Saturday, March 7, 2015

3/7/15 While the Blitzkrieg Raged





According to Vic Niederhoffer, Friday was the second time since 1999 that both stocks and bonds sold off as hard in the same session (the other instance was January 29, 2009).  SPX -1.5%, TLT -2.2%.  '5 trillion loss in stocks, 5 trillion in bonds-' (Niederhoffer's numbers).  No place to hide.  Gold -2.7%, miners -7%.  XLU (Utilities) -3%.  EEM (Emerging Markets) -1.5%.

I think the six-year-old bull is tired, but probably has the grit to hit new highs once more before going down.  Expect dip buyers to show up next week.  If we gap down on Monday, buy/add.  If we gap up, sell and buy back on the retest.



148 comments:

  1. Watching Season 2 of 'The Wire' on Amazon Prime. The story line from Season 1 (the Baltimore projects) continues in the background, although the focus shifts to the Baltimore docks with a smuggling operation.

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  2. You have been one of the first in the investment community to correctly predict that QE2 is going to heat up the stock market. Is this also true for the European QE-program which is starting this month?

    Sure, just look at the German Dax. It’s up 17% this year whereas the S&P 500 is up 2%. A lot of European stocks have really taken off in the wake of the European QE. It’s going to do the same thing that it did in the US: It’s going to drive asset prices higher. Except now, they are driving yields to negative. They are driving them below zero to get people to go out in the risk curve. So by pushing up asset prices ECB president Draghi is going to make the same mistake as the Fed.

    How come?

    The program will push up asset prices but it won’t necessarily create jobs and GDP growth. And to that end it will create more strife within the central bank. In the US as an outgrowth of that, culturally we had the Occupy Wall Street movement and we created the phrase «the one percent». So the wealthy own equities and assets and they are benefiting from QE. And that is going to create a lot of unhappiness because if you are not in the one percent you do not own a lot of assets. You are relying on a middle class job and you really are suffering.

    Here is my new favorite example: The website TrueCar pointed out that average cars that cost 33’000 $ or less last year in total number of unit sales went up 4%. Cars that cost 50’000 $ were up 30% and cars that cost 70’000 $ or more were up 50% in sales. So if your business is selling 120’000 $ electric cars like Tesla you had a fantastic year. But if your business is selling 22’000 $ Toyota Corollas it was a very, very difficult year for you.

    http://www.zerohedge.com/news/2015-03-07/jim-bianco-explains-why-qe-failed-and-why-ecb-making-same-mistake-fed

    ReplyDelete
    Replies
    1. And what about valuations?

      Wall Street’s favorite metric, the forward P/E ratio, is above 17 right now. This is the highest level in eleven years. Over the last 40 years, only in the bubble period of 2000 the forward P/E ratio was higher. So if you ask a typical fund manager when he would generically sell the stock market he would probably say: «When earnings are declining, interest rates are rising and the economy is slowing.» That is exactly what we have right now. But all of a sudden, no one wants to believe it and no one wants to sell.

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    2. I wonder when Jim Bianca will come clean about being bearish for like 4 years now. No jobs growth? Haven't we had one of the longest stretches ever of 200k+ jobs?

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    3. I'm wondering what big Jimbo has to say about this;

      http://www.bbc.com/capital/story/20150227-bull-market-for-us-business-grads

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    4. I've gone back numerous times over the past few years to compare the earnings yield to the past 60 years and even after these big moves for the past 6 years we're right in line, maybe slightly above, prior years. And those years had much higher interest rates so now when you have an earnings yield of say 6% and compare it to a 2.3% 10 year yield it makes the stock market look cheap.

      Having said that, we could always see a year or two years of sideways churning to work off any excesses, then resume an uptrend. This is exactly what happened from the late 40's thru the late 60's, a bull market that lasted like 20 years. The S&P went up like 6x during that time period. I actually think it's due for some significant consolidation period. The Small Caps have consolidated for a year or so and could potential do so for another year or two...
      http://stockcharts.com/freecharts/historical/img/100-130.png

      When I look back at charts of the market, though, recessions are what cause major downturns. Only once before was there no recession when we had a 25%+ pullback and that was in 1987 when the S&P 500 hit a trailing p/e of 23.1 and a current p/e of 20.8. Right now its 18.2 trailing and 17.2 current.

