My long term outlook.
The world economy will embark (actually, has already embarked- if you want to stamp a date on it, I would say sometime in late January 2016) on a decade of out-sized growth (led by the very BRICs that have fallen out of favor with investors), giving rise to the 21st century version of the Roaring Twenties.
That's my take for the next ten years in one sentence.
Hmm... take it easy on that crack pipe.
ReplyDeleteIn other words, you disagree?
DeleteCorrect, there's no evidence I have found (quite the contrary) nor have you produced any, to support this dreamy concept.
DeleteThat is, this is similar to saying BMY will close the gap down from $120's, a double from here.
DeleteHere is an interesting note from Niels Jensen, titled "If only we could blame China":
ReplyDeletehttp://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/OTB_Mar_04_2016.pdf
It ends like this: "Having said all of that, this is not the first time that a crisis has hit the emerging markets. In 1997-98 the so-called Asian crisis did substantial damage to equity prices as well as commodity prices, and the ultimate saviour back then turned out to be the combination of low commodity prices – in particular low oil prices – and very competitive foreign exchange rates.
I see no reason why the present combination of low oil prices and attractive foreign exchange rates
shouldn’t invigorate economic growth across emerging markets, just as it did it back then. After all, the fall
in oil prices this time has been even bigger than it was in 1997-98 (chart 8). EM equities could quite plausibly end up being the bargain of the year, although I am concerned about corporate leverage in many EM countries. One would therefore have to step carefully."
I looked through the letter that Jesse sent out this weekend and found a couple of stocks, whose charts resonated with me. So I placed a buy stop limit order for some MTL at $2.00/$2.10, and for some AEZS at $4.00/$4.20. In other words, if these stocks continue their newly established uptrends and break above the recent highs, then sky will be the limit.
ReplyDeleteKTEC - For instance, how does this company survive? I don't get it, there are many in this predicament.
ReplyDeleteMBUU - http://www.ghostwhisperer.us/Music/Lyle%20Lovett/Lyle%20Lovett%20-%20If%20I%20Had%20A%20Boat.mp3
AEZS- Wow, I haven't looked at that one in a long time. I'd rather see if we could take a shot a buck lower.
ReplyDeleteLow oil prices is a major benefit to global growth after we get past the phase of bankruptcies (which seems to me like we may have passed the worst). This is the reason why I'm holding TNA despite the market being expensive (small caps for the first time in a while are actually not that expensive). Low oil is the outlier to earnings growth. Also, the amount of production cuts in multiple industries that we have seen means a lot of industries are now leaner and will make more profits when they come out of the money losing phase they're in. So that should help the S&P earnings growth rate. But the S&P is still quite expensive.
ReplyDeleteA stock I keep looking at is TERP. Anyone following it closely with the whole SUNE / Tepper thing going on?
Can't go wrong I think if you believe solar takes root and there's not too much capacity. Personally, I've seen more windmills than solar panels going up.
DeleteAnd I'm thinking both fit nicely with electric vehicles, just not sure how states/counties recoup lost fuel revenue.
DeleteLong UGAZ at $.7782
ReplyDeleteJeeze, that sounds cheap.
DeleteChickenpookieMarch 7, 2016 at 6:48 AM
ReplyDeleteCorrect, there's no evidence I have found (quite the contrary) nor have you produced any, to support this dreamy concept.
Fair enough. As a counterpoint, I would point out that John Hussman has (consistently and insistently over a period of six years) produced a ton of evidence to support a major market decline.
I have no explanatory conclusion for Hussman's (meth)odology aside from he appears to have poor mechanisms for predicting time horizon (market timing)?
DeleteI sold TNA today at $55.16 avg. RSI at 71 and hourly RSI hit 71+ for the 7th time since the bottom. Hoping for a small pullback to buy in.
ReplyDeleteMy buy stop order on AEZS was triggered this morning at $4.00. Placed a sell stop at today's low of $3.55. Also, with SLX exploding, MTL should not be far behind. So I just bought some at $1.94 and placed a sell stop at the recent lows of $1.70.
ReplyDeleteYINN - Of note, the redness....
ReplyDeleteAh, I get it... Run prices back up and suck in new batch of sheep, distribute then off to Hudson NY Harbor Yacht Club for vacation.
ReplyDeletePGAL - Saw a note of "Stable" rating for Portugal, perfect excuse to sell apparently.
I flipped the switch to SPXS when I sold TNA but I was too Chickenshit (pookie?) to take much of a large position. Woe is me.
DeleteHere is another of our good Canadian companies, unfortunately private:
ReplyDeletehttp://www.nakednews.com/?
Probably a better source for information than Hussman!
DeleteSold out of TNA today and bought some UGAZ and some SPXS. I'm not expecting doom like so many bears but this feels very November 2011-ish in this runup. A bit of an extended run that will at least consolidate given the valuation of the market. In Nov 2011 we were trading at 13x with 10%+ earnings growth whereas now we're at 19x with negative earnings growth.
