Monday, June 30, 2014

06/30/14 The Tasmanian Bear

Extinct, or scarce at the very least.  We're approaching the outskirts of a trading zone I'm looking forward to.  Opening small positions in VXX (Volatility Futures) and HDGE (a bear fund I've highlighted in the past).  The plan will be to close VXX on spikes, but to accumulate a position in HDGE.

69 comments:

  1. I like it 2nd. I'm sticking with more overseas and beaten down us stuff. I think I was relying on the wrong info for the valuation of eem and when in doubt close it out. I sold my edc at 30.96 to 31 today for a small gain. I also saw GM dip and almost bought but still think it goes lower first. I'm looking closer at it and FIATY and be but valuations / entries could be better

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  2. I was actually wondering if we will get some weakness heading into the Alibaba IPO. That reminds me of the Facebook IPO but on a much larger scale. If memory serves me right from looking at it over the weekend we had some rough sailing heading into the FB IPO, then we bounce, and then ultimately made a bottom a couple of weeks later. Don't have the exact numbers. I wouldn't be surprised to see the same with BABA given just how massive it is. I believe it's scheduled for early August so maybe we have the same pattern: short term peak in mid / late July...

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  3. I'm making a list of all of the companies we use regularly in our lives. It's quite an extensive list...much more extensive than I thought. 49 stocks so far. Of these, there are 8 stocks that I would say we either use religiously or at least regularly...ironically or not they are all big winners:

    YELP
    Z
    CAKE
    GOOGL
    AAPL
    AMZN
    ZU
    VZ

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    1. I' m 73 and seldom visit any of those. Maybe GOOGL and AMZN once in a while. My search is by https://duckduckgo.com/ . More privacy.

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    2. I use GOOGL and VZ from that list and may break down for AAPL at some point but AAPL reminds me of Sony from back when Sony tried to take the world by the gonads.

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  4. My guess is FXI rips tomorrow and extends the July streak to make it 10 of the last 11.

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  5. Sne doing well in japan:
    http://www.marketwatch.com/investing/stock/6758

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  6. I'd swap CMG for CAKE, NKE for ZU, and add V to that list.

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    1. I actually was thinking of VZ, confused it for V

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    2. Yeah CMG is on our list too although I'm not a huge fan. ZU is a mom's website. I just see charges for that friggin site on a daily basis in my bank account. If it didn't have a $5 Billion market cap I'd consider it.

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  7. I have a funny feeling that the bottom falls out of GM at some point soon. Only reason is I looked back on valuations of GM back in the day and there were times it would trade at 4-5X EPS. Why not now when they're recalling half of their cars? Could provide a nice buying opp if it happens.

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  8. TBT - See what repeatedly happens immediately after I throw in the towel?

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  9. EDC - LOL, TOF same thing for you....

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    1. My lateral move out of edc and into balt and sne is down about 1% relatively speaking but there's hope!

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    2. Was $6.20 a bit ago, now $6.10 BDI back up to 894

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  10. 2nd- How big of a position are you considering in HDGE?

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  11. According to Z my home value has increased 22% from the last estimate....If someone knocked on my door and offered me that price I'd probably take it.

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    1. That's so you can pay hefty prop taxes.

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    2. That's the main reason I wouldn't sell. My tax basis is crazy low and most of the work I've done here isn't reflected in property taxes.

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    3. "My tax basis is crazy low" Maybe you fall under the 1978 PROP 13 criteria?

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  12. AGO - Gonna take advantage of this? "30-Jun-14 02:46PM Puerto Rico worries deepen on lawsuits, bond selloff Reuters"

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  13. DG - At least this thing's up.

    So has something changed, 1st of month buying or has some great news surfaced?

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  14. TZA - Thank God I sold at $14.25, sheesh...

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  15. BXE - Half position, which I paid dearly for @ $8.82......

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  16. Wow BALT ripping higher. Nice.

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  17. TOF,

    re GM, it is a cyclical stock and valued as such. The low P/E ratio's are typically near the top of the market when earnings are rocking, but people are too smart to pay up for them. But, with the current cycle, I think we have years to run for that because the average age of cars on the road is the oldest its ever been and people will want to get new ones as the job market improves.

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    1. The local junkyard is just packed with cars from the DC area, they have no place to put them so they get crushed almost right away. They're busy as hell crushing cars.

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    2. BB - I am somewhat surprised by the move in GM but in the face of a gargantuan move in the markets today I guess not. GM actually traded down around 4-5 in the early 80's if memory serves me right. I remember Peter Lynch was buying into them and commented about that absurdly low valuations...probably in the early 80's.

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  18. CP, probably not a bad buying opp for AGO. I'm still holding my full position:


    http://www.btigresearch.com/2014/06/30/assured-guaranty-ago-reiterating-buy-and-37-price-target-well-positioned-to-withstand-potential-impact-of-prepa-restructuring/

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    1. Maybe there was a reason Wilbur was selling? he sold his entire position in IRE too I believe.

