Thursday, June 4, 2015
6/4/15 Skying
Here's the latest media incantation of Bogle/Buffett quotes, invoking their presence amidst this week's selloff in global bonds: http://www.marketwatch.com/story/why-bogle-and-buffett-tell-investors-to-ignore-market-noise-2015-06-04?mod=MW_story_latest_news. Remain fully invested at all times, right? Great advice most of the time, and markets do in fact trend up most of the time. What John Bogle fails to appreciate is the wide range of pain thresholds among homo sapiens. How many of them were able to endure a drawdown of -50% in 2009? What about the -75% correction in the NDQ nine years earlier in 2000? Many investors experienced both. That's really not my thing.
How inflated are global asset prices right now? Sylvia Plath might say they're skying, a term I first encountered when Harry Chapin embedded a few lines of her poetry into the lyrics for 'Taxi.'
'Baby's so high, that she's skying
Yes she's flying, afraid to fall
I'll tell you why baby's crying
Cause she's dying, aren't we all'
When global central banks reverse current policies, allowing interest rates and currency valuations to rise free of intervention, how will asset prices react? I don't think anyone knows.
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2015 hasn't been good for me (from the standpoint of trading). It's gotten to the point where I'm ready to join Hussman in hoping for a -50% correction. That would be the 'easy' solution to respectable gains in the second half.
ReplyDeleteThere have been a number of smart people recently saying "stocks are on the high side, relative to history, but quite cheap relative to interest rates". I agree and one of these has to give. I think rates are starting to rise, but I think this is a slow process and the central banks have less control over this than it seems. It's going to be an interesting time, but I think any major pullbacks this year will be buying opportunities, not the start of a bear market.
ReplyDeleteThe Shanghai Composite just decisively pierced 5000.
ReplyDeleteCrazy. I don't think we can play that market. It is up 50% YTD, but FXI is only up 20%. Probably better anyhow as sure seems like a speculative bubble.
DeleteGotta give HUssman credit. He can always finds new ways to say the market should go down:
ReplyDelete"I’ll say this again – valuations alone are not the concern. It’s the additional feature of deteriorating market internals that introduces a critical element of risk here."
I'm still shocked he is has any investors left. Over the last 5 years, he is down 35%, and the market has doubled, so people who bought an index fund now have triple what people who bought a Hussman fund. Even with a spectacular crash, I don't think he comes close to catching up.
Just think though: when the S&P crashes to 0 he will be the king of the world.
DeleteBut if we were going to have a 1987 style crash, it could be soon. You've got a lot of cross-currents that could cause something unexpected:
ReplyDelete1. Greece
2. Rates turn up sharply
3. Bond ETF's wiht large holdings
4. Improving unemployment and wages
Let's say you get a margin call on a bond holder who is forced to sell into a sharply declining market with no buyers or a Bond ETF trying to dump a bunch of bonds due to ETF sales. Could cause certain rates to skyrocket bond values to fall, and you get a reinforcing cycle with more margin calls, etc. Could flow over into equity markets and cause stocks to get hit too.
Probably not as crashes are rare, but I see it is as being more possible now than in normal markets.
Crashes typically happen after parabolic short term moves up or when the economy is deteriorating rapidly. Neither of those has happened recently.
DeleteThe former happened with so many things, like the 1929 crash, 1987 crash, 2000 nasdaq crash, 2011 silver crash. the only thing remotely close to that is biotechs but even those i think would need more upside to constitute a blowoff top.
instead, we have had a steady economy with a stalling / sideways market for 8 months.
DeleteYeah, good point. Very unlikely
DeleteBut I have been thinking about the unwinding of QE/low rates and it's never been done before and we haven't transitioned from a bond bull market to a bear market in probably 70 years, so noone trading has any experience with this, so probably it goes fairly smoothly, but it might not.
Bidding ENPH @ S2, 8.82.
ReplyDeleteOppss....I just bought it at 9.02 by mistake.
DeleteWhat are you thinking for holding period / upside?
DeleteNot long. I just tried to sell it and fucked up and missed that little spike.
DeleteHows everything going?
DeleteGood. Just really busy with work and it's hard to get excited about the market at these levels and time of year. Kendra has Jr. high promotion today, so that will be cool.
DeleteNBG - What's today's exchange rate on Drachma?
ReplyDeleteDMND - Remember when this was a turd? People eat a lot of snacks and overpay for most of them despite the buttery flavor is fake.
ReplyDeleteYRCW - Still not cheap enough?
