Sunday, May 16, 2010

5/17/10 Summer's Almost Gone



Summer's almost gone
Summer's almost gone
Almost gone
Yeah, it's almost gone
Where will we be
When the summer's gone?

Morning found us calmly unaware
Noon burn gold into our hair
At night, we swim the laughin' sea
When summer's gone
Where will we be
Where will we be
Where will we be

Morning found us calmly unaware
Noon burn gold into our hair
At night, we swim the laughin' sea
When summer's gone
Where will we be

Summer's almost gone
Summer's almost gone
We had some good times
But they're gone
The winter's comin' on
Summer's almost gone


Seoul's down over -2% right now. It may even pierce the 200 SMA before the night's over.

'Calmly unaware-' what is that, another way of saying 'blissfully ignorant?' What we should strive for is to be 'calmly aware-' a market survivalist state of mind.

139 comments:

  1. Sorry to hear about the Sharks, Mark.

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  2. Nikkei about to join Seoul in the 2% breakfast club.

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  3. Everyone here is ready and waiting for Black Monday, right?

    With so many bears talking minus 10-25%, can it still unfold? I think so.

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  4. 2nd- I think all we have to do is watch X. It's made higher highs and higher lows the whole way. If it breaks the 200 that pattern is also broken.

    Anyone on the west coast...60 Minutes piece on the gulf spill.

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  5. From the WIR-

    "What the world needs today is a national leader like a Rudy Giuliani or Eliot Spitzer – someone who will go for the jugular, but also means well. The people need a hero, and I’m not referring to a former body-builder turned into marshmallow by his fellow legislators."

    I'm a Spitzer advocate myself, as you all know. Note that Spitzer didn't try to pull a John Edwards. Or even a Bill Clinton.

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  6. Shanghai not to be left behind> minus 1.94% and closing in.

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  7. Shanghai -2.29%. Nikkei -2.29%. Hang Seng -2.48%. See a pattern?

    DJIA futes -93.

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  8. Not too much good news to be discovered out there is there?

    Electricity consumption up 21% in China...

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  9. Assuming J6P is REALLY on the side lines, and the money center banks are holding all the cards, those sell programs can move rally fast. Perhaps we are starting to see the unwinding of the Yen carry trade. That's some serious money in play.

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  10. For those who care about such things, S1 for the ES is 1119.50. S2??...1103.75.

    http://www.screencast.com/t/M2Q1ZTdlMW

    I'm putting extra coffee in the pot for tomorrow :)

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  11. Mark - Who's in that photo, looks like Tina Turner!

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  12. CP- Close!! No, that's Kahn!! Who I thought looked like Rod Stewart in a post 2nd did a few days ago. Have a good weekend?

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  13. Yep, the weather was cooperative for a change, the first completely dry weekend we've had in several.

    I still say that's Tina Turner, Kahn has a much softer(babier) face than that. ;)

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  14. I just realized, that gap up from Monday was filled during Friday's selling spree...

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  15. HEK - If I didn't know any better, kinda looks like a buy here.

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  16. chicken - i'd be careful on ANY longs right now.

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  17. TOF - Yes, risk is very high right now, looks like we're going to gap down en la-manyana.

    Congress will be voting on the Volcker rule this week, right?

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  18. Guys,

    If you'd known about this black monday thing you should have mentioned something last week:)

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  19. RoBear: buying SCO and VXX when oil was at 86 were great entries. Can you please let us know in the future when you open multi-day positions and explain why you are opening them? I am not a daytrader, and thus I am very interested in hearing about new multi-day positions that someone thinks are worthwhile. Thanks...

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  20. DJIA- now it's 8 hours later, and futes up +2.

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  21. In spite of a -5% drop in Shanghai?

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  22. Like magic, huh?

    Get a whiff of panic coming round the globe, and MAGICALLY, as if GOD himself said "thy market shalt not drop in panic", it all is green before anyone wakes up...

    A wise man, instead of questioning *IF* it was rigged, would investigate at what point the magic appeared, so that he might add a fudge factor to it and anticipate it next time.

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  23. OK, futes now moving in the right direction...

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  24. Bob,

    That's what I tried to do Friday afternoon....Unfortunately I guess I picked the wrong stock:)

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  25. Landry-

    Random Thoughts:

    Ash clouds, airline service worker strikes, and lost luggage (twice!)...but somehow we made it home. Special thanks to my wife Marcy who runs 4 miles a day. Without her running from gate to gate, we would not have made this "Amazing Race" home.

