As most of you know I liquidated my VLO stock core holdings at an average price of 17.50 and since have used the cash to make day trades on VLO. I have made 20 gap trades since June, at an average gain of .60 after expenses.
That gives me the equivalent value of $29 per old core share.....much higher then the old buy and hold strategy from days of old. And the best feature of not holding the stock......cash in the bank every day.
Now I realize that my tax load will increase by 10% on those gains but that equals $3.....so that still leaves me at $26 vs current stock price of $20. I have also used the cash on VLO "off" days to make additional cash on trading ATI and XOM.
Bottom line is trading is the only way to "own" stock ..... that is how wallstreet raids your 401k, so you need to beat them at their own game.
Who says you can't teach an old dog new tricks? I have watched you make the journey from a staunch 'buy-n-hold' investor, to a savvy hit-n-run daytrader over the past year. Your analysis of fundamentals, weighed against the play The Street WANTS us to make, has led you to higher thinking. Using your Gut-o-Meter (patent pending), you have applied your strategy with precision. I disagree with about 80% of the posts on the board lately, but I will no longer waste time arguing my point here. I will share my ER ideas now because I'd like your input, (as well as Jack, Zig, Ranger, Hope, and any of the 'Old Guard' who would like to chime in). After OpEx I had planned to stockpile puts up to the release date, but I could not resist exiting with profits along the way. I've been in & out of the $20's and $21's (probably shoulda held those $21's) a couple times last week. Currently holding no VLO position. Friday's price pump left an interesting little top with a long wick on the chart and a close near the low of the day. 20mil volume, but small lots... smells like HFT manipulation. All big block trades were on the down tick. The street keeps lowering the bar (-33 cents was the last eps estimate I saw) so maybe VLO can limp in with a 'better than expected' ER and move higher, though it doesn't seem likely. The other idea is that US Steel also releases same day, and they will have a significant pull on the market which may take VLO along for the ride (up or down). Their bar is subterranean (-$2.87). The point is, the street has set up all these companies for the easy beat for the last 2 quarters. Last week's action looked like a pre-earnings pump, to keep the shareprice afloat (+$19) in the event of an ugly ER. The option chart for the $20 puts shows divergence between IV and op price. I look for them to come back together or both head north (stock price drop). RSI is silly high for the current fundamentals. Due for a tumble. I will be looking to re-establish VLO positions on Monday, but just curious what you guys have to say, as my thinking has been bearish on VLO for a long time... Maybe too long! Thanks gang! P.
I just mailed off my application to trade options. Taking the big plunge. I want to be able to get in and out more often without committing tens of thousands. I also want to be able to play the short side as it can be very lucrative.
And I'm done with buy and hold. I learned a few things from you guys.