ReplyDeleteRan all my numbers YTD and still down about 4%. The US$ is down about 4% vs. the CDN$, so would be down around 2% in US$ terms.
ReplyDeleteBut am happy to see the CDN$ going back up as it broadly gives us more buying power.
Not bad. I'm currently at +5% after this latest run up in TNA. Still sitting with mostly cash. I'm hoping we get some base building here to give me some more confidence to pick some individual stocks.
DeleteBasically, I'd like to see the number of blowups in individual stocks start to subside. The thought of holding a 15-20% position that drops 40% in the span of a couple of days is keeping me cautious until we see steadier / calmer waters.
DeleteI agree with that approach TOF.
DeleteTERP- No one would ever really know.
ReplyDeleteBeauty of a chart.
DeleteMight explode tomorrow...
DeleteOr implode with another lawsuit.
DeleteSmart guys should know, they shouldn't be gambling with OPM. The problem occurs I think, when management lies to them and they don't catch it.
DeleteIf this was an either/or TERP/SUNE I'd bet on SUNE Also consider, there are other fish in the ocean?
Heck, maybe banks will have a bountiful feast just arranging secondaries for debt-burdened companies? Question is, will the insiders share with shareholders?
GOOGL is actually getting cheap again. I could see it going for 25x 2017 earnings at some point next year which would mean a 45% rise from here.
ReplyDeleteEnded up closing out of SPXS after hours at $17 for a small gain on the day.
ReplyDeleteI'm looking to get back into TNA but trying to choose wisely. My signal will most likely just be a hourly RSI of 30 or below. Been a while since that happened.
Goldman looking for a big jump in the markets, FWIW:
ReplyDeletehttp://www.bloomberg.com/news/articles/2016-03-07/goldman-sachs-sees-best-time-in-two-decades-to-buy-s-p-500-calls
Goldman Sachs Dismisses Metals Rally With Call to Short Copper
DeleteExplanation of iron ore move:
ReplyDeletehttp://www.businessinsider.com/heres-whats-going-on-with-iron-ore-and-why-the-price-is-expected-to-crash-eventually-2016-3
Chinese Exports dropped 25% in February.
ReplyDeleteJapan's Government Eyes Fukushima as Hydrogen Production Center
ReplyDeleteDavid Stockman was a two-term Congressman from Michigan. He was also the Director of the Office of Management and Budget under President Ronald Reagan.
ReplyDeletehttp://dailyreckoning.com/obama-americas-pretty-darn-great-right-now/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailyreckoning+%28The+Daily+Reckoning%29
SUNE - There's your pop! TERP as well I expect, no? VSLR deal was cancelled.
ReplyDeleteJONE - "Jones Energy tops 4Q profit forecasts +7.91%"
ReplyDeleteWas wondering what all the fuss was about, looks like it's back under control now.
CENX - Well that sucks, along with SID and CLF, others as well no doubt.
ReplyDeleteNMM - You've gotta be fast to catch a top. That assumes you can identify one, or even direction for that matter. It doesn't help when peers cheer stocks without even considering fundamental economic data, just make up shit as they go based on how their colon feels at the moment.
ReplyDeleteDang, this really sucks.... Hwy, what happened to the roaring 20's?
ReplyDeleteDreamy or Not, some numbers behind reality with a realistic assessment.
ReplyDeletehttp://awealthofcommonsense.com/2016/03/bottomfishing/
It sure would be nice to sidestep the downside though, just once would help. The warning signs are front and center, inclusive of typical assault of bad omens: "going to the moon!", lol...
DeleteI'll add, this concept of impossible to predict seems like an excuse for poor DD, seems to me if you have access to useful and accurate data you have a pretty good chance of making excellent decisions.
DeleteFor instance, it's easy to see most of China is under distribution and capital is fleeing. IMO, this is a reason to steer clear at least until the flames and smoke subside, which could take a decade or more due to momentum and domino theory.
The best way I know is to have stops.
DeleteWhat's your uncle point?
My uncle point occurs when if becomes clear to me upside is out of the question. The negative case has only gained strength.
DeleteSecondary plan is trade the downtrend, this could involve a leisurely approach, given the trend is well defined. I have no desire to trade an uptrend, B&H would be the strategy.
I really have no uncle point. I'd rather own more stocks as they get cheaper, so even though it not fun to watch your holdings go down, I consider it part of the price you have to pay to be successful in the market.
DeleteI try and use valuation, business indicators and understanding cycles to move in and out stocks and stock cycles. I think very few people should go all in or all out of anything as it is psychologically too hard to do and I'd bet a lot of money most people end up losing more than they are gaining.
Stocks move in advance of news, so trading on what you are reading is too late. Unless you are doing deep research ahead of the crowd, but that is hard enough to do on a select group of stocks, let alone the broad market.
I did establish a type of hedge anticipating a round of oiler capital raise-ups, which in my assessment distills to a continued production environment.