      Delete
    5. The economy is slowing? With a persistent employment 12 months straight why would corporate America be hiring like mad men if the economy was slowing? Isn't it generally accepted, a steepening yield curve suggests growth, and vice-versa? Yield curve steepened, right or wrong?

      Yeah, vehicles are expensive as hell, as commodity prices have fallen off a cliff, automakers scooping up the difference if sales NUMBERS, ie: UNITS SOLD are rising?

      Wage inflation can cut into corporate profits, are we there yet? Surely the market will react before it happens, right?

      Delete
  3. 2nd- It feels old to me as well...but has for about a year now.

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  4. XON - Maybe there was something to that GIANT insider buy?

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  5. URG - This one's been launching, is nuculur back on the table?

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  6. GLDD - Getting tons of volume, are US ports shutting down and turning out the lights?

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  7. Many stocks are retesting support levels, or have dropped just under? Do we see the volume spike that occurred on the previous lows, indication some increased trading and late comers jumping in or was it simply a bounce play?

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  8. BAC (or/and other banks), what do you make of the action? If especially $US launches and rates rise, lifting banks, does that indicate econ contraction? $US lifting might indicate demand for US made products (exports), and would tend to create employment, no? Employment leads to further demand...

    I don't see what the problem is, this worries me.

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  9. Oh, and there isn't a lack of energy, we're awash in it practically. Recall when oil was launching, scaling new heights daily, the fear was high energy prices would stifle econ activity?

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  10. BAC - I dunno man, if you look at the H&S sure does look like it failed at Friday's open. Umm, doesn't that count for something positive, maybe big-time positive? Could it be way more positive than nickle and dime traders give credit for?

    Seriously, should we really anticipate that H&S should fruit? SRS jumped though, in a big way. If rates should skyrocket that would place a serious pinch on home sales? Is that even possible, for rates to skyrocket? SRS closed at top of the daily candle.

    UCO - Wow, tons of volume. Sad to think this one might be bought at 1/2 current price in the coming months? A flurry of bankrupt oil producers might garner some attention? Nice bubble....

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  11. ALSK - Did they like the earnings or not? Seems to be some disagreement in the action.

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  12. “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

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  13. BXE out with their reserves announcement. Lots of info,but after a quick look, here's probably the key from a valuation perspective:

    Bellatrix's December 31, 2014 net asset value of $1.7 billion , equivalent to $9.01 /share using a 10% per year discount to future net revenue adjusted for year-end net debt, seismic, and land value.

    http://finance.yahoo.com/news/bellatrix-announces-growth-250-million-113000630.html

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  14. CENX - Down another 5%, hurray for aluminum?

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  15. NM - Off the cliff too, natural resources no longer needed in the new world?

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  16. GEVO - Gevo Sells Renewable Jet Fuel to NASA GlobeNewswire +19.28%

    ReplyDelete
    Replies
    1. Renewable fuels were invented only recently and are totally green, right?

      Delete
  17. I ended up selling most of my eyes today at 17.2. Hoping to get some more on a dip

    ReplyDelete
    Replies
    1. I'm now up about 7% (in laws are up 20%) YTD. Given the prospect of being down 15% at one point I'm taking the opportunity to move to cash and reassess things. I blew a golden opportunity to be up 40% so far by not holding FCAU

      Delete
    2. Actually probably like 50%+ so I consider this a blessing to be up a decent chunk after the annoying run

      Delete
    3. GM has been pretty strong as well, could go on for years maybe?

      Delete
  18. SPG makes offer for MAC, one component of the portfolio is Tysons Corner shopping center.

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  19. MCD - Should begin drone delivery and ordering via AMZN immediately!

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  20. Oh man this is brutal. i’m at a coffee shop and listening to some young guy interview some older guy. “what would you say is your proudest achievement”

    ReplyDelete
    Replies
    1. this is classic!

      “management’s assumption is that this will be a salary exempt position”

      "upper management hasn’t told anyone else but i’m leaving to move to the state of washington so you will be taking over my role."

      “we are definitely growing by leaps and bounds”

      I'm tempted to just excuse the interviewees and say it sounds like a shit job.

      Delete
    2. White collar job. I never received overtime pay either. Sounds like a small company without an HR department or he's participating in the process.

