I (re)acquired valuable insights into my trading psychology this week.
(a) I allowed the Wednesday morning 'breakout' in Brazil to suck me in. Sure, I recall thinking 'break out to fake out,' and consciously waited for VALE to pull back from 9.14 (there had been prints as high as 9.3x pre-market) to 8.85 before opening the first tranche. Bids hopped back almost immediately to 9.10 (+2.8%), and I considered closing for a decent 5-minute gain. Unfortunately, I had '9.3x' playing in my head and I gave the trade too long a leash. Prices pulled back to 8.8x. That was my signal to exit. Instead, I opted for a second tranche at 8.48. Bids continued to drop, and VALE closed @ 8.19.
(b) I opened a position in RYWVX (Rydex 2x Emerging Markets) the same morning @ the 1030 window. The 2-day drop of -6% in Shanghai coupled with strong buying in Latin America had me thinking it was a high-conviction trade and I moved early. Another mistake. Using EEM as a benchmark, prices pulled back to my opening basis of 42.78, then declined further to close @ 42.39. I was pretty sure Thursday's open would be even lower, so rather than add to RYWVX I opted to open corollary (and less-correlated) positions in RYTNX (Rydex 2x SPX), RYGBX (Rydex 1.2x Government Long Bond), and RYPMX (Rydex Precious Metals).
(c) The market delivered the lower open in EEM the following day, and to a lesser degree also presented lower bids on VALE and PBR. Here's the thing. Had I waited for lower-risk entries, Thursday morning would have presented a Jim Rogers scenario: http://www.growthstockwire.com/3620/the-best-thing-jim-rogers-ever-said. Instead, I was distracted with the task of 'managing' losses on three existing positions- which prevented me from 'seeing' a clear setup into Friday's NFP: both stocks and (especially) bonds had been selling off hard all week, which almost ensured a post-payrolls rally.
My bad.
(d) This morning's pullback in VALE was another buying opp, at least IMO. It was a difficult trade, one which necessitated distancing myself from Wednesday's 'error'/ Thursday's 'mitigation' re the same stock. The trade may still move against me, of course. But I can least say it was a 'clean' trade, kind of like getting back on the horse.
Wacky week...really wacky past 6 months. I luckily positioned for an upside move yesterday and hearing the commentary from the Fast Money people on Thurs solidified it as all of them expected a negative reaction. Some of the guys on that show have been bearish for what seems like years.
ReplyDeleteHere's a good article on earnings this quarter...not as bad as people had feared:
http://www.businessinsider.com/q1-sp-500-earnings-growth-turns-positive-2015-5
I'm noticing a lot of bargains in the retail space and may spread out and overweight my money in that space. The ones I see that look somewhat to very attractive are: TIF, KORS, RL, WMT, COH, FOSL, PVH, TUP
If you think markets are going to be weak, WMT is a very good stock to own. It's the only stock I know of that you can't see the financial crisis in it's chart - it just powered through it like nothing.
DeleteNFLX did too (power thru), more or less
DeleteBoth are trades on people spending less and choosing cheaper alternatives. Something to think about for the next economic downturn.
DeleteIf you have access to Amazon Prime (or want to sign up for a free trial), 'Bosch' is worth watching. It didn't really do it for me until halfway through Episode One (where I stopped watching several weeks ago), but then it really took off.
ReplyDeleteHow many of you own a Fitbit, an Apple Watch, or other wearable technology? I've been playing around with Glass. The technology behind it is impressive, but like Mark I have yet to find it useful- very few 'apps' have been developed for Glass.
ReplyDeleteI recently had the privilege of participating in focus groups at Google and at Intel Security (formerly McAfee). Although not at liberty to discuss specifics, it's clear that R&D for wearable technology is receiving a great deal of attention. I would compare the current state of development to that of the Internet in 1995. It's just beginning to take off. By the time Silicon Valley (or maybe Asia) releases Wearables 2.0, look out!
I have a golfing GPS that I like a lot. If I could get the same functionality on an i-watch, plus other capabilities, I probably buy one when this gps dies. Maybe sports apps are part of the future for some of these products.
DeleteI also have google fit as a freebe app on my phone. It's kind of fun, but you have to remember to carry your phone everywhere, so I can see why people might want to replace it with a wearable, but I personally do not get enough value out of it to bother. I think you know if you are getting exercise or not, and don't need a wearable to tell you. It seems to me it is the people who don't like to exercise buy these wearables hoping to change their habits, but haven't really seen ti work for them.
