Sometime Change Isn’t For The Best
Megyn Kelly was the star of Fox News and when her contract ended she decided that she was ready for a new gig. She maintained that her former boss, the late Roger Alias had harassed her and was guilty of abuse. So, when NBC came along and said that they would be happy to pay her $69 million dollars for a three-year deal it was pretty tough to turn it down. She took the dough and was now NBC’s daytime star.
Things started out on a winning note, but the former corporate attorney’s abrasive style began to wear on viewers and her ratings became shaky. NBC tried a number of program changes that they thought would work and finally in September 2017, they rebranded the nine o’clock Today show as “Megyn Kelly Today”. Two things happened when she took over the time slot. First, ratings began to drop when she had trouble with the balance of soft features and hard news. NBC decided that they could gut that one out but the second one was a little tougher as production costs soared, giving the suits a big dose of heartburn.
So, NBC decided to try another angle. Megyn would keep her day job, but they wanted her to do a “60 minutes” style Sunday night show. That deal bombed immediately and was replaced by “an occasional’ Megyn Kelly special. Ratings on Megyn Kelly today have now reached an all-time low, particularly with the important 25-54 age group. They are down over 14% from where the show started and a whopping 34% from the previous Today show cast.
NBC news chairman Andrew Lack who took the gamble to hire Megyn Kelly is still showing a strong face and believes that her ratings and personal appeal will take time. We have heard this line before. What is he going to say “I made a big mistake” but the numbers don’t lie. The old Today format generated over $500 million a year in revenue and produced $100 million of profit. It was NBC’s most valuable asset. It doesn’t take a genius to figure out that if you are down almost 35% in viewership and production costs are soaring that the results will not be good. My guess: When Megyn’s contract ends she will leave NBC to “pursue other opportunities” and Andrew Lack will resign to “spend more time with his family”. I could be wrong but I have seen this movie many times before and it rarely has a happy ending.
Ask Mr. Seifert
I am constantly asked questions about trading and how to exploit certain market factors to insure success. Each week I will answer one of those questions with a short paragraph.
Is there a way to write covered calls without the risk of losing my stock?
Yes, there is. Covered calls have always been a favorite of investors, but they had one major drawback. If the stock had a large rally, you could lose your stock at a low price and not participate in the large gain. If the market was in congestion, the covered call strategy provided a way to enhance one’s yield but if the stock broke out of the trading range, you either lost your stock or lost your downside protection. However, in the past five years the SEC has allowed investors to trade weekly options and this has been a game changer. The trick to success is to learn how to use vertical credit spreads to protect your downside and at the same time guarantee that if the market rallies you participate in most of the gain without the risk of having your stock taken away. I developed a strategy several years ago that I call the 21st Century Covered Call Strategy. It is one of the Optionomics’ subscriptions. To check it out, click on it at the top of the page. There you will find a booklet that describes the strategy in detail. You can try it for FREE for the next two weeks.
The Wise Guy Report: The View From The Electronic Floor
Each week I talk about how the Wise Guys (floor traders) are finding soft spots in the market to take advantage of price dislocations in one of the following major commodities: Gold (GC), Crude Oil (CL) or Long-Term Interest Rates (ZB). Let’s look at last’s week price action from the electronic pits in one of the three major commodity markets, the Ten-year Bond which is in a bear market at this time.
With U.S. Equities calming down and the Crude Oil market cooling off the next big issue is the Fed and how they are going to handle the unwinding of QE. After years of cheap money that helped to drive up Real Estate and equity prices the Fed was going to have to raise interest rates to stop the risk of inflation. It appears that the market found that the 3% level was as much as it can handle right now. I know that it seems high but when I got in the business in 1978 (40 years ago), the fed funds rate reached 20% and the 10-year bond was yielding over 8%. So far, the Fed has managed the unwinding of QE without having significant effect on equities or housing prices, but they have trillions of dollars to go before the job is complete. Let’s hope that they can unwind it with the same skill as they put it on!
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I offer a FREE Two-Week trial to the various subscription services with no cost or strings attached. Each strategy is explained in a 5-7 page booklet which includes sample weekly recommendations and model portfolios. I doubt that you have ever seen anything like this. During your FREE trial, you can paper trade the various strategies and get a feel for the deal without risking a penny. Simply click on the appropriate tab at the top on the Optionomics’ Home page to access the informative booklets and then sign up for one or all of the weekly subscriptions.
- The Bullish – Bearish Credit Spread Strategy: The nuts and bolts of trading weekly credit spreads.
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- The Low Cost Put Hedge Strategy: Sleep at night knowing your portfolio is protected for little or no cost.
- The Earnings Trade: Trade potential big movers with little or no downside risk.
- The One Day Wonder Trade: Get ready for some real action. A one day trade with great results.
Each Monday morning by 10:00 EST, the plays for the upcoming week plus updated model portfolios for each strategy are posted on the site. The prices in the reports are Monday morning’s opening prices. In addition, I have a webinar on Wednesday where I discuss various option strategies, what is happening on the floor and answer any questions that you may have. Don’t worry if you miss the show. They are archived on the site. Sound Good? Good! You can subscribe to one or more of the subscriptions for only $20 per month on a month to month basis with no contract or strings attached. I think you will agree that this is a super offer so give it a try. Click on optionomics@marketedge.com to access the Optionomics LLC web site and get started today doing what the pros do – “Sell Them – Don’t Buy Them’.
Mr. Seifert