In many (if not most) cases, I won't really know the answer until after the fact. Which leads me to come up with a few thoughts re the past two weeks (in no particular order):
(a) It's often smarter to trade after the fact. My initial foray into CAF/FXI (and to a lesser degree, EEM) was driven by the 11/10 open of the Shanghai-HK Connect. I booked a paper gain of 2+% on CAF, but elected to hold well after 'reaction to the news' made it clear it was a 'sell.' I allowed (my errant) conviction to overrule discipline.
(b) The chase. With few exceptions, I won't chase prices. Gaps up and parabolic rises are fueled by emotional extremes (generally panic on the part of shorts). Friday's open was the latest instance. It's certainly possible we see further panic on Monday, but opening on a retrace/retest is the lower risk entry. My 'shorts' on Emerging Markets/US indexes (via EEV/HDGE) are a short term bet on lower prices in both on Monday. They are also high risk bets, and I'm appropriately sized down.
(c) The next trade. With respect to foreign markets, what is the next trade? In my opinion, announcements from China (via the PBoC) and Europe (via the ECB) are extremely bullish. Not because they signal economic strength, but because they undergird risk sentiment. And it's sentiment (and not economic reality) that drives the market. Traders who opened positions on Friday will likely be tested. I'll be looking to reopen positions in Europe and/or Emerging Markets on any weakness. No test, no trade.
Full plate on NFLX this weekend.
ReplyDelete(a) Peaky Blinders Season 2.
(b) Wallander Season 3.
Fantastic live performance by Chicago at Tanglewood in 1970:
ReplyDeletehttps://www.youtube.com/watch?v=UXb8ZDuICCs
Easy to see why Hendrix referred to the band and Terry Kath in these terms: 'Your horn players are like one set of lungs and your guitar player is better than me.'
MYTH #5: GUITARIST TERRY KATH DIED WHILE PLAYING RUSSIAN ROULETTE.
DeleteI had thought this one was put to rest decades ago, but I saw a couple comments somewhere within the two weeks prior to writing this in which people stated this myth.
Let’s examine all the angles of this. First, Terry Kath was the guitarist of the group, and one of the founding members (with Danny Seraphine and Walt Parazaider). Second, the guy was a freakin’ monster on guitar. He is my hero on the six-string.
So getting straight to it: Terry Kath did shoot himself in the head. But it was not suicide (in the strictest definition of the term) nor was it “Russian roulette.” The gun wasn’t even a revolver.
On the evening of January 23, 1978, Kath was at a party at the house of some guy named Don Johnson. Unfortunately, it wasn’t THAT Don Johnson; I think it was his guitar tech or something. So things have wound down, and I’ve read or heard from sources I don’t recall that Kath and this guy were actually going to start working on Terry’s solo album. (To greatly paraphrase Peter Cetera and add in my own assumptions based off of stuff I’ve read and seen, Kath would have likely been out of the band by the end of 1978 had he lived, especially if their career had taken the same dive in the late 70′s with him there). Johnson and Kath were the only ones at home, and Kath was most likely either drunk and/or high. All band members have noted since his death that his drug usage was out of control. Also, Kath was a gun enthusiast and often carried a gun on his person. Don Johnson had a couple hand guns, and Kath was messing around with them. He took an unloaded .38 revolver to his head and pulled the trigger several times, laughing at Don’s pleas for him to stop. He put the gun down and picked up a 9 mm semiautomatic, took out the clip and saw that there were no bullets in it, replaced the clip, put it to his temple, laughed at Don and said, “Don’t worry, it’s not loaded” and pulled the trigger. You probably guessed there was a bullet in the chamber. He died instantly.
Another side of this myth says that his wife and daughter were in the room when it happened. That’s not true at all; no accounts of this mention them being there. In fact, in the Behind the Music episode on Chicago, his widow actually talks about walking from the door to the gate of her home where police were waiting to tell her what had happened.
Of all the things that people can get wrong about Chicago, this is the one that I find the hardest to keep from stepping in and correcting. It’s tragic enough from all angles, so we don’t really need to have the truth embellished or stretched.
https://bradenbost.wordpress.com/2011/06/28/seven-myths-about-the-band-chicago/
So does the pipeline get tacked onto the immigration bill and both are approved?