I dumped AAPL and GILD after hours Friday, prefer to see how we open and take it from there.
ReplyDeleteNice beat by NAT this morning and say rates still look good and does not seem like newbuilds are getting ahead of demand, for now at least.
ReplyDeleteFRom the Globe and Mail:
ReplyDeleteEquity analysts tout Bellatrix, rating agencies – not so much
Monday, May 11, 2015
TIM KILADZE
Print this article
Look no farther than commentary about Bellatrix Exploration Ltd. for proof that no one knows what to think about Canadian energy names.
Seventeen equity analysts cover the natural gas producer, and not a single one has a “sell” rating on the company. When Bellatrix reported quarterly earnings on Tuesday, their comments largely suggested the company looks rather decent.
Rating agencies, meanwhile, are much less assured. Bellatrix announced a five-year, $250-million (U.S.) high-yield debt offering Friday morning, and Standard & Poor’s and Moody’s Investors Service rated the notes a paltry “B-” and “B3,” respectively. The new debt is being taken out to pay off existing debt under the company’s bank credit facility.
This stark divide illustrates the dichotomy of views that exist for Canadian energy names. Even though many of their shares have fallen off a cliff in the past year – Bellatrix’s are down a stunning 68 per cent – hope remains in some corners that this selloff is simply an overreaction.
Try telling that to the rating agencies. With Bellatrix, S&P worries about its “highly volatile and capital-intensive exploration and production industry, modest scale of operations and geographic concentration.” On the latter point, the company is focused on just two plays – the Spirit River’s natural gas liquids and Cardium light oil. As for debt, S&P expects Bellatrix’s debt to amount to $742-million, or 4- to 4.5-times its earnings before interest, taxes, depreciation and amortization, by the end of 2015 – though this didn’t seem to be a major red flag for the agency right now.
Moody’s shares some of those concerns, and also worries about Bellatrix’s “high proportion of natural gas [and] weak margins.”
Read through equity analyst notes, though, and they’re largely optimistic – which might have something to do with investment banks hoping to win underwriting business. The analysts often note that the company’s new gas plant is scheduled to start up in July, giving Bellatrix the ability to boost production, and that its Spirit River capital spending is 20 per cent below the original cost estimates.
To be fair, both sides are willing to acknowledge some of the other’s viewpoints. The rating agencies, for instance, admit the company has low maintenance capital expenditures, while some analysts point out that roughly 35 per cent of Bellatrix’s natural gas liquids production is tied to propane, and propane prices are in rough shape.
But over all, they present pretty divergent views. And that’s important to note, because in the long run, only one side can be correct.
Thanks BB. Anything here change the way to look at BXE?
DeleteVALE off @ 7.94 on the opening +4% pop.
ReplyDeleteNBL/ROSE- My initial thought was the lack of premium.
ReplyDeleteLong IACI at $73.6 avg. They own about 70% of Tinder which is apparently valued at $4 to $6 Billion. The entire mkt cap of IACI is $6 Billion. Pays a 1.9% dividend and trades at 16x trailing PE
ReplyDeleteAlso bought some EBAY at 58.49. They’re splitting off Paypal as a separate company in July
ReplyDeleteMy thinking on Paypal is they did $2.1 Billion in revenues last quarter. Thats slightly less than the $2.2 Billion MA did last quarter. Paypal's growth was 14% vs MA's 2.6%. By comparison V did $3.4 Billion and grew 7.7%.
DeleteVisa trades at 12.9X TTM Sales
Mastercard trades at 11.2X TTM Sales
Assuming TTM sales for Paypal are around $7.8 Billion and using a 10% discounted p/s to the average of V/MA then you get a valuation of $84.6 Billion. I'm not sure if this is the best way to look at it but sales are the only #'s I can find on Paypal. It's growing faster than its competitors so you could make the argument it should be worth a comparable valuation. If it's worth that much then it makes the rest of eBay worth negative $14 Billion.
Here's info on registered accounts with Paypal:
Deletehttp://www.statista.com/statistics/218493/paypals-total-active-registered-accounts-from-2010/
This may help with valuations - according to this Motley Fool guy from last October, Paypal's operating margins were 24%. From Yahoo Finance, V's operating margins are 64% (! have not validated any of these numbers)
Deletehttp://www.fool.com/investing/general/2014/10/09/how-paypal-can-become-a-100-billion-company.aspx
This IACI is pretty well ignored by the market. Average of 5 posts per day on Stocktwits the past 7 days. Only 232 people watching it. Compare that to TWTR for example: 301 posts per day and 22,507 people watching it.