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    3. Yeah just makes me remember why I left the work force 3 years ago to take a risk on investing full time.

      Delete
  21. The year-to-date table below of many dozen large-cap stocks (market caps > than $25 billion) speaks volumes… something isn’t right.
    Source: Sterne Agee and Thomson Reuters BASELINE
    Market Price In
    Cap % Change The
    (Billions) YTD S&P 500
    EXXON MOBIL XOM 362.6 -7.4% YES
    BERKSHIRE HATHAWAY B BRKB 358.0 -3.2% YES
    MICROSOFT MSFT 349.2 -8.8% YES
    JOHNSON & JOHNSON JNJ 280.2 -4.3% YES
    JPMORGAN CHASE & CO JPM 227.6 -2.7% YES
    PROCTER & GAMBLE P G 223.4 -9.3% YES
    CHEVRON CVX 195.8 -7.7% YES
    ORACLE ORCL 187.8 -5.8% YES
    COCA-COLA K O 181.9 -1.7% YES
    BANK OF AMERICA BAC 170.6 -9.3% YES
    INTEL INTC 160.5 -8.5% YES
    INT'L BUSINESS MACH IBM 156.9 -1.2% YES
    PHILIP MORRIS INTL P M 124.4 -1.7% YES
    QUALCOMM QCOM 118.9 -3.8% YES
    AMGEN AMGN 117.8 -2.8% YES
    SCHLUMBERGER SLB 106.9 -2.7% YES
    UNION PACIFIC UNP 103.5 -2.2% YES
    UNITED PARCEL SVC UPS 91.1 -9.5% YES
    ABBVIE ABBV 88.6 -15.0% YES
    AMERICAN EXPRESS AXP 83.1 -13.7% YES
    GOLDMAN SACHS GROUP GS 81.4 -3.6% YES
    CONOCOPHILLIPS COP 77.3 -9.1% YES
    TWENTY-FRST CNT FX A FOXA 74.4 -10.2% YES
    HEWLETT-PACKARD HPQ 61.9 -17.3% YES
    MONDELEZ INTL MDLZ 59.2 -3.1% YES
    OCCIDENTAL PETROLEUM OXY 58.0 -7.2% YES
    EMC EMC 56.3 -7.0% YES
    DUKE ENERGY DUK 53.0 -10.3% YES
    EOG RESOURCES EOG 48.5 -3.8% YES
    CATERPILLAR CAT 48.5 -12.5% YES
    GENERAL DYNAMICS GD 44.6 -2.2% YES
    BANK OF NY MELLON BK 44.2 -3.2% YES
    CAPITAL ONE FIN'L COF 43.9 -4.3% YES
    NEXTERA ENERGY NEE 43.1 -7.1% YES
    YAHOO YHOO 41.2 -14.0% YES
    DOMINION RESOURCES D 40.6 -9.5% YES
    KIMBERLY-CLARK KMB 39.8 -7.5% YES
    EMERSON ELECTRIC EMR 39.2 -8.4% YES
    BAXTER INT'L BAX 36.7 -7.6% YES
    DELTA AIR LINES DAL 36.6 -11.0% YES
    STRYKER SYK 34.1 -4.5% YES
    CSX CSX 33.5 -7.0% YES
    AMERICAN AIRWAYS GRP AAL 33.4 -10.5% NO
    FRANKLIN RESOURCES BEN 33.0 -4.2% YES
    RAYTHEON RTN 32.4 -2.7% YES
    GENERAL MILLS GIS 31.5 -2.3% YES
    MICRON TECHNOLOGY MU 30.6 -18.6% YES
    STATE STREET STT 30.4 -7.2% YES
    PRECISION CASTPARTS PCP 30.3 -11.7% YES
    ARCHER-DANIELS-MDLND ADM 29.8 -11.1% YES
    APPLIED MATERIALS AMAT 29.1 -4.1% YES
    VIACOM CL B (NEW) VIAB 28.9 -6.6% YES
    DISCOVER FINANCIAL DFS 26.7 -10.1% YES
    UNIVERSE AVERAGE (Equal Weight) -7.2%
    S&P 500 SPX 0.6%

    ReplyDelete
    Replies
    1. Prices don't grow taller than trees? Do I see what looks like a momo rally out of October's sell off?

