stock goes down, the maximum loss is the premium.