DeleteALDW is that hedge, I figure it's near as impossible to construct a new refinery as it is to replace the Norfolk Naval shipyard. We'll see how that goes, lol... Probably should've gone with the shipyard in retrospect but my chance in the low 60's was foiled by a belief government would sacrifice defense contractors in favor of the middle class. Surprise, surprise, change didn't happen, duh some things never change.
"I try and use valuation, business indicators and understanding cycles"
DeleteI guess you mean to say valuation, cycles and indicators moving in your favor. I haven't seen much evidence of this recently.
Getting progressively worse now....
ReplyDelete"Goldman looking for a big jump in the markets, FWIW:
ReplyDeletehttp://www.bloomberg.com/news/articles/2016-03-07/goldman-sachs-sees-best-time-in-two-decades-to-buy-s-p-500-calls"
I always get a kick out of these articles. What could possibly be better than March 2009?
Goldman also advises short copper. That's Dr. Copper, BTW...
DeleteBack in TNA.
ReplyDeleteSold out of UGAZ for a small loss. Was looking for a follow through day. Might still get it but I got impatient.
ReplyDeleteEROS - Still melting up...
ReplyDeleteWOR - That would've been a good play, turns out. Yeah, it's helpful looking at the past b/c I always learn something I can carry forward. So please stop trying to tell me there's no value looking backward while conveniently leaving out qualifiers. If we never looked back we'd have no future.
SPH - I'll have to do some math to uncover which was a better choice (vs WOR) but I chose this for the divy... Makes no sense to me risking capital in a stock unlikely to move unless there's some kind of compensation. Take BXE for example, no dividend, not even a kiss. Oh Vey!
Plastic explosives molded to complex shape = "Cutting edge terrorism"
ReplyDeleteMilitary budget $1B, is that right? Can't we just produce our own oil we're spending $1B on securing, considering we don't need or want oil anyway? The more money we throw into that hole the larger it becomes....
Got a money pump idea, using BXE as the vehicle. Wanna hear it?
ReplyDeleteHere's one: oil is going back to $100 and BXE will be at $30. Sounds reasonable to me!
DeleteIt's not gonna be easy convincing you guys we aren't on the verge of an economic growth moonshot is it?
Delete"I’ll admit that we federal employees take advantage of the private sector. That it’s Robin Hood in reverse, but you get addicted to the easy money and carefree lifestyle. Let’s face it, it like Bill Gates said, “Life is not fair; get used to it.”
ReplyDeleteYINN - The pre-market traders nailed today's price, hasn't budged.
ReplyDeleteJust got my nat gas bill for Feb and nat gas usage is down almost 1/3 from last Feb. The average daily temperature here was 16 degrees Fahrenheit higher than last Feb.
ReplyDeleteGood example of why nat gas prices have been hurt.
ChickenpookieMarch 8, 2016 at 9:15 AM
ReplyDelete"I try and use valuation, business indicators and understanding cycles"
I guess you mean to say valuation, cycles and indicators moving in your favor. I haven't seen much evidence of this recently.
> CP, what is the point of putting down someone else's investing style? Don't read what I say if you don't think it is worthwhile.
B/C you've been wrong since the 10yr rate reached 3.15%, that's why.
DeleteCP,
DeleteYou've been wrong about a lot of things too, but no-one puts down your style or ideas.
Reality is we all get a lot of stuff wrong, even the absolute best of the best do. The important part is to get enough right to make money.
And there's certainly no good to come from criticizing other's ideas. If you want to challenge something someone says, that is all good, something like "I don't think rates are going up because of A and B" and we can discuss.
But investing is tough enough and we need to stay positive. I put out my ideas, my buys and sells and my returns. You can read all this and take from it what you want, or nothing at all - your choice. I read your stuff and everyone else's and do the same. But much better to keep away from negative commentary about others approaches.
If I was always right I wouldn't be talking to you chumps on the internet boards. We'd be dining together on my yacht!
DeleteI'll remember that!
DeleteWrong, like with ALDW/SPH/NVDA or BXE/EROS/FMD?
DeleteMy short-term outlook.
ReplyDeleteIt would be appropriate to see a -2% to -5% pullback over the next week or two. Sooner better than later, and a sharp drop at some point better than a drift.
The Russell was down pretty sharply today. 2.4%
DeleteDamn right it was.
DeleteThus it shall rise!
DeleteDamn right it will!
DeleteThursday is a day to be aware of from the perspective it could be a repeat Draghi disappointment.
ReplyDeleteLLTC - I like this company as well, can't justify why my broker seems to have poo-pooed on these companies I like... Might be missing something.
ReplyDeleteComments?
ReplyDeletehttp://dailyreckoning.com/how-central-banks-are-fixing-to-ambush-the-casino/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dailyreckoning+%28The+Daily+Reckoning%29
I've seen him come on the tv for 7 years now talking doomsday. My first thought is always: what is he trying to sell me?
DeleteExactly, always selling something, do not waste your time with DR.
DeleteI have pop-up blocker on, didn't catch he's selling something but read his article seems like he's got some good arguments.