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  22. I know he can do the job, but can he get the job?

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  23. I like this guy's reply.

    "Dr. John 1 minute ago 0 0
    This guy is one of the few whose articles pop up on Yahoo that I generally appreciate. The fact that he and many others tracking employment think that the labor market is anywhere near healthy shows, I think, how far they are from everyday American workers. We have the tiniest bit of wage growth even if we've had a fairly robust decline in unemployment (all the comparable U scales). BLS data on (inflation adjusted) average weekly wages hasn't much budged, in fact, since the late 70s. America is vastly more prosperous, but where is the prosperity? It doesn't much exist for 80% of the country.
    That, in a nutshell, is the history of Friedman's free market fundamentalism as well as Laffer's supply side dominance (trickle down)."

    http://finance.yahoo.com/news/el-erian-heres-big-problem-164312872.html?l=1

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  24. If I wanted to make up a portfolio of well known brand names that in the shitter (outside of the energy sector) it would be pretty easy. My list would include:

    RL
    WYNN
    PIR
    YNDX (ok well known in russia)
    TIF
    AXP
    KORS

    Not sure what this means yet. I did see Jeff Saut's note today:
    "Obviously, the large buildup of internal energy I have been discussing is being released on the downside, which is somewhat surprising, but not totally unexpected given the divergences highlighted in these reports. For example, in the past when the D-J Transports have failed to confirm the D-J Industrials new highs within six weeks, it has led to pullbacks of 8% to 10%. "

    It's been about 4 months since IYT made all time highs so will be interesting to see if this does spill over to the other sectors first. Fear seems pretty low here so maybe we do get a 10% correction? Sentiment wise this would make more sense than back in the Nov / Dec / January time frame as we had just gotten past a fairly sizable correction in October. I'm hoping we do get some good opportunities soon. Would love to see some panic.

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  25. Picked up SPXS at $19.33 today right before the close. I'll admit this article swayed me a bit:
    http://m.seekingalpha.com/article/2978956-the-earnings-recession-of-2015-stock-market-in-danger

    I've followed this guy off and on for a few years and he's been pretty accurate. Plus the Saut comments about Transports diverging made me think this is a decent risk/reward trade. We'll see. Probably will get squashed tomorrow in this raging bull but worth a shot.

    ReplyDelete
    Replies
    1. Earnings are mainly dropping due to energy and the rest of the market's earnings are pretty good. If that stays the case, I think energy prices declining due to increased supply (not poor demand) should be a net positive for the economy and the overall market and stocks should go up. Might be biased and picking facts to pick support my views, but I think I'm correct.

      Delete
  26. T3D,

    given the S&P 500 is up 1% YTD, it would make sense a lot of big companies are down in value. Top 10 market cap companies which are up:

    AAPL +15%
    GE +1%
    WFC - flat
    PFE +10%

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  27. (a) Goldcorp taken off @ 18.62 (-2.7%).
    (b) CHK stopped out @ 14.68 (-3.2%). The stock closed off -6.13% @ 14.24 on high volume.
    (c) RYPMX (Rydex Precious Metals) closed the day -3.15%. I took the position off the table.
    (d) RYWVX (Rydex 2x Emerging Marktets) closed the day -2.25%. I took the position off the table.
    (e) RYVIX (Rydex Energy Services) closed the day -1.69%. I took the position off the table.
    (f) RYEIX (Rydex Energy) closed the day -1.08%. I took the position off the table.
    (g) RYTNX (Rydex 2x SPX) closed the day +0.82%. I took the position off the table.
    (h) RYGBX (Rydex 1.2x Government Long Bond) closed the day +1.33%. I took the position off the table.

    With the exception of bonds, any and all attempts to rally in the sectors that sold off the hardest on Friday were sold off further today. Brace for more downside, IMO.

    ReplyDelete
  28. EWZ (Brazil) quietly slid an additional -3.63% today to set a new 52-wk low. If we remove dividends from the equation, it last traded at these levels in December 2008. The Black Swan occasionally arrives unnoticed.

    ReplyDelete
    Replies
    1. We probably already had the black swan: oil crash. This has had a major impact on Brazil.

