Saturday, April 18, 2015

4/18/15 Red House



The average investor in China has to be asking himself how he plans to navigate Monday's open.

My least successful trade on Friday is also the most instructive, at least when applied to the above scenario.

(a) Let's say the Shanghai Composite opens down -5% (as suggested by Friday's futures).  Do you sell?
(b) Should the index fall further, let's say to -7%, will you have a stop level in place?
(c) Should the index then gap down hard to -9%, will you decide to capitulate, or will you add to your positions?
(d) Do you have the capital to add to positions?  If not, do you plan to raise capital by cashing out?  At what point will you cash out?

Let's replay Friday's action in RSX (Market Vectors Russia).  Not unlike the Shanghai Composite, RSX had also risen (prior to Friday's selloff) about +20% since March.

(a) RSX gaps down -3.8% at the open.  Do you sell?
(b) It continues to slide to -5.5%, which coincides with technical support levels.  Do you stop out, or do you add to the position?
(c) A large sell order appears midday, taking RSX to the -8.7% level in the blink of an eye.  Do you capitulate, or do you buy/add?
(d) Have you the capital to buy/add?  Was it raised by cashing out @ -3.8%, to be deployed at lower levels?

All good questions for investors in the Shanghai Composite to ponder this weekend.  Of course, it's unlikely that investors in the DJIA/SPX will need to ponder these questions immediately.  Unlikely, but not out of the question.

182 comments:

  1. NFLX's 'Daredevil' surprisingly good so far (Episode 1).

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  2. Those questions are too hard for me. That's why I just try to buy cheap stocks and avoid the major market meltdowns like 2000 and 2007. But if you can get those right, lots of money to be made.

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  3. Tanker rates looking quite good:

    https://www.intertanko.com/Members-Information/Research-and-Projects/Research-and-Projects/Indicative-key-figures-/

    Many are close to the highs of the last 15 years. If these rates hold, the tanker stocks will do really well as they increased revenue will fall right to the bottom line. There are a lot of positives in the oil shipping markets now like crude going to further places than the US from the middle east and Iran potentially starting to ship more crude and maybe even the US exporting. It doesn't look like we are getting the big overbuilding like we saw in dry bulk, so also makes me positive.

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    1. Those markets change so rapidly its really hard for me to have any significant confidence in their longevity. I've been thinking about this sector a little bit the past couple of weeks: what is to stop a dry bulk shipper from getting into this market? Do the ships have to be rigged up specifically for transporting oil? Seems to me with so much supply lying around that it's just a matter of time before that sector gets squashed but I'm really naive with that whole sector.

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    2. Good question, but it does look like they can't just be converted over. Found this:

      http://www.tradewindsnews.com/weekly/352983/Owners-convert-capesize-bulkers-into-tanker-orders

      about companies trying to change their dry bulk new build to be a tanker,but will be allowed to do so if the materials to build the dry bulk ship haven't been bought, so they must be build differently and not easy to switch.

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    3. I think shipping in general is a pretty good business and there are stories of quite a few people who have made fortunes in shipping. But the last few years have been very tough with the commodity boom and huge rise in dry bulk rates and then all that money jumping into shipping.

      I do agree it is hard to understand and I am keeping my positions fairly small in these stocks and do not plan on them being long term holds. But I can also see them doing very well if rates continue to rise and profitability skyrockets, so I think a good risk reward for my position size.

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    4. Tankers have to be double-hull, for one thing. That requirement sent the older ships to the scrap yard.

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    5. That could be helping rates too.

      What I like about this story is when you have a product with a high fixed cost like ships, then any increase in marginal income goes right to the bottom line. So, if profit margins are 10%, and revenue goes up by 10%, actual profits will almost double as all of that incremental revenue is profit. You get some of these tankers showing profit growth like this and traders hop on board and drive prices up.

      I guess that Economics course I took way back was actually useful

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    6. The main concern has always been around the supply since presumably demand has been fairly constant (certainly moreso than dry bulk). The economics of the business are very easy to grasp. I don't know anything about this sector's supply/demand so I'm left in the dark on that stuff.

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  4. ZINC - Downtrend broken headed up? I don't have much confidence in these kinds of stocks having watched and unfortunately participated, while they fall into the toilet.

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  5. BXE had 4th most insider buying on TSX this week:

    https://www.canadianinsider.com/

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  6. China - LTRO style stimulus? Buying local government debt, refinancing that debt at low(er) rates?

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  7. PAL - I guess that's it for this one, probably creditors take over just prior to a huge palladium market rally? Gotta love the fake bull trap.

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  8. "THE ILLUSION OF CONTROL:
    And a streak of being right can make anyone forget how important luck is in determining the outcome.

    Research led by psychologist Ellen Langer, now at Harvard University, shows that when people who predict the tosses of a coin are told they got eight out of their first 10 flips correct, they conclude that they are significantly better than average at calling heads or tails—and that they could get well over half their guesses right if the coin were tossed another 100 times.

    Prof. Langer called these incorrect beliefs “the illusion of control.”

    If, however, people either get most of their early guesses wrong or win and lose in a random pattern, they don’t believe they have any special gift for calling heads or tails; nor do they remember being correct more often than they were.

    Guarding against the illusion of control takes constant vigilance. The longer you’ve been right, the harder it gets."

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    Replies
    1. Yep. Investing certainly isn't luck, it's being able to comprehensibly evaluate corporate dynamics balanced with potential for demand then jumping on something that has potential.

