27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Sunday nights aren't usually associated with major financial news, which makes it all the more curious why Pacific Investment Management Company (PIMCO) released a major update a few hours before midnight on September 28.
But then again, PIMCO didn't exactly have a typical week, either.
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Last Friday, founder Bill Gross announced he was leaving the firm for Janus Capital Group Inc (NYSE: JNS). Shares of Janus rose 43 percent.
PIMCO as a whole isn't publicly traded, but investors sold many of its funds en masse.
PIMCO Corporate and Income Opp Fund (NYSE: PTY), PIMCO Global Stockplus and Income Fund (NYSE: PGP) and Pimco HIgh Income Fund (NYSE: PHK) each shed over 5 percent in value during Friday's trading.
The Wall Street Journal reports PIMCO could have lost at least $10 billion from withdrawals over the weekend.
So, how did the firm respond? With a Q&A from Chief Investment Officers Scott Mather, Mark Kiesel and Mihir Worah, who now manage Gross's $200 billion-plus baby, the PIMCO Total Return Fund.
Highlights from the Q&A session are below:
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- "I am proud to say that we all have strong long-term records of generating performance for clients." -Scott Mather
- "As with every other generalist portfolio manager at PIMCO, Bill Gross relied on us – along with the firm’s 240 other portfolio managers – for help in generating the trade ideas that have driven the strategy’s strong historical performance." -Mark Kiesel
- "[W]e believe that a more explicit team approach actually brings a lot of benefits to the strategy." -Mihir Worah
- "[T]here may be times when we simply can’t come to an agreement. Should that happen, I will make the call." -Scott Mather
- "Our belief in the New Neutral continues to anchor our views. We believe the Fed has been looking, and will continue to look, to reflate the U.S. economy." -Scott Mather
Twitter reacted as one might expect:
The gist of it is that there are now three PMs managing Total Return, but in the event of a major disagreement, Scott Mather makes the call.
— Downtown Josh Brown (@ReformedBroker) September 29, 2014"It was a seamless transition." Um, really? http://t.co/N8KBCc2icO
— Dani Hughes (@divinedani) September 29, 2014They're trying to stop all the liquidations on Monday, ain't gonna help “@PIMCO: new article, PIMCO TR Update… http://t.co/UTCNLnFXoj”
— Nicholas Olesen CFP© (@NicholasOlesen) September 29, 2014Great quote from @researchpuzzler via @ReformedBroker. Shows why not all risks can be quantified pic.twitter.com/KTWQfxvmlK
— Ben Carlson (@awealthofcs) September 28, 2014Disclosure: At the time of this writing, the author had no position in the equities mentioned in this report.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.