ReplyDeleteIACI has about 70% ownership of one of the fastest growing mobile social apps (Tinder) and only just started monetizing it. Could be a nice winner here, with a nice dividend to boot.
Doug Kass is fond of saying that 'the market [often] has no memory from day to day,' which certainly applies to the current environment.
ReplyDelete(a) OIH (Oil Services) giving back most of Friday's gains. XLE (Energy) giving back all of Friday's gains and then some.
(b) EEM (Emerging Markets) off -0.9%. EWZ (Brazil) -2.3%. PBR (Petrobras) -0.8%, and VALE now back to 7.57. Even FXI (China 'H' Shares) is off -0.5% despite last night's rallies in Hong Kong (+0.5%) and Shanghai (+3%). GREK (Greece) -3.5%.
(c) TLT (the long bond) off -2.2%(!) to 119.84, undercutting even last Thursday's intraday low of 120.37. It last traded at these levels the first week of December 2014.
(d) Miners flat.
I'm going to apply the insights gleaned last week, and exercise patience.
This very well could be the beginning of a long term trend in rising interest rates. Longer term charts show TLT traded around $90 prior to the financial crisis and probably around $95 from 2009 - 2012. It is still at $120, so could do down a long way.
DeleteCould be another head fake of course, but it has broken the uptrend which was in place since early 2014, so maybe this is one.
I took a 6% position in ICAD today. Here's a good overview of their business:
ReplyDeletehttp://finance.yahoo.com/news/icad-therapy-going-gangbusters-drives-133500817.html
They just got crushed by some change in Medicare reimbursements. I'm banking on it being an overreaction. The business has a really big recurring component to it that is growing really fast and they just broke into positive free cash flow and EPS after years of losses. They paid off all of their debt and have about 1/4 of the market cap in cash.
It took me a while to buy the position today. I was buying between $5.10 and $5.40
I passed on a re-entry into nat gas today and am wondering if I missed it. I was thinking it could drop to $2.75. I'll be looking to buy UGAZ around there.
ReplyDeleteNES. Up about 150% off the low. Something like that. They still owe I think close to 500-600M, so how that get's paid I have no clue.
ReplyDeleteyeah i saw that today. that's the one with Heckmann right?
DeleteA continued sell-off in bond markets is pressuring US indexes this morning. I consider it a bullish development, as global markets are sorely in need of a catalyst to drive it out of its current plateau.
ReplyDeleteMOG like NBL here.
ReplyDeleteI added to IACI down below $73. It's now my largest position. I plan on adding more if it drops further.
ReplyDeleteWhat exactly is it?
DeleteIt's Barry Diller's company. They own a bunch of stuff including Match.com, The Princeton Review, Vimeo. The goldmine is Tinder, though. One of the most popular apps right now. My friends that are single say basically anyone that is single is on it.
DeleteAs far as internet stocks go its a pretty cheap company...trades at 16-18x FCF / EPS and pays a 1.9% dividend.
Just added a bunch more. Sold out of a most of my other positions.
DeleteHmmm. OK. Thanks. I'll check out Tinder.
DeleteSome people are throwing around a $5 Billion valuation for Tinder. I've seen estimates all over the place, from $1 Billion to $5 Billion. If it's $2 Billion then that makes IACI's stake (around 70%) worth $1.4 Billion. IACI is worth like $5.9 Billion as a whole.
DeleteThere's been some talk about the entire Match Group part of their business being spun off. IACI has had a history of spinning off divisions like EXPE, TREE, etc.
Don't let your wife find out Mark - it's mainly a site for hooking up!
DeleteYeah, like adult friend finder, aka F--k buddy.
Deletethis one is way more successful than those though due to smartphones. its the perfect business for phones. They have a significant international part of their biz too. It's kind of a no brainer in my opinion. Best part is you can collect dividends while waiting for it to be realized fully by the market.
DeleteWhy do you think the mkt is not acknowledging its value now?
DeleteSeveral reasons:
Delete(1) They just started monetizing their user base in the last month of March so only one month worth of revenues last quarter. The user growth ramped up last quarter within their Match Group, presumably all because of Tinder...see this: http://globaldatinginsights.com/30042015-how-many-people-subscribed-to-tinder-plus/
(2) The valuation relative to earnings and sales and cash flow hasn't moved up much at all compared to the past 5+ years so there hasn't been much premium built into IACI for Tinder.
