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Paul Allen, CFA
@PaulAllenCFA
Common sense view on markets coupled with an ongoing personal investment in developing erudition and genuine economic literacy
Waldorf Towers
Joined November 2024
2.5K Following
537 Followers
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@Irishdrunkdance Going to look into it. Will be sure to tag you when we have some thoughts on it.
10 out of 14 of our long options positions expired last Friday; we closed out the remaining four, finishing at a 93% return for the quarter.
Our original book was posted on Substack, timestamped at initiation, along with updates as new positions were added during the quarter.
We will be constructing another long/short book for Q3 and will post that shortly, along with a more detailed attribution analysis.
Our view here https://t.co/9MYcT3s4n3
Our view is that overseas companies will overwhelmingly bear the cost of tariffs, which will likely result in a less than expected bump to CPI, which in itself would be a one-off hit anyway. Overall, moderate tariffs are *deflationary* if anything
https://t.co/HeUr6HFKJF We have so far been correct, with business eating the majority of tariff costs. We differ with Goldman in that the pass-through to consumers is likely to be less than they anticipate
Businesses are eating 64% of tariffs right now. We know that.
But according to Goldman, by October this will drop to only 8%, with consumers eating 67%.
Nice one in @SamRo's note this morning.
@Irishdrunkdance Very nice! We haven't looked at them yet but will be sure to now. Sounds good with the short interest.
We're very eager to see what the $RKLB earnings report has in store for us on Thursday after market close.
We've continued to hold our full position over this period in anticipation of the earnings release, despite the fact that at one point the calls were up over 400%...
We will see whether or not that was a good decision tomorrow. In retrospect, we wonder whether simply taking profits after such a big move would be prudent, and then reestablishing a small position on a pullback going into earnings to retain some upside exposure. Perhaps our patience will be rewarded tomorrow!
Our options book is currently poised very nicely at a 38.20% return as we head into our first major earnings reports on Wednesday with both $FCX and $TSLA reporting.
Our biggest winners so far have been calls on:
$RKLB up 405.75%
$U up 185.14%
$DKNG up 170.49%
$CRDO up 87%
Very eager to see what these upcoming earnings reports have in store for us. There's bound to be some big moves.
https://t.co/2fAPxAuFwK The "receipts" of the trade idea are in our Substack, along with general trade idea rationale.
And just like that, our options portfolio is now up 22.22% since inception on June 16...
Our long crude and copper trade (via XLE and FCX) continues to play out very well, with the added tailwinds of the Trump copper tariff announcement today, as well as higher than expected global growth continuing to come through as we foresaw following the April 2 Liberation Day selloff.
The small-cap theme we went big on also continues to unfold, bolstered by the passage of the Big Beautiful Bill last Friday.
With retail failing to buy yesterday's dip to the extent frequently seen with Tesla (full retracement of large selloffs being very common the following day), it looks as though it may end up being an ideal market hedge after all.
Will be very exciting to pass through earnings season with this book, with it already off to such a momentous start.
$XLE $FCX $ZIM $CRDO $CVLT $RKLB $XMTR $U $DKNG $RMS $COST $BMBL $TSLA $TLT $SPY $QQQ
Boom! $XMTR up 44% today on almost doubling the expected EPS in their earnings report.
We had expected strength given the tailwinds that small caps are currently benefiting from under the Trump administration and the ongoing AI industry boom.
Our calls have now doubled in value; we bought at $6.99 and they are currently worth $14.40. We're going to book this profit here, although the stock could easily continue to run in our view. Perhaps we will play next earnings on the long side a second time.
We're long $XMTR
Over the course of the year, we think AI manufacturing small-caps are going to see a lot of price action as further contract wins come through
Our view is that overseas companies will overwhelmingly bear the cost of tariffs, which will likely result in a less than expected bump to CPI, which in itself would be a one-off hit anyway. Overall, moderate tariffs are *deflationary* if anything
The $COST puts purchased at $45.45 two months ago are now worth $68.55. We will to continue to hold these
Our options book is currently poised very nicely at a 38.20% return as we head into our first major earnings reports on Wednesday with both $FCX and $TSLA reporting.
Our biggest winners so far have been calls on:
$RKLB up 405.75%
$U up 185.14%
$DKNG up 170.49%
$CRDO up 87%
Very eager to see what these upcoming earnings reports have in store for us. There's bound to be some big moves.
One of the other picks in our book, cybersecurity and data protection company $CLVT, is up almost 20%, smashing their revenue guidance in today's earnings report.
We continue to be bullish on the sector and will be looking for other earnings options plays for next quarter
Our options book is currently poised very nicely at a 38.20% return as we head into our first major earnings reports on Wednesday with both $FCX and $TSLA reporting.
Our biggest winners so far have been calls on:
$RKLB up 405.75%
$U up 185.14%
$DKNG up 170.49%
$CRDO up 87%
Very eager to see what these upcoming earnings reports have in store for us. There's bound to be some big moves.