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  9. Do you guys have a WSJ subscription? I've noticed that a few of my biggest winners the past couple of years have been related to news catalysts and am wondering if I would be better served getting a subscription.

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    1. I used to, but didn't find it worthwhile. But there are times still I click on stuff and it is behind their paywall, but not that often. I find news feeds (eg. Reuters) which I get through Yahoo Finance and my broker are the best source of info. I do have a paid subscription to the Toronto Globe and Mail, but they reduced the price to $1 for 6 months, so hard to say no. If I was going to get another subscription, I'd go for the Financial Times over the WSJ as I end up reading their stuff (or getting blocked by their paywall) far more than the WSJ.

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    2. But I'd try it if I were you. I think you can get a 3 month trial for $1 or something and even at full price, it is a great deal if it works for you. One good trade would more than pay for it for the year.

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    3. I do not, but use to read Barron's every week until it seemed like old news based on the rise of information on the internet.

      I think the key is just to have a few competent sources and simplify. Fidelity has a really good research area you may be able to try that for a trial or open an account.

      Generally the internet causes information overload.

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    4. I agree I think. I would never be able to consistently read the WSJ, online or offline. I've generally found looking at the headlines on CNN and then looking at the big movers lists every day on Finviz helps with getting ideas on themes. The hardest part, like anything in life, is keeping the info organized. Like ROSG. I had it on an old watch list that I threw away and found only because my 1 year old daughter dug it out of the trash in my office....had I been more organized about it I probably would have looked closer at buying the pullback to the $3's.

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  10. The Remaking of Wall Street, 1967 to 1971:
    http://hbswk.hbs.edu/archive/1719.html

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  11. China does their best not to import anything but there are some raw materials they've imported in the past to support their infrastructure build out and of course they aren't that great at manufacturing civil aircraft but they're great at copying existing designs so eventually they will build their own outdated aircraft and build on that.

    "In her pre-market brief, Wells Fargo Metals Director Janet Miraola quoted Mike Bird of Business Insider:

    China’s economy is not looking too healthy right now. But its probably even worse than it looks. Power output is completely flat and imports from the country’s commodity suppliers are plunging. Domestic demand is plunging for the only time ever on record. Even in the midst of the global financial crisis domestic demand did not actually fall."

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  12. FCAU - Getting tired of this one...
    TDW - Long some of this on the 50SMA support retest. OMG, what have I done???

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    1. If that Ferrari IPO gets delayed (mention of it possibly slipping into 2016 at annual meeting) I think you could see FCAU test the low $14's/high $13's again. maybe coupled with a slow month in sales??? that would be a great buying area. Probably worth holding if you want to hold it thru the IPO but otherwise I'm thinking we could get another dip.

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  13. INXX - Just noticed, India infrastructure ETF took a dive lately. Not very inspiring.

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  14. GMO - Picked up a new Chinese banking partner I guess, wonder how long it takes them to push the price to zero forced BK and screw shareholders?

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  15. Mort Zuckerman - "US economy will be slow at least through year end."

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  16. TASR having a great day today. Announced sales of 6,400 tasers to like 20 or so departments across the world. Equates to about $7 or $8 Million in sales based on avg selling prices for each item. Not a huge deal b/c none were body cameras but those types of relationships tend to strengthen and result in sales of body cameras and monthly subscriptions to Evidence.com.

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    1. Yep, sales should go exponential for TASR, IMO.

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    2. TASR should capture nearly all of the market for the digital storage. They're building out a really nice business model.

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  17. SPG and NRG are hooking up for tax breaks and who knows what else, right?
    "Buy NRG get SCTY for free" Given target is a tantalizing $27 for such a sweet subsidized bundle of solar plays, that's not very convincing.

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  18. Re FCAU, hard to know when the market will get excited about the stock, and picking the timing is always hard:

    "Our stay-put behavior reflects our view that the stock market serves as a relocation center at which money is moved from the active to the patient."

    Warren Buffet - 1991

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    1. I agree with that when you get to a point where you can't afford to move in and out of stuff due to size, like where he was in 1991. Also keep in mind that during Warren's entire early part of his career the average holding period of stocks was several years. Now it's a few months. I'm betting that this impatience creates opportunities on a more regular basis for people that can move $$ around faster. I've had success for 13 years now by being more active and never holding thing for a year or longer. But of course, to each his own.

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    2. If you can trade effectively like you do, that is a great way to work, but for probably 95% of people, trying to time trades hurts their returns more than it helps.

      I think Buffet's point is more, if you find a great stock or idea, buy it and wait and the value will come out. Too many people say, hey, I'm up 10% in a week, better take profits only to have a stock double or triple and miss the big gains.

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  19. ITB - We should probably own this one if we think there's a shortage of homes.

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    Replies
    1. I agree, although I do see more value in a stock like BAC

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  20. (a) China unleashed its second surprise Sunday night (cutting the reserve ratio requirement for banks by -1%), a market-friendly move which effectively offset Friday's announcements. As a result, Shanghai (-1.64%) and Hong Kong (-2.02%) were spared more serious overnight declines.
    (b) The $USD is up +0.6%, contributing to a -0.77% selloff in FXE (the Euro). Will look to reopen FXE within the next 24 hours.
    (c) US indexes are rallying +1%. EEM is not (flat).
    (d) TLT (long-dated Treasurys) off -0.8%.
    (e) Gold off -9/oz, crude flat.
    (f) Russia (RSX -0.8%) and Greece (GREK -2.58%) continue to sell off.

