After spiking further overnight, $USD futures have now reversed hard. I believe at least a short-term trade in the Euro will be profitable.
(a) Reopening a position in FXE pre-market @ 104.54 (above Wednesday's high, thus buying a 'swing low,' as opposed to catching a falling knife). (b) The dollar weakness should now become a tailwind for gold/commodities. GDX +0.8% pre-market. (c) Emerging markets are highly correlated with commodities. Early indications: EEM (Emerging Markets) +1.4%, EWZ (Braziil) +2.58%, PBR (Petrobras) +1.9%, RSX (Russia) +1.2%.
(a) FXI (China) off @ 41.42 (+1.3%). (b) VGK (Europe) off @ 53.70 (+0.7%). (c) RSX (Russia) off @ 16.63 (+2%). (d) PBR (Petrobras) off @ 5.56 (+2.5%). (e) Will be taking RYTNX (Rydex 2x SPX) and RYWVX (Rydex 2x Emerging Markets) off at the 1030 est window.
(a) RYTNX closed the 1030 window @ 69.39 (+1.61% from Wednesday's close, and +1.52% for the trade). (b) RYWVX closed the 1030 window @ 59.44 (+2.17% from Wednesday's close, and +2.64 for the trade).
Global markets giving back most or all of the day's gains. EWZ (Brazil) now just +0.1% @ 30.64. PBR (Petrobras) -0.92% @ 5.36. RSX -0.5% @ 16.47. EEM +0.65% @ 30.78. FXI 41.29.
This article from Whitney Tilson implies that the formaldehyde issue isn't that big of a health concern unless its at really high levels. Plus, the % of sales from laminate I believe is really low and the test that 60 minutes did on it isn't even the same one that regulators do.
Turning bearish on global markets ex-US. How is it possible to be a bull on Wednesday, and a bear on Thursday? I simply let prices tell me which way to lean. Global markets gapped up this morning, and certainly appeared ready to rally. Instead, the rally was sold.
(a) EWZ (Brazil), which gapped up as much as +2.58% pre-market, is now trading -1.08% and in danger of falling below the 52-wk low set Wednesday. PBR (Petrobras) opened strong, but went on to print a new 52-wk low @ 5.21. (b) EEM (Emerging Markets) has given back 60% of its intraday gains. (c) RSX (Russia) has flipped from a +1.4% intraday gain to a -1.1% loss.
All of the above is bearish. Put another way, the 30m+ shares of EEM purchased this morning are now underwater. Their owners represent the kind of resistance I prefer not to engage. I'll wait for another low-risk entry if/when they capitulate.
Bb- it's 26 million. Not a cheap stock. Trades at a slight discount to CMG price to sales. But they are going to be doing drive thru on their better markets so I think they could ultimate steal some business away from mcd. I think there's room for them to expand pretty significantly. They had a weak net earnings # this past quarter but the overall trend has been higher from 3.x% to 5%. Cmg is over 10%. If they get to that level then right now the stock would be doing 0.75 or so EPS
(a) Moving 60% of the portfolio into a combination of TIP/ FINPX (one is an inflation-protected bond ETF, the other an inflation-protected bond mutual fund-> a La-Z-Boy defense formation, if you will) at the close. (b) Plan to close RYPMX (Rydex Precious Metals) at the close. Based on current pricing for GDX, the fund should end flat relative to Wednesday's close, or a +3.43% gain for the two-day trade.
Still holding FXE (Euro), which has backed off slightly from this morning's open. Considering a position in HDGE.
I picked up some KORS today at $65.72. I like the valuation here a lot. 20% position.
I'm keeping my HABT at a 25% position and may look to pare it down. This insider selling before the lockup may cause some pressure and allow me a lower entry.
Dropping the Euro trade @ 103.61 for a -0.9% loss. The flight-to-safety trade (should it unfold) is likely to bid up not only Treasurys, but also the $USD.
BABA - Surely this one isn't going to remain weak? The new internet shopping revolution is changing the world of commerce (for good or bad, it is what it is)....
Perhaps the question is, if these AMZN's of the world will meet resistance from the retailers who missed the boat, will the retailers step up and if so how?
I cleared out of my positions and went back into RUSS at $14.75 this morning. I just don't have a great feeling for this market in light of crashes in Brazil and Russia and Greece.
SHAK vs HABT - Must be a matter of religious differences between east vs west? We still eat beef around here.... and lamb/goat now too are becoming popular. Lamb burgers, anyone?
All depends how fast they can grow. CMG was always expensive, but their growth turned the stock into one of the best stocks since the financial crisis.