(3) The trajectory for this business has been parabolic and other companies that have been or are in this phase with a social / messaging / mobile business model have gotten huge valuations. A 70% stake of a $5 Billion asset could equate to more than half of the entire IACI brand. Keep in mind that companies like MySpace and Facebook and WeChat all started out as chat / dating type services and morphed into giant social networks at their peaks, with valuations ranging from $15 Billion (MySpace at peak) to $180 Billion for TCEHY and $210 Billion for FB. I know the MySpace story well because I had it back when it was owned by Intermix and I would watch the user growth numbers ramp up on a daily basis (back then you could track it by logging in as a user). This is similar in a lot of ways to MySpace / Intermix in that its a rapidly growing subsidiary within a parent company and its value is being clouded by the conglomerate.
Scaling back into VALE @ 7.5x.
ReplyDeleteReopening RYWVX (Rydex 2x Emerging markets) @ the 1030 est window.
Opening a position in FCG (NGas exploration/production companies) @ 10.4x.
Make that 11.4x for FCG.
DeleteI'm debating holding this ICAD and just hoping it closes the gap. I bought yesterday around $5.20. It has some obvious risk that they don't negotiate good reimbursement rates but when I bought it I was gambling that the 50% drop more than accounted for it. I've seen a lot of situations like this where the stock recovers the loss and then it turns out the fears were overblown and the stock rips to new highs. Tough to gauge if this will happen here, but the company has been growing like a weed the past few years, it has a nice 70%+ recurring revenue stream, and is debt free with 25% of their mkt cap in cash.
ReplyDeleteI actually sold half of my stake at $5.75-$5.8 (I swear!) and the rest around $5.4 to $5.45. I put it in IACI. Like hte safety / upside better in IACI and I'd like to have the dividend which goes ex tmrw
DeleteENPH holds here or goes to 8 right?
ReplyDelete(a) Adding a second tranche of VALE @ 7.38.
ReplyDelete(b) Scaling back into PBR (Petrobras) @ 9.79.
(c) Doubling up on an already profitable position in RYWVX (Rydex 2x Emerging Markets).
(d) Adding positions in RYGBX (Rydex 1.2x Government Long Bond) + RYEIX (Rydex Energy) at the close.
Sold mine on 11th for 10.33. This thing seems to go up or down every other day sorta like AREX.
ReplyDeleteThe mkt really seems like just a red/black roulette wheel anymore with trying to get a sentiment edge or a TOF/BB fundy edge to get the benefit of the two double zero's on the wheel.
ENPH picked up some at 10.20 for a flip
DeleteVery interesting spot for ENPH. Wish I had an edge on this fundamentally. Guess you don't need one if you're trading it, but I like to have some level of conviction before entering a trade.
DeleteTOF,
ReplyDeletedo you set up a portfolio on Twitter to get stock info or how do you use it? I looks once in a while by searching for the $SYMBOL, but it is add-hoc and not efficeient.
Yeah, I use the $SYMBOL. I haven't found an easier way. I am thinking about maintaining a site that will consolidate all of my research tools and track stocks I've already researched, as well as have detailed notes on my trading/investing ideas, track my results, and use as an educational tool for my kids (bought the domain name www.aRandomBlogonWallStreet.com). I find it hard to track stuff on spreadsheets and notepads and I waste time researching the same companies over and over when I'm screening for stocks.
DeleteAs a side note, I've found it useful observe the amount of daily posts on Twitter and Stocktwits for stocks in determining what level of euphoria people have about individual stocks...so I use both of them a lot for that part of my research.
I agree it is difficult to keep it all straight. I have a number of spreadsheets I use to track performance over time as I don't find any of the online tools accurate and I also want to track a bunch of metrics against my performance. For stocks, I've got a Word template I use to write up stocks, but it's hit and miss as to whether I do it or updates with new info.
DeleteThe Blog might a good idea as it forces you to document stuff better. The Reminiscences guy's blog has a lot of info, but doesn't seem like it is too onerous to maintain.
Moody's announced their assessment of the BXE bond offering. While it is not AAA (not a surprise), it is better than the midpoint and quite a bit better than the average US energy company. I think this shows that BXE is dealing with their financing concerns very well and should bounce back as smallcap energy companies rebound.