    I spot a moderate-risk, yet attractive entries- hence positions will be small: RYWVX (Rydex 2x Emerging Markets), RYTPX (Rydex 2x Inverse SPX), RYGBX (Rydex 1.2x Government Long Bond), and RYVIX (Rydex Oil Services).

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  21. QCOM - I kinda like this chart. This company makes those portable device WIFI chips, do you guys use WIFI much? I guess you must use it constantly?

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  22. UEC - Apr-20-15 10:48AM Uranium Energy (UEC) Stock Rises Today on Insider Buying, Bullish Uranium Outlook at TheStreet +18.47%

    URG is next?

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  23. Heading back home tomorrow. Looks like my stocks did pretty made money I was gone, so that makes for a good vacation.

    A lot of of micro-brews here in Arizona (like everywhere now I think). Went to a festival with 200 beers- too many to chose. Of the more common beers, got into the Fat Tire Amber Ale.

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  24. AXP - Bounce is beginning, maybe?

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  25. NVS - There ya' go. This company built a cancer research facility for a doctor that says he has a cure.

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  26. Reopened a position in GREK (Greece) @ 9.79.

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  27. NVR - Bango! Initial reaction, up she goes.
    BXE - Gives it up faster than a crack whore, must be oil inventory report?

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  28. (a) Taking RYWVX (Rydex 2x Emerging Markets) + RYTPX (Rydex Inverse 2x SPX) off at the 1030 est window. The combination was a 'paired trade' opened at a 2:1 ratio RYWVX:RYTPX (the inverse fund acting as a hedge against a global selloff). EEM currently +0.95%, SPY +0.15%, so a net +1.2% gain on funds deployed.
    (b) FXE (Euro) back to 105.15, and looking to reopen with a 104-handle.
    (c) Flyer on PBR (Petrobras) @ 8.78 ahead of Wednesday's release of audited financials.

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  29. PSX - Looks pretty decent, ~$100 target maybe?

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  30. GEVO - Biofuel not so green.....?

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  31. GILD - Up on volume, obligatory collapse in 1,2,3....?

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  32. Only did one thing today: Bought some BITA at $55.45. Been regretting not buying that for too long...since I found it at $8 ugh.

    Still holding TASR. Should have known the pattern would hold - big up day followed by big down. Guaranteed.

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  33. (a) RYWVX (Rydex 2x Emerging Markets) closed the 1030 window +2%. RYTPX (Rydex 2x Inverse SPX) closed green as well, but only +0.09%.
    (b) RYGBX (Rydex 1.2x Government Long Bond) + RYVIX (Rydex Oil Services) are not expected to perform as well! TLT currently off -0.59%, and OIH off a whopping -2.8%!
    (c) I sized RYGBX equal weight with RYWVX, and RYVIX equal weight with RYTPX. Since all positions were sized 'small' to begin with, I plan to hold RYGBX another day, and will add to RYVIX at the close (had I not opened yesterday, I would certainly be opening today).

    Downside risk remains high. DJIA currently off -100 points. However, both bonds + utilities are also off. $USD has given back most of its early session gains. Gold is higher, crude lower. The market dance is more 'complicated' than it has been, displaying 'unusual' market interrelationships- but that's how opportunities are created.

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  34. Wonder if DEA agents have moved on to importing heroine, now that the marijuana market is crowded?

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  35. WYNN, they hit the bid late in the day while gone, in at 126.73

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  36. (a) Added to PBR (Petrobras) @ 8.55.
    (b) Opened XLU (Utilities) @ 44.29.
    (c) Opened USO (Crude) @ 19.40.
    (d) Opened GE (General Electric) pre-market @ 26.55.
    (e) Opened SLW (Silver Wheaton) @ 19.30.

    TLT (long bond) continues to pull back (-0.6%), but OIH (oil services) catching a bid (+0.8%).

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  37. China - Wouldn't it be fair to say there has been a shift from manufacturing umbrellas and beach chairs towards IT and technology?

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  38. Sold bita at 58.6

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  39. Looks like DB having a good quarter:

    http://www.bloomberg.com/news/articles/2015-04-22/deutsche-bank-sees-legal-costs-of-eu1-5-billion-in-first-quarter?cmpid=yhoo

    I'm thinking about adding as it looks like business is running well and probably the upcoming split of the business will drive value. Probably will just hold as its up over 2% today, but could be the catalyst to get things moving.

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  40. California is rich enough to afford $65M for TSLA, just raise taxes on something and reallocate the income.

    "A review of California’s Self Generation Incentive Program, or SGIP, shows Tesla has ambitions to sell batteries for a range of commercial uses, from powering its factories to reducing electric bills at schools and wineries. Tesla is on track to reap as much as $65 million in SGIP rebates, which are designed to encourage investment in alternative energy."

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  41. (a) Taking off the majority of PBR (Petrobras) here @ 9.93 (+4.5% from basis).
    (b) Gold/miners selling off hard, with hopefully capitulation not far behind. Plan to add to miners at the close.

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  42. Silver is at least 100x cheaper than it's supposed to be.