DeleteThis one is for you CP:
ReplyDeletehttp://www.cnbc.com/2016/03/08/the-market-needs-a-leader-like-ronald-reagan-commentary.html
Read the comments to this article. Same comments we have read for what? 7 years now?
I'm hoping we get a bigger pullback here akin to the 2011 November pullback that resulted in a massive move higher. Current valuation is really hard to get excited about, but I do see a scenario where commodities start rising across the board at least marginally, which will make a few sectors report better earnings, but remain still low enough to keep input costs low for the majority of companies. And in this scenario, I could see earnings rising by 7-10% for the next few years.
ReplyDeleteSo 8.5% growth for the next 3 years = 27.7% total. Using $106 as a base you get $135. Using a 18 multiple you get 2,437. 6.8% + 2.2% yield = 9.0%. Not bad.
By the way, anyone else watching MITK rise? Strong as a bull the past 4 months.
It's hard to know what metrics to use valuing the market because of the very low rates. The big funds will look at what return they can get on bonds vs. stocks and allocate accordingly. The investment grade ETF, LQD, has a yield of 3.45% and the S&P, with a p/e of 18.5, is 5.4%.
DeleteThis was from Buffett last May when stocks were about 5% higher than now:
"The billionaire Buffett said the stock market would be viewed as "cheap" now if interest rates continued to remain low, but not necessarily if rates normalize."
If rate go up and the economy improves, this will all rebalance, but for now, I tend to agree with Buffet, but also try and buy sub-10 p/e stock, of which there are quite a few, to be safe.
There is nothing more bullish than 'overbought' conditions becoming even more 'overbought.' After all, that's how we end up with higher prices. There are two ways to work off an 'overbought' condition: price, or time. Prices can pull back, and (as pointed out earlier) a -2% to -5% decline would be normal after the recent +10% rally. Time corrections are less dramatic. However, a multi-week or -month chop within a narrow price range is just as effective at shaking out weak hands (as traders become bored or discouraged).
ReplyDeleteIf you're trading, price corrections are ideal. If you're holding, time corrections are preferable. Either way, keep the Roaring Twenties in mind. Over long periods of time, the greatest risk is missing out/being left behind.
CP- You've been a valued member of this blog for several years, but you're going to have to tone down the negative comments re other participants. The comments come close to being outright insults.
ReplyDeleteA boy could get pneumonia sittin' next to you.
DeleteLooking through the results of some of the drillers and see quality companies posting losses, some for the first time in over 20 years. Analysts forecasting losses again for 2016 before rebounding to small profits in 2017. A number of the poorly run ones are already out of business.
ReplyDeleteThings which would be happening closer to a bottom than a top.
I agree. All of this is setting up these industries (mining etc) for profits in the future. Even if they're lower than they were in 2010, they will be positive versus deeply negative last year, and this will no longer be a drag on S&P earnings.
DeleteI still think the place to be if you want to stay in the US is in small caps. If we do end up going a good deal higher, say 20-30% over the next couple of years, then small caps should outperform because of their exposure to a stable US economy (this proved to be beneficial in the past year in terms of earnings vs international companies) and after they have dropped so much they are trading at lower multiples than large caps.
Delete"If rate go up and the economy improves, this will all rebalance, but for now, I tend to agree with Buffet, but also try and buy sub-10 p/e stock, of which there are quite a few, to be safe."
ReplyDeleteBB - Are you just screening for those in finviz? I have found a lot of their screens to be somewhat unreliable. Gurufocus has a screener too but I haven't checked to confirm their accuracy.
My call is Nat gas is in a new bull market. Now its time to buy dips.
ReplyDeleteI bought some UGAZ at $.8203. Crazy to use these low prices.
DeleteI believe there's a 1:25 split on UGAZ soon.
I think you could probably buy and hold this for a 50% move...or you could be a degenerate like me and try to trade it.
DeleteStill so freaking busy....
ReplyDeleteCMG- Unlike TOF, I really like CMG...but all of the locations here have been DEAD for MONTHS. I wonder if they will ever regain that lost traffic. I bet not.
ReplyDeleteIf I had guts I would buy puts in that thing. I really dislike their food and would have to imagine they have hurt their image for 2-3 years. It's not on the level of that JACK fiasco from the 90's but still not good.
DeleteIt's sort like the honeymoon period stocks get after an IPO. Once that ballon pops it never recovers that high.
DeleteYou're right Mark, with a few exceptions like PCLN, AMZN.
DeleteAnd it's still not a cheap stock with p/e and fwd p/e over 30.
Lots of burrito competition popping up now too. Probably is a good short.
I can't recall. Is David still long NGas?
ReplyDeleteMike,
ReplyDeleteyeah I use FINVIZ for screening, still the best out there I think, but I always look at other resources before buying.
A lot of the cheap stocks are in financials, but at their lows, stocks like UTX got below 10, UNP got down near an 11 p/e, and WMT around 12.5, steel bender CAM.TO is still under 10. There are lots still out there, at least where I am looking.
Cool thanks.
