What's with TD?

The MACD is showing a bearish signal.  I sold mine and may buy back if there is a dip.

TD Bank in play?

About a month back, we were told by our branch they are closing and we need to move our safe deposit box from there. Looks like they are consolidating a lot of branches.  For what?  Getting ready for an acquisition?  Look at the stock price movement too.  Even if they don't get taken over, this will make an already profitable bank more profitable, and by all accounts banks are expected to do better in a higher interest environment.  Find the story interesting?  I do too.  I expect this to be another case where I can be thankful to Peter Lynch and his book, "One up on Wall Street."

MT interesting

The $7 put (for writing one) of Jan 2018 appears interesting with a $2.30 premium.  If it is not exercised look at the percentage return.  If it does get exercised, still you are buying below $5.

Effect of holding 20% to plunk in right after correction

HOW YOUR INVESTMENT OF $1 WOULD HAVE DONE
EFFECT OF HOLDING 20% CASH BEFORE A CORRECTION AND PLUNKING IT IN AFTER CORRRECTION IS OVER Compare column pairs 3-4, 5-6 & 7-8
CASH%	20
year	return	Value	Value	Value	Value	Value	Value
2014	13.8	50.42	70.73	1.48	2.08	1.31	1.83
2013	32.43	44.31	62.15	1.30	1.83	1.15	1.61
2012	15.88	33.46	46.93	0.98	1.38	0.87	1.21
2011	2.07	28.87	40.50	0.85	1.19	0.75	1.05
2010	14.87	28.29	39.68	0.83	1.17	0.73	1.03
2009	27.11	24.63	34.54	0.72	1.02	0.64	0.89
2008	-37.22	19.37	27.18	0.57	0.80	0.50	0.70
2007	5.46	30.86	43.29	0.91	1.27	0.80
2006	15.74	29.26	41.05	0.86	1.21
2005	4.79	25.28	35.47	0.74	1.04
2004	10.82	24.13	33.84	0.71	0.99
2003	28.72	21.77	30.54	0.64	0.90
2002	-22.27	16.91	23.73	0.50	0.70
2001	-11.98	21.76	30.52	0.64
2000	-9.11	24.72	34.68	0.73
1999	21.11	27.20	38.15	0.80
1998	28.73	22.46	31.50
1997	33.67	17.45	24.47
1996	23.06	13.05	18.31
1995	38.02	10.61	14.88
1994	1.19	7.68	10.78
1993	10.17	7.59	10.65
1992	7.6	6.89	9.67
1991	30.95	6.41	8.99
1990	-3.42	4.89	6.86
1989	32	5.07	7.11
1988	16.64	3.84	5.38
1987	5.69	3.29	4.61
1986	19.06	3.11	4.37
1985	32.24	2.61	3.67
1984	5.96	1.98	2.77
1983	23.13	1.87	2.62
1982	21.22	1.52	2.13
1981	-5.33	1.25	1.75
1980	32.76	1.32	1.85
1979	18.69	0.99	1.40
1978	6.41	0.84	1.18
1977	-7.78	0.79	1.10
1976	24.2	0.85	1.20
1975	38.46	0.69	0.96
1974	-26.95	0.50	0.70
1973	-15.03	0.68
1972	19.15	0.80
CASH IS KING JUST AFTER  A BIG CORRECTION.  MAKE SURE YOU HAVE IT.