      Delete
  29. I think this is accurate as the downturn in fall, 2011 was quite a severe one and certainly felt like a bear market at the time. This is another good reason the bull market continues for a long time still:

    http://www.marketwatch.com/story/the-bull-market-in-stocks-is-much-younger-than-you-think-2015-03-10

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  30. WLL - Put themselves up for sale, didn't get much of a price response but did make it to top of channel.

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  31. ALDW - That was a new 52wk high for this refiner.

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  32. BMY - No chance this one's going above $100 ?

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  33. Took the profits in SPXS this morning. Never pass up a 3% gain on a triple leveraged ETF with a gap is my experience. Even if it goes down more it is likely to fill that gap. There will come a time when that won't happen but odds are always stacked against it.

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  34. Started a small position in RUSS around 14.4...most likely too late but if RSX free falls like GREK or EWZ are then RUSS is going to skyrocket. I'm tempted to add some on weakness and make it a larger position but won't for now.

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  35. Started a position in RUSS...most likely too late but if RSX free falls like GREK or EWZ are then RUSS is going to skyrocket to $30-$40. I'm tempted to add some on weakness and make it a larger position but won't for now because its really risky.

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  36. Started a position in RUSS...most likely too late but if RSX free falls like GREK or EWZ are then RUSS is going to skyrocket to $30-$40. I'm tempted to add some on weakness and make it a larger position but won't for now because its really risky.

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  37. Sorry about the multiple messages. Having issues with the site.

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  38. Any of you guys going to buy the Apple Watch? They have some really cool features for fitness / health stuff in it.

    ReplyDelete
    Replies
    1. Maybe. I'd do it for the health/fitness stuff but it looks like I wouldn't want to ware it while doing it??

      Delete
    2. Not me. I find stuff like this just trendy and people don't use long term. I'm a bit of a sceptic on new technologies in general, but seem like if Nike couldn't make a go of it with the fuel band, hard to see people buying into the watch.

      Delete
    3. Not me either, last I checked my Iphone shows time.

      Does bring back memories of Dick Tracy.

      For those to young to know:

      http://en.wikipedia.org/wiki/Dick_Tracy

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    4. I might still have my digital TI watch from the 70's lying around here somewhere.

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    5. But since I dislike plastic so much, especially for something that's obsolete by the time it reaches my possession, definitely suggest getting the $17k one. Wonder how many calories I can expect to burn while programming it to track my caloric tipping point?

      Delete
    6. Hey, what are the chances Apple put all those fitness/health features and developed this device so it qualifies for medical subsidies from the healthcare program? That could be quite a windfall?

      Delete
  39. GREK - If Greece is falling off the cliff, why isn't it making new 52 week lows?

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  40. Mainstream Analysts getting on board with the European investment theme calling for possible 70% return over 2 years. Possible - look what the IWM did in 2013. Some could say this is a sign of a top, but I think it is early in getting people on the bandwagon as most European markets are still quite a bit below last summer's high's.

    http://finance.yahoo.com/news/why-europe-shares-could-surge-043457596.html

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    Replies
    1. Makes sense to me, this European fear tactic is getting long in the tooth.

      Delete
  41. UUP vs AAPL - Which of these is most likely to outperform?

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  42. DBC - So when do the commodities producers begin filing bankruptcy, or are their profits not correlated with commodities prices in $US?

    I recall reading a few years ago JPM/GS had their warehouses stacked to the rafters with metals, not sure what to think of this but seems there's some kind of oversupply issues for nearly every kind of commodity imaginable?

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  43. The market has been able to shake off the us dollar move for a long time. It could just be a matter of this latest move being too much and causing a pullback in the market. the dollar is now up 10% YTD which is a huge move for a currency. This is having an impact on earnings which obviously has an impact on stocks. Doubt it turns into any kind of big drop but still think odds favor a 10% drop now more than it has in the past few years.

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  44. A seemingly indiscriminate wave of selling continues this morning. Stopping immediately out of positions which move against me? A rather long list over the past few days, all of which are proving their worth today:

    (a) FXE (Euro) stopped out around 107.2x. Now trading at 105.39.
    (b) Oil Services/Energy. Took -1.69%/-1.08% hits yesterday. OIH/XLE now off another -1.8%/-1.2%.
    (c) Miners. I took a -3% hit yesterday, but quick stops allowed me to sidestep a -7% move on Friday and a -1.3% move this morning. GDXJ (juniors) actually printed a new 52-wk low today.
    (d) Emerging Markets. Identical pattern. I sustained a -2.25% dent yesterday on RYWVX (Rydex 2x Emerging Markets), but managed to avoid the -3.67% decline on Friday and what looks to be a -3.8% hit today.