ReplyDeleteMAT - The news for this one has been straight from Whoville, with Hasbroken firmly becoming the Grinch Who Stole Christmas. Christmas in July perhaps? I dunno what they've got but socially unacceptable dolls probably won't cut it going forward?
ReplyDeleteFCAU - Hmm.... Wonder IF this can be sold any more than that... Doubtful, IMO.
ReplyDeleteMaybe a margin call on someone in Italy?
DeleteI'm contemplating buying
DeleteBought back into BIS at $29.85
ReplyDeleteMarchionne: No Ferrari IPO before early October.
ReplyDeleteMust know something, Ferrari gonna win a major race?
DeleteThe conspiracy theorist in me says maybe he's delaying to package it all together in a merger? realistically its probably just a delay.
DeleteConfirmed sales and profit guidance for the year as well and said:
Delete"Speaking to reporters in Venice, Marchionne also said he could stay on at the helm of FCA if there was a consolidation process and if he was asked to do so."
SO, maybe there is a merger in the works
NOR - Probably no correlation with price of aluminum at this point?
ReplyDeletePSEC - Damn, I thought this one might generate some grocery money but now I'm still stuck eating mustard & biscuits.
ReplyDeleteOh, negative article. Might be true, given recent plummet.
DeleteAll the merger stuff for FCAU really makes me want to stay away.
ReplyDeleteI agree. But the allure of Ferrari makes me want to stay
DeleteI'm still holding. I think Marchionne ends up selling the company. The pressure is on acquirers to make a bid before Oct to keep Ferrari.
DeleteClosed out my position in BIS for a small loss. Added to TWTR and bought back into EJ. Still holding GOOGL and IACI. The stuff I'm watching is performing better than the market so far today. Not sure which one is the tail.
ReplyDeleteOh yeah, still have CRNT. Hoping that one takes off eventually. Its cheap, just needs confirmation that things are turning around.
DeleteI think I need some new ideas, like cash for instance......
ReplyDeleteTry a little EJ here.
DeleteI'm still finding some decent setups. I like the setups in GOOGL, TWTR, SPWR, FSLR, EJ, LEJU, VA, even EYES still looks ok.
DeleteAnother idea might be VLKAY (Volkswagen) on this recent drop. Down 10% in about 2 weeks.
DeleteFCAU - An open gap down, oh my. Especially if the euro-version gaped down as well.
ReplyDeleteI'm thinking we have another big run in the dollar in the fall after a 5-6 month or so consolidation..another reason I'm gearing up for a short in Biotechs by the fall. I really hope we get a run the next month or two due to no fed hike + Greece resolution and IBB goes to $400. That would put IBB up 33% heading into the fall, after a +300% move the prior 3 years. I feel like that's a good setup for a mini crash
ReplyDeleteMy thinking is TWTR will be a well organized repository for real time videos / tweets / etc similar to Youtube. They will eventually organize it better and allow users to view old tweets / videos (through Periscope) within each user's twitter handle or throughout the entire site / app. When they get that down they will be able to put ads in each video and throughout tweet streams. Plus they will be able to get more search revenues. I think the current market cap is a fraction of what their ultimate opportunity is. It doesn't seem rational to me that it's worth 1/10th what FB is worth.
ReplyDeleteA Little East-Coast Train News ...
ReplyDeletehttps://www.youtube.com/watch?v=zHHB6-x51tE
http://cs.trains.com/trn/b/observation-tower/archive/2015/05/26/chasing-norfolk-amp-western-611-between-manassas-and-front-royal-virginia.aspx
Given the run-up in FXI and CAF, I expected to see EJ and LEJU well above last December's prices (when I last traded the pair). Obviously, not all stocks have participated.
ReplyDeleteDB upshsrply this morning on news of new CEO.
ReplyDeleteI'm still holding, but not really sure what to do with this.
Has he proposed not selling revenue generators or just fresh ideas?
DeleteEVBS cash is $7.51, wonder if action is predictive?
DeleteSold ej at 6.45
ReplyDeleteWhat can we learn from the world's best beach bums? Count me in!
ReplyDeletePIR - Came back to us.
ReplyDeleteINXX - Looks like bull flag to me.
TTM - Wow, is india falling off the edge of the planet?
Added more Twtr at 36.7
ReplyDeleteMoved to all in on Twtr today. Might trade around my position
ReplyDeleteEJ - Son of a gun. Oh well, no telling which hole the next weasel pops from.