INDEX INVESTING JUST BEFORE AND JUST AFTER A BIG CORRECTION

HOW YOUR INVESTMENT OF $1 WOULD HAVE DONE
IF YOU INVESTED JUST BEFORE OR JUST AFTER A MAJOR CORRECTION COMPARE PAIRS OF COLUMNS 3-4, 5-6 & 7-8
year  return Value Value Value Value Value Value 2014 13.8 63.03 101.54 1.85 2.98 1.63 2.60 2013 32.43 55.39 89.23 1.63 2.62 1.44 2.29 2012 15.88 41.82 67.38 1.23 1.98 1.08 1.73 2011 2.07 36.09 58.15 1.06 1.71 0.94 1.49 2010 14.87 35.36 56.97 1.04 1.67 0.92 1.46 2009 27.11 30.78 49.59 0.91 1.46 0.80 1.27 2008 -37.22 24.22 39.02 0.71 1.15 0.63 1 2007 5.46 38.57 62.15 1.13 1.82 1 2006 15.74 36.58 58.93 1.08 1.73 2005 4.79 31.60 50.91 0.93 1.49 2004 10.82 30.16 48.59 0.89 1.43 2003 28.72 27.21 43.84 0.80 1.29 2002 -22.27 21.14 34.06 0.62 1.00 2001 -11.98 27.20 43.82 0.80 2000 -9.11 30.90 49.78 0.91 1999 21.11 34.00 54.77 1.00 1998 28.73 28.07 45.23 1997 33.67 21.81 35.13 1996 23.06 16.31 26.28 1995 38.02 13.26 21.36 1994 1.19 9.61 15.47 1993 10.17 9.49 15.29 1992 7.6 8.62 13.88 1991 30.95 8.01 12.90 1990 -3.42 6.11 9.85 1989 32 6.33 10.20 1988 16.64 4.80 7.73 1987 5.69 4.11 6.63 1986 19.06 3.89 6.27 1985 32.24 3.27 5.26 1984 5.96 2.47 3.98 1983 23.13 2.33 3.76 1982 21.22 1.89 3.05 1981 -5.33 1.56 2.52 1980 32.76 1.65 2.66 1979 18.69 1.24 2.00 1978 6.41 1.05 1.69 1977 -7.78 0.98 1.59 1976 24.2 1.07 1.72 1975 38.46 0.86 1.38 1974 -26.95 0.62 1.00 1973 -15.03 0.85 1972 19.15 1.00
CASH IS KING JUST AFTER  A BIG CORRECTION.   MAKE SURE YOU HAVE IT. RECOMPUTE TABLE WITH DIFFERENT CASH % AND PICK YOUR CHOICE BY YOUR RISK AVERSION.

More on Energy : Schlumberger

Morningstar has a high recommendation on Varco (NOV) and Schlumberger (SLB).  Both are beaten down due to oil prices and may still have some downside.  But who can time the market perfectly ?

While SLB has a Wide moat rating, NOV has only a narrow moat.  Both do have an A+ rating for credit meaning their balance sheets are strong.  I like the story on SLB a lot, particularly the various defensive steps it has put in motion, its size, leading market position, etc.  Russia is an issue, but I don't believe a company so big as SLB would not have hedged their investment appropriately.

SLB trades at 85.21 and has a Fair value estimate of 105 and Buy At recommendation of 73.50.

If one has a time horizon of 3 years, this would be a safe bet with very high potential returns if one hedges appropriately.

Possible trades are:

Buy/Sell with Jan 16 calls for strike 90 sold at 5.40
Buy/Sell with Jan 16 calls for strike 100 sold 2.48
A 50-50 combination of the above if one can afford it since upside potential is quite high.
Sell Jan 16 strike 90 PUT at 11.05

Happy Hunting !

Two energy plays

With oil prices tumbling, energy stocks have taken a big beating and some good names are trading at prices not seen in many years.  Among those, Morningstar recommends a set and even among them are two Devon (DVN) and Apache (APA) trading respectively at 60 and 64 dollars a share.   There are many good fundamentals these two can brag about too including a strong balance sheet and good management.   Their fair value estimates are respectively at 93 and 98.  Even the most pessimistic ones about the energy sector consider this a great time for those with a long term (5 year +) horizon.

Besides that there are some good PUT writing opportunities too.  Consider for example a strike 60 PUT on DVN for Jan 2016 selling at 7.55, or a 65 strike PUT on APA selling at 8.49.  These are positions I find more suitable for the risk averse; the return is good if the PUT doesn't get exercised and if it indeed does, then I am buying the stocks very cheap to hold. Think of it another way: it is like buying the stock today and getting a 10%+ return in about a year.