    Naturally, a smaller loss is still a loss. However, the psychological damage inflicted by a large(r) loss is exponentially greater. The ability to manage a trade absolutely hinges on one's mental state. For instance, a -2% to -3% loss on relatively small positions in Emerging Markets or miners allows me to reopen positions with little 'baggage.' Whereas traders who have held through -10% to -13% declines on hopes of a rebound will be emotionally 'handicapped.' Longer-term investors looking at -20% to -40% losses in miners or Emerging Markets? They represent a class of holders in danger of capitulation, a state of mind which produces low-risk entries for market timers.

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  45. Replies
    1. I look at it every day. Lots of things are on my radar to buy a little lower.

      Delete
  46. Silver - I'm noticing it's got a lot of upside before it's priced at $250

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  47. Could it be eurobanks need to sell their US equities and raise cash? With ECB buying eurodebt, who are the sellers and what are their plans for redeployment?

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  48. CP, I believe I saw a miner and an oil company declare bankruptcy on Seeking alpha this morning.

    ReplyDelete
    Replies
    1. VANCOUVER, March 10 (Reuters) - U.S.-based gold miner Allied Nevada Gold Corp filed for bankruptcy protection on Tuesday, buckling under a heavy debt load amid weaker metal prices.

      Allied Nevada, which owns the Hycroft open pit gold and silver mine in Nevada, said in a statement it was filing to restructure its debt, which stood at $543 million at the end of September.

      Delete
    2. BPZ
      BPZ Energy files for Chapter 11
      BPZ Energy (NYSE:BPZ) files for Chapter 11 bankruptcy protection after skipping a $60M payment owed to bondholders earlier this month.BPZ says the drop in oil prices and the general industry downturn had made it difficult to refinance its debt.The company explores and produces oil and gas on 1.9M acres offshore and onshore in Peru and in Ecuador.

      Delete
    3. Allied Nevada Gold was one that was being flashed around a lot I think I recognize that name.

      Delete
  49. Pull out your razor, mama gonna shave him dry....... Ya know the elephant is big and stout, would be alright if it weren't for his snout.

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  50. Reopening two positions at the close: RYPMX (Rydex Precious Metals) and RYWVX (Rydex 2x Emerging Markets).

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  51. Sold 1/2 of RUSS into the close.

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  52. SCON - There's one weasel that went POP today.

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  53. I picked up some HABT after hours at $32. I honestly can't justify the current valuation. But I love this place and its always rocking when I go there. It's the perfectly priced joint that is in the midst of taking market share from MCD / BKW. Longer term (ie 5-10 years), it will most likely be a big winner. In the short term, I'm hoping to add more at the $30 level if it happens. So I'm ok with it dropping more tomorrow. Right now only a 3% position.

    ReplyDelete
    Replies
    1. Gotta say I'm getting more and more excited about these stocks dropping. I think I can build out a nice portfolio of some companies I consider to be longer term winners like:

      RL
      WYNN
      TIF
      AXP
      EYES
      FCAU
      HABT
      Z
      CAKE

      Delete
    2. Question is being able to hold em

      Delete
    3. 1/3 of CMG's p/s, so that's something to aim for for a fast grower.

      Delete
    4. Is that just an arbitrary #? Their P/S are similar right now but HABT has huge SSS of >13%.

      Delete
    5. When you have a fast growing company, people often better to focus on metrics like p/s instead of p/e or p/b with the thought that as they grow the sales quickly they are overspending on capital, etc for faster growth, then when they start to slow, focus on increasing margins to achieve industry-level profitability.

      HBT has p/s of 1.8 where CMG p/s is 5.0 (Morningstar).

      So if HBT (which I had never heard of) can continue to grow quickly and get market recognition, the potential is that the market could give it a CMG type multiple (the premier company in this area of the market) on sales as it grows out its footprint.