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  43. (a) Closing SLW (Silver Wheaton) @ 19.06 for a -1.25% loss. GDX (miners) now off -3%, and hoping for a ‘real’ selloff on Thursday for a low-risk entry.
    (b) OIH (oil services) now +1.2%. Plan to close RYVIX (Rydex Oil Services) end of day.
    (c) TLT (long bond) -1.25%. Holding RYGBX (Rydex 1.2x Government Long Bond) another day didn’t work out. I plan to take the hit end of day (there’s usually no point in arguing with price action longer than a day or two), which will offset my gains on RYVIX and deliver a breakeven finish for my Rydex positions.
    (d) GE off @ 26.90 for a +1.3% gain.
    (e) XLU off @ 44.55 for a small +0.6% gain.
    (f) Closing USO (Crude) @ 19.35 for a small -0.25% loss.

    100% cash by end of day. +0.3% overall gain for the port.

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  44. ITB - Well, well, well.... A bit of a surprise to me this closed red again given the reported shortage of homes. PHM reports en la manyana and looks like a decent setup if you know the results in advance or whatever. I don't believe the FED will tolerate home price collapse, they'll do "whatever it takes".......

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  45. VALE - Wow man? "Vale Stock Rises Today on Record Iron Ore Output at TheStreet +10.36%"

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  46. What a miserable group of wimps running for Prez.

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    Replies
    1. I still think the right strategy is to pare down risk significantly at some point in 2016.

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  47. "Looks like DB having a good quarter:

    http://www.bloomberg.com/news/articles/2015-04-22/deutsche-bank-sees-legal-costs-of-eu1-5-billion-in-first-quarter?cmpid=yhoo

    I'm thinking about adding as it looks like business is running well and probably the upcoming split of the business will drive value. Probably will just hold as its up over 2% today, but could be the catalyst to get things moving."

    BB - Could you fill me in on the upcoming split you're referring to?

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  48. IBKC - That's my bid on the board :)

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  49. AEIS - What do you think of this one, on the buy list but I don't like the insider sales.

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  50. Ticker Expected Report Date BofAML Estimate Consensus Estimate
    IBKC 4/22/2015 0.98 0.98
    TSRA 4/23/2015 0.64 0.66
    SIVB 4/23/2015 1.45 1.34
    SWFT 4/27/2015 0.24 0.27
    MTSI 4/28/2015 0.39 0.35
    SAVE 4/29/2015 1.03 0.97
    CW 4/29/2015 0.84 0.80
    AXL 5/1/2015 0.55 0.58
    AEIS 5/4/2015 0.37 0.43
    ACM 5/5/2015 0.53 0.45
    HNT 5/5/2015 0.53 0.68
    PTCT 5/5/2015 -- -1.18
    BLMN 5/5/2015 0.55 0.54
    CCOI 5/7/2015 0.02 0.03
    TTWO 5/13/2015 0.27 0.27
    BAH 5/21/2015 0.30 0.33
    RH 6/11/2015 0.19 0.19
    GBX 7/1/2015 1.66 1.61

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  51. QCOM - Duh, of course Samsung's going to do this, Samsung is not some Podunk company and if you think they're going to buy chips when they can make them themselves then you're a fool. Samsung runs a foundry in addition to their own products, they killed Japanese semi producers long ago.

    "Samsung Electronics Co opted to use an internally developed processor for its new"

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  52. "What a miserable group of wimps running for Prez."

    Yeah, except we're so used to being screwed we don't know what the alternative feels like..

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  53. CCK - 04/21/15 Neutral Buy

    Pure clairvoyance, obviously.

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  54. Mexico to invest $8B in ports infrastructure, US - ??? Oh, we're too preoccupied with military maneuvers.

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  55. TOF,

    re DB, there is a board meeting on Friday, after which the announcement may be made. They've been working on this a long time.

    This is a good summary of what they are considering:

    http://www.ft.com/intl/cms/s/0/f8faa72c-e693-11e4-9fa1-00144feab7de.html?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev#axzz3Y3pooIO1

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  56. I read this week that Hilary has a 70% chance of winning the Democratic nomination and that in survey of her versus the leading Republican candidates, she polls at least 20% higher than all of them.

    So it looks like it is hers to lose, but this server thing (which I'm still not sure what it was about) seems to be serious enough that it could knock her down some.

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  57. (a) Reopened PBR (Petrobras) @ 8.55.
    (b) Reopened FCX (Freeport McMoran) @ 19.88.

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    Replies
    1. PBR off @ 8.85 (+3.5%). The trade was entered with a nano-time frame based on crowd reaction (likely to include a great deal of confusion) to yesterday’s release of financial statements.

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    2. FCX off @ 20.07 (+1%). Same strategy.

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  58. FCAU - Not so good, something's up?

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  59. TTM - Really came back to us, wonder which part(s) isn't doing well?

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    Replies
    1. Yeah it's an expensive stock relative to sales when you compare it to the other mfgs. But they make up for that in margins.

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  60. Give me your top ten boys. I got a itchy finger.

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    Replies
    1. I don't know if i have a top ten but the top 10 on my watch list are:

      GILD
      FCAU
      VA
      TASR
      BITA
      EYES
      BKJ
      AXP
      BAC
      TWTR

      I own TASR and BKJ of those.

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    2. ISNS is into license plate readers, police need those too. microdot company though and maybe a joke, surely there's some competition?

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    3. SAVE seems to be preferred over VA.... Of course I don't know much.

