As stated in my February 2023 Market Review, Outlook, and Commentary from earlier this month, in my view the next Bull Market has started, albeit tenuously. It may not be a rip-roaring bull market in the manner of 2020 and 2021; however, the technical indicators and overall trend in inflation and interest rates justify a shift in the trajectory of the market towards the positive side, at least for most of this year. With that in mind, here are the changes I have made to my own Market FIRE-optimized stock and options portfolio for early 2023 through the end of February, compared to my last portfolio disclosure from the start of the year.
With the near-term pull-back in the market during the month of February, I have used the early part of this month to liquidate long stock positions that I no longer wished to hold, after having closed any outstanding covered call options against those stock positions. Gradually as this pullback has progressed and with the proceeds from having liquidated the afore mentioned former long stock holdings, I have also expanded a long stock position in one pre-existing holding and sold short cash-secured puts in exchange for elevated premium in other companies in which I already hold stock. I currently intend to eventually allow for these short put options to be assigned if they do not decline in value to the extent that would justify closing them at a profit. I have also acquired a small number of long call options in order to form a collar position to hedge certain covered call options that have been deep in-the-money for several months.
Here is the table from my prior 2023 stock disclosure from January, with positions that have been liquidated indicated by strikethrough font:
| Company | Ticker Symbol | General Description |
| Advanced Micro Devices Inc. | AMD | Technology (Semi-conductors) |
| AirBNB Inc. Class A | ABNB | Technology/Consumer Discretionary (Travel) |
| Amazon.com Inc. | AMZN | Technology/Consumer Discretionary (Ecommerce) and Enterprise Cloud |
| Arch Resources Inc. | ARCH | Commodities and Energy Exploration (Coal) |
| Berkshire Hathway Inc. Class B | BRKB | Financial Conglomerate |
| Citigroup Inc. | C | Financial (large bank) |
| Cleveland-Cliffs Inc. | CLF | Materials (Iron Ore Exploration and Steel Production) |
| Devon Energy Corp | DVN | Energy Exploration (Crude Oil and Natural Gas) |
| Freeport-McMoran Inc. | FCX | Materials (Copper and Gold) |
| General Motors Co | GM | Industrial/Consumer Discretionary (Automobile production) |
| Global Foundries Inc. | GFS | Technology/Industrial |
| GXO Logistics Inc. | GXO | Industrial/Technology (Logistics and ecommerce) |
| Ollies Bargain Outlet | OLLI | |
| Paypal Holdings Inc. | PYPL | Technology/Financial (Fintech)/Consumer Discretionary (Ecommerce) |
| Piedmont Lithium Inc. | PLL | Commodities (Lithium) |
| Range Resources Corp. | RRC | Energy Exploration (Natural Gas) |
| Roblox Corp. Class A | RBLX | Technology (Gaming) |
| Shift4 Payments Inc. Class A | FOUR | Technology/Financial (Fintech)/Consumer Discretionary (Travel and Restaurants) |
| Uber Technologies Inc. | UBER | Transportation/Technology/Consumer Discretionary (Travel) |
| Walmart Inc. | WMT | Consumer Staples (Retail) |
| Wells Fargo & Co. | WFC | Financial (large bank) |
Long Stock Position Liquidations
As this modified chart of stock holdings indicates, I have liquidated my entire stock positions in Bed Bath & Beyond (BBBY), Goodyear Tire (GT), Pfizer, (PFE) and Tesla (TSLA).
Bed Bath & Beyond (BBBY), as indicated in my previous January disclosure, was a very small position that was essentially intended as a short-term revival of a former much larger holding from when the company had much stronger fundamentals, after which I exited the earlier position with a large profit. During the time of this most recent holding of BBBY, I was able to extract in covered call premium most of the capital devoted to the long stock. With the drumbeat of news stories indicating an imminent bankruptcy filing by the company (which still has not occurred even as the company closes an ever-increasing number of physical stores), I decided to sell what little position I had in the company before it became completely worthless.
