Will Trump come back?
Julian Assange is finally coming back after 8 years in hiding, I wonder where Trump will be seeking asylum – perhaps Mother Russia? As noted by CNN: “Besieged at home, Trump sets off for ‘do-or-die’ foreign trip,” stating “if President Donald Trump’s crucial first foreign trip passes off without a disaster, it will be considered a success.” 8 days without a disaster? It’s only been 114 days so far and I don’t think we’ve gone 3 in a row without a new scandal!
Not only that but Julian Assange is back – I can’t wait to see WikiLeaks turn its sights on Donald’s secrets. Over in Europe, they want to know if Trump is really pulling out of the Paris Climate Accord in defiance of the entire rest of the World, who ratified the treaty – there’s a good start. That’s the middle of his trip, which Trump ends with a NATO meeting, where he has to explain to the actual Members why he thinks they don’t do their share but first, Trump heads over to the Middle East, where he has boasted he can fix things.
Of course the real purpose of the trip is to sell arms to the Saudis and we have our LMT and RTN back from when Trump was first elected (see: “Merry Trumpmas – Looking Forward to a Wild New Year“). Raytheon (RTN) is already over our $145 target and our trade idea for them was:
It’s only been 5 months but already the short $120 puts are down to $3.65 ($1,825) and the $120/145 spread is net $19.50 ($9,750) for net $7,925, which is up $5,125 (183%) and simply “on track” for our full $9,700 (346%) gain. The upside from the trade as it stands is more than a double but that’s not that interesting to us as a new trade – as clearly we can do much better than doubling our money over 18 months.
In fact, let’s look at the LMT trade from the same morning’s report:
Despite the recent dip, LMT is still over our target as well and the short $200 puts are down to $5.86 ($2,930) while the $220/260 spread is net $26.80 ($13,400) so net $10,470 is up $5,970 (132%), not quite as good as RTN but not bad for a 5-month return, right?
That’s something I want to stress about our long-term plays, it’s not that they don’t make money in the short run – we prefer them because, IF we are wrong, we have 2 years to ride out the trade and make adjustments. If we’re right – we make fantastic returns using very little cash. As I noted yesterday, our Long-Term Portfolio has blasted higher this month and, in our Live Member Chat Room, when we reviewed the LTP – we found NOTHING that needed changing into today’s expirations BECAUSE they are generally “set and forget” long-term FUNDAMENTAL trades like the ones above.