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    2. Yep, I think it's a good opportunity. What was that other ticker providing health care in Puerto Rico?

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    3. GTS does the healthcare.

      The other one I've looked at some is BPOP (banking). It is also cheap assuming Peurto Rico is OK.

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    4. Hey thanks for remembering those. Kinda looks like money flows back and forth between GTS and AGO, must be a coincidence.

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  19. Another day of the market chugalugging higher.

    Ryan Detrick shows July the best performing month on average of this bull market - 3.67%

    http://stocktwits.com/message/24279429

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  20. GMO - Someone loaded the boat Friday, and I see a lot of volume spikes in many other tickers too, something was up IMO.

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  21. Also love how the twitter folks are piling on GM jokes. To me, that, plus the stock not going down, shows it is ready to move up pretty soon.

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    1. Yeah sentiment is a huge driver in these media centric stocks. Remember how much coverage BP and Toyota (foot pedal) had? Those were great long term entries. However, if you recall, both stocks took a long time to get going. I don't think there's any huge rush to buy GM. I could be wrong because the market is so hot but I'm betting we get a safer entry point than buying after it's up 20% from recent lows.

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    2. Could be. My cost was $33.60 in April, so it is always easier to hold when you have a lower cost (dumb, but true).

      Also, to me, the chart since December looks like it could be making a nice rounding or head and shoulders type bottom.

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  22. Sold out of the rest of my NILE at $28.6 and TLYS at $8.3X.

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  23. Added more BALT with my NILE/TLYS proceeds at $6.16.

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  24. Heavy buying in October $18 SNE Calls.

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  25. LEJU continues to rip. Love it.

    Watching CNBC. It's amazing how many people hate this market. They have these commentators / traders on complaining about how the Fed is the only reason the market is up.

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    1. It's one of the reasons I feel there's little downside in the market for now.

      I figure most stocks are in strong hands - people who have done research and want to own the company and will hold them through some downside. The trader types seem to be waiting for pullbacks to get in, but they aren't happening because the quick to sell crowd is out of stocks.

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    2. Yeah I think I agree to a certain extent. I do think there's excessive optimism amongst traders in the market. The idea of short selling is pretty much shunned. Doesn't mean we sell off but does make me a bit cautious. I have a bunch of holdings that I won't sell, though, but I'm not a buy and hold guy.

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  26. 2009 Fiat 1.3 MJT engine was sourced to a Indian manufacturer, TATA

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  27. Good numbers on car sales today, especially from FIATY. GM increased even with the bad news.

    Ford is weak now with their top-selling F-150 weak due to a new model coming out in the fall, so will be interesting to see if (especially) FIATY can keep these numbers going after the F-150 comes out or if they are just taking advantage of Ford's change

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  28. Also just saw this:

    The average transaction price for a vehicle sold in the U.S. fell 2.2% M/M and 0.8% Y/Y in June, according to Truecar.com.Perhaps a surprise given the overload of recall news, but General Motors (GM) was the automaker which showed the biggest increase in average transaction price over the last year (partially due to mix). Ford (F) and Toyota (TM) also scratched out gains, while Nissan (NSANY) and Volkswagen (VLKAY) went in the other direction.GM's level of incentive spending was also 11.9% lower than a year ago.

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  29. CP- Prop 13 still applies here, yes.

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  30. Nice reaction to hitting the 200 DMA for BALT. I didn't even realize that when I was buying it yesterday. If China outperforms in July which is does almost every year, I wonder if rates will rise significantly. The CEO of BALT hinted at a good second half for capesize rates. That would be nice.

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  31. RSI_EMA reading on the Russell 2000 futures was over 95 at the peak today, which is the highest it has been in the past 90 days, higher 3/14, 4/22, and 5/12. In other words, high as hell.

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  32. GM's market cap is a mere 2x that of TSLA's, imagine that.

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    1. FIATY is a dog compared to them.

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    2. If FIATY can turn Europe around, will be a big winner stock for sure.

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  33. (a) The size of a position in HDGE will vary, and will absolutely depend on what the market does.
    (b) Despite new highs in the US indexes, my watch list is currently populated with mining stocks. A pullback to the pre-Yellen spike (should it materialize) may be the next fat pitch.

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  34. Replies
    1. I would bet against that. Still 90% long. So much money has been lost by top callers like Hussman and Kass during this bull run that even when they are right, it won't get them back to where they should be.

      We still have low interest rates, an improving economy, and reasonable valuations. I don't see any reason why we should top out.

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  35. Wilbur Ross sold his last 10 million shares of AGO yesterday.

    I still think it is good, but will have to look at again in more detail as he is a very smart and successful guy and maybe the risk is higher than I think. Detroit is cleaning up nicely, but Puerto Rico is getting messy.

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  36. Good job numbers this morning which is helping stock futures and hurting interest rates.

    I think we were right a couple of weeks ago when we talked about the bottom in rates and TBT looks good here.

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  37. UUP - $US has really tanked this month.

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  38. NLY - Sheesh.... Probably should add here but will wait.

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