ReplyDeletehttps://www.moodys.com/research/Moodys-Publishes-Covenant-Quality-Assessment-for-Bellatrix-Exploration-Ltd-Bond--PR_325206?WT.mc_id=AM~WWFob29fRmluYW5jZV9TQl9SYXRpbmcgTmV3c19BbGxfRW5n~20150512_PR_325206
I'm thinking hard about the idea that we are at the point in the cycle when rates rise and I'm looking at the stocks I own and what I would want to buy to take advantage of this. For example, ORI and FLY are both cheap, but I think they trade mainly on their yield, so I may want to sell these. I already have no utilities or telcoms or reits as I think these all get hit hard.
ReplyDeleteOn the buy side, I have a number of insurers and European banks, but am thinking this is a good time to buy US banks as their interest margins should be increasing. A lot of them still have much lower ROE's than they had prior to the financial crisis, so it they can get these up, we'll get the double boost of rising profits and rising p/e's.
Commodities are also quite interesting as the physical commodities appear to have bottomed, and the stocks have moved up some, but if the commodity move is real, the miners / energy companies/ ag stocks/ shippers all look interesting.
I think I agree with you on this but I'm not completely sold on rates rising - I think we may ultimately have another bout of even lower rates should the economy falter. I've traded BAC a few times but haven't committed myself to holding it. I like JPM too. I almost took a big position in JPM back in February but just feel like I'd be chasing it up here.
DeleteFor anyone interested I hear North Korea's Defense Minister position is open.
ReplyDeleteIf they allow telecommuting, I would at least consider applying.
DeleteFYI - IACI went ex-dividend today. $0.34 dividend.
ReplyDeleteI have my first Tinder research meeting today at the local Brew Pub.
ReplyDeleteGood to try out the products before you buy the stock.
DeleteI sold my eBay today and put more into IACI in the low $72's. Hopefully I find a match with this stock.
ReplyDeleteI'll be here all week...
(a) Taking VALE off the table @ 7.16 for a -4% loss. This stock just isn't ready to rally.
ReplyDelete(b) PBR (Petrobras). I took the position off @ 10.16 during the morning spike, reopened the position @ 9.91, and now taking the reopened position off @ 9.86. Overall gain of +3%.
(c) Will close RYWVX (Rydex 2x Emerging Markets) end of day for what will likely be a 'breakeven' trade.
(d) RYGBX (Rydex 1.2x Government Long Bond) off at the close for what probably be a -1% hit.
(e) RYEIX (Rydex Energy) off at the close for a fractional percentage loss.
Implicit in each trade we undertake is the willingness to be wrong. There's not much we can do about that- the only alternative is to remain on the sidelines. What we are able to control is our response to being wrong. I generally decide to take losses immediately.
DeleteENPH just bailed out now, just too weak.
ReplyDeleteLots of things seem weak huh?
DeleteYeah man, all year I've just gone from a little down to flat. I guess it beats them getting into my pocket big time. Still think I should just go flat till SEP.
DeleteA very different world of trading now.
Man, if this tests 8 again....
DeleteI find it hard to believe that markets continue to be flat if interest rates continue to rise. Too many industries will have their profitability changed by this. If you look how economies are generally improving and the TLT chart is breaking down, I think we are getting close to that time (finally!).
DeleteThis is where i grew up for the first 17 years of my life about a mile from the wrong side of the tracks. The guy in the pic looks like my friend George, but is not thank goodness.
ReplyDeletehttp://www.zerohedge.com/news/2015-05-12/face-baltimore-you-wont-see-news?page=3
Hell nobody has hardly ever heard of Dundalk, but during my times Bethlehem Steel was one of the largest employers of the area, glad I'm gone.
Freaking nightmare.
DeleteYeah, sad that places like that still exist, but great you got out of there
DeleteJONE down 10% today on that Metalmark Capital (some Morgan Stanley Partners) wants to sell 22% of it's holdings. Not a capital raise, just a big holder wanting out, so it won't affect the fundamentals of the company and it should bounce back to current levels after this is absorbed.
ReplyDeleteBidding ENPH @ 9.31, S2.
ReplyDeleteOMG, are you freaking kidding me! LOD is 9.3104!!! FU!!
DeleteYou cheapskate! Can't bid up one penny?!?!
DeleteI wasn't here...
DeleteExcuses, excuses. You're the king of setting those low ball offers and getting filled. Probably a function of not looking at stocks all day, which is helpful at times I'm sure.
DeleteOh, man. That has to hurt.