DeleteHave you screened for small caps with p/e's under 10?
Re small caps vs. large caps, I generally like small caps too. The big question I see is what happens to the US$. It could go either way this year and will push large cap earnings around depending on which way it goes..
ReplyDeleteOil +5% to close at its highest price since last December. Not surprisingly, EWZ (Brazil) is up +0.9% and EEM (emerging markets) +0.6%. VT (total world stock market) +0.41%. US indexes giving back most of the day’s gains but still positive.
ReplyDeleteRSX (Russia) +3%. CYB (Chinese Yuan) currently at its YTD high.
DeleteIsn't EWZ like +25% YTD? Nuts man.
DeleteWhen is GREK going to go parabolic?
I guess it kind of has...+26% since bottom a month ago.
DeleteTrading Nat Gas - I wonder if it is worth setting up a futures account? You can have even more leverage than UGAZ and you don't have the contango issues you are fighting against with the ETF.
ReplyDeleteYou really want that headache?
Deletehaha I echo Marks thoughts. Taking a 10-15% position on UGAZ is tough enough especially when you have the equivalent of an earnings report every week.
Delete"I can't recall. Is David still long NGas?"
ReplyDeleteYep. :) I've been buying UGAZ in steps on the way down starting from $1.75. My last purchase was at $0.70, and I have a sell limit on that bunch at $0.9. Hopefully, it gets hit tomorrow. :)
I don't have as much confidence in my day trading skills as Mike has, so I wasn't even thinking of making money on it by moving in and out. Instead, if something is near a bottom (and it is hard not to think that NG is near that bottom after the front-month futures dropped to a 17-year low due to a warm winter and a lot of *previous* shale oil gas, while ahead of us we have production cuts, industrial demand growth, and a lot of weather uncertainty) and is bound to recover at some point in a not so distant future, I figured that an automatic scale-in / scale-out strategy would be appropriate...
T3D -- thanks for point out a couple of weeks ago that MOS/POT have bottomed out! I purchased calls on POT on that day and they have appreciated substantially over the last couple of weeks...
ReplyDeleteI'll try to hold these calls until the price chart shows signs of topping out. So far it is a straight line up, starting from early Feb...
DeleteGlad its working for you!
DeleteEROS made a triple bottom between Nov, Jan and Feb. Where do you guys think it will move from here? :) Let's put it another way: if you buy some now, place a stop at the Feb low and then prepare to take profits when it moves up by the same amount as the distance between current price and the stop price, would the probability of exiting with a profit be larger than probability of exiting with a loss?
ReplyDeleteI have a feeling it's headed back up, absent someone else inks contracts to provide content for their market?
DeleteYou would think last week's phenomenal global rally would improve trader sentiment. Not so much:
ReplyDeletehttp://www.marketwatch.com/story/heres-why-you-can-expect-more-upside-for-us-stocks-2016-03-04?siteid=rss&utm_source=tf
Which is great news for the rest of of us. Bears were unable to capitalize on a sharp -100-point mid-morning plunge in the DJIA, which closed at 17000. It would not surprise me to see a gap-up open on Thursday, forcing shorts to drive the DJIA up 300-500 points by the close.
Eyeing oil price rise, Chevron to boost Permian rig count.
ReplyDeleteChevron LNG Production Goes Online in Gorgon Development.
”A sngle tanker loaded wth Gorgon LNG has enough fuel to supply 80,000 Japanese homes a year. ”
FinViz has 173 Micro-cap stocks (under $300 million market cap) with a p/e of less than 10, so a pretty good selection.
ReplyDeleteOften the best stocks to buy are those that look expensive on stock screens due to 1-time items, unrecognized assets, accounting rules, etc., but are actually cheap or seeing a big jump in earnings, so the cheapness will become apparent soon and drive the price up.
The hard part is finding these because they do not show up onscreens.
ORI, which was one of my best stocks last year, previously looked expensive because GAAP required that all subsidiary earnings be consolidated. ORI had written the value down to $0 one separately incorporated subsidiary on the balance sheet because it was basically bankrupt, but they still had to flow the subsidiary earnings through the income statement, so it made earnings look much worse than they actually were.
ORI is 30% above it's 52wk low, SPH is 48% and dividend is greater.
DeleteORI is up 23% over the last year, SPH is down 31%. SPH has had a nice bounce off the bottom (I guess 48%), but might still be a good buy here. I would assume trading down with the price of energy, but haven't looked into to.
DeleteI've sold about 80% of my ORI into this appreciation.
NWLI - Looks ready to move back up. Remember when it was $265 the post declaring the next leg up is here? Well, maybe this time....
ReplyDeleteIf $US rallied here, commodities get pummeled again?
ReplyDeleteNot necessarily. $USD rallied for the 2nd half of February, and so did oil. Gold stayed flat over that period of time.
DeleteNatty - I can imagine a huge short covering rally.... Sounds like Australia is going to be a big LNG supplier for Asia though, larger producer than Qatar.