But I agree, risk is high and and sort of miss in sales will likely be hit quite hard. Also, after 1 CMG, people are always looking for the next and often prices get too high.
The comparison to CMG is only illustrative of how a company's growth can impact margins over time, in my opinion. There won't ever be another CMG. SHAK / HABT are playing on people's tastes moving away from MCD / Burger King / WEN. There's a stigma associated with eating at those places now and people prefer cleaner / more upscale places.
If you look at the opportunity they have in front of them, it's pretty large. MCD / WEN / BKW have a combined market cap of around $110 Billion. SHAK / HABT is around $2.5 Billion combined. Having said this, SHAK is one of the most overpriced stocks I've seen in a long time. Lots of assumptions for growth are going into its multiple.
They're also two different brands entirely. HABT serves things other than burgers that are actually pretty good. And its very affordable...you can get a meal for $8. SHAK is much higher end with no chicken sandwiches or grill tuna sandwiches. It's also priced a lot higher...around $11-13 per meal.
Some of the value guys are starting to talk about Russia as a place to invest and are taking small positions. A much larger majority are just staying away due to the concerns about people following laws, accounting, etc.
On the road with ROSE ($17.12 – B) – Spent Mon-Wed this week on the road with the company, which was interesting timing given the equity deal launched on Monday afternoon and the 2015-16 outlook was provided just 2.5 weeks ago. The 2-year outlook (unique in small-cap E&P land) took investors off-guard and the stock plummeted -15%. We believe spending within cash flow and protecting assets in lieu of growth is prudent. We remain positive on the long-term prospects for the equity despite near-term headwinds. This is a stock to buy and hold for investors constructive on 2016+ crude oil prices and resource delineation in the Delaware basin. More below.
Don't know much about healthcare stocks, but I like the numbers on this one. I also always worry about the politics of drug prices because they are so high in the US, but the drug companies seem to always be able to keep charging them, so I guess I should have more faith that they'll continue to be able to.
Beautiful.
ReplyDeleteThe Eagle Descends.
ReplyDeleteThe pain trade in 2015 has clearly been shorting the $USD, more easily visualized via a chart of the Euro (FXE):
http://finance.yahoo.com/echarts?s=FXE+Interactive#%7B%22range%22%3A%223mo%22%2C%22lineType%22%3A%22candlestick%22%2C%22scale%22%3A%22linear%22%7D
After spiking further overnight, $USD futures have now reversed hard. I believe at least a short-term trade in the Euro will be profitable.
(a) Reopening a position in FXE pre-market @ 104.54 (above Wednesday's high, thus buying a 'swing low,' as opposed to catching a falling knife).
(b) The dollar weakness should now become a tailwind for gold/commodities. GDX +0.8% pre-market.
(c) Emerging markets are highly correlated with commodities. Early indications: EEM (Emerging Markets) +1.4%, EWZ (Braziil) +2.58%, PBR (Petrobras) +1.9%, RSX (Russia) +1.2%.
Looking to buy INTC @ 30. -4.6% to 30.85 pre-market.
ReplyDeleteFCX (Freeport McMoran) off @ 19.57 (+3.6%).
ReplyDeleteLL - Time to trade a turd......
ReplyDeleteGoldcorp off @ 19.03, and reopened @ 18.64.
ReplyDeleteEWZ (Brazil) off @ 31.18 (+2.6%).
ReplyDeleteAdded to my HABT, EYES, and RUSS positions at $13.6, $14.8, and $31.1
ReplyDeleteSold RUSS at $13.85 avg. Lost a little on that.
DeleteSecond tranche of Goldcorp off @ 18.75. Done with that position.
ReplyDelete(a) FXI (China) off @ 41.42 (+1.3%).
Delete(b) VGK (Europe) off @ 53.70 (+0.7%).
(c) RSX (Russia) off @ 16.63 (+2%).
(d) PBR (Petrobras) off @ 5.56 (+2.5%).
(e) Will be taking RYTNX (Rydex 2x SPX) and RYWVX (Rydex 2x Emerging Markets) off at the 1030 est window.
Risk reduction.
TLT - Sold off ahead of the ECB QE, it seems. Now, that might reverse?
ReplyDeleteI added a little more to my HABT position at $30.8 and $31.2. Avg is now around $31.6
ReplyDelete(a) RYTNX closed the 1030 window @ 69.39 (+1.61% from Wednesday's close, and +1.52% for the trade).
ReplyDelete(b) RYWVX closed the 1030 window @ 59.44 (+2.17% from Wednesday's close, and +2.64 for the trade).