ReplyDeleteOne asset class that's 'mos def' not skying is miners. A highly volatile sector. Scaling into GG (Goldcorp) @ 17.04, a retest of its 52-wk low.
ReplyDeleteFace plants everywhere.
DeleteEVBS - That sure is a lot of volume...... 10x so far.
ReplyDeleteDB - "Deutsche Bank: Cryan may help focus 2020 vision: upgrade to Neutral" $33 target.
ReplyDeleteRBA - I thought this one might do well on the perhaps misfortunate liquidation of others and various changes of business plans including trimming the fat, etc.. Pretty easy to guess considering so much demand has been pulled forward due to ultra low rates. Might have a long way to go as increasing rates continue to force changes of business plans that never fruited?
ReplyDeleteDENVER, June 3, 2015/ CNW/- On June 11- 12, 2015, Ritchie Bros., the world's largest industrial auctioneer, will conduct a huge unreserved public equipment auction at its site in Denver, Colorado. "This is one of the nicest selections of equipment we've ever sold at an auction in Denver,"
DeleteI guess Denver must be rocking, move along no impressive liquidations here.
Looking through a bunch of 3 month charts for both indexes and individual stocks. Amazing how flat many of these are. You can see why people are calling the market boring these days and think nothing is happening.
ReplyDeleteAlso, a lot of the sentiment surverys are negative (cnn, http://tickersense.typepad.com/, iiaa). I was thinking about this and it seems a bit odd, but I think it is because the easiest thing to do, which would feel the best would be to sell some stuff, take some things off the table and wait for a pullback on Greece, rates, etc. But because this feels right and safe, I'm thinking it is the wrong thing to do and the right, harder thing to do is buy or hold here and that we might just get a market meltup once we get a catalyst (like Greece resolution either way).
I really don't know of anyhow who is aggressively bullish now and I think of the good guys I trust are all cautious and have raised cash or bought puts or something to prepare for a pullback. I guess David Rosenberg is the exception - he is very bullish.
We'll see, but I'm pretty happy with the stocks I own from a bottom up perspective. Hope the top down market ends up agreeing with me.
I agree I think there's a lot of hesitance around owning stocks. I think we get a 1994 type year most likely. At least that would probably be the healthiest thing longer term
DeleteEspecially if it was followed by a 1995 to 199 market.
Deletehttp://www.ritholtz.com/blog/2015/06/1st-new-led-zeppelin-song-in-30-years/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
ReplyDeletehttps://www.youtube.com/watch?v=Y2hZ6OytDxo
DeleteCanadian pension fund to buy GE finance?
ReplyDeleteOur pension plans are independent from the government, unlike US Social Security, and have generally good records and good funding positions. They are moving more and more into unlisted cash generating businesses, partially because they are so big they have to.
DeleteNBL - Here we go....?
ReplyDeleteGoldcorp off @ 17.50 at the open for a +2.6% gain. Trading for bunts and singles while waiting for set-ups in a difficult market. The long bond continues to sell off, as if the bond traders are rushing in (and anticipating) where Yellen fears to tread: higher rates.
ReplyDeleteDB back down 3% today on news of a police raid on info from customer accounts from a business they bought a few years ago.
ReplyDeleteI think DB struggles short term, but will do will over say 3 years. Maybe should just sell and put on the watch list for better entries. Certainly a lot of stuff going on with DB.
BSBR woulda-shoulda......
DeleteBXE - Going back to $3.20 for yet another resistance retest?
ReplyDeletePSEC - Looks like I added a little....
ReplyDeleteI drempt I'm standing in a wal-mart and they're rolling back prices everywhere.
ReplyDeleteENPH on isle 12
ReplyDeleteisle 8
DeleteFMD - Hard to believe this one isn't trading @ $12 by now, stocks I own only go down only the ones I don't own go up and keep going for years.
ReplyDeleteTo capitulate or not, that is the question. Gave up 4% of gains in the blink of an eye. Gains that I worked hard to get. I suspect this could continue for a while, this dripping lower by the market with underlying weakness spreading.
ReplyDeleteTransports rolled over?
Deletenot really. hopefully this all blows over soon. lots of people are getting scared which is usually a good thing. I've never made money panicking.
DeleteConcurring ISIS could take up to 5 years...
ReplyDeleteKRE - F-in' thing remains green....
ReplyDeleteEVBS - Still trading for less than cash on hand....
ReplyDeleteISNS - Something's not up?
ReplyDeleteTTM - About time, sheesh.
RBY - This one has not been following the others down the tube..... Inst. buying too.