ReplyDeleteGWPH- I might take a shot at 30 if it gets there...smoke um if you got um!
ReplyDeleteHarlan and I were 'watching' Anderson Copper of CNN interview Trump last night in the typical set up. 2 chairs facing each other fairly close together.
ReplyDeleteHarlan glances up and asks... "Is Trump in therapy?"
Trump is the therapist! :) Surely best candidate party has to offer (big assumption it can be called a party).
DeleteI fear Clinton represents more of the same insider interests.
The DJIA did in fact gap up overnight, although the +150-point premarket spike reverted to a paltry +6 points at the open. Currently +60 points.
ReplyDeleteIt's a tough scenario for both shorts and investors sitting in cash. The market simply will not correct. If short, my advice is to cover- the markets are headed higher. If you're on the sidelines, the market is forcing you to dive in from an uncomfortable height.
Sure enough, there she goes!
DeletePEIX - Thankfully, didn't report a profit. Imagine if there was one.
ReplyDeleteBack in TNA. I've been day trading everything and see no reason to stop doing this. The only longer term hold I had was TNA from $46 to $55. Two things I see that are bullish about today despite the sharp reversal:
ReplyDelete(1) Bonds down / TNX up significantly
(2) VIX barely up
I'll be out of this trade before the day is over I'm sure. I still want to let this mini correction play itself out and I also have in the back of my mind that the market is pretty overvalued relative to earnings.
DeleteNWLI - Still has the volume thing going, makes it look like accumulation. What else could explain price action of volume with no price drop?
ReplyDeleteIsrael has been working on solar hydrogen production supposedly, wonder how that's going? I think using solar to produce anhydrous ammonia might be the solution b/c the ammonia would be easier to transport then once at destination is fairly easy to disassociate to it's constituents.
ReplyDeleteN2 + 3H2 → 2NH3
Fill her up with 5 nines NH3?
Why wouldn't TLT be higher on a day like this? Seems really odd to me.
ReplyDeleteI think the chances of a rate hike increased?
DeleteGot stopped out of TNA.
ReplyDeleteBuy the rumor, sell the news is what today is all about.
That's what it seems like to me. ON CNBC, they are trying to make a big deal that the market didn't go up on ECB stimulus and that it means Central Banks have become ineffective. But I really think it is just people squaring up bets on what the stimulus will be and the market will show its true color in a couple days.
DeleteSeems like the GOP anticipates Hilary will be POTUS This might just be the only correct prediction they've made in over a decade.
ReplyDeleteCENX - Now green, amazing partial recovery this stock has been experiencing, I cannot anticipate this continues.
ReplyDeleteHDSN - This stock has been doing quite well also, interesting that APD/Airgas/etc. have not completely sucked this business into their coffer, much bigger fish to fry (H2, NH3?)?
http://www.refrigerant22.com/images/R-22_Chart_For_Refrigerant22_R-22_Price_Chart_R-22_Price_Chart.pdf
Got back into TNA at $50. I find it curious that TNX is up and TLT is down which is a bullish sign. I'd rather lean bullish after a 4% pullback in RUT
ReplyDeleteDamn this market is fast. I sold at $50.37 by the time I was done with my post.
DeleteI'm looking to hold some overnight after thinking this through a little more over the past hour or two. On the surface today's action looks very bearish, but in the context of a huge run up, I think its probably smarter to look at this simply as a sell the news type day. My bet is this is a pullback that will be bought, barring any external type events.
DeleteThe bigger concern I come back to, though, is I think the market is very expensive as a whole - every single index. This has kept me from taking single stock positions as the odds of me buying the few stocks that go against the grain are low. If it was 2000 where the tech stocks / nasdaq / S&P were extremely overvalued while the Dow and small caps were reasonably priced then I wouldn't be opposed to buying single stocks.
DeleteSo for the next year or two I'm going to focus on tactical trading, buying on weakness and shorting on strength. My goal is 10% gains per year while keeping at least 50% cash at all times until things get so oversold its worth jumping all in.
Of course, if we are able to stay above the 200 DMA and the VIX stayed sub-16 and we see the blowups subside then I'd change my opinion.
DeleteHave you thought about going outside the US?
DeleteFor example, the Germany ETF, EWG, has a p/e of 13.7 and you are buying inexpensive Euro's with valuable US$, so there should be some currency upside over time.
When I look at my holdings, I'd say it is about 30% US focused, with about 30% globally focused and 40% Canada.
DeleteSo in thinking about this, it shows to me that I think there is more value outside the US than inside the US.
Each and every time I've had a dealing involving Canada it turned out quite negative. Same for family that proceeded me.
DeleteNWLI out with good numbers again.
ReplyDeleteYou've got a $222 stock with a book value of $428 and consistently profitable making $28 this year (in a tough macro environment). So p/b of .52 and p/e of 7.9 now. Hard to see how this goes poorly.
WY doing some serious heavy lifting for me today.
ReplyDeleteEVA is really moving.
DeleteBB - I haven't really considered outside the US only because I've had little luck buying overseas stuff in the past.