Global markets giving back most or all of the day's gains. EWZ (Brazil) now just +0.1% @ 30.64. PBR (Petrobras) -0.92% @ 5.36. RSX -0.5% @ 16.47. EEM +0.65% @ 30.78. FXI 41.29.
Management team is pretty solid at HABT. Looking through these profiles:
ReplyDeletehttp://ir.habitburger.com/phoenix.zhtml?c=253775&p=irol-govmanage
CEO of HABT was previously president of Cheesecake. The Chief Development Officer (guy that picks locations) was previously at PF Changs
Natty - Yesterday we had a shortage, today a surplus.
ReplyDeleteBTU - Off another 5%, LOL, bottomless pit.... So what's the replacement, cold fusion?
ReplyDeleteWhat do u guys make of LL?
ReplyDeleteWhat do you say, Mark? Is there anything to the story about formaldehyde in their flooring products?
DeleteThis article from Whitney Tilson implies that the formaldehyde issue isn't that big of a health concern unless its at really high levels. Plus, the % of sales from laminate I believe is really low and the test that 60 minutes did on it isn't even the same one that regulators do.
DeleteI don't know about you, but that kind of 'reassurance' wouldn't do it for me. Not if it's my residence.
DeleteTurning bearish on global markets ex-US. How is it possible to be a bull on Wednesday, and a bear on Thursday? I simply let prices tell me which way to lean. Global markets gapped up this morning, and certainly appeared ready to rally. Instead, the rally was sold.
ReplyDelete(a) EWZ (Brazil), which gapped up as much as +2.58% pre-market, is now trading -1.08% and in danger of falling below the 52-wk low set Wednesday. PBR (Petrobras) opened strong, but went on to print a new 52-wk low @ 5.21.
(b) EEM (Emerging Markets) has given back 60% of its intraday gains.
(c) RSX (Russia) has flipped from a +1.4% intraday gain to a -1.1% loss.
All of the above is bearish. Put another way, the 30m+ shares of EEM purchased this morning are now underwater. Their owners represent the kind of resistance I prefer not to engage. I'll wait for another low-risk entry if/when they capitulate.
TOF,
ReplyDeletehow many shares are their fully diluted for HABT? Their last earnings report is confusing and I haven't been able to find a clear answer yet.
Bb- it's 26 million. Not a cheap stock. Trades at a slight discount to CMG price to sales. But they are going to be doing drive thru on their better markets so I think they could ultimate steal some business away from mcd. I think there's room for them to expand pretty significantly. They had a weak net earnings # this past quarter but the overall trend has been higher from 3.x% to 5%. Cmg is over 10%. If they get to that level then right now the stock would be doing 0.75 or so EPS
DeleteOK. Thanks. Probably not a surprise, but too rich for me.
DeleteWill still go check it out though - gotta try the "Best Burger in America"
LL- Sorry, no way. I think it is a shame.
ReplyDelete(a) Moving 60% of the portfolio into a combination of TIP/ FINPX (one is an inflation-protected bond ETF, the other an inflation-protected bond mutual fund-> a La-Z-Boy defense formation, if you will) at the close.
ReplyDelete(b) Plan to close RYPMX (Rydex Precious Metals) at the close. Based on current pricing for GDX, the fund should end flat relative to Wednesday's close, or a +3.43% gain for the two-day trade.
Still holding FXE (Euro), which has backed off slightly from this morning's open. Considering a position in HDGE.
Someone hit my buy limit on HDGE @ 11.22.
ReplyDeleteEYES - What a bunch of BS, man....
ReplyDeleteNWPX - How about these past couple sessions, knockout bottom?
ReplyDeleteHasn't had that few weeks of rising volume though, might have to go lower.....
DeleteAre billions of corporate and EM government bonds being issued denominated in euros? I guess everyone's short euros.....?
ReplyDeleteThe Fiat 500 Abarth has a throaty sound, reminiscent of the death rattles of a million baby polar bears.
ReplyDeleteORI - This one looks like it might be ready to run, just went through the back test...
ReplyDeleteKB - Reports in the morning.
ReplyDeleteCENX - Is aluminum really that bad off?
ReplyDeleteEWZ (Brazil) opens off -3% to 29.3x, and PBR (Petrobras) breaks below 5 to 4.95. Crude declines -2%.
ReplyDeleteOdds are high that we'll look back at Brazil as a 'tell' for 2015, much as plunging oil prices represented a 'black swan' event in 2014.
DeleteAKS - Down, and out.....
ReplyDeleteKB - Earnings???
LL - Hold onto your undies.....