ReplyDeleteI sold TWTR at $35.9ish avg. Not sure if I'm capitulating or selling smartly. Either way, I'm going to sit in cash for the time being. Saut kind of swayed me a bit on my thinking...
ReplyDeletehttp://www.raymondjames.com/multimedia2.htm?url=Saut_Daily.wma&player=wmp&target=int&width=300&height=0
ATML I didn't buy this one b/c my broker has a much lower price target..... Looks like they're completely wrong. I like the programmable ARM device they offer b/c it's flexible enough to integrate into so many consumer system designs.
ReplyDeleteFCAU - I just don't get the urge to merge, this has to be a negotiation strategy.
ReplyDeleteDid you read his speech or presentation? It's all about economies of scale and cutting costs to generate higher ROE's in a very cyclical industry. Similar to what has happened in airlines.
DeleteMaybe he has an ulterior motive but he seems like a straight shooter and very smart guy.
CHH - Why would insiders sell if they were anticipating increased traffic? Late cycle? "Choice Hotels International: Our low end, late cycle play of choice; upgrading to Buy
ReplyDeleteMay 08, 2015"
i grabbed some boring old WMT at $72.6. down huge in the past 5 months. looking for a bounce.
ReplyDeleteCertainly not much downside risk in that one. It does well in poor markets and you could get your 2nd dividend payment if you hold it long enough
DeleteYeah I'm hoping I get a run to $79-80 before the fall
DeleteLooks good that I sold my rail stocks. Valuations were just too high and the growth due to oil by rail was falling
ReplyDeletehttp://www.theglobeandmail.com/globe-investor/investment-ideas/canadas-railroads-confront-market-gravity-stocks-go-down-too/article24873910/
I see IBB in the same boat and I think it's bubble gets pricked by higher interest rates. If we do get the first fed increase in Sept, would line up well with TOF's BIS plan. I am very confident IBB is much lower in the future, just getting the timing right is difficult.
Yeah that's what I'm hoping for. One last run into August that allows me an entry into bis
DeleteTOF- Do you have another link for the Saut video? Looks like the other expired.
DeleteWitch doctors working magic? Attack of the hopium monster.
DeletePsychological warfare......
ReplyDeleteGMO - I'm beginning to wonder if maybe a shortage of LNG ships leads to a huge demand step for molybdenum...
ReplyDeleteYesterday I heard that employers were taking their foot off the gas then today I hear small caps are feeling frisky. Somebody's FOS.
ReplyDeleteWFM - Is that a hammer? Hard to know when the selling abates but it's much cheaper now that sat a few months ago when fear was extinct. And, the gap up obligation has resolved itself (oh how conveniently surprising! ).
ReplyDelete(a) Further weakness in TLT, which is now a remarkable -12% off its highs in April.
ReplyDelete(b) GDX (miners) has given up its early morning strength (+1%), and is now -1.29% in the red. Goldcorp now bidding 17.10. The fact that both gold and gold miners have failed to respond to a dramatic decline in the $USD is worrisome (to gold bulls, anyway).
(c) Despite a +2.7% rally in crude, both OIH (oil services) + XLE (energy) have given back most of their morning rallies.
(d) EEM (Emerging markets) -0.7%. FXI (China 'H' Shares) -1.5%.
Things are looking bad, which means they're starting to look good to me. Not quite good enough for a date (and a date is all I'm interested in until we see far lower prices for global assets).
Setup for a morning gap?
DeleteWhy aren't there more companies around sporting cool or bold instead of boring names? "Fat Bastard Burgers" would be a cool name.
ReplyDeleteWHR - Insiders have sold 58%, perhaps an indicator that share buybacks aren't just for the benefit of common stock owners?
ReplyDeletemark - saut usually has a daily commentary on his desktop version of this link below...its a link on the right:
ReplyDeletehttp://www.raymondjames.com/inv_strat.htm
Heavy lift helicopters for setting up new portable oil drill rigs?
ReplyDeleteCool photos of dancers.
ReplyDeletehttp://ayakovlev.com/albums/studio-1/content/the-dancer-70/lightbox/
I sold my WMT at $73 and rolled it into SPWR / FSLR at $31-$31.3 and $50.1-$50.7. The IPO news on 8Point3 came out today. This is a major catalyst for these stocks.