ReplyDeleteI concur, no luck at all. For instance, the Indian market goes on a tear while the ETF takes a big dump. Almost as if buying top of India is the correct approach, let me know when their market rolls over and I'll buy the ETF?
DeleteI've looked at those Indian ETFs and the holdings aren't that great. I'd rather buy a stock like CTSH. I keep watching MMYT. At some point that will be an awesome buy and hold.
DeleteWith almost a mill in play, my net day change is -$18.00.
ReplyDeleteIf AAPL can start pushing we might have something into the close.
Delete-44% 3 day haircut BPT
ReplyDeletehttp://finance.yahoo.com/news/due-recent-fall-oil-prices-140000688.html
Probably goes sub $12?
DeleteThe DJIA plunged -168 points midday, a solid ‘take down’ for traders who bought the open. The SPX declined to 1969 (one of my favorite years). Both indexes have recovered nicely, with the DJIA trading @ -31 points, and the SPX @ -2. EEM (emerging markets) flat, with a +3.81% rise in EWZ (Brazil) offsetting a -2.38% decline in ASHR (China ‘A’ Shares). VT (the total world stock market) flat @ -0.1%.
ReplyDelete72% of Stocks Closed Lower Today, recovery superficial. I don't think you looked under the hood.
DeleteEYES - My position is down a mere 62%, hard to get bullish over that.
ReplyDeleteDidn't realize you're still holding it. Great long term technology but they will need a lot of funding to get them through the interim.
DeleteI never sold it, was a relatively small position but every cut hurts and there've been a long string. Being hopeful hasn't made any difference.
DeleteDo you typically hold until a certain target price? What about stops in case you're wrong?
DeleteWell, it turned down the instant I bought it. Shouldn't have bought it.
DeleteI think of it like a piece of paper and nothing more. If it drops below my pain threshold I'm out. No questions asked. The only times I get burnt badly is if I buy into a thesis and stick to it and ignore stops and what not. Granted I'm a trader and don't hold things for very long, but in up markets I'm willing to hold stuff for longer periods. These things aren't wives that we are married to. There's thousands of stocks out there so no sense in getting married to em.
DeleteJone - Closed at $3.20, not that long ago was trading over $10, this isn't bullish.
ReplyDeleteI could go on, you probably see the same thing I do but are in denial.
Canada sold their remaining gold and has turned their back on fossil fuel energy. Next they'll probably bail out Bombardier so Bombardier can move production off shore.
ReplyDeleteI don't get it, what does Canada have aside from crazy high real estate prices?
PWE - Another example of Canada turning their backs on commodities.
ReplyDeleteBECI - Tapping another $200m of credit, helping to expand risk to the balance sheets of banks.
Perhaps someone like Saudi Arabia will take over this company's assets but chances are slim to none, It'd be quite a surprise. Doubtful Canadian banks will either, note BEP has turned to buying South American assets as opposed to investing in Canada.
DeleteWhat's up with Canada exporting water to California, is that really dead? No further discussion probably means it's going to happen, I already know Obama has been pushing for this and what the Dems want they get.
After reading Jesse's letter over the weekend, I took small positions in two stocks whose charts I liked the most: AEZS and MTL. Today I got stopped out of the first one. :) Let's see whether MTL will eventually compensate the loss I took on AEZS today.
ReplyDeleteOn the bright side, UGAZ hit my sell limit today at $0.90 for the shares I purchased at $0.70. Even though I was scaling into UGAZ using very small positions, today's gain on UGAZ was still twice larger than the loss I took on AEZS.
Just in case, I placed a new buy limit order on UGAZ at $0.70, so as to rinse and repeat if NG decides to wobble around the bottom for some time.
CP,
ReplyDeleteCanada is a great commodity market and gives you the ability to really hone in on what you want to own in commodities unlike pretty much any other country. You want a West Guyana Metals drilling company, we have it. You want oil pipeline coating,we have that too. etc.
The tough thing for the Canadian Market has been the pullback in commodities the last number of years.
If you had known, putting money into Canada at the end of the 2002 Bear market was a great investment. The EWC returned almost 300% before the 2008 downturn as opposed to the SPY which returned 75%.
A lot has changed since 2002, Canada was in the right place at the right time.
DeleteRUN in AH, sheesh...
ReplyDeleteIn general, when investing outside the US, you have to consider currency as well as stock appreciation. That could be why the Indian ETF's are not working while the Indian market goes up.
ReplyDeleteThe last few years, the US has absolutely been the place to be as you had both rising stock prices and and appreciating US$ (or depreciating other currencies). But these things go in cycles and the US$ is fundamentally overvalued against most currencies on a long term basis, so I would bet over a longer period, say 5 years, the US underperforms other developed markets like the US and probably Canada as commodities rebound (assuming they do).
Canada has underperformed the US for 5 years in a row now and it has never underperformed for 6, so odds are getting good that outperformance will be coming soon.