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    4. Yeah I like the flying experience in VA better, price earnings (estimates) is much lower, they have a ton of customer loyalty (shows up in annual rankings of airlines and in their social media following). the overhang on VA is insiders are looking to offload a bunch of their shares through offerings. Plus, they don't have a long enough operating history as a public company and that scares people off.

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  61. GM - Hit on earnings, at bottom of channel now.
    General Motors Company: 1Q15 in-line, don’t get so worked up – first take April 23, 2015 08:34 AM ET $51 target posted at the moment.

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    Replies
    1. GM reported 1Q15 op EPS of $0.86, above our $0.85 estimate, but below the optimistic Bloomberg consensus of $0.97. North America was strong as expected and EU was slightly better while other regions were largely in-line with our forecasts. GM's 2015 outlook was unchanged, which along with a big yield (3.9%) and buyback (8% of mkt cap) is encouraging.

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  62. ISNS - Anybody heard of this one? Seems inconsequential in the scheme of the world but who knows....

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    Replies
    1. I mentioned this one a couple of weeks ago...I'm still holding a tiny position. Norman Pessin, a guy that invested heavily in NLS back when it was at $2, has a 6-7% stake in ISNS.

      Delete
  63. KEX - This one turned green now...........

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  64. Mark, the tanker companies are still looking good.

    I own NAT and ASC, but there are others like FRO, EURN, etc.

    From the latest NAT annual report out today:

    From NAT's latest annual report below - if rates hold up here, these companies are going to be super profitable:

    The Tanker Market 2015

    The first quarter of 2015 was the strongest quarter in years. The general uptick in rates seen through the fourth quarter of 2015 continued without the fallback seen during the same quarter in 2014. Suezmax rates up to the week ending March 13, 2015 averaged just over $51,000 per day based on the Clarksons Modern Suezmax Tanker Index. For the equivalent VLCC index the average was just over $53,000 per day.

    Coming into 2015 vessel values continued to rise. The following values are based on weekly observations up to the week ending March 13, 2015. According to the Clarksons data, 5 year old Suezmaxes rose in value by 8.4% from an average of $54.9m in 4Q2014 to $59.5m in 1Q2015. 5 year old VLCCs rose in value by 5.2% from an average of $76.7m in 4Q2014 to $80.7m in 2015. Prices rose as a result of a stronger earnings environment and increased activity in the timecharter market.

    An improved balance between supply and demand for tanker vessels is affecting the market positively. It is expected that the global fleet will increase slightly during 2015 because of the present order book. However, some shipping companies are now facing challenges in financing their large newbuilding programs, as shipping banks are more restrictive than before in granting credit. Assuming current scrapping levels, it can be assumed that the Suezmax fleet may contract in 2015, before resuming growth in 2016, given the current order book.


    This guy at Seekingalpha basically shows the same:

    http://seekingalpha.com/article/3079306-6-tanker-companies-that-probably-had-a-good-first-quarter

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    Replies
    1. The risk is how much of these higher rates are priced in as the stocks have already gone up quite a bit or if rates don't hold, but I think we can go quite a lot higher.

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  65. Mark, for or a longer term hold, I think GIB and CBI are probably still good. I wouldn't sell mine here for sure.

    And I think the financials in general are still the place to be. They are generally growing about 8% a year, and have good p/e and p/b support to limit the downside. Plus, they are cheap relative to the market and their traditional valuation, so if they can start to show some better growth, which is pretty likely when rates do rise, you'll get the kicker of rising valuations and earnings. It's just taking a lot longer to get the rising rates than I thought possible.

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  66. CP,

    doesn't look like the market liked GM's quarter. But I think some good tailwinds on it with good valuation, lower gas pushing people to larger vehicles which GM makes, recalls ending, strong China share, plus hopefully Europe and South America getting things together.

    I think I've been holding for close to a year now and I'm slightly above water, but it is another one that is taking longer than I'd like. But I think it will eventually move and if it can get to say $65 in say another 3 years, that's almost a 20% annualized return from my purchase, and I would be good with that.

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    Replies
    1. I agree with this. Of the big ones I watch, BAC and DB are pretty clearly significantly undervalued.

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    2. ha meant to respond to another post with this one.

      Delete
  67. Re VA, I flew Air Canada Rouge (their discount line) and Westjet to Phoenix and back and both flights, people were grumbling. I think people are getting fed up with the every shrinking seat size and lack of service and being charged for everything and we may see a push the other way and people willing to pay a bit more to get more space and a better travel experience.

    Plus a friend of mine stayed at the Virgin Hotel in Chicago for work a couple of weeks ago and said it was really cool. "Minimalist, but quirky" and they had the new Tesla sportscar for their hotel shuttle.

    So, I guess my point is VA may be in the right place at the right time, but haven't looked into it yet.

    ReplyDelete
  68. Further on GM, if you google "GM: Time to ‘Aggressively’ Buy the Stock" Barrons pushing GM saying 35% upside, probably in the 1 year period.

    I think Barron's still has some pretty good readership within the big money crowd like pensions.

    ReplyDelete
  69. Thanks. I'm liking VA/DB/CBI the best. Still have FCAU/ARR/BXE/GPRO

    ReplyDelete
    Replies
    1. Did you buy ARR for yield?

      If so here are two others on my watchlist BXMT KED in 6ish range

      Delete
    2. Einhorn of Greenlight Capital started buying CBI, I would saying that's positive.