      Delete
    6. BB - Ok I thought you said to target 1/3 of CMG's p/s. I think you're looking at the wrong data (ie not the fully diluted share count post IPO). HABT's p/s is right in line with CMG and p/s is actually what I've been using as a gauge.

      Delete
    7. OK. Didn't realize that. I guess then it will be harder to get valuation expansion from HBT and grow in share price will be more in line with growth in sales.

      Delete
    8. Give it a shot there Kenny Rogers :)

      Delete
  54. Modest rebound in play. EEM pre-market bid +0.7%.

    (a) Reopened PBR (Petrobras) @ 5.41.
    (b) Reopened EWZ (Brazil) @ 30.38.

    I consider Brazil a high-risk trade.

    ReplyDelete
  55. More energy companies in financial trouble:

    KKR
    Report: KKR's Samson Resources near breaking loan covenants
    One of the country's largest privately-held natural gas producers, Samson Resources - owned by KKR - is expected to break its loan covenants within weeks, reports the NYPost.Samson last month hired restructuring advisers and is in talks with a JPMorgan-led group over its $1B revolver. Samson last year broke the covenant on this line and JPMorgan gave it a waiver while lowering the borrowing limit to $1B from $1.8B.KKR - which led the $7.2B buyout of Samson in 2011 - could see its equity stake wiped out less than a year after another of its energy portfolio, Energy Future Holdings, filed for bankruptcy.

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  56. Bought back the RUSS shares in premarket around $14 that I sold yesterday at the close.

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    1. My suspicion is this is a bounce (in RSX) to short. We'll see if it can take out the highs from yesterday with vigor and try to close the gap. I think the selloff continues but will be cognizant of the potential for this being a higher low.

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    2. Sold the half back at $14.5. This thing is a firecracker.

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  57. this move in the dollar is getting a bit ridiculous.

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    Replies
    1. I'm confused about how to react, stronger dollar makes it hard to justify foreign equities absent a currency hedge but if you need a currency hedge then why not just trade currency?.

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  58. SCON - Somebody's bidding but for how long?

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  59. Is there any way to compare HABT to SHAK? Haven't eaten at either but there is a HABT here now. Didn't HABT start mostly in college towns??

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  60. Sold the rest of my RUSS at $14.5X. Hoping to get back in at a lower price.

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  61. Adding a position in RYTNX (Rydex 2x SPX) at the 1030 est window.

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  62. "You would be astonished by the number of roads in disrepair"

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  63. I picked up RUSS again at $14.6

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    Replies
    1. Wow. We simultaneously opened opposing positions.

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    2. Yeah I'll probably be wrong. I'm pressing the pedal after a 10% move down, usually a bad move. But its Russia so the rules may not apply.

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    3. Plus they have a central bank meeting on Friday so I'm thinking some more pain today and tomorrow to pressure them to do something.

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  64. FWIW, I've notice a pretty significant drop in traffic at the local CMG. Maybe the price increases are catching up?? I think my burito is like $12 and I get water to drink.

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    Replies
    1. A $12 burrito?!?!

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    2. This is part of the reason I like HABT so much. You can get a meal for $7.50 and the food actually tastes really good. I wanted to buy this on the IPO date but it ran too much. Hoping to add some more if it drops below $30.

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    3. When we were in Florida last March, Burritos were $6.75.

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  65. "I'm confused about how to react, stronger dollar makes it hard to justify foreign equities absent a currency hedge but if you need a currency hedge then why not just trade currency?."

    Well, all of the painful sectors of the market are directly tied to the dollar:
    EMs
    Oil
    Gold
    Steel
    etc.

    If you think the dollar will reverse course then look there. I don't. I was looking for a move to 120 back in March/April last year. It's up to 100. That would be another 20% higher but hopefully it takes longer than expected. I believe that would cause severe panic in emerging markets, particularly Russia.

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    1. Its probably worth taking a bet against this happening, given how beaten down some of these things are and how drastic the move has been.

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    2. Not sure which way that bet is against......?

      I guess the euro reaches parity with $US, so we can have that common currency some special people have been salivating over?

      At some point it won't matter, energy will stop falling. No telling when the waves of bankruptcies subside.

      If natty has to displace coal for electric power, that's a mighty tall order I think. Nuculuur could become popular quickly.....