Goodyear Tire (GT) is an industrial/consumer discretionary stock that I had held for about 1 1/2 years, and during this time it consistently underperformed the broader applicable sectors (especially the industrial sector), as the company dealt with the fallout from various legal difficulties and experienced underwhelming earnings. Having determined that company-specific issues would likely continue to cause competitive problems that would lead to further market underperformance, I decided that my underlying capital could be better used elsewhere and that I should free up the cash that was tied up in this stock.
Pfizer (PFE) is a stock that, unlike GT, appears to have strong fundamentals, but nonetheless it has been underperforming in the pharmaceutical/healthcare sectors during the previous year. After strong early performance during the early part of my ownership of the stock in 2020 during the COVID-19 pandemic, its financial reliance on COVID vaccinations and treatments appeared to cause its stock performance to suffer by late 2022 and early 2023 as the pandemic subsided. Pfizer’s “pipeline” of future drugs appears to be favorable, but it does not appear to have any likely “blockbusters” as the company had experienced with Covid vaccines and treatments. The company has been in an unmistakable technical downward trend from a technical standpoint. I did not believe that this downward trend would be likely to reverse in the near future, especially as outright defense sector stocks (including healthcare) may themselves underperform in new bull market.
Tesla (TSLA) is a stock that I sold at a gain after having held it since late 2020. Recent performance included a severe drop at the end of 2022 that caused my position to temporarily be an unrealized loss; the stock’s early 2023 comeback allowed me to lock in a large gain during a period that I believe will have continued volatility. In the short-term, I believe that TSLA’s high valuation and increasing competition in the EV space will put downward pressure on the stock. Nonetheless, with its high (though declining) profit margins, continued leadership in the EV space, and continued advantage in battery and semi-autonomous driving technology, my longer-term outlook for the stock remains positive, and I am open to again acquiring long stock shares in TSLA at a lower price. I may decide to play shorter-term movements in its stock price through short puts or long calls, but I have yet to do so.
Long Stock Position Additions
During this same period, I have added to my pre-existing long stock position in GXO Logistics (GXO). This is a company that manages and automates warehouses for ecommerce companies and the distribution divisions of brick-and-mortar stores. It has been consistently expanding but still has reasonable trailing and forward price/earnings ratios. As a hybrid industrial/technology/consumer discretionary play, it appears to be within sectors that should enjoy strength based on my overall market view, with an economy expected by me to continue growing to some degree but with ongoing elevated (though mostly declining) inflation. I continue to have strong conviction in the underlying strength of the company from a fundamental standpoint, as well as strong conviction in the expected performance of the company’s stock. Additionally, after having been on a downward sloping trend in the second half of 2022, the company was experiencing a rapid share price gain in January and early February that seemed to indicate a positive technical shift upward, even as there was a pullback along with the rest of the market in February. I believed this was a good time to buy more of the stock, before other analysts may jump on the bandwagon, and so I acted accordingly. (I have held off on writing covered calls on my new shares until a new run up in price occurs.)
Short Cash-Secured Put Options Related To Existing Long Stock Positions
I have sold short cash-secured puts in Advanced Micro Devices (AMD), Shift4 Payments (FOUR), and Ollies’ Bargain Outlet (OLLI) to potentially add to long stock positions in this companies, while in the meantime having collected elevated put call option premium. As with GXO, these stocks all appeared to have changed their trajectory from negative to positive before experiencing what I believe to only be a partial pullback in February. As with GXO, I believe these three companies are likely to continue rapid rates of market expansion even as they are reasonably valued relative to other companies generally in the overall market and specifically in their sectors.
AMD continues to expand its market share in semiconductors in areas in which it is in competition with the troubled intel (namely in PCs and data centers), even as it may enjoy continued secular momentum due to its use in newly popular artificial intelligence (or AI) applications. Though the core PC and data center parts of the company’s sales may be under cyclical pressure, it is believed that the bottom of the CPU and GPU chip segments is within sight and should be counteracted in AMD’s case by strength in the AI-subfield.