      Great buys BB on NAT, ASC and CBI.

      notice VALE is up 20% in 2 days

      Delete
    3. I saw that too. Its interesting watching the iron ore miners continue to try and grow production as prices plummet. Seems to be the approach of crushing the less efficient guys to kill competition for the next upcycle. I'm staying away from this, but will be interesting to see how well this works. I think the difference this time is there may not be another big upcycle again as China should be pretty built out now. Some guys are saying India will be the next big buyer, but if not, there may not be a bigger pie down the road.

      Delete
  70. I bought some DB today at 34.17 and some GILD at $105.4. I like that DB announcement coming tomorrow. Sold 1/10th of my TASR at $29.9 but will prob regret it. They have a $300 to $500+ million dollar annuity coming to them with video storage.

    Also looking at some GM.

    ReplyDelete
  71. CBI results a little confusing.

    Their net income was $1.21 and best estimates, but their non-GAAP income excluding integration costs was $0.87 and way below estimates. I don't understand how earnings excluding integration costs could be below GAAP earnings? WIll have to do some more digging.

    ReplyDelete
    Replies
    1. OK, nevermind. The excluding integration numbers were for last year and not presented for this year, so that makes sense.

      SO, looks like $1.21 actual on a $1.14 estimate, but stock down 3% after hours so far.

      Delete
  72. Got really lucky....I flipped GOOGL earlier from $562 to $580 and bought some back at $569. All in my business accounts though which isn't a big account, but nice to make a few nice trades like that.

    ReplyDelete
    Replies
    1. Flipped it back again at $579. The moves in that and AMZN after hours were epic.

      Delete
    2. and nice not to have the profits locked away in your retirement accounts too!

      Delete
  73. WPT - Was that a knockout move yesterday?

    ReplyDelete
  74. There goes Taiwan - blue sky breakout:
    https://www.google.com/finance?q=TPE%3ATAIEX&ei=5985VamKFO3nigLFhYGgDg

    Been expecting this a long time. Now is probably a fantastic time to buy some longer term calls on EWT. This breakout is 26 or so years in the making.

    ReplyDelete
    Replies
    1. I posted this last June...now is the time:
      http://charts.stocktwits.com/production/original_24233764.jpg?1404092169

      Delete
    2. And of course now there's news of a reason why...a justification for this move:
      http://blogs.barrons.com/focusonfunds/2015/04/23/charts-bode-well-for-taiwan-etf/?mod=yahoobarrons&ru=yahoo

      Delete
  75. Gold and silver prices breaking down: http://www.kitco.com/charts/livesilver.html. Hoping for an attractive entry point into miners today.

    ReplyDelete
  76. Made / making a bunch of moves today.

    Bought GILD, VA, BABA, GMCR, a little more DB, small piece of EYES, BITA. Sold some of TASR.

    Spreading everything out into smaller positions.

    Spent a lot of time last night looking at Taiwanese companies. SPIL and UMC look interesting to me. GIGM is a POS but could be a speculative one.

    ReplyDelete
    Replies
    1. I bought some GIGM only because it (1) trades below cash, (2) has a cloud business that people will pump even though its shit, and (3) Taiwan is about to enter into a massive raging bull run

      Delete
    2. Bought at $0.90. I honestly don't expect much from it but if the Taiwanese market goes on a big run like the Chinese market did then I would think this one has the chance of going up big. Kept size small.

      Delete
  77. I think my portfolio has poor ovarian reserve.....

    ReplyDelete
  78. I sold out of DB around $34.3ish. I bought on the dip this morning so taking the 0.7% or so gain off the table. Not a big deal but I was expecting more of a pop out of the meeting they had today and didn't get it. I added to BITA around $60.5

    ReplyDelete
    Replies
    1. Looks like the final official decision may be out tonight.

      But I think with the LIBOR thing settled and the bank split likely taking place, that we could still see a good move upwards. Sometimes with these complicated stocks, people wait the for analyst reviews before doing anything. Or sometimes you people wait to see the execution first.

      We'll see, but I think this should be a value enhancing event, so it should come through in the stock eventually.

      Delete
    2. I agree. Just saw some other opportunities elsewhere for the time being. That's usually why I haven't been buying financials for the past 6 years. Missed some nice moves but have done better elsewhere. At some point that will inevitably switch.

      Delete
  79. Looks like MD, FL, and TX are all on board with the body cameras for police.

    MD: http://thedailyrecord.com/2015/04/23/hogan-to-sign-body-camera-bill/
    FL: http://news.wfsu.org/post/body-cameras-bills-soon-get-house-vote-anti-speed-trap-bill-heads-governor
    TX: http://www.chron.com/news/politics/texas/article/Texas-Senate-OKs-police-body-camera-bill-6219809.php

    ReplyDelete
    Replies
    1. Former NYPD police chief was just on Fox Business News. Said we will see police departments move in a big way toward body cams: http://video.foxbusiness.com/v/4194028793001/ray-kelly-talks-isis-threats-police-body-cameras/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+foxbusiness/video+%28Internal+-+Video+-+Video%29#sp=show-clips

      Its not so much the cameras as it is the storage of the videos. TASR should be the clear winner as they have the majority of the police departments using their products so they have a large distribution network in place and they are offering exchange programs on their tasers if police departments sign up for their higher monthly storage fees. The US alone is worth anywhere from $190 Million to $760 Million annually in storage fees alone. This is a mammoth market and my hope is TASR wins 50% of that. Plus, they are already locked in with London (30,000 police force) which should be a proving ground for the rest of Europe.