ReplyDeleteIs it true that only 7% of Millennials hold a valid driver's license?
ReplyDeleteWallander looks good!
ReplyDeletespeaking of NFLX, I love Foyle's War.
ReplyDeleteAgreed. Foyle's War, George Gently, The Bletchley Circle, and the BBC version of Wallander with Kenneth Branagh. The Brits know how to write, direct and produce intelligent television.
Deleteexactly. between NFLX and BBCA seems like I'm still working in London....LOL
Deletelooking at a small basket of bio tech, drug delivery mainly plus 1-2 gene therapy stocks. you have any fav's in that sector?
No, I'm not following anything in that sector right now.
DeleteHere's a smart tweet from Michael Santoli:
ReplyDeleteDo all the folks who call the US market the "best house in a bad neighborhood" realize that's *exactly* the one you're not supposed to buy?
On the watchlist for Monday:
ReplyDeletehttp://quotes.ino.com/charting/?s=NYMEX_QG.Z14.E
The last time I checked (either intraday Thursday or early Friday), NGas was trading around 4.50. Now it's 4.05:
http://quotes.ino.com/charting/index.html?s=NYMEX_QG.Z14.E&t=&a=&w=&v=d1
http://money.cnn.com/video/news/economy/2014/10/23/we-the-economy-made-by-china-in-america.cnnmoney/index.html?iid=S_Taboola
ReplyDeleteTCK - +10% day Friday
ReplyDeleteWhatever happened to the infrastructure overhaul projects theme, remember the "shovel ready projects" concept?
ReplyDeleteCp there's a thread on this forum I check from time to time on oibr:
ReplyDeletehttp://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/oi-s-a-oibr/
I'm surprised you checked it out, thanks. I tend to think if there was anything to it you'd be interested, considering your skills of discovering value are certainly better than mine.
DeleteBHP had an interesting presentation last week on commodities and see large, but changing demand growth (eg. Less steel, more copper) out of China and India. If correct and not too biased, could bode well for TCK.
ReplyDeleteAlso, interesting work out of google showing how it takes more energy to create a renewable energy device than the energy we get out of it. Maybe coal us not doomed.
FCAU/DB/AEM - All getting bid up ahead of the open?
ReplyDeleteActually my top 3 performing stocks this AM.
DeleteHard to buy these gaps up! :)
DeleteTurns out I shoulda' sold the LGCY and BXE gaps up, par for the course.
Delete(a) EWZ (Brazil) opens down -2%, EEM -0.7%. That may be it for the morning session given a preponderance of dip buyers.
ReplyDelete(b) Closing EEV (2x Inverse EEM) for a +1.25% gain.
(c) NGas looks interesting, with an overnight drop in futes of -4.5% (extending Friday's decline of -4%).
(d) Opened a position in UGAZ (3x Ngas) pre-market @ 13.79, closing here @ 14.11 for a +2.3% gain.
Copper - I keep hearing of the historic preservation societies who've been actively rescuing ancient archeological ruins in the Middle East from Chinese copper miners.
ReplyDeleteINT - Only $2 til gap down is closed, then what happens?
ReplyDeleteHagel - Fired, Sec of defense outed and still oil doesn't get a lift. Can only guess Iran gives up "nucular" (thx, to George Bush for this word!) ambitions.
ReplyDeleteOAS/CLR - Both of these can supposedly produce at $70 oil, which looks better? I like CLR due to insider participation, should provide incentive (but what if they begin selling?!?!?). On the other hand what if OAS insiders begin buying?!?!?
ReplyDeleteIranian talks extended 7 months - Thus oil positive, I'd assume.
ReplyDeleteFCX is feeling the double whammy I'm sure: they diversified out of their copper/gold assets to some extent into oil over the past couple of years. So they now have exposure to the wonderful businesses of Gold, Copper, and Oil, all of which look to me like they're on the right hand slope of the mountain peak.
ReplyDeleteLooks like an analyst was out trying to estimate value of Ferrari, placing it at 4.6 Billion Euros ($5.7 Billion). That's about 15X 2013 earnings and less than 2x 2013 sales. I like seeing notes like this because it suggests to me that none of these guys are considering the upside and sentiment isn't even remotely close to bullish.