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    3. The way I'm thinking is the higher US$ makes overseas stocks cheaper in US$, so take advantage and buy positions in them with the high currency. If the US$ keeps going up, gradually buy more overseas.

      If I was an American, I'd also be thinking about taking a European vacation this year too.

      With currency moves though, they do tend to be longer cycle, so probably the dollar continues up for a while (possibly years), but over the long term, currencies move back to around purchasing power parity, so around $1.20 or $1.25 to the Euro.

      As an example of how this gets out of whack, the Canadian dollar should be around $0.80, where it is now, but it spent most of the last decade around $1.00, because the Canadian dollar was highly desired because of the commodity boom. Now that it is over, we back to fair value. The US$ is going up over fair value because the US has a better economy, further into economic recovery, etc. We saw this in the late 1990's where the US$ was high as people wanted in on the tech boom and the US was the place to be,

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    4. A family member was just in Portugal, no idea what prompted the decision or how trip went.

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    5. $US is heading up clearly, but who's responsible for the entire disease of the financial crisis in the first place, it doesn't matter?

      Maybe we should be short gold......

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  66. 2nd - nice call on RSX. You were right it looks like.

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    Replies
    1. I ended up selling out of RUSS at $14.20 down to $13.7. Ugh.

      I bought some ERX today at $50.7. It strikes me as odd that oil is flat on a day when the dollar is going up huge and looks to be in the midst of a parabolic move higher.

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    2. Added to ERX at $50.6. I'm thinking if it drops below $48 I'll be gone. Otherwise targeting a move to $65 or so. This is very reminiscent of those momo stocks last spring. If it is a replay this latest dip is where you would want to get long.

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  67. MCZ - Someone like it all of a sudden......

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  68. EYES, wtf, why are they selling this......

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    Replies
    1. earnings after the bell, of course! i'm looking to buy back in.

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  69. I built up a 20% position in HABT today at $32.8.

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    Replies
    1. Afraid to take my burger challenge??? Hmmm....

      Is there any way to compare HABT to SHAK? Haven't eaten at either but there is a HABT here now. Didn't HABT start mostly in college towns??

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    2. ...and leave my burrito out of it.

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    3. ha.

      SHAK is east coast. HABT is west coast. Prices are far different which is why HABT will be a much bigger success.

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    4. i've never eaten at the SHAK but i've heard it costs about $13 per meal whereas the HABT is like $8.

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    5. Hmmm. I'm interested in this. I'll poke around.

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  70. bought back into RUSS at the close.

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  71. UNG - So we can't determine if natty is in oversupply or not...... Nice.

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  72. Supposedly(emphasis, never trust anything heard from the vaposphere) Putin bought shit-tons of gold so doesn't it make sense gold should get clobbered to $700 or lower?

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  73. I bought back into EYES today at $16.2 with a much smaller position. Looks ok after hours so far. Nice report at first look.

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    Replies
    1. will look to add a little more lower, hopefully around $15 or $14.

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  74. JONE - That was a nice low price..... Not sure what to think but sure did turn around.

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  75. SHAK- Wow, there's only about 40 of these. Nothing west of Chicago. Beer/wine, etc. Kinda a cool bldg. I can see why it's more than a HABT.

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  76. BAC - Off a little in AH, one of the two that were rejected or do we get to know same time as everyone?

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  77. (a) RYTNX (Rydex 2x SPX) ended the day @ 68.29, just below my 1030 est basis of 68.35.
    (b) RYWVX (Rydex 2x Emerging Markets) ended the day +0.47%.
    (c) RYPMX (Rydex Precious Metals) ended the day +3.43%. Note that GDX (a proxy for RYPMX) declined -2% in the early morning (presumably shaking out weak hands) prior to closing up +3%. That's generally the kind of action that signals at least a ST reversal.
    (d) EWZ (Brazil) closed @ 30.61 (+0.76% from basis).
    (e) PBR (Petrobras) closed flat.

    Holding all positions overnight.

    I added two positions intraday:

    (a) Goldcorp was reopened @ 18.12. The stock closed @ 18.69 (+3% from basis).
    (b) RSX (Russia) was reopened @ 16.31. The stock closed @ 16.54 (+1.4% from basis).

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  78. We're going to Phoenix next month - will check out the HABT.

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