ReplyDeletehttp://www.benzinga.com/analyst-ratings/analyst-color/15/04/5392643/by-2016-all-solar-investors-will-know-the-name-8point3
DeletePetrolem inventories wasy down - not sure why, but will help oil if it continues:
ReplyDeleteEIA Petroleum Inventories
EIA Petroleum Inventories:Crude -6.8M barrels vs. -1.7M consensus, -1.9M last week.Gasoline -2.9M barrels vs. +0.3M consensus, -0.3M last week.Distillates +0.9M barrels vs. +1.3M consensus, +3.8M last week.Futures +1.85% to $61.25.
It's all on ships at sea?
DeleteThe spread between current and future oil prices has dropped to the point where and buy and store at sea no longer makes sense.
DeleteIf I was going to guess, it could be more oil from the mid-east, etc. going to China, etc., but oil is a complex market.
If spread is gone, it might make sense to go long an ETF?
DeleteI grabbed some of that ENOC today at $10.36. I've been watching this one a while...got interested in this space again after the Reminiscences guy mentioned it and after seeing they partnered with Tesla. They also have partnerships with SPWR and I'm assuming they will do one with SCTY. Could be a nice play on solar / alt energy similar to like AMBA on the wearables space.
ReplyDeleteMy thinking on this is that the SaaS part of their business should do about $70 Million this year. If they were to spin this company off it would be worth about $500 Million to $1 Billion, depending on what the market multiple is relative to sales. CRM traded at 16x sales when it went public. ATHN and others trade at around 10 or so times sales.
DeleteBut the market opportunity for this part monthly recurring revenues is really big - they're estimating $1.3 Billion. If they could do at $200 Million then that part of the biz could be worth $1.5 to $2 Billion or so. I figure its worth a shot and makes sense to keep some shares
DJIA +250 points, EEM (emerging markets) +1.4%, OIH (oil services) +2.5%, XLE (energy) +1.3%, GDX (miners) +0.8%. So apparently things were bad enough yesterday to have warranted a few positions. Tough break.
ReplyDeleteOn the other hand, TLT (the long bond) is now off -1.1%. Brazil started out strong, and now giving back much of its morning gains.
(a) Reopening a position in PBR (Petrobras) @ 9.06, well off its morning high of 9.44.
(b) Will open a position in RYGBX (Rydex 1.2x Government Long Bond) at the close.
(c) May reopen a position in RYPMX (Rydex Precious Metals) at the close.
(d) Small position in EJ (E-House China Holdings) @ 6.98 (off morning highs around 7.15), an interesting play on a leveraged buy-out offer by management.
Hairy Enormous Butt, #3 favorite CEO
ReplyDeleteOK, the 8point3 thing is interesting.
ReplyDeleteENPH price action today was freaking horrible.
I reserved a camping site for the family in the last week of July. I'm pretty set on being very low risk / high cash as we head into the late summer and want to be as far away from the markets as possible. I have July 20 to 27 and September 15th as key dates that could be short / intermediate term tops for the market. I'm thinking this is a really good time to go on vacation.
ReplyDeleteHow does your wife feel about planning vacations around stock market cycles?
DeleteHa she doesn't really care. We were choosing between a few dates and that's the one I chose based on my feeling about the market.
DeletePSEC - Looking a little better, not sure if I managed to catch the bottom....
ReplyDeleteARR - Lots of supply, it's tempting to nibble.
ReplyDeleteAKS - Under $5, so is the next leg down beginning? End of stock market cycle thus time to go camping! :)
ReplyDeleteTOF- Where are you going?
ReplyDeleteHeading up to big bear to camp and take my son fishing. Any trips planned?
DeleteRyan Detrick, CMT @RyanDetrick 2m2 minutes ago
ReplyDeleteAAII neutral above 45% for record 10 straight wks. 6 back in '88 was previous record. No one knows what to do. $SPY
TCK - Idled met coal operations, doesn't sound like steel is booming or the'res a switch going on to another fuel. Wood pellets maybe?
ReplyDeleteEVA - IPO'd at a 200+ P/E, huh? Wood pellets subsidies coming?
ReplyDeleteSold ENPH for w hopping 1K profit. Yesterdays tape was uglier than my dogs butt.
ReplyDeleteTOF- Cool. Nothing yet here. Lot's of tournaments to navigate around. probably last minute.
ReplyDeleteAdded more ENOC at $10.3x today.
ReplyDeleteI made one lateral move earlier today and sold out of FSLR and moved that into SPWR. I prefer SPWR because they seem to have their shit together when it comes to addressing future technologies as well as significant exposure to the residential market which makes up the lion's share of the total solar market.
ReplyDelete(a) TLT currently up +2% (a whopping move in the bond market). Will be closing RYGBX (Rydex 1.2x Government Long Bond) end of day.
