Pharmathene (PIP)

PIP had a great day today, up 26%, to $3.04. This is the stock that I bought yesterday in the Port24 (and in a real money account).

I touched months ago on the topic of having watchlists of stocks, that should be reviewed daily to weekly. Once you have a feel for where the stock price tends to move (and of course, knowledge of the timing of upcoming events), you will get a feel for when a stock is simply insanely priced. It's worth reviewing Benjamin Graham's (and Warren Buffett's) continuing referral to Mr. Market: that silly little guy who shows up every day either manic or depressive, offering stocks for sale at wildly inflated prices because he's so rosy, or at crazily depressed prices because he's glum or convinced the sky is falling. The trick is that YOU DO NOT HAVE TO BUY AT ANY POINT - it is entirely up to you. You can agree with everyone that Apple makes the best listening or tablet devices, but until there is a shock to the stock price and it's offered at something you consider value, you don't have to buy it! Yesterday was simply a time when PIP was being offered at a price that was entirely "glum" Mr. Market.

Recall however that I also sold July $2.50 calls against the position I added yesterday (within the Port24). Although I've technically "lost" paper money on this trade, as opposed to simply buying the shares, I am not too sad. I entered the trade looking only at the one month objective of gaining the 12% (144% annualized!!!) return should PIP be at more than $2.50 on July 15th. I am quite firmly convinced it will, so I am not touching the trade at this point.

Please note there IS something I could (and may well) do at this point. I bought the stock at $2.42 and sold $2.50 calls for $0.30. I could buy back those same calls for $0.80 now, and then sell the stock for $3.04. I would lose $0.50 per share on the options, but gain $0.62 per share on the underlying shares. Of course, you have to factor commissions into the above, so it's not a full 12 cent gain per share... maybe more like ten on average.

That would be a 4% gain, obviously not nearly as nice as the 12% I stand to gain if left in place. On the other hand, this is a 4% gain in ONE DAY. That annualizes to 1,440%! Such comparisons are silly when you talk about a one or two day gain, but then I have that cash on hand for future trades, instead of locking it up for a month. Since this trade is about 8% of the entire Port, there is some interest in closing it out quickly if I can do so at a better than already-planned return.

Stay tuned!

Regards,
Trond

Options expiration fallout

The composition of the Port has changed dramatically from just a couple weeks ago.

We bid adieu to Seattle Genetics (SGEN) last Friday, as I had sold $17.50 calls and it closed at $19.50. Since I bought it 3 1/2 months ago at $15, and sold $1.25 worth of premium I can't complain too much with the 21% total return.

This morning I took advantage of the cash on hand, buying an old friend and a special situation.

The Port now owns Dendreon (DNDN) again, at $38.16. I did, however, sell July $40 calls, expecting a lift from the CMS coverage and the upcoming Seal Beach plant approval.

I also bought a second load of Pharmathene (PIP) (6,000 shares at $2.42) and sold 60 July calls at $2.50. Those calls, however, had a premium of $0.30!! That is a 12% premium for one month... and too much for me to resist in the Port.

Notably, I also bought some PIP for myself in my real money account this morning. I did not sell calls against these.

I'm down to $4,400 cash in the Port, so until I either sell more calls or liquidate some stock, I'll be holding the following:

Shares .. Ticker.. (calls sold)
1500 ARQL (0)
1200 BTX (0)
2600 CLDX (0)
9000 CLSN (0)
1600 DCTH (0)
300 DNDN (3)
1100 EXEL (0)
2000 MITI (0)
2000 NBIX (20)
7000 NNVC (0)
2500 PIP (0)
6000 PIP (60)
1600 SGMO (0)

Regards,
Trond

PZG sell

Paramount Gold & Silver had a modestly good PR today and I've decided to sell the 3,600 shares the Port24 holds (at $3.71). That gives me an 18% return over the five months I have held.

I still like PZG but will look to re-enter somewhat lower ... the next news is not expected for a few months and I suspect it will trail down again.
Others I'm considering for inclusion at today's prices are more SGMO or PIP. VHC and ZIOP are also contenders.

Regards,
Trond

Managing money and Port24 update

First, let's get the Port out of the way: I sold calls against the EXEL position today; 11 Jul $10s for $0.65 per share. Cash is up to $1,096.58, and the overall value to $151,963.58, a 16.9% annualized return, beating the S&P and Nasdaq by 18 and 12% respectively.

The big news in my personal life is that I will be hanging out a shingle to manage money and do financial planning. Getting going will take a couple months in between studying and passing the Series 65 exam, getting registered with the State of California as a Registered Investment Adviser, and starting an LLC.

Besides looking at people's finances and finding ways to improve their moeny situation, I will be offering a couple "funds" - a growth and a growth/income option. More information will be forthcoming! I think I will be using the construction of this business as a blog series, so if interested in the creation of an entrepreneur, please stay tuned! My blog portfolio will stay a fixture, but I'll also use quite a bit of the analysis I'll be using on my company funds to do an even better job managing the Port.

I would ask the readers to please take a moment to hit the 'Post a Comment" link and let me know what it would take to make you call a financial planner, and utilize their services. Thanks!

Regards,
Trond

Exelixis

I bought 1100 shares of Exelixis (EXEL) at $8.78 in the Port today. They presented great data at ASCO and Mr. Market seems to have overstated the side effect dangers.

I will have more to say later on, but I wanted to post disclosure ASAP.

Regards,
Trond

Neurocrine calls

NBIX had a nice run this week and it is time to sell some $8 calls. The June's do not have enough premium to make them worthwhile, so we'll be selling the July $8s for $0.25 a share. With today's price $7.76 (and the purchase price in January at $7.30 and a total of $0.70 of option premium gained now) we'll have made about 14% in six months (assuming a close in July above $7.50). If exercised, we'll have a 19% gain.

I still have $10K in cash to buy something else; I would say right now Celsion would be a buy if I did not already have a stake. Other possibilities are Sangamo, ArQule, and Micromet - but I already have positions in those too. I will sit on my hands until something extraordinary comes along.

Regards,
Trond