ReplyDeleteEven with this low ball estimate that means the rest of the company is worth $10 Billion or roughly 0.08 times annual revenues.
By comparison here are the price to revenues of the largest auto companies:
TM - 0.77
F - 0.41
GM - 0.33
VLKAY - 0.25
TTM - 0.58
Avg: 0.47
Excluding TM the avg is 0.39. That's almost 5-fold higher than FCAU excluding Ferrari.
VLKAY is an interesting one as well. They own the Porsche & Lamborghini brands. I wouldn't be surprised if they feel compelled to spin those out should the Ferrari IPO go off well.
DeleteIf Ferrari was valued like this analyst suggests, then the remaining business of FCAU would be generating about $122 Billion in revenues. Assuming a 20% discount to the lowest multiple in the group above (VLKAY) still gets you to a valuation of $24.4 Billion for the rest of FCAU. Combined thats about $31 Billion vs current mkt cap of $16 Billion (which includes additional dilution from recent convertible). This is a very conservative estimate in my opinion but it shows you just how much potential upside there is.
I like your math. I need to learn how to perform that level of analysis....
DeleteFNMA - Large order on the ask, wonder if the hedge funds who hyped this one are still accumulating?
ReplyDeleteWow, volume in EEV is non-existent. My sale accounts for 5% of today's volume (and I had a very small position).
ReplyDeleteAnd there was a lot of volume above $19, have to think that was distribution?
DeleteGuys - Check out ARO. I mentioned this one before. I've been looking around for companies that are really beaten down over the past year or so hoping to take advantage of tax loss selling rebounds and this one might fit the bill. It's a beaten down retailer operating at a loss. But theres been some insider buying at these levels and they do have $152 Million in cash on their balance sheet so risk of going out of business in near term is very low. Plus the weekly chart is a thing of beauty. Look at the diverging RSI readings as it made new lows:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=ARO&p=W&b=5&g=0&id=p68516778730
I had a little bit of spare cash that I invested into it today at $3.34. I figure at the very least it's a good holiday season play. They have earnings on 12/3 so there's some risk there but shit at a 80% discount to last year's prices and no bankruptcy risk much of that earnings risk is gone.
Not a bad idea, risk seems low. Now above trend line from March as well.
DeleteOUTR - No longer $50
ReplyDeleteFunny I was just looking at that this morning. Cheap stock. Still think there's a big hurdle for most people to get away from DVDs and go to full streaming. Most people don't even know how to set the clock on their microwave!
DeletePCRX let go, will reload lower.
ReplyDeleteexcellent
Delete"INTC has BIG BASE & a tactical 90-day upside breakout. Potential to $41, then $46 & $60 longer term. Support: $33-32. Bullish engulfing patterns for R2K & MID but relative breakouts vs. SPX needed for strong seasonal SMID cap performance. Stock charts: 90-day breakouts: CRMT, INTC, MGNX, RLGY & SIRO. 90-day breakdowns: ABCO."
ReplyDeleteSemiconductor manufacturers use a good amount of electricity for running their fabs, INTC threatened to stop investing in their Santa Clara fab during the northern California Enron energy crisis. Perhaps energy concerns were a major factor behind the final decision?
DeleteSee also NXPI (Maker of aapl-Pay com chips), NVDA, TSM, STM, etc. Third world demand picture for IT technology?
ReplyDeleteMCHP - Another one run over by the mid October bus. Makes me feel clueless, not knowing what did this to so many stocks.
ReplyDeleteIAT - Clearly, there are some regional banks that CAN and HAVE performed?
ReplyDeleteBTCS - So much for the idea of virtual currency alternatives?
ReplyDeleteA couple weeks ago, got some shares in AINC (Ashford Hospitality Inc) because I won AHT (Ashfor Hospitality Trust). They are spinning out their property management business. The shares have rocketed from $54 to $126, so I sold. Seems to be just a squeeze due to lack of supply as I think the earnings are only around $2 or $3 from their SEC filings, so will probably drop back quickly in the future.