This aged very well; up 74% in under four months. By far one of the most obvious longs during the Liberation Day selloff, if not the most
$NVDA $QQQ
It's really simple, anything under $100 for $NVDA, you buy; don't even think, just buy
$SPY $QQQ $TLT $USD
Great to finally see $SMCI start to play out properly in the price action, up 42.25% since our post in early December.
While not currently part of our options book, we think by year end this will be a call that has aged well
$SMCI is an excellent binary event play right now with a fairly positive long-term outlook for those willing to hold through potential adversity, regardless of how things play out in the immediate future.
If their regulatory problems get cleared up and delisting is no longer on the table, we could be taking the elevator back $120+ quite easily, with even better long-term prospects given the company's direct exposure to current AI data center build-out expenditures.
The very real risk here is $SMCI getting delisted for the *second* time (yes, they were previously delisted in 2018 for failing to complete filings in a timely manner). It took almost two years to address compliance issues to finally get relisted on the Nasdaq in January 2020.
If this occurs again the stock price will get killed; the company will be relegated to the OTC pink sheets. Nevertheless, we're confident that even in this worst-case scenario $SMCI could still be relisted, but this is a non-trivial near-term risk, without a doubt.
All in all, this is an excellent binary event-style play that is likely worthy of at least a small position one way or the other. We at Pierce & Pierce are long both a small amount of the stock, as well as a decent call option position.
The recent update, while reassuring and certainly what the market wanted to hear, was issued by a committee consisting of a single individual. So this situation is not without significant risk.
A kind of mentor pitched $INTC as a "value" turnaround play in late 2023, at around $38 per share...
It's now down 45% since then, in true value turnaround fashion! Ongoing bad news and deterioration of core operations has continued to weigh on their earnings and outlook.
It raises the question why anyone would play such a difficult apple-bobbing game, picking these troubled turnaround stories for probably at most 50% upside, when you can just buy stocks that are growing their revenue and earnings by close to that amount YoY?
It's like waking up and deciding to play the stock market on hard mode, and hints at fairly serious cognitive deficits when one is staunchly committed to such an approach; unfortunately there are many such cases!
$FCX reported earnings this morning, which significantly beat on both top and bottom line estimates.
It's currently down 0.68% this morning, but still up 3.85% over the past 5 days. We expect it to continue to get bid into further copper price strength over the coming weeks.
We're very bullish on the cybersecurity space over the next few quarters, with increased spending likely to be ramped up beyond current analyst expectations amid expanding threats from ongoing AI development, in this case applied to nefarious ends
$CIBR $CRWD $ZS $PANW $FTNT $NET $CYBR $OKTA $RPD
Our options book is currently poised very nicely at a 38.20% return as we head into our first major earnings reports on Wednesday with both $FCX and $TSLA reporting.
Our biggest winners so far have been calls on:
$RKLB up 405.75%
$U up 185.14%
$DKNG up 170.49%
$CRDO up 87%
Very eager to see what these upcoming earnings reports have in store for us. There's bound to be some big moves.
And just like that, our options portfolio is now up 22.22% since inception on June 16...
Our long crude and copper trade (via XLE and FCX) continues to play out very well, with the added tailwinds of the Trump copper tariff announcement today, as well as higher than expected global growth continuing to come through as we foresaw following the April 2 Liberation Day selloff.
The small-cap theme we went big on also continues to unfold, bolstered by the passage of the Big Beautiful Bill last Friday.
With retail failing to buy yesterday's dip to the extent frequently seen with Tesla (full retracement of large selloffs being very common the following day), it looks as though it may end up being an ideal market hedge after all.
Will be very exciting to pass through earnings season with this book, with it already off to such a momentous start.
$XLE $FCX $ZIM $CRDO $CVLT $RKLB $XMTR $U $DKNG $RMS $COST $BMBL $TSLA $TLT $SPY $QQQ
Our $RKLB calls are now worth $25.50, up 440% since we bought them!
And just like that, our options portfolio is now up 22.22% since inception on June 16...
Our long crude and copper trade (via XLE and FCX) continues to play out very well, with the added tailwinds of the Trump copper tariff announcement today, as well as higher than expected global growth continuing to come through as we foresaw following the April 2 Liberation Day selloff.
The small-cap theme we went big on also continues to unfold, bolstered by the passage of the Big Beautiful Bill last Friday.
With retail failing to buy yesterday's dip to the extent frequently seen with Tesla (full retracement of large selloffs being very common the following day), it looks as though it may end up being an ideal market hedge after all.
Will be very exciting to pass through earnings season with this book, with it already off to such a momentous start.
$XLE $FCX $ZIM $CRDO $CVLT $RKLB $XMTR $U $DKNG $RMS $COST $BMBL $TSLA $TLT $SPY $QQQ
The Russell 2000 continues to outperform in line with our views
$SPY $QQQ $IWM
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