Crowds love to party. And it's the crowd that elects the politicians that drive the economic policies that will ultimately drive the global stock market to the kind of highs that Boomers are known for. Impossible? In my opinion, it's impossible they won't.
Besides current very large speculative long positions (relative to short) in gold (which in the past few years have always coincided with tops in gold), another possible reason for a pullback in gold is a rally in the broad market followed by a general increase in optimism and unwinding of the "protective" gold trade. I decided to try entering DGLD again and placed a buy stop limit at $53.50/$54, just above Thursday's highs.
I'm thinking part of the reason gold is heading down as people are starting to think interest rates will slowly rise, which would be bad for gold as it reduced the risk of runaway inflation, indicates the deflation risk is receding, and increases the opportunity costs for holding bullion.
Ended up making a little money in NFLX today and AMD. Sold both. Small wins. Back to cash into the close except for position in AMZN which I'm not selling no matter what. It's a small position so not really concerned with near term moves.
I read through Jesse's article and it totally makes sense. People are skeptical / bullish...but I wonder how many people are truly acting bearish / shorting stocks or are in cash out of fear. Instead, I think people have been lulled to sleep by the low volatility and central bank backstop. Not saying things will collapse because I think sentiment plays a huge role and most people still have one foot out the door. But when we look at what could bring things down I'd have to image the negative interest rates plus inherent faith in central bankers could be the source. This comment may ultimately be something we may back on as indicative of an enormous bubble in central bank faith / CB stimulus:
“Markets say the ECB is done, their box is empty,” Vasiliauskas, who heads Lithuania’s central bank, said in an interview on Tuesday in Vilnius. “But we are magic people. Each time we take something and give to the markets -- a rabbit out of the hat.”
What is so typical is now that the market has been flat for a couple years, the AAII survey is almost 50% neutral, one of its highest readings - http://www.aaii.com/sentimentsurvey
People so predictably expect what has been happening to continue for a long time into the future.
Yeah its crazy. Everyone was bearish when the market was recovering from 2009 to 2014 because the economy was still weak ("I'll wait until the economy improves before buying"), then they got really bullish after there were signs of improvement in the economy which coincided with a medium term top, then they got really bearish earlier this year. Sentiment is a funny thing
Following quiet trading in Asia (notable is the bullish -0.5% pullback in Taiwan on the heels of Monday's +2.6% rally!), Europe lights a fire under global indexes. Germany's DAX +1.52% and back within 8 points of 10,000. France's CAC +1.64%, UK FTSE +0.95%, Euro Stoxx 50 +1.74%.
DJIA +155 points in early trading. EEM (emerging markets) +0.67%. VT (total world stock market) +0.82%.
Interesting study on how people think they do vs. how they really do:
The average investor isn't very good, but the average investor thinks they, themselves, are sensational.
That's hardly an overstatement. A decade ago, two economists asked a group of investors how they performed as investors. They then checked those self-assessed returns with the investors' brokerage statements to reconcile the difference -- which, not surpassing, was astronomical. The average investor overestimated his returns by 11 percentage points per year. For perspective, Warren Buffett became the best investor of all time by outperforming the market by the same amount, 11 percentage points per year. Less surprising but just as important is that the average investor considered himself above average.
Hong Kong's Hang Seng (+2.71%) set the tone for a continuation of Tuesday's liftoff. Germany's DAX now comfortably above 10000 and Brazil's iBovespa back near 50000. DJIA +126 points in early trading.
Several global ETFs scoring a mid-week 'double' (eg, EEM [emerging markets] +1.28% heading into the close on top of Tuesday's +1.01% gain, FXI [China 'H' Shares] +1.83% on top of Tuesday's +1.2%, DJIA +163 points on top of Tuesday's +213 points).
Monday's pullback looks to have been just a sacrifice 'out.'
SEATTLE --(BUSINESS WIRE)-- Amazon Web Services, Inc. (AWS), an Amazon.com company (NASDAQ:AMZN), today announced that Salesforce (NYSE: CRM), the Customer Success Platform and the world's #1 CRM company, has selected AWS as its preferred public cloud infrastructure provider. For the first time, Salesforce will expand use of AWS to core services--including Sales Cloud, Service Cloud, App Cloud , Community Cloud, Analytics Cloud and more--for the company's planned international infrastructure expansion.
Part of my bias toward owning this stock is the disruption I have seen this company cause in the internet companies / industries I have worked in and am familiar with. It's truly a revolutionary type company and in my opinion it has the power to be the largest company in the world.