    The trip was a good one. In my "off" time, I was able to meet with traders, exchange officials, and vendors from England, France, and Italy. I picked their brains about electronic trading. The consensus was that it's here to stay. They seem to think that they have better control systems (than us) and that we will likely over regulate. It'll be interesting to see how it all unfolds.

    Back to the markets:

    Friday's selloff suggests that the rally is only a retrace one.

    Ideally, I'd like to see new highs so we could forget about playing the short side.

    Unfortunately, at least for now, it appears that's not going to happen.

    The indices have taken on a First Thrust/Gatekeeper appearance.

    Considering the above, look to fire off a short or two.

    As usual though, wait for entries.

    Ciao!

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  26. Back to 5.94 on TZA? Taking a flyer...

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  27. I know, I know...

    Just walked in. Threw a red on the pass line. That's it.

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  28. TZA- off at 6, back on at 5.93...

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  29. TZA- off at 5.94, back on at 5.87...

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  30. Wow you really are throwing chips:)

    I wish I were an online broker:) Then I would actually make $:)

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  31. TZA off @ 5.90.

    Like speed ping-pong.

    OK, done for the morning. Back to work. See y'all later...

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  32. ES right at the PP and globex high...so what does it do now....

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  33. Fucked in the ass by PAL

    It looks like it's really trying to break it's uptrend.....Chicken:)

    I'm going for a hike in the woods.

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  34. I should call it "prison PAL":)

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  35. Wow TZA getting it done.

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  36. Well, there's your answer for now :)..That was quick.

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  37. I am a little nonplussed as regards the price action in PAL.

    I'm a frigging victim of my own stop setting.

    See what happened was, there was a predatory slamdown of the bids tricking many into thinking that hey, PAL is breaking support, thereby hitting my stop, cause there's only so much you can loose.

    Of course, at the time the indexes were slamming green and palladium futures were rising fast, so why should I be suspicious?

    Now we're going into the toilet bowl and ....duh, that's the signal for the stock to rise.

    Why I'll be a monkey's uncle!

    Bloodsuckers!

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  38. oh that is just frigging thievery.

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  39. tza performing like a new girl just off the bus trying to break into movies.

    yowza!

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  40. Don't worry "PAL" I'll pick up the wet bar of soap:)

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  41. LOL, shark, the imagery!

    Bought TZA starting too early, added till ran out of margin in trading acct (1.2mm) at 5.89, then went long with IRA acct at 5.89/5.90, sold at 6.02 to 6.05 for over $4k in profit.

    AND NOT GIVING IT BACK, lol

    EOD (end of day)

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  42. PS: and that sure beats being long 50k, seeing the position under water by $4k, and having to take lumps. I just said the hell with it and threw the IRA acct into the panic.

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  43. Volume--Not too many people playing today.

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  44. Bob- Yeah, sometimes you just have to take out second gun and blast away...

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  45. Yeah, to make up for the stupidity of buying too early on...

    long at 6.02 again now

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  46. So nothings going to happen today until the close, if then?

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  47. Yeah, I got this market figured out now.

    (a) Wait for a really big move up/down. Give things a few weeks to settle down.

    (b) Then go short/long. Stay that way until it's gone far enough for a decent long-term gain.

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  48. Damnnn Cheapy... $1.2M as in Million? Get me some of that cash!

    Anyone looking at longs? If so, I'd recommend GCI. I've been liking this turnaround story for about 4 months now. The stock has basically traded sideways in that time, although it has made higher lows and higher highs. JPM just bought a 10% stake in the company. Sentiment is negative on the sector (newspapers) but a lot of their competition has gone out of biz and they generate significant free cash flow (about $900 Million per year vs $3.9 Billion market cap). The company should earn $2.20 to $2.50 this year and they pay a 1% dividend that in my mind could go up to $1.50 in a few years after debt is paid off. They're paying off about $800 Million per year in debt and are down to $2.8 Billion now. The company is a cash cow. And they're moving more and more toward digital/online business, with about 35% of their revenues coming from there. They own Career Builder.com and Cars.com, amongst many others.

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  49. Time to find a more challenging sport ;)

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  50. long a starter position in GCI at $16.4...putting this in the longer term time frame.

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  51. Edit: Added more GCI at $16.27. Will add more in a few days if it dips to $15's.

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  52. TOF- I'll look at GCI tonight, thanks. What are your price targets?

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  53. Small consolation:

    The screwdoodling I did receive occurred higher than the current price:)

    Therefore whoever bought from me got fucked also. A little psychic comeuppance.

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  54. Bidding PAL @ 3.74. Good support there with the 200 just below it for a stop.

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  55. TOF, wish I still owned it, at $6.19 now

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  56. PAL - Wow, what the heck happened?