ReplyDelete(b) Miners down about -1%. Goldcorp traded as low as 16.81, now back to 17.
(c) PBR (Petrobras) traded as low as 8.90 (I added to my position at 8.92), now back to 9.11.
(d) EJ treading water at 7.01.
(e) RYWVX closed the 1030 window down a tad from Wednesday's close. I'm positive on Emerging Markets through Friday, if only b/c of trapped shorts + wannabe investors caught napping.
(f) Considering small positions in RYVIX (Rydex oil services), RYMBX (Rydex commodities) and RYEIX (Rydex energy) on (what are likely reflexive) pullbacks in each sector due to the rising dollar. I'm still skeptical re any strength in the $USD. Ultimately, a short squeeze may take the buck back to YTD highs, but I just don't see it happening this week.
Reopened Goldcorp at 17.01.
DeleteOpened a position in RYWVX this morning at the 1030 est window.
DeleteOpened a position in RSX this morning at 18.34.
DeleteYou guys see AXON? Is this not a bubble?
ReplyDeleteI had an interesting conversation with the CFO of ENOC. Couple of interesting things came of it:
ReplyDelete(1) He mentioned that SPWR signed an exclusive with ENOC specifically so that they could exactly measure the savings their customers get from their solar panels. He said that solar companies previously have only been able to estimate the savings they get but with ENOC’s software they can accurately assess their potential savings so SPWR locked them up to an exclusive 3 year contract for “millions” per the CFO. No other pure solar company (some utilities offer solar in addition to others and can use ENOC’s software) can use ENOC.
(2) He sounded very open to the possibility that they might split the company up into the EIS business, which is essentially a SaaS business, and the demand response business. The EIS business is going to do $70-75 Million this year in revenues, growing 50% year on year. I compiled a list of SaaS companies with their most recent quarter over quarter growth rates and p/s (based on TTM sales) ratios below:
Symbo P/S Qtr on Qtr Rev Growth
AZPN 8.86 7.40%
CNQR 10.46 22.12%
CRM 8.39 23.15%
WDAY 17.52 57.17%
N 11.82 33.98%
ATHN 5.77 26.63%
TASR 10.98 23.76%
DATA 18.45 74.40%
NOW 16.05 52.41%
Average 12.03 35.67%
If you assume an average ratio of 12.03p/s then this portion of their business could be worth 12 x $70 Million = $840 Million. If you put a 50% discount on this average to be conservative, you get $420 Million. That leaves the demand response business worth -$110 Million conservatively.
This is why I think there's considerable upside in this stock.
I emailed my solar guy about it.
DeleteHe's familiar with it but will check it out.
DeleteCool thanks.
DeleteDorsey looks like an freaking moron.
ReplyDeleteHave you ever listened to him on a conference call? Least inspiring executive I've heard at a large cap company
DeleteWeird to see the market down so much and see a huge chunk of my watchlist green. Something has to give. I bet this is larger traders positioning for the Fed meeting.
ReplyDeleteOr the Greece decision. If we get one over the weekend, could make for a volitile Monday
DeleteSold half of my CKI.TO. Was up from $10 to $12 this year and had gotten to be almost 20% of my portfolio. Still have a large position in it, but wanted to raise some cash to put into cheaper stocks and reduced the risk with the upside a lot lower now.
ReplyDeleteNot a bad time to have some cash going into the summer. It's looking like it will be a slow one with the broad markets flat and people losing interest. Could be a good time to pick up some stuff cheap.
Very nice California strawberries we bought yesterday at the grocery store, couldn't pass them up.
ReplyDeleteAny Whip Cream?
DeleteOT: cool vid
http://media.brisbanetimes.com.au/news/world-news/dreamliner-performs-nearvertical-takeoff-6609059.html
No whipped cream unfortunately, and I won't allow that cool-whip stuff made from hydrogenated corn oil. So it's yogurt instead, unless I get off my butt and whip the cream myself.....
DeleteVertical climb also known as riding the elevator.
DeleteHere are the cumulative returns for Biotechs since 2008:
ReplyDeletehttps://teamonfuego.files.wordpress.com/2015/06/screen-shot-2015-06-11-at-10-13-16-pm.jpg?w=600&h=538
Going back 50 years the only similar run that I can find is the 1995-1999 Nasdaq bubble:
https://teamonfuego.files.wordpress.com/2015/06/screen-shot-2015-06-11-at-10-16-53-pm.jpg?w=600&h=588
I'm really hoping for a final run into the summer. The issue with shorting IBB is GILD and AMGN are the two largest holdings and they are both cheap.