I follow a lot of entrepreneur podcasts and most of them advocate starting up a business that sells on amazon. There's a huge flood of money pouring into sponsored product ads on Amazon (basically the same thing as Google ads except focused strictly on products). If you think about the efficacy of these ads, consider that they have a conversion rate (i.e. number of visitors that turn into buyers) of over 11%, which is over 10x the norm for internet retailers. As an advertiser you want to spend your money wherever you are getting big ROI and you want to measure it accurately. Both is possibly with Amazon. I believe we are just on the tip of the iceberg for advertising spending on Amazon. I think we will start seeing larger brands like Gap, who just said they're going to be moving to Amazon, moving a lot of ad spend to Amazon. This is highly profitable spending, which has huge conversion rates and is easily trackable.
I'm looking at my own business which I'm now running full time (quit my job last week) and I'm spending about $1,800 a month in advertising on Amazon. I'm making about 4x that spend in profits off of those ads per month. I would be willing to up my spending 10x if it means making just a fraction more in profits. And I'm a small fry in the big scheme of things.
And strictly from a technical perspective, the stock is riding its 12 DMA higher and is looking like its going to break out again. There's really nothing wrong with the fundamental / technical picture right now.
The big risk fundamentally I see with AMZN is judging how much growth is priced into their stock vs. what they can achieve. They already have a $330B market cap, so hard to move the needle at that level (as AAPL is seeing). Plus, if you assume a fwd p/e equal to GOOG, profitability has to quadruple current expected fwd p/e, hard to do.
They are a great company and do have some very strong competitive advantages and as long as they can keep growing at current rates, it's hard to see the stock running into a whole lot of trouble, but these high-value, fast growers can fall to earth fast if things slip.
Financials having another strong day today, continuing a strong week. Getting more confident the interest rate bump will hold this time and not bring down broad markets like in December, so bodes well for further increases in banks and insurers and stocks more linked to the broad economy like rails and machinery.
Anyone who jumps on the stage above and tries to shut down the rally will be drowned out by the crowd.
ReplyDeleteTOF- +4.12% YTD.
ReplyDeleteI'm down 0.1% for the year in US$ now, but down 7% in Cdn$ as the CDN$ is doing so well.
DeleteDid poorly in that Feb pullback and slowly working my way back. Definitely been a better year to be a short term trader so far.
Besides current very large speculative long positions (relative to short) in gold (which in the past few years have always coincided with tops in gold), another possible reason for a pullback in gold is a rally in the broad market followed by a general increase in optimism and unwinding of the "protective" gold trade. I decided to try entering DGLD again and placed a buy stop limit at $53.50/$54, just above Thursday's highs.
ReplyDeleteI'm thinking part of the reason gold is heading down as people are starting to think interest rates will slowly rise, which would be bad for gold as it reduced the risk of runaway inflation, indicates the deflation risk is receding, and increases the opportunity costs for holding bullion.
DeleteSCTY- The rip off the bottom has to be the hedgies ganging up on Soros.
ReplyDeleteEnded up making a little money in NFLX today and AMD. Sold both. Small wins. Back to cash into the close except for position in AMZN which I'm not selling no matter what. It's a small position so not really concerned with near term moves.
ReplyDeleteI read through Jesse's article and it totally makes sense. People are skeptical / bullish...but I wonder how many people are truly acting bearish / shorting stocks or are in cash out of fear. Instead, I think people have been lulled to sleep by the low volatility and central bank backstop. Not saying things will collapse because I think sentiment plays a huge role and most people still have one foot out the door. But when we look at what could bring things down I'd have to image the negative interest rates plus inherent faith in central bankers could be the source. This comment may ultimately be something we may back on as indicative of an enormous bubble in central bank faith / CB stimulus:
ReplyDeletehttp://www.bloomberg.com/news/articles/2016-05-11/ecb-can-still-pull-rabbits-out-of-the-hat-council-member-says
“Markets say the ECB is done, their box is empty,” Vasiliauskas, who heads Lithuania’s central bank, said in an interview on Tuesday in Vilnius. “But we are magic people. Each time we take something and give to the markets -- a rabbit out of the hat.”
Meant to say "people are skeptical / not bullish"
DeleteWe are "magic people"
DeleteWhat is so typical is now that the market has been flat for a couple years, the AAII survey is almost 50% neutral, one of its highest readings - http://www.aaii.com/sentimentsurvey
DeletePeople so predictably expect what has been happening to continue for a long time into the future.
Yeah its crazy. Everyone was bearish when the market was recovering from 2009 to 2014 because the economy was still weak ("I'll wait until the economy improves before buying"), then they got really bullish after there were signs of improvement in the economy which coincided with a medium term top, then they got really bearish earlier this year. Sentiment is a funny thing
DeleteLiftoff.
ReplyDeleteFollowing quiet trading in Asia (notable is the bullish -0.5% pullback in Taiwan on the heels of Monday's +2.6% rally!), Europe lights a fire under global indexes. Germany's DAX +1.52% and back within 8 points of 10,000. France's CAC +1.64%, UK FTSE +0.95%, Euro Stoxx 50 +1.74%.
DJIA +155 points in early trading. EEM (emerging markets) +0.67%. VT (total world stock market) +0.82%.