    I don't know, but it just doesn't look like we're going to see higher prices today... unless of course this is a shakedown prior to a closing rally which I wouldn't count on.

    More like a slow painful death, somebody call the undertaker.

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  57. Oil seems oversold, don't it?

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  58. Maybe we get a Slo-Mo Black Monday.

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  59. Not even close to thinking about going long. It would have to drop below 10k for me to think about a bounce play.

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  60. Hey 2nd.

    What's good?

    tza may be good for a lot more today. Hold it if ya got it.

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  61. Added a little more GCI at $15.90. Company is now trading at 4 times free cash flow.

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  62. hey 2nd....where did you get this black monday shit and why does it seem to be actually happening?

    Cause Asia sold off like Ron Jeremy?

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  63. Mark - I think GCI is worth $25 to $30 right now. As they continue to pay down debt the company will reduce interest expense and therefore increase earnings. They paid $40 Million in interest expense in q1. That is an additional $0.17/share per quarter in earnings. They could use this to pay dividends. Assuming they continue to pay down debt they should be done paying it off in 3 years. And that's if the economy doesn't pick up at all. If it does they will make more money and pay off debt quicker.

    In my estimation the company has the earnings power right now to pay a dividend yield of 10%.

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  64. Shouldn't they call it red Monday? I mean red is down right?

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  65. If I'm you I pull any PAL bids.

    the metal is crashing now.

    and the stock don't look so hot.

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  66. hey aren't you guys gald you made 2 cents in tza earlier:)

    Ok I am being an asshole I know. That's what my mom would say to me:)

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  67. Marked to fantasy? Looks like someone's selling using market orders(mark to market).

    Congress votes on financial reform this week, right?

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  68. Ok, last opening position on GCI for the day...bought some more at $15.68. Average is probably around $15.90.

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  69. OK I lied...I bought a few GCI July $14 calls at $2.5 and June $15 calls at $1.5.

    My position is getting close to full for this one...

    I'm also thinking about putting a little of my cash at the close into the SPY fund in my long only account. I held off on Friday to see what today's action is like and I think at 10% down its a decent time to start putting at least a little money to work in case everyone's 25% down correction call is wrong.

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  70. I'm galled and appalled at why this market won't just go ahead and sell off.

    These daily 10% swings are getting monotonous.

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  71. I've always enjoyed reading this guys' market outlook...he thinks the market sell off is reaching its bottom:

    http://www.raymondjames.com/inv_strat.htm

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  72. Boy, TCK pooped right through it's 200.

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  73. TOF, your analysis of GCI assumes that the next two years will unfold as extrapolation of the previous year, right? What if the next year will unfold as 2008, with a gradual slowdown in the global economy until it comes to a halt with a full-blown recession in Europe that spreads all over the world? I am sure the stocks are falling now partly because the investors are giving more and more weight to the future unfolding as a negative spiral as opposed to a positive one. How do you think GCI would fair if the banks and the economy start getting stressed out again? Is it recession-proof?

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  74. TOF- NLS is at an interesting technical area.

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  75. Someone please slap me, but I'm looking at MON again. LOOKING....

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  76. UNG is still the little engine that could. It refuses to go down.
    Bob

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  77. This morning TWM did hit my sell stop limit order at $18.50 for 100 shares out of the 200 share position I opened last Monday at $19.50. I guess that's why I am reluctant to set stops. I just increased my sell limit order for the other 100 shares to $21.50, so as to compensate for today's loss on the first 1/2 of the 200-share TWM position I opened last Monday.

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  78. I decided to be a little more careful about adding to UCO, and instead of buying 100 more shares earlier this morning at $9.65, I figured that I would rather sell some UCO $10 puts. So I sold 3 June $10 puts for $1.15 each, which would allow me to add to my UCO position at $8.85 (or to pocket $345 in options premium). In some sense it is easier to make money by selling options, since if the UCO shares are assigned to me at the effective cost of $8.85 (with UCO below $8.85), then all I would need is for UCO to rally back to $9, at which point I'll sell 3 $9 covered calls on UCO (say for $0.85) and will exit that 300 share position with a decent profit or will reduce my cost basis on that position yet again.

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  79. Scottrade down or just my computer?

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  80. Mark - NLS is definitely at an interesting point. I was looking at it a lot today but I can't get myself to buy it given all of the risk in the markets (so I would rather be in a more liquid stock). Having said that, I actually thought the company had a decent earnings report and is definitely on the right track in turning around the company. They are beholden to the credit markets, though, because a lot of their customers can't get access to credit to pay for their machines. They said so in the conference call. However, they also said they are in talks with a bank to provide that credit.