ReplyDeleteVery small position as I only got 1 share for every 87 AHT I had, so not something I wanted to hold long term anyhow.
AHP I think had something to do with that one but it was confusing.
DeleteBrazil -3%. EEM -0.84%. Strong bids under China (FXI, CAF). Crude -1.2%. Gold/silver retain their bids, miners off -1.8%.
ReplyDelete(a) Reopened GDP (Goodrich Petroleum) @ 10.09 (-5%).
(b) Half positions in RYPMX (Precious Metals), RYWVX (2x Emerging Markets), RYEIX (Energy), RYVIX (Energy Services) at the close.
Risk levels remain high.
Yep, I hear everyone thinks crude's going to $5~$10...... or lower.
DeleteCP - Probably means sentiment has gone too far to one end, no? I still think HCLP / SLCA / EMES are setting up for nice trades in terms of risk/reward.
DeleteYeah man, I'm totally confused, as usual.
DeleteI mean that literally, no joke.
DeleteSolar - Farmers getting offers for their land supposedly. And, for some reason York Electric's 8KW (barely enough to power 5 hairdryers unless you waited for a sunny day) system is mentioned by the author as if it's a big deal?
ReplyDeletehttp://www.utilitydive.com/news/is-south-carolina-solar-about-to-explode/334164/
BMO - 6th year of 20 year bull market.
ReplyDeleteJust heard "Yield curve is going to flatten like nobody can imagine" (not sure who said this, just caught the predictive "warning" on TV)
ReplyDeleteSo how is that consistent with a "20 year bull market" when a flat yield curve is an indicator of recession?
Court stenographer wanted in San Fran, six figure salary.
ReplyDeleteBuy solar producers b/c climate change is disrupting the hibernation patterns of the Alaskan squirrel population.
ReplyDeleteMid-Oct was the Ebola scare, wasn't it? Ah, there's the piece I was missing! Wow....
ReplyDeleteReally good article on why you can't trust the CAPE that Hussman and many of the other bears use as a basis for being negative on the markets. To me, it just reiterates ignore the macro and but good companies/stocks:
ReplyDeletehttp://www.philosophicaleconomics.com/2014/11/dilution-index-evolution-and-the-shiller-cape-anatomy-of-a-post-crisis-value-trap/
SCOK - +26%
ReplyDeleteJust returned from capital beltway area - Looks to me vehicles on the road were aged. Man, that place is great if you're a rat.
ReplyDeleteTASR - Police force likely to expedite orders?
ReplyDelete(a) GDX (miners) set to close +3.5%! Clearing the table on RYPMX (Rydex Precious Metals) at the close.
ReplyDelete(b) Crude is down to a 4-year low on uncertainties re OPEC production cuts later this week. XLE and OIH also off about -2%.
(c) EEM -0.5%, EWZ (Brazil) +0.4%.
The negativity in the energy sector today is exactly the kind of environment I 'buy,' and my gains in the mining sector give me flexibility to extend the play. On the other hand, I won't be adding to my 'half positions.' Holding RYEIX, RYVIX, and RYWVX (to some extent, Emerging Markets are getting hit on oil as well).
$WTIC - New lows, that hurts...
ReplyDeletePXD long 166.52
ReplyDeleteTSL - Actually up, on "bad" news.
ReplyDeleteIraqi oilers?
ReplyDeletehttp://www.rigzone.com/jobs/countries/IQ/iraq_jobs.asp
MXC - There ya go.
ReplyDeleteTOF mentioned these three, HCLP EMES SLCA
ReplyDeletehttp://247wallst.com/energy-business/2014/11/26/follow-the-sand-to-the-real-fracking-boom/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FRyNm+%2824%2F7+Wall+St.%29
counter point to above
Deletehttp://seekingalpha.com/article/2712545-take-your-head-out-of-the-sand-elevated-downside-risk-for-high-flying-proppant-producers
BXE announced $100 million increase to credit facilities.
ReplyDeleteGood indication that the bankers still like the success BXE showing, even with declining oil prices
We're gonna need it! At least till $4.82 gap up is closed.
DeleteOAS - Red
CLR - Red
$WTIC - Red...
Like you said before, "Oh well!" :(
BAH is on a tear.