Another advantage to investing outside the US is often stocks are much cheaper as they are less picked over. I would point at SVC.TO (SNVNF) vs. ALLT (internet traffic inspection) as a good example where the Canadian company is the market leader, profitable and generally growing faster, but also cheaper because it is not listed on a major US exchange.
ReplyDeleteCP,
ReplyDeleteCanada always rates near the top of best countries to live in. Latest survey came in #2 behind Germany and ahead of US #4.
Canada rated #1 in "Quality of Life"
US rated #1 in "Power:
http://www.usnews.com/news/best-countries/overall-full-list
I'm surprised the US is #4, must've climbed a few rungs.Like other trophy cities,
Deletehttp://business.financialpost.com/personal-finance/mortgages-real-estate/more-than-one-in-10-vancouver-condos-sit-empty-in-city-desperate-for-affordable-housing
DB - The bank with the worlds largest derivative exposure upgraded RUN today. I see DB has been trying to convince everyone with tons of positive upgrades lately. If so great wonder why they sold Canadian assets?
ReplyDeleteThey upgraded it before earnings AH's? I wonder if RUN's 'Bright Box' storage is ENPH. Sounds like it. They are basically the same as VSLR/SCTY without the commercial side.
DeleteAnd their trucks are blue instead of green or orange if that matters.
DeleteYeah, I don't see much solar here so not sure whose trucks or color. I have seen wind though, quite a bit, just not sure where it's coming from maybe China.
DeleteDidn't sound like Tepper wanted TERP to buy rooftop. NRG seems to be doing pretty well. Not sure about electric cars, haven't seen them on the road either. Always wondered why most people in Santa Clara didn't drive electric cars guess the only way I get an update is by actually going there myself.
2nd is the only person I know who owns a hybrid.
"For example, the Germany ETF, EWG, has a p/e of 13.7 and you are buying inexpensive Euro's with valuable US$, so there should be some currency upside over time."
ReplyDeleteI ran the P/Es for the top 48% of their holdings and get a 15.8 P/E and that includes an auto stock (Daimler), a financial (Allianz) and a telecom, all of which historically have lower than avg multiples due to cyclicality / no growth.
Siemens is an interesting one at 9.7x P/E. FCF is much lower than Net Inc so not as cheap but it's a well run company with a 21% ROE and 70% Greenblatt ROC. Also pays a 3.5% dividend.
Hmmm. That is surprising as the ishares web site, who owns this ETF, is where I got the 13.7 (https://www.ishares.com/us/products/239650/ishares-msci-germany-etf)
DeleteSiemen's tries to portray themselves as the German GE, so on those metrics, it looks pretty good. Morningstar is good for getting into on non-US stocks I find with 10 year valuation and earnings info.
I was also looking at long term charts comparing the country ETF's to the SPY and the spread between the SPY and most countries is pretty much at all time highs. Of course it depends on the start date, but my thinking is the US has led out of the recession and we see other countries like the European ones follow, and this differential shrinks. I'm sure a lot of the spread is the currency as the ETF's include currency, but that's fine for you US investors.
I wouldn't but a country ETF personally, but I think they should work going forward.
DeleteIf I was going to buy one, EWN would probably be it as they have a lot of world class companies, but the ETF is not so cheap because of Unilever, which is an expensive Consumer Staple.
BTU is up 100% this week, amazing and confusing.
ReplyDeletehttp://www.wellscap.com/docs/emp/20160309.pdf
ReplyDeleteGood read
Ok, now I have to try and figure out which stocks Paulson has poo-pooed, too tired for that right now....
DeleteOh that's right, he poo-pooed on one of my stocks that kicked ass since.
DeleteNot so sure I believe him, he's basically touting banks with rising rates but looks like banks are mired in this: "oil and gas companies draw down on their credit facilities in record fashion."
Banks can't run oil companies...
I think he said emerging / small caps as well.
DeleteWe'll see. I still think we have another leg lower but am open to anything..
The thing that concerns me most is the day all of these central banks remove their stimulus. It's gotten to be pretty ridiculous and creates quite the vacuum (ie august and January) when they reverse course
DeleteWhat he is saying here makes a lot of sense to me. Picking stocks going forward will require figuring out which ones handle rising wages and inflation pressures better than others. We should see generally rising sales as Nominal GDP moves up to the 5% range, so that should help if a company can keep costs lower.
DeleteFutures through the roof. This whole futures account thing is starting to sound more interesting since there's really nothing that happens during the day most of the times.
ReplyDeleteYou know what is funny - if you look at a 5 day chart of the Euro-600 stock market, it is pretty much dead flat for the week with a big rise and drop yesterday mixed in.
DeleteSo real net, I think, is that Draghi did pretty much what was priced into the market.
Okay, so looks like the initial response to Draghi's move was correct?
DeleteTCK - With a forward PE of 40, this suggests growth expectations wouldn't you say? Or, it might indicate this baby is severely overbought?
ReplyDeleteConsider global trade has slowed, what are the chances this is a hindsight metric?
new post
ReplyDelete