Shift4 Payments (FOUR) also continues to expand its market share, and it does so in its areas of historical emphasis of restaurants and hotels, which continue to be favored areas of the economy on which consumers continue to spend increasing amounts of money despite macroeconomic headwinds. It is also considered to be a small- to mid-cap company, which in the early stages of a new bull market is the type of stock that usually outperforms, as other companies of this size have also done since the start of 2023.
Ollies‘ Bargain Outlet (OLLI) likewise continues to expand its store count and sales in the area of discount retail, which should benefit from the current and expected near-term future macroeconomic situation. People of all income levels have been “trading down” in their choice of retail outlets in order to save money in order to deal with ongoing inflation and slowing levels of economic growth. Other companies such as Walmart and TJX have benefitted from this trend. Ollies’ similarly should benefit, even as its stock price is well below its pandemic-era highs due in part due to recent execution issues related to supply chains that are believed to have been corrected. As with Shift4 Payments, it is also a relatively small- to mid-cap company that should outperform relative to peers if this indeed is the early stage of the next bull market.
Closed Covered Call Options At Profit
During the early portion of 2023 through February, I closed covered call options at an acceptable profit in Arch Resources (ARCH), Range Resources (RRC), Devon Energy (DVN), Paypal (PYPL), and Freeport McMoran (FCX). In turn, to date I have written new covered call options for ARCH, RRC, and PYPL. I still have shares for DVN and FCX now available to have covered call options written against, along with the afore mentioned added supplemental long stock position in GXO. These option sales will await additional stock price appreciation, with an intended targeted RSI level of between 50 and 60.
Long Call Options
During this same period, I also bought long call options in Arch Resources (ARCH), Walmart (WMT), Shift4 Payments (FOUR), and GXO Logistics (GXO) in order to hedge against my short call options. I have had covered call options for all these underlying stock positions that have either been deep-in-the-money for several months or were in-the-money and at risk of becoming deep-in-the-money. The long call options acquired during this time were meant to complement the outstanding covered call options so as to form credit call spreads. I closed the long call option for ARCH after it had a post-earnings release rapid pop in stock price, and also in turn rolled up and over the covered call option that itself was nearing expiration.
Rolled Over Covered Call Options
Also during this early 2023 time period through February, I rolled over covered call options that were not otherwise sufficiently profitable for AirBNB (ABNB), Advanced Micro Devices (AMD), Amazon (AMZN), Arch Resources (ARCH), Cleveland Cliffs (CLF), Freeport McMoran (FCX), General Motors (GM), Global Foundries (GFS), Ollie’s Bargain Outlet (OLLI), Paypal (PYPL), Shift4 Payments (FOUR), and Piedmont Lithium (PLL). Among these, the covered call options for ABNB, ARCH, AMD, AMZN, FCX, GM, OLLI, and PYPL were rolled-up, insofar as the new covered call options that I wrote for the same underlying stocks were at higher strike prices than the corresponding recently closed options.
It should be noted that the large number of roll overs for covered calls was necessitated by the sharp run up for stocks overall in January 2023. These actions with my covered call options allowed for capital preservation of appreciated underlying stock. Some of these new options are still deep-in-the-money, but not as much so as they were before the roll over and before the most recent February pull-back in stock prices.
Also note that some of the options that were rolled over are related to underlying stock associated with other options above on the list of options that were closed profitably. These options indicated on the two different sections of this disclosure are not duplicative but are rather meant to indicate separate options linked to the same underlying stock during this same time period.
A handful of existing covered call options are nearing expiration by mid-March and are thus on deck for soon being closed, though it is too soon to know whether that closure will be done at a profit or a net cash-wash with roll-over to newer options with longer-dated expiration dates. The options in this category pertain to stock in Advanced Micro Devices (AMD), Citigroup (C), Roblox (RBLX), Uber Technologies (UBER), Walmart (WMT), and Wells Fargo (WFC).
Stock Market FIRE.com 
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