      Typical cloud storage companies trade at 7 to 15 times sales (see CRM, ATHN, NOW, DATA), depending on how frothy they get, so the US market by itself is potentially worth a $1.3 Billion to $11.4 Billion market cap opportunity, depending on avg monthly fees police departments pay (between $25 and $100/month) and what multiple investors pay (between 7 and 15). I think its worth somewhere around $3 to $4 Billion in market cap potential and I think TASR gets at least 50% of it...right now they have over 95%. They have the most compelling offering as they can tie in the sales of Tasers with it, which no one else can do. Plus they have developed a pretty extensive software division over the past 3+ years, after realizing just how slow police forces were to change to digital info (many police forces still use VHS tapes for storing data, as well as paper for storing files).

      Canada and Europe are about the same size, assuming certain countries don't even use it while others like the UK and France do use it.

      Delete
  80. Hope nobody bought CBI before earnings last night!

    ReplyDelete
    Replies
    1. Oil is pulling back some. Charts across the board are setting up very similarly to the way the momo stocks traded last spring/summer, after they all took massive dumps. Take a look, for example, at prior momo stocks in the sand fracking space like SLCA and compare that to stocks like NOW last year. Presumably, should this similarity hold, you would want to be buying the next drop in these stocks. If I see SLCA take a big drop to say $30 I would be interested in buying, strictly on this thinking.

      Delete
    2. HII - Battleships are doing great. They don't belch global warming gas like cars and coal, they just wage war on behalf of corporate America.

      Delete
  81. Keep hearing something about opposition to drilling off Atlantic coast, apparently there's some debate on the subject today. Not sure whatever happened to the exciting wind farm project, either.....

    BAS - Also reported earnings, as well as CBI..... CBI is nuclear or oil storage tanks, not sure.

    ReplyDelete
  82. AMZN - I'm trying to recall why we don't own a company that delivered practically ALL of our Christmas gifts, we practically don't even need to step into a WAL-MART anymore. We watch our movies by internet streaming services, too but we won't buy them either.

    ReplyDelete
    Replies
    1. Yep. My old boss bought 3,000 shares of it yesterday but chickened out and sold before the report. Ouch.

      I know we get packages from AMZN almost daily.

      Delete
    2. Just bought 10 items from Amazon yesterday and added six more today.

      Delete
    3. BTW AMZN and COST not sure who gets more of my spending.

      Delete
    4. Valutation is tough though. At current multiples, a lot of growth is built in and, when it does slow down, I think you see big drops in these stocks. The hard part though, is if growth continues, the drop could come from much higher prices.


      Delete
    5. Think CSCO, MSFT,etc in the 1990's. Great growth stocks until they weren't. CSCO still only 1/3 of its price 15 years ago.

      Delete
  83. UUP - I see the $US is testing support.... PM traders betting the support will hold is most likely or perhaps betting rates will rise? I don't think they know what they're betting on, themselves.

    ReplyDelete
  84. CBI - read through the earnings and the con call transcript and I think the reason the stock is down is promarily because Q1 cash flow was weak. Revenue was a slight miss as well, but I think people are worried that payment for certain projects (like the nuclear one with the big delays) will be held up and hurt cash flow. Their management said they expect cash flow o be better the next 3 q's and should match earnings for the year. They also said things look good for matching 2015 revenue and earnings guidance. IF they do, it would be 15% revenue growth and a p/e on 2015 earnings of 8.3, so both very good. Actually very hard to see how this wouldn't get revalued higher this year unless they do miss numbers.

    ReplyDelete
  85. MSFT AMZN NEM and let's throw in VALE.

    WTF, I admit it, the percent of change this large on a daily basis makes no sense to me, anyone else?

    ReplyDelete
    Replies
    1. Either big short interest and a beat or expectations were way too low.

      But either way, people were too pessimistic on these going into earnings and maybe shows tech and mining are good hunting grounds now.

      Delete
    2. Perhaps if we were betting there are only five or six corporations remaining at the end of the decade, which ones would those likely be?

      Delete
    3. AMZN will be around, but the question is what will the stock be worth. Going back to CSCO, I think it doubled every year in the 1990's and seemed like a nobrainer with the internet growing and everyone needing more and better connectivity going forward, but look what happened. At some point, same thing happens with AMZN. People think it will grow forever and it won't.

      Another way to think about it - market cap is already over $200 billion. Almost the same as WMT, but 1/5 the sales. WMT is very profitable, dividend champion, 2nd most shopped web site, etc. I wonder how much revenue AMZN would be doing if it had to raise prices to generate same level of net profits as other retailers. Easy to get people to buy your stuff when you provide great service and prices. A lot harder when one of those is cut back.

      Delete
  86. My steel fabricating stock CAM.TO had big revenue growth and a match on earnings. Much better to be a consumer of steel than a manufacturer these days.

    ReplyDelete
  87. This is my thinking on Taiwan - Apple announced they're shifting a good deal of production from Samsung to TSM. This alone should account for potentially $6 to $10 Billion in additional revenues to TSM. Additionally, Apple has yet to announce plans to open up retail stores in Taiwan so there could be upside there. All of these should be major boosts to the Taiwan economy, which is only around $450 Billion - an increase of $10B equates to a 2.5% rise in GDP. And assuming the relationship goes well, there may be more and more production shifted to TSM.