CENX - Roll another one...
I picked up some KORS today at $65.72. I like the valuation here a lot. 20% position.
ReplyDeleteI'm keeping my HABT at a 25% position and may look to pare it down. This insider selling before the lockup may cause some pressure and allow me a lower entry.
GREK wants to retest its YTD low.
ReplyDeleteHLF - Breaking up, do we wanna chase?
ReplyDeleteBSBR - Cheap enuff? What the heck is wrong???
ReplyDeleteDropping the Euro trade @ 103.61 for a -0.9% loss. The flight-to-safety trade (should it unfold) is likely to bid up not only Treasurys, but also the $USD.
ReplyDelete6 month rally coming for European exporters.........
DeleteBABA - Surely this one isn't going to remain weak? The new internet shopping revolution is changing the world of commerce (for good or bad, it is what it is)....
ReplyDeletePerhaps the question is, if these AMZN's of the world will meet resistance from the retailers who missed the boat, will the retailers step up and if so how?
I cleared out of my positions and went back into RUSS at $14.75 this morning. I just don't have a great feeling for this market in light of crashes in Brazil and Russia and Greece.
ReplyDeleteSHAK vs HABT - Must be a matter of religious differences between east vs west? We still eat beef around here.... and lamb/goat now too are becoming popular. Lamb burgers, anyone?
ReplyDeleteHABT, even though it is very expensive, looks like much better value than SHAK. An awful lot of growth priced into SHAK.
DeleteWhich makes me think SHAK has a good chance of getting clobbered.
DeleteAll depends how fast they can grow. CMG was always expensive, but their growth turned the stock into one of the best stocks since the financial crisis.
DeleteBut I agree, risk is high and and sort of miss in sales will likely be hit quite hard. Also, after 1 CMG, people are always looking for the next and often prices get too high.
The comparison to CMG is only illustrative of how a company's growth can impact margins over time, in my opinion. There won't ever be another CMG. SHAK / HABT are playing on people's tastes moving away from MCD / Burger King / WEN. There's a stigma associated with eating at those places now and people prefer cleaner / more upscale places.
DeleteIf you look at the opportunity they have in front of them, it's pretty large. MCD / WEN / BKW have a combined market cap of around $110 Billion. SHAK / HABT is around $2.5 Billion combined. Having said this, SHAK is one of the most overpriced stocks I've seen in a long time. Lots of assumptions for growth are going into its multiple.
They're also two different brands entirely. HABT serves things other than burgers that are actually pretty good. And its very affordable...you can get a meal for $8. SHAK is much higher end with no chicken sandwiches or grill tuna sandwiches. It's also priced a lot higher...around $11-13 per meal.
Some of the value guys are starting to talk about Russia as a place to invest and are taking small positions. A much larger majority are just staying away due to the concerns about people following laws, accounting, etc.
ReplyDeleteEven on a crappy day like today, FCAU just keeps rocking.
ReplyDeleteI keep thinking I should trim some and maybe replace it with more GM, but it just keeps pushing upwards and a lot of things are going right for them.
If Machinonne could execute a sale of the company, that would be a great exit stra
TP-
ReplyDeleteOn the road with ROSE ($17.12 – B) – Spent Mon-Wed this week on the road with the company, which was interesting timing given the equity deal launched on Monday afternoon and the 2015-16 outlook was provided just 2.5 weeks ago. The 2-year outlook (unique in small-cap E&P land) took investors off-guard and the stock plummeted -15%. We believe spending within cash flow and protecting assets in lieu of growth is prudent. We remain positive on the long-term prospects for the equity despite near-term headwinds. This is a stock to buy and hold for investors constructive on 2016+ crude oil prices and resource delineation in the Delaware basin. More below.
DeleteFCAU=Beast.
My FCAU profits could buy me a new Durango
DeleteMaybe they'll get up to Aston Martin levels soon, but no way they'll get to Maserati levels!
DeleteVHC - Time for short covering?
ReplyDeleteBought 1/3 position in gild. I know they r reprocibg the hep c drug but it's a really cheap stock.
ReplyDeleteDon't know much about healthcare stocks, but I like the numbers on this one. I also always worry about the politics of drug prices because they are so high in the US, but the drug companies seem to always be able to keep charging them, so I guess I should have more faith that they'll continue to be able to.
DeleteNGL/SARA/XSL - Sings of life after death?
ReplyDeleteFMD - Why is this one moving up....... still.....
ReplyDeletehttp://www.technologyreview.com/news/535766/solar-power-and-somewhere-to-store-it/
ReplyDelete