Timing can be amazingly coincidental..... Any other potential influences such as big date of important test or Congressional budget cut? For now, the wind is in their favor until it isn't?
DeleteMy guess is it's all because of the Fed rate hike. It's pointless to worry about but people do.
DeleteIf I had to bet on it, the Fed doesn't hike next week, global markets have a significant relief rally into late July/early August, then fears creep back about a rate hike in August/Sept, Fed hikes rates, biotechs drop 20% or so.
I think the rise in rates pops this bubble too. With rates low, it is easy to make a DCF analysis look good, which is almost always how people justify these high valuations. But raise the discount rate and the numbers don't make sense.
DeleteGILD does look like an interesting stock, but I think it gets pulled down when the IBB crashes, and will probably be a good time to buy.
I do think economic growth accelerates fairly significantly into the 2nd half and we may be in a situation where the Fed is forced to hike a couple of times between Sept and next summer. Bigger picture I do worry about the market heading into the election next year and thereafter.
DeleteBB - I didn't see your post while writing mine. Yes, that's what I'm thinking as well...I think we could see a sharp pullback in biotechs in the fall. The number of recent money losing IPOs in the space and with IPOs like the one yesterday (AXON) definitely point to a bubble.
DeleteI think the GILD rise could eventually be muted by regulatory changes to reduce pricing or put caps on pricing for drugs. There's been significant resistance to their pricing.
Bought a position in POW.TO. It is a Canadian financial services/ insurance / investment company that is well run and a good dividend payor.
ReplyDeleteI sold it back in 2007 for $35 and bought it back today at $32, so good thing I didn't buy and hold! At the time, the stock was expensive and of course it then got hit by the financial crisis, so has been a long recovery. They've just started increasing dividends after a long time, and will benefit from rising rates. They are a 20% discount to the value of their holdings, which is the highest it has been in the last 10 years, so that discount should also narrow as business improves.
It is a conservative, large cap pick, but I think being more conservative at this point in the market cycle, at least with part of my money, is a good thing.
I agree with this strategy (being more conservative). But I will say that I'm seeing plenty of opportunities still. I've seen the majority of them in the bigger cap space lately.
DeleteENOC doing well I bought some of this on close yesterday.
ReplyDeleteAt http://www.insiderinsights.com/ rated Insider trades as nearly significant .
http://www.insiderinsights.com/company/ENOC/enernoc
AAPL went long at 127.45 and thinking about going long AREX into the close.
DeleteNot doing much but here is what I have.
ReplyDeleteRJA AXP BXMT FSLR ENOC AAPL
I know BB thinks BXMT will suffer with rising rates, but that should not be the case here, but may get lumped in with that line of thought. I have been looking at that for a few months. It is a div /income play for me.
have a little of FNV too basis 48.34 and for BXMT 29.72
DeleteFWIW
T3 - I like the exposure to solar...it's all I'm holding right now actually. I personally prefer SPWR because based on what I've been researching they seem to be more on the cutting edge of shit that is going on (I think them locking up ENOC in an exclusive relationship kind of confirms this), they tend to get the big partnerships with the leading tech firms (which probably validates it), and they have significant exposure to residential. I think their That Yieldco should be a major benefit to them and FSLR.
DeleteYeah, thanks for pointing out the yield co's and ENOC.
DeleteThey hit my AREX too.
BXMT - BB also said he doesn't understand the business model of REIT's.
DeleteI understand standard REITS where they buy a building and rent it out, but what I don't get is these mortgage REIT companies - seem very complex and high risk.
DeleteI don't know BXMT and it could well be a good one. There will be individual stocks in the REIT area which do well in a rising rate world, but I think you want to be sure about the stock's business as the sector will be facing headwinds. Look at the IYR chart or XLU for utilities, also hurt by higher rates.
IYT - Really hasn't given up much of the recent move up, and that volume was pretty large..... So I'm kinda leaning towards IYT hasn't rolled over just consolidation?
ReplyDeleteYeah man. I still think IYT is just consolidating. People are so impatient it's ridiculous. Nevermind that a stock/sector runs up huge...if it consolidates its automatically a harbinger of doom or proof that it's weak and should be shorted. Same argument is being made with GOOGL right now.
DeleteIYT has almost quadrupled since the 2009 bottom and valuations got too high to justify. I like the fact that people on TV are worried about the transports as it is rebuilding the wall of worry. Reality is the businesses in IYT are generally doing fine, but their stocks are weak due to the price getting ahead of earnings.
