You've Gotta Play To Win

Science Fiction author Robert Heinlein said it best.

If you'd don't play you can't win.

Many traders have missed the rally, worried that the new highs are unsustainable. But we don't need to predict out years from now to be good investors; we are better served buying value when opportunities present, being patient and avoiding following the herd.

We started Market Shadows Virtual Value Portfolio  on Oct. 26, 2012.  It took us about 19.5 months to get to our current level, up almost 51%. Our plain vanilla, unlevered mix of stocks has outperformed the Standard & Poors 500 ETF (SPY) by 21.6% since inception on a total return basis.

VVP  WE Jun. 6, 2014

‘Value’ has been the place to be so far in 2014. Our results have been good because we were not afraid to stay almost fully invested. The Fed’s ZIRP has turned cash into nothing more than a temporary parking spot between other investments. If the European Central Bank's thinking goes viral (e.g. Negative Interest Rate Policy, NIRP), cash may even become a cost to keep.

Major Indices -  YTD returns as of Jun. 6, 2014

Our three new option plays this week were especially well-timed. Panera Bread (PNRA) jumped sharply after announcing a major stock buyback authorization, LifeTime Fitness (LTM) and Aegion (AEGN) both rebounded strongly on Friday, almost immediately after our Thursday put sales.

Follow all our closed-out and current option plays by clicking here Virtual Put Writing Portfolio.

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