2014 was a good year. We took some hits along the way. But overall we did quite well. While we set up for some new picks, we need to ditch some of the dogs we hold. Each should have worked out much better than they did.
If you still hold the BABA January 97.50 put, exit that… and hold the other BABA calls.
We also need to get rid of the IBM call and the Home Depot put, as well.
Over 2014, we did very well with BABA trades. The BABA April 105 calls paid out 74% and 65% gains. The BABA January 90 calls gave us gains of 131%. The BABA July 135 calls returned 85% and 203% gains.
So overall with BABA, we did okay.
As for the Home Depot January 87.50, we did take a 51% gain on half of the trade in October. The second half didn’t work out as well as it should have.
With IBM, we’ll look to jump back into calls at some point. This is a Buffett stock. There’s no reason for it to still trade on the floor, as it has.
As for new trades, we did issue new ones this week on Dow upside before the market ran up… But I’m seeing a move in the silver market that I’d like to take advantage of. I typically watch the Silver – Gold ratio for buy points. At the moment, the ratio sits at 72. As it begins to near extremes set in 1995, 2003 and 2008, the argument is that silver will move higher. When the ratio topped out in 1995, silver ran up 70%. When it toped in 2004, silver was up 200%. And when it topped in 2008, silver was up more than 400%.
There are also arguments that silver demand will outweigh supply shortly. This could set us up for a good run – with patience – with silver, most notably the silver ETF (SLV). But to play this well, we need to buy for the long-term.
Consider buying to open the SLV January 2016 15 call up to $2.60.
Have a great weekend. We’ll talk again soon.
Until then take good care,
Ian L. Cooper
Inside Value Trader