Delete(a) US indexes are under selling pressure> DJIA -150 points (-0.8%), SPX + NDQ both off about-0.6%.
ReplyDelete(b) The long bond (TLT) was up nicely in the morning, now in the red.
(c) Miners off another -0.7%.
(d) Emerging Markets are holding up well. EEM is actually green at the moment. RSX -1%. PBR (Petrobras) pulling back slightly, EJ (E-House Holdings) +1.2%.
I plan to close all positions by end of day, with combined trades yielding a one-day loss, but a two-day gain. Will all positions bounce on Monday? They might. Trading on hope is just not my style. What if global markets sell off on Monday? Being in cash then allows me to reopen all positions (should I decide to do so) at a lower basis. The key to outperformance in the capital markets is not the ability to open/close positions for large gains. It's much simpler than that. The key is to avoid large drawdowns, and almost all devastating losses begin with hope.
In sports, of course, hope can often drive outperformance. Here’s to the Warriors!
Warriors is the University of Hawaii sports team name, when I played for then it was "The Rainbows."
DeleteGo Bows!!!
EXAS (Exact Sciences) is selling off hard (-8%) on heavy volume, and I don’t know what the reason is. Reopening a position around 26. Pure speculation, but a bet based on faith in the company and its product (Cologuard).
ReplyDeleteClosing EXAS @ 26.54 for a +2% gain.
ReplyDelete3 minute trade based on faith!
Deletelove it. good job
DeleteThat's what I call huge faith, and the trade name Cologuard is precious.
Delete1,093 seems rather cheap for platinum?
ReplyDeleteEEM - Might be good here?
ReplyDeleteGood article from Rosenberg. Applies to IYT as well:
ReplyDeletehttp://business.financialpost.com/investing/investing-pro/david-rosenberg-why-the-sp-500-is-not-in-correction-mode
Clintons/Bushs....what's the matter with these people.
ReplyDeleteThinking of going to San Diego in November for vacation. You guys know of any good areas? We will want to be on the water within walking distance to restaurants, etc.. Seems to be a lot for rent in Mission Beach / Pacific Beach area.
ReplyDeleteMission and pacific beach are younger crowd. You can still find nice stuff but I would suggest la jolla, delmar, or Carlsbad first. Encinitas is nice but has turned into more of a party town lately
DeleteLooking at a map it goes mission, pb, la jolla, delmar, solana beach, Encinitas, Carlsbad.
DeleteActually I would recommend solana beach as well
Meant to say that is south to north on a map
DeleteThank TOF. That's a good idea. We'd prefer something quieter. We can take a drive down to the boardwalk in Mission Beach for a day tour.
DeleteYeah the boardwalk is great. I used to ride my bike down there all of the time. I'd definitely recommend renting bikes there
DeleteNice message.
ReplyDeletehttps://www.youtube.com/watch?v=oTik0YV_L0Y
The original
Deletehttps://www.youtube.com/watch?v=xXnPKMJa6VY
The number that makes us bullish on America: $99 trillion http://on.mktw.net/1GiO2pZ
ReplyDeleteGILD
ReplyDeletehttp://ophirgottlieb.tumblr.com/post/121362562224/why-gilead-may-be-the-strongest-company-in-the
I'm still a little annoyed about this one. They did a great job shaking me out of that trade
DeleteSolid day for SPWR / FSLR
ReplyDeleteJust let FSLR go 53.25
DeleteAwesome!
DeleteRussia - Best day to buy is Monday after Putin hasn't done anything to create a stir over the weekend.
ReplyDeleteEYES- I saw the spike on my phone and came back home only to see the inevitable.
ReplyDeleteDon't look now but its re-spiking
DeleteGetting back to that Falling Knives article I posted, which put 60% down over 1 year as the threshold, I've noticed as I go through charts that a lot of these stocks that I consider to have very strong long term prospects...tend to fall just shy of the down 60% move needed to be classified as a Falling Knife. I don't have any data to back this up, though.
ReplyDeleteIf this is a possibility then it stands to reason that a stock like Z might just be a buy soon. It's 52 week high was $164.90 on 7/28/14. 60% down from there is 65.96 by 7/28/15. That's a drop of 23% from here. Can it happen? Doubt it. Instead, I'm looking to re-enter this at a weekly RSI of 30-31. Right now its at 35.8. I have a feeling there's not much more to go down with this one.