    David - regarding GCI and the economy...I'd argue that there is no way in hell we will see as bad of an economy as in 2H 2008 through 1H 2009. And during that time period GCI paid generated $850 Million in FCF in 2008 and $800 Million in FCF in 2009.

    I think the question should be "What if the economy continues to gradually improve?" If that's the case then GCI is very undervalued and has the potential to significantly increase its dividend.

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  81. David, Great minds think alike. I am thinking of jumping into uco. Got that driving season coming up.

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  82. TOF, why was GCI trading at $3 in July 09? The Armageddon story was finished at that point and US was on the path of slow recovery. GCI must have been having some problems at that point to be trading that low. Do you know what those problems were?

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  83. RoBear, your SCO entry was right on time, so let me know when you actually jump into UCO and I'll add to my position at that point. :)

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  84. TOF- Good point about the liquidity. It gets a little hairy when your holding 1/2 the daily volume :)...been there.

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  85. At an impulse, I just sold 100 shares of TWM at $19.05 (those that I purchased at $19.50) and set a buy limit order at $18.25 for 100 shares. Something told me that I might be able to reload TWM at better prices.

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  86. Looks like I wasn't the only one watching MON. I'll have to set aside my feelings over being slapped by her....twice :)

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  87. I'm leaning more and more to taking my equities allocation down to 40% and my cash down to 10% and buying 2-3 homes in my area - I just cannot seem to get a grip on this market, plus I've already missed the gold rush.

    either that or I will double down on my DIG position...:)

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  88. What's really strange is T's are weak along with gold.

    Is today just a flier?

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  89. V- Just too much up in the air right now??

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  90. Well, Europe closed essentially flat so that's got to count for something.

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  91. JB- What % of cash would you have to put down for break even cash flow?

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  92. Just look at how many stocks are just above at or below the low of 5/6 or SP 500 of 1065 vs today of 1126.84.

    Individual stocks are much weaker than the indexes indicate.

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  93. Hey Mark - would pay cash for the properties. 150k homes are renting for about 1500 a month.

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  94. JB- That's an amazing ratio...but you know how I feel about owning them out right.

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  95. The idea of being a landlord is not very appealing to me. At one time I have three condos here in the mid 80's. The quality of the experience is all dependent on the quality of the tenant.

    The economy is going to continue to weigh on people's ability to get or keep a job thereby making it another hard variable when accessing potential renters.

    I can also contemplate real estate prices staying lower than people expect for a long time.

    Interesting prices have not really fallen that far here in paradise and sales have increased at lower prices. Foreclosures are rising recently.

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  96. David - The stock was down at $3 for probably a variety of reasons, none of which were true. The two most prevalent were:

    (1) everyone was trading the double dip recession then...remember? head and shoulders set up on the S&P?

    (2) people thought (and still think) that newspapers were going to be extinct...

    The company earned $0.46/share in the July 2009 quarter alone so their demise was greatly exaggerated. Since that time the company has paid off $600 Million in debt and continues to earn $0.50 or so per share. In addition to this, some of their weaker competitors have gone out of business so their customer base has fewer newspapers to choose from when advertising.

    While the newspaper industry is shrinking, the number of players is shrinking as well. And the bigger players should stand to benefit somewhat because of this. It all comes down to valuation, though, in my mind. And at 4 times free cash flow, I think the price is really cheap.

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  97. I'm not either t3d, but the wife's retired and has a ton of time on her hands, trying to kill two birds with one stone.

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  98. JB, a 12% gross return does seem appealing, what would you estimate your net return after customary costs?

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  99. How in the hell is the S&P green with energy/financials in the toiety???

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  100. moving 1/3 of my cash into the SPY index fund (50%) and the emerging markets fund (50%) in my long only account at the close.

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  101. my set aside would be between 100-200 per month, repairs, delinquncy, etc....so net net I would be looking at an annual return of 10.4%...

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  102. geez...NLS was the buy Mark. Look at that bounce as soon as it touched the 200 DMA. I think it will retest that level again at some point though. If the company signs a bank to extend credit to their customers then the stock probably won't retest that level...that would be a big positive to the company. The conference call clues us in on that.

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  103. UCO went long at close 9.73. I am calling it a double bottom set up with January lows. Dont know if chartology works that great with 2x etfs, but risk reward is not bad.
    Robear.

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  104. Looks like I'm not alone, there. Dollar looking toppy, IMO.

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  105. UCO...I was waiting for WTIC to hit 68.

    RB- Could also call it a triple bottom back to Sept.

    NLS- Yep...BOING!