Helzberg Diamonds - "A Berkshire Hathaway Company"
ReplyDeleteFU, We're closed Thanks Giving! :) Too funny!
ReplyDelete(a) China and HK rally overnight. CAF (A shares) +1.73% and FXI (H shares) +2.58% this morning.
ReplyDelete(b) A smaller rally in EWZ (Brazil), +1%.
(c) EEM +0.9%.
(d) Plan to close RYWVX (Rydex 2x Emerging Markets) @ the 1030 est window.
(e) Crude prices continue to fall, now -0.6% to 73.58. XLE (Energy) and OIH (Oil Services) both taking hits. Both sectors are approaching prices at which I would consider sizing up ahead of a bounce.
Scaled into OIH (Oil Services) @ 42.10, which appears to be a retest of the mid-October low of 40.98. Note that OIH is almost -30% off the July highs.
DeleteSDRL- There goes the divy.
ReplyDeleteJust noticed that DB is up over 10% in the last 2 weeks (and almost back to my purchase price). Maybe the bottom is in as Europe gets more serious about QE and inflating the economy.
ReplyDeleteActually DB is underperforming the German market which is up more than that. And many of the other Euro-countries have also had outsized moves.
DeleteI know, it keeps moving steadily up and it's driving me nutz, just like FCAU
DeleteA face only a mother could love?
http://blogs.cars.com/.a/6a00d83451b3c669e2019b050b1e44970d-pi
Energy- OK, what's best guess as the last day for tax loss selling?
ReplyDeleteI recall about 5-6 years ago oil bottomed right after Christmas.
DeleteNADL - Gap down
ReplyDeleteNWLI - Holy canoli, up $8 on 200 shares.
ReplyDeleteFCAU - Seems like opening profit taking keeps getting bought.
MXC - Still going the wrong way.
DDC - Looks like bull flag, no?
ReplyDeleteDBC - Seriously, how much lower can this one go? I suppose if the $US broke out of 10 year channel it could fall more.
ReplyDeleteVLCCF - Are these guys going to carry coal (using smaller ships) to India for the manufacturing boom? My DD leads me to believe India has plenty of iron ore but no coal.
TBT - Approaching $50 now, is yield curve flattening?
ReplyDeletehttp://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2014
INT - Hasn't closed the gap down yet but might fail here?
ReplyDeleteHAL - I'm interested in this one due to their presence in Iraq, in addition to other factors. Contrary comments welcome.
ReplyDeleteTASR - Wow man, you guys see this thing moving up? Got to be good lookin' 'cause he's so hard to see.
ReplyDeleteOPEC scheduled meeting tomorrow, looks like?
ReplyDelete"What to expect from OPEC
Ahead of the November 27 OPEC meeting, commodity strategist Francisco Blanch notes OPEC’s past success in bringing down its near-term aggregate oil production to balance the market in exchange for long-term oil market share. This time, factors
to consider include the challenge of fast growing US shale oil production, Saudi Arabia’s higher fiscal budget breakeven oil price if volumes come down, and the impact of price volatility. Blanch expects OPEC to choose a ceiling cut of 0.5 million
b/d versus a bigger cut. In his view, this should be enough to support current oil prices before they bounce back toward $90/bbl over the next three months.
The pain is short term, buy hospital stocks Headline risk likely drove the recent pullback in hospital stocks as the Republicans
won control of Congress in the midterm elections and the Supreme Court agreed to hear the case against exchange subsidies. These concerns are overblown, according to analyst Kevin Fischbeck, who remains bullish on the group. He
believes the threat to reform is low and expects most states to find a way to maintain subsidies even if the Supreme Court overturns them. Fischbeck estimates only 2% of total EBITDA is at risk, which means the pullback fully prices in the
potential loss. He highlights a buying opportunity in Community Health (CYH) and HCA (HCA), citing upside from reform over the next few years and an improving core business."
I took off ARO today. Could have taken it off at the open yesterday and was tempted to do so. Oh well. I think it gets to $5 regardless but I ended up buying more FCAU today below $12.5 just because its dirt cheap.
ReplyDeleteHope you guys have a good Thanksgiving. We all have a lot to be thankful for. Remember, it could always be worse...you could be a Raiders fan!