    I ended up buying EWT for my in-laws. I put 50% of their money into it. They are up about 25% this year so I view this as a safe strategy to preserve their gains but also take part in what I think are major near/intermediate term catalysts.

    ReplyDelete
    Replies
    1. Any country that is a consumer of fossil fuels is a huge beneficiary, as well.

      Delete
    2. Wonder why AAPL went with Samsung to begin with, could be the bid was more competitive. Seems this will leave Samsung with capacity to increase production of their own devices, wonder who makes the Samsung screens, cases, etc..

      Delete
  88. I took off my position in BITA at $61.9. I'm sure I will regret it. Bought some EWT.

    ReplyDelete
  89. AMZN - Should still have room to grow, considering their sales are less than IBM? I know I have more to do with AMZN than IBM in my everyday life.

    CKH - Okay, it just occurred to me why TDW is not doing well today... CKH reported and the market didn't like it apparently.

    ReplyDelete
  90. Sold out of VA at around where I bought it. Oh well.

    ReplyDelete
    Replies
    1. Wow. 5 minutes later it's up 4%

      Delete
    2. Ask me about VALE, PBR, and GREK.

      Delete
    3. If I'd had the balls, I'd be well on my way to that +40% year.

      Delete
    4. Yeah, of course. Go figure....

      Delete
  91. Taiwan does look interesting. I wish I knew more about their economy, stocks, currency, etc.

    They must be pretty happy being 25% up already in this flattish market without having to do any work themselves!

    ReplyDelete
  92. Market sure feels like it's getting ready to break out of this trading range to the upside. I try not to place too much emphasis on feelings, because feeling good often occurs right before a slam-down, but 5 months ago, we were at SPY $207 and a week ago, we were also at SPY $207, but now we are looking to break above recent highs and it feels like this time we will do it.

    ReplyDelete
  93. Opening partial positions at the close:

    (a) RYPMX (Rydex Precious Metals)
    (b) RYVIX (Rydex Oil Services)
    (c) RYEIX (Rydex Energy)
    (d) RYEUS (Rydex 1.25x Europe)

    ReplyDelete
  94. Thought I would check in on our good friend, John Hussman, and see if things had gotten better for him, but no, his fund is down another 12% over the last 12 months.

    Fund Assets are finally way down to $838 million (about half of when Iast looked).

    But his expense ratio is up to 1.07%, so he's still making $9 million (minus expenses) from his investors.

    ReplyDelete
    Replies
    1. What is it that attracts/retains his remaining clientele? Would it be the weekly market narratives? Each well constructed and composed, yet when strung together over the past several years has resulted in an ongoing 'story' that misleads investors.

      Delete
  95. I moved to a 33% weighting in my own account on EWT. Avg is $16.82. Tough buying after this move but I liken it to buying the SPX after January 1, 2013. The index is 50% higher since then.

    TSM is a major component in EWT so there's some risk there at 22% of the ETF.

    ReplyDelete
    Replies
    1. I looked at that too when you suggested EWT. TSM seems reasonably priced - in line with traditional valuations. And the chart is pretty long term steadily rising one. But I really can't comment on their business. I find it happens a lot with smaller country ETF's though where you are really dependent on 1 or 2 companies or industries.

      Delete
  96. NEM CEO Gary Goldberg expects gold prices to gain ~25% to $1,500/oz. by 2020 on rising demand from China and a weaker dollar; for now, Goldberg says the strong U.S. dollar is “definitely having an adverse effect” on gold prices, and he expects the dollar will “eventually come back off of its highs in the next couple of years."

    Wow! That's where I want to put my money for the next five years.

    ReplyDelete
  97. Further ideas on the subject of valuations:
    http://www.merrilledge.com/publish/content/application/pdf/gwmol/S-and-P-500-Relative-Value-Cheat-Sheet-April-2015.pdf

    ReplyDelete
  98. Ritchie Bros. sells US$57+ million of equipment and trucks in Houston, TX auction

    ReplyDelete
  99. NFLX> 'The Boy in the Striped Pajamas' now available for streaming.

    ReplyDelete
    Replies
    1. On a scale of 1-10, where would 'OK' fall?

      Delete
    2. Do you guys watch any of these:

      Peaky Blinders
      Mad Men
      Game of Thrones (where can you watch this?)
      Blacklist

      Delete
  100. I think he got it right, don't you?
    "This REIT Yielding 7.4% Should Benefit Investors When Rates Rise Mar. 27, 2015 6:45 AM ET About: Blackstone Mortgage Trust, Inc. (BXMT)"

    ReplyDelete
    Replies
    1. I don't know anything about BXMT, but in general, I am staying away from anything which is hurt by higher rates, which most REIT's will be.

      Delete
  101. Good to see Taiwan continuing its rally:
    https://www.google.com/finance?q=TPE%3ATAIEX&ei=BLQ9VYD2LML9igKbh4HoBg

    Tough buying after a big move up but this is 26 years in the making.

    http://charts.stocktwits.com/production/original_24233764.jpg?1404092169

    Another reason I like it here is this 10,000 level has been resistance for years. Its one of those psychological levels that, once it gives way, will result in a quick 20 to 30% move up.

    ReplyDelete
  102. new post

    I enjoyed both seasons of Peaky Blinders.

    ReplyDelete