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  106. damn, f'ing around with other sh*t and I didn't grab uco or dig....good job guys

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  107. Mark- You've been hanging out with the little guy too much- the 'toiety?'

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  108. it's freaking daytrading heaven right now. you can't really make a swing trade without getting serious whiplash...

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  109. jb said...

    "my set aside would be between 100-200 per month, repairs, delinquncy, etc....so net net I would be looking at an annual return of 10.4%... "

    Have you included property taxes in this figure? I'm not sure how to approach the subject of keeping tenants, I'm hearing folks are choosing to rent as opposed to own these days but haven't verified the trend.

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  110. yes, CP that includes taxes. around my parts renting is on the upswing big time.

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  111. jb - I think it's possible if you stay on top of it and have a well defined lease. Renters can be hard on a house, those are the ones you don't want.

    Of course you'll have to paint and replace carpets, etc... roof eventually. A low maintenance exterior like stucco, stone or brick goes a long way toward keeping costs down, just as roofing materials.

    I was into being a landlord and in all fairness did ok at first, but it became very difficult after moving across country from my properties b/c every time something needed to be done it cost me out the wazoo and keeping an eye on the place was an impossible task.

    Not trying to talk you out of it b/c it could work well, just saying it takes dedication.

    Also, make sure to include in your lease, a provision requiring any disputes must be adjudicated in the county of the residence.

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  112. GCI - Apparently Buffet's been selling:

    "OMAHA, Neb. (TheStreet) -- Warren Buffett's Berkshire Hathaway(BRK.B) got out of health insurance and into garbage collection and medical devices during the first quarter of 2010.
    According to the seasonal disclosure of its investment holdings, Berkshire killed its stake in WellPoint(WLP) during the first quarter, selling all 1.3 million shares. Buffett's holding company also liquidated sizable stakes in UnitedHealth Group (1.2 million shares) and regional bank SunTrust(STI) (2.4 million shares).

    Buffett continued to sell shares in Gannett(GCI), and notably sold stock in Kraft(KFT), a long time Berkshire favorite that came under fire from Buffett for its purchase of Cadbury. "

    http://www.thestreet.com/_yahoo/story/10759022/1/buffett-dumps-health-insurance.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

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  113. TA (the stock) is back on the watch list.

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  114. Sold the UCO for about $600 profit

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  115. Chicken - Buffett has been selling stocks to raise cash for the BNI buyout. I wouldn't pay too much attention to his most recent sells.

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  116. Cheapy - are you moving your profits out of your account each day? that's the only way to insure you're not going to lose them later on.

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  117. TOF, all accounts except one small one are at all time highs.

    I don't take the money out of the trading accounts mostly because its too much hassle.

    I lose money sometimes, just like anyone else, but try to limit the losses to manageable amounts on quick trades. On longer term trades or investments I use accounts, like my IRA that I don't typically look at, and only go look when I'm going to sell.

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  118. Mark,

    I think the entire AG space was in a bubble that rivals housing since the ethanol craze. I believe average PE ratios in this space, pre-ethanol was around 10. Still now their valuations are in Apple territoriality. This correction in Agriculture is probably a regression to the mean and there still is a long way to go to reach the mean. MOS, Mon and Pot are companies I would like to own, but hoping for a cheaper price. Check this analysis out.
    http://app.ockhamresearch.com/Industrial-Materials/Agriculture/Agricultural-Chemicals/MOS

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  119. I kinda agree with RoBear after watching the action in them lately. I mean, MON most likely isnt going to hit its profit targets for 2011...do people really want to pay 15 times earnings estimates that are going down? Not sure.

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  120. RB- Interesting take, thanks. I'll check out the link.

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  121. TOF - Excellent observation on Buffett's need to raise cash, perhaps selling pressure for these will now relax.

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  122. TA - Looks like it's another buy to me.

    It's difficult to believe so many stocks are this beat up, too good to be true....

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  123. RE: TA (Travelers of America) - I was looking at this one a while ago...they have a big problem in that they are completely tied to the price of oil. Their margins are razor thin on this side of their business, which accounts for a bulk of their sales.

    I'm assuming you're talking about the same company, right?

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  124. Congratulations Ca. Assembly for getting the tough work done!!! New legislation passed today that mandates "Firemen" now be called "Firefighters".

    Good thing that dicey issue is out of the way so they can concentrate on the budget.

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  125. TOF- TravelCenters, but that's the one. First quarter results were crappy, and something seems strange how they deal with fuel prices. Not typical.

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  126. I raise my glass in a toast to the Ca. Firemen! A shout out for a fine job accomplished by the Ca. assembly, now they should go home before they get a sudden urge to spend more money the state doesn't have.

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