YELP looks good here.
ReplyDeleteI picked some up at $58.35. YELP is pretty compelling down here in the $58 area only because it was trading at over 20 times annual sales in March and its down now to about 11 times. I could see it swing back up to 15 times again.
DeleteLooks like it should test 70. Remind me Monday pls.
DeleteMonday? Shit I'll probably be out by then. Tiny position.
DeleteBABA - What will share price be once PE is over 3,000?
ReplyDelete(a) RYWVX closed the 1030 window up +2.04%, or +1.1% from my basis.
ReplyDelete(b) Energy and oil services still in the midst of brutal selloffs> XLE off another -1%, OIH off -3%. At some point (and no one really knows when that will be), there will be no one left to sell. It feels like they're running a few 'stops' today, but only market makers have that info. I'm holding half-positions in both sectors, with the portfolio treading water (losses in the two sectors offset by earlier gains in miners and Emerging Markets). As 'certain' as I am that both sectors are at near-term bottoms, I plan to add to positions only on high-volume reversals. In addition, OPEC votes on Thursday (no Thanksgiving holiday in the Muslim world!), and adding to current positions would pose unnecessary risk pending the outcome of a vote on production cuts. (The current 'conspiracy' theory has OPEC lowering oil prices in an effort to kill off fracking companies.)
(c) Miners off -1% today.
(d) EEM and EWZ (Brazil) backing off morning highs. CAF and FXI, on the other hand, are both at intraday highs.
GEVO - Wonder how far they'll run this one up into the abolishing of the renewable fuels mandate? There's a good pump and dump potential for this one, considering AG subsidies encourage spewing toxic chemicals onto farmland this mandate should be abolished.
ReplyDeleteZ - I think this qualifies as a bull flag with $140 target.
ReplyDeleteBTU - Institutional ownership is 99.5%, right?
ReplyDeleteBXE - Does the total credit line now exceed market cap?
ReplyDeleteSeems like a decent place to try entering DBC?
ReplyDeleteELNK - Nice 50% gain off the bottom.
ReplyDeleteCrude - Down $4.30 to $69.39?
ReplyDeleteLow so far was $67.75
DeleteNVDA - Looks like maybe $4 upside?
ReplyDeleteNXPI - Could there be another $20 upside? That would truly be incredible.
DeleteOil getting crushed today on your thanksgiving and many energy stocks, even large ones like CNQ , down 10%.
ReplyDeleteDecided to reduce my exposure a bit and sold an energy services stock MCB.TO. Bought in 2012, so still up 65% on it, but down 30% YTD. In hindsight, obviously should have sold it earlier, but they seemed to be in a pretty good spot in the market.
Might be a bad decision of selling my winners and should instead be selling 1 of my smallcap producers which have been destroyed, but I think the energy stocks are moving on the broad industry news and now individual company info, so the beaten down ones should have a better chance to bounce faster when it comes.
Lowest cost producers should fair the best, I expect. Reminds me of the gold miner fiasco.
DeleteNot going unnoticed here. I'll buy something Monday if it sticks.
DeleteThe thing I am struggling with is, even after this, stocks like CNQ are still up YTD in Cdn $, whereas smaller stocks like BXE are down 30% and many of the really small ones are down more than 50%. Not sure what the best risk/reward scenario is as there is obviously a lot more risk in the small stocks, especially if oil stays down for a while.
DeleteHas oil been falling in Cdn $ ?
DeleteSold that DM.TO that I bought earlier this month for $0.415 for $0.445. Buyout is $0.45 in Jan/Feb, so not worth waiting around for the extra 1.1%. Made for a quick 7.2% in just over 3 weeks. Love these arb plays in small stocks that the arb funds can't bother with when they come around.
ReplyDeleteBXE - Down near 10% but still not a new low. Not too bad, considering the drop oil experienced.
ReplyDeleteCP,
ReplyDeleteoil has been falling in Canadian $, but not to the same level as in US. The C$ is down 6% this year, so that offsets some, plus oil is mostly priced against a Canadian Benchmark (Western Select) and this usually trades at a discount to WTIC and the discount has narrowed this year.
new post
ReplyDelete