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.
This article originally appeared on Lightspeed's Active Trading Blog.
"Star Wars: The Force Awakens" has been perhaps the most hyped and anticipated movie of all-time. The movie’s opening weekend even exceeded lofty expectations, grossing $238 million for Walt Disney Co (NYSE: DIS).
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One of the driving forces behind the franchise’s success is the blend of characters in the Star Wars universe. Perhaps a similar blend of stock “personalities” could produce some Lucas-esque magic in your portfolio! Here’s a fun look at some stocks with traits reminiscent of Star Wars characters.
Han Solo: Tesla Motors Inc (NASDAQ: TSLA)
Han is the charismatic, brash and exciting smuggler spaceship captain with a heart of gold. Solo can be a hothead and unreliable at times, but there’s no questioning his skills as a pilot and his tenacity in battle.
The same spirit of excitement and volatility can be seen in the stock of Tesla Motors. Tesla’s upside potential is staggering, but the company has plenty of growing pains to work through before fulfilling its full potential. In terms of volatility, Tesla’s stock has swung from $136 to $291 to $181 to $286 to $195 to its current level of $232 all within the last two years. Not even Han Solo is that volatile!
Chewbacca: AT&T Inc. (NYSE: T)
Stay with us here. Chewbacca is Han’s lovable and dependable sidekick who always has Han’s back through thick and thin. If all else fails, Han knows that Chewbacca will be there for him in the end.
AT&T has been this stable, reliable, if unremarkable, performer for investors in recent years. In the past two years, AT&T has never traded lower than $28.87 and never higher than $35.46, all the while paying investors a steady 5.6% dividend.
Princess Leia: Hewlett Packard Enterprise Co (NYSE: HPE)
In terms of the fiery female leadership that Leia provides in the Star Wars movies, you’d be hard-pressed to find a stock that embodies this spirit more than Hewlett Packard Enterprise.
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CEO Meg Whitman has spearheaded a turnaround story at Hewlett Packard that included aggressive and creative corporate restructuring, ultimately resulting in splitting the company into two units, HPE and HP Inc (NYSE: HPQ).
Darth Vader: Comcast Corporation (NASDAQ: CMCSA)
Darth Vader is one of the most loved movie villains of all time, and the sympathy his backstory draws from the Star Wars audience creates quite a complex character.
Complex is certainly an appropriate word for Comcast. The company’s reputation among customers has certainly imploded like the Death Star following a streak of appearances on The Worst Company In America rankings and its share price is flat over the past year, underperforming against competitors like Disney.
While Comcast pays a decent dividend yield between 1.5 percent and 2 percent, stock-pickers can do better in the media space.
Luke Skywalker: Netflix, Inc. (NASDAQ: NFLX)
Finally, there would be no Star Wars without the hero of the saga, Luke Skywalker. After all, it was Luke who led the rebel forces to overthrow the mighty Empire and save the galaxy.
Netflix has delivered the same type of leadership and disruption to the movie and TV industries in recent years. Not only is Netflix the top-performing stock in the S&P 500 in 2015, it has also generated a return of 3,160% over the past decade.
In addition, Netflix completely overthrew the Blockbuster movie rental empire and carved out a huge share of the video entertainment market in the process.
Takeaway
A Star Wars stock portfolio may not be the key to generating huge returns, but the principles of diversity and balance are critical to the long-term success of any portfolio. Identifying the traits in a stock that makes it unique is an important part of becoming a successful trader.
Disclosure: the author has no position in the stocks mentioned. Image via Lightspeed.
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.