Picked up some WFM at $31.3 and AMBA at $39.6
ReplyDeleteLong AMD at $3.99
ReplyDeleteGrabbed some EWZ at $26.57. I think the sell the impeachment news period has passed
ReplyDeleteI sold AMD at $4.05. I ended up doubling down around $3.96 and taking too large of a position so taking off the risk.
ReplyDeleteLong ugaz 21.1, FCX 11.29
ReplyDeleteInteresting study on how people think they do vs. how they really do:
ReplyDeleteThe average investor isn't very good, but the average investor thinks they, themselves, are sensational.
That's hardly an overstatement. A decade ago, two economists asked a group of investors how they performed as investors. They then checked those self-assessed returns with the investors' brokerage statements to reconcile the difference -- which, not surpassing, was astronomical. The average investor overestimated his returns by 11 percentage points per year. For perspective, Warren Buffett became the best investor of all time by outperforming the market by the same amount, 11 percentage points per year. Less surprising but just as important is that the average investor considered himself above average.
Duh.
DeleteSold IWM +3.7%
ReplyDeleteHong Kong's Hang Seng (+2.71%) set the tone for a continuation of Tuesday's liftoff. Germany's DAX now comfortably above 10000 and Brazil's iBovespa back near 50000. DJIA +126 points in early trading.
ReplyDeletePicked up GNCA at $4.11
ReplyDeleteSold FCX at $11.66
ReplyDeleteLong pbr at 6.17
ReplyDeleteI think we see $50+ this week in oil
DeleteSeveral global ETFs scoring a mid-week 'double' (eg, EEM [emerging markets] +1.28% heading into the close on top of Tuesday's +1.01% gain, FXI [China 'H' Shares] +1.83% on top of Tuesday's +1.2%, DJIA +163 points on top of Tuesday's +213 points).
ReplyDeleteMonday's pullback looks to have been just a sacrifice 'out.'
Fertilizer's look good, POT, MOS. CF, MOS
ReplyDeletelong MOS
should say looking interesting
DeleteGold equities bouncing off 50 dma, who knows.
picked up SLW and PBR
DeleteSEATTLE --(BUSINESS WIRE)-- Amazon Web Services, Inc. (AWS), an Amazon.com company (NASDAQ:AMZN), today announced that Salesforce (NYSE: CRM), the Customer Success Platform and the world's #1 CRM company, has selected AWS as its preferred public cloud infrastructure provider. For the first time, Salesforce will expand use of AWS to core services--including Sales Cloud, Service Cloud, App Cloud , Community Cloud, Analytics Cloud and more--for the company's planned international infrastructure expansion.
ReplyDeletePart of my bias toward owning this stock is the disruption I have seen this company cause in the internet companies / industries I have worked in and am familiar with. It's truly a revolutionary type company and in my opinion it has the power to be the largest company in the world.
DeleteI follow a lot of entrepreneur podcasts and most of them advocate starting up a business that sells on amazon. There's a huge flood of money pouring into sponsored product ads on Amazon (basically the same thing as Google ads except focused strictly on products). If you think about the efficacy of these ads, consider that they have a conversion rate (i.e. number of visitors that turn into buyers) of over 11%, which is over 10x the norm for internet retailers. As an advertiser you want to spend your money wherever you are getting big ROI and you want to measure it accurately. Both is possibly with Amazon. I believe we are just on the tip of the iceberg for advertising spending on Amazon. I think we will start seeing larger brands like Gap, who just said they're going to be moving to Amazon, moving a lot of ad spend to Amazon. This is highly profitable spending, which has huge conversion rates and is easily trackable.
I'm looking at my own business which I'm now running full time (quit my job last week) and I'm spending about $1,800 a month in advertising on Amazon. I'm making about 4x that spend in profits off of those ads per month. I would be willing to up my spending 10x if it means making just a fraction more in profits. And I'm a small fry in the big scheme of things.
And strictly from a technical perspective, the stock is riding its 12 DMA higher and is looking like its going to break out again. There's really nothing wrong with the fundamental / technical picture right now.
DeleteI also think googl long term is in some trouble
DeleteThe big risk fundamentally I see with AMZN is judging how much growth is priced into their stock vs. what they can achieve. They already have a $330B market cap, so hard to move the needle at that level (as AAPL is seeing). Plus, if you assume a fwd p/e equal to GOOG, profitability has to quadruple current expected fwd p/e, hard to do.
DeleteThey are a great company and do have some very strong competitive advantages and as long as they can keep growing at current rates, it's hard to see the stock running into a whole lot of trouble, but these high-value, fast growers can fall to earth fast if things slip.
Financials having another strong day today, continuing a strong week. Getting more confident the interest rate bump will hold this time and not bring down broad markets like in December, so bodes well for further increases in banks and insurers and stocks more linked to the broad economy like rails and machinery.
ReplyDelete