DeleteI’ve been tracking Tinder on Twitter for the past few days to gauge the level of interest in it and it’s ridiculous. If you go to Twitter.com/search and type “Tinder” you’ll see how many people post on it. 45 new posts on Twitter with the word “Tinder” in it in the past 7 minutes
ReplyDeleteI've just left my browser window open to accumulate the new posts on Twitter with the word "Tinder" in it and in the past 4 hours and 45 minutes there have been 1681 posts. That's an average of 353.9 posts an hour or 8,493 posts per day.
DeleteNot sure yet what this all means but I'll track it to see how it trends.
Sold t-shirt maker GIL today. Is one of those growthy stocks that almost never trades at a cheap valuation and I picked it up in the selloff in 2011 when it got quite reasonable. Got almost a triple out of it, but it's now trading at over 20 times 2015 earnings, so too expensive for me, even for a good growing company.
ReplyDeleteIf I'm right about rates rising, the economy picking up and the stock market moving towards cheaper stocks like financials, I think a stock like GIL, which is a consumer staple pretty much, will languish. Especially at the current valuation.
Crap, GIL up $1.50 from my sale price - didn't get it off my watchlist fast enough!
DeleteMDW going BK?
ReplyDeleteReopening a position in PBR (Petrobras) @ 9.97.
ReplyDeleteI can't recall the last time I've had a stock go up 2 days in a row.
ReplyDeleteIt's just really tough near tops, no? Even things oversold will sell off more if we roll over for real.
DeleteI'm not sure we're near a top, though...not yet. Still thinking we get a biotech crash in the late summer / early fall. At least that's how its setting up if biotechs rip to new highs without any pullbacks / significant consolidation period. If that happens then I think we could finally get our 10% market correction people have been craving.
DeleteI'm prepping for a move into BIS in August should we get to $400 or so in IBB without any consolidation.
I've been finding the market to be good the last week or so after a long flatish period. Stocks like ING hitting new highs almost every day, CBI getting a big bounce, FCAU bouncing nicely as well, NWLI making a good move off the trendline. Plus a bunch more in Canada.
DeleteMaybe there's a move in the market towards cheaper, more value oriented stocks going on. I do think the upticks in rates has people thinking about rotation and what stocks work next.
687 posts with the word "Tinder" in it on Twitter in the past hour. Yesterday's average was 340 or so per hour. Not sure why it's up so much today.
ReplyDeleteCould be people lining up dates for the weekend.
DeleteThat would be my take if it generally hold each Friday.
DeleteHa- could be. It's funny to see how searches replicate real life
DeleteMark never reported back how his Tinder meeting went - maybe it is still an ongoing investigation
Delete(a) PBR (Petrobras) currently bidding 10.15.
ReplyDelete(b) Reopening a position in VALE @ 7.09.
(c) Will reopen a position in RYWVX (Rydex 2x Emerging Markets) at the close.
Tanker rates doing really well:
ReplyDeletehttp://www.bloomberg.com/news/articles/2015-05-15/oil-tanker-rates-soar-as-supplies-surge-from-iraq-saudi-arabia
Can't see the supply/demand imbalance fixed quickly, so the trade is probably good for the rest of the year. I'm long NAT and ASC which are both up almost 3% today, but FRO is the leverage play an up almost 10%
http://www.marketwatch.com/story/an-important-dow-divergence-is-ominous-for-stocks-2015-05-15
ReplyDeleteThink this is good for building the wall of worry as I see the transports down because they got too far ahead of the market and were overvalued, and not because they are signalling a declining economy.
PBR (Petrobras) up +4% to 10.56 after hours after an earnings 'beat' well above expectations: http://finance.yahoo.com/news/brazils-petrobras-posts-5-33-213655475.html. The fact that it's 'only' +4% is a testament to the negative sentiment surrounding the company. The stock price remains -50% below last September's levels (prior to the oil shock), and -75% below 2011 levels. I'm not interested in closing my position for a +6% gain. Short interest in the stock is high, and I prefer spending the weekend contemplating a squeeze! In any event, the positive earnings + cash flow numbers may signal a significant reversal in trend. Anything can happen, of course, and I may regret not taking profits here.
ReplyDeleteProbably in a couple years, all the issues around the bribery, etc. will be resolved and the stock will have doubled and everyone on TV will say "that was obvious". It is such an important company to Brazil, these things almost always just get worked out.
DeleteBut I don't see anyone on TV saying buy now.