Sunday, May 15, 2011
05/15/11 Back To Buy-and-Hold
During the first 25 years of my trading 'career,' it was a well-known fact that short-term traders generally lost money- buy-and-hold was far and away the better strategy.
Then the Crash of 2008-09 erased 10-20 years' worth of gains, and the buzz phrase became 'buy-and-hold is dead.' OK, I can dig that.
Now, however, I think the easy path higher will once again prove to be buy-and-hold.
It's easy to make trading 'hard.' Especially if you're a smart guy who overthinks the game.
Forget about the bleeding crowd, and stick with the strategy that boasts a centuries-old track record. That's where I'm headed tonight.
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One step ahead of the crowd. That's where you want to be. The freaking crowd is now day trading! Fade 'em.
ReplyDeleteI think inflation is on its way. Fixed income assets are not going to do it. Gold/silver? Give me a break, man. Stocks and real estate are where it's at.
ReplyDelete2nd, This post sounds familiar. I guess this time is going to be different.:)
ReplyDeleteDavid- It you want to purchase a home in Campbell at the cycle low, it's already too late. JMO. The winds of change are blowing. Here's my take.
ReplyDelete(a) In 5-7 years, you will not recognize a single handle on any of the 'bear' blogs. Assuming they're still around.
(b) Bay Area real estate will be 30-50% above current prices.
(c) A buy-and-hold portfolio will be an easy double from here.
rb- It may sound familiar, but it's simply an evolving take. Change takes time, and usually involves reversals/second-guessing/backtracing.
ReplyDeleteYou could put together one of those lazy man portfolio's. Like that Farrell guy. I don't think has them anymore because he seems to have gone completely off the reservation, like Col KURTZ. He has basically forecast Armageddon now. If he is right who will be left to tell I told you so.
ReplyDeletehttp://www.marketwatch.com/story/well-great-depression-2-2011
rb- I'm on my way down to City Hall right now with a crowbar, where I plan to rip the heads off parking meters for a 6-month stay in the county jail. A botched escape attempt should easily add another 5 years. I'll be released a rich man, ready to retire and write a novel about doing time.
ReplyDeleteThat's my 5-year plan.
"Part of the reason I think a correction may be coming is watching the commodities and the momentum stocks tank..."
ReplyDeleteThe same thing happened in January 2011, and I bought some puts thinking that a market correction was inevitable. Boy, was I wrong. During the Japan crash, my intuition told me that that was the last chance to sell my IWM and SPY puts, while they are still in the money. Boy, was I lucky with that decision. :)
Maybe this time the correction in commodities and momentum stocks does signify a correction is coming, but independently from 2nd_ave I came to the same conclusion as he did: instead of worrying about market crashes, I should use the current weakness as a great entry point for a long-term buy-and-hold strategy, and cash out in a few years. When the buy-and-hold opportunity is there, no trading can compete with it.
The minor point on which I differ with 2nd_ave is about the particular assets to buy and hold. The only think I am sure about long term is that commodities will keep going up, and hence given a very small universe of stocks I am tracking, the best buy-and-hold portfolio IMO is 90% ECUXF and 10% GMO. I've been busy shifting all my cash and less-than-stellar stocks into ECUXF over the past few months, and now I think we have a unique opportunity to stock up on GMO (which I'll do on Monday).
2nd_ave -- how about we make a bet. If ECUXF doesn't triple from the current level of $0.75 before the end of 2012, I'll buy you a bottle of Nadurra. If it triples at any point before that (i.e., rises above $2.25), you'll buy me a bottle of Nadurra -- how does that sound?
As for real estate in the Bay Area, the data speaks for itself. The condo prices in SF have been going down in a straight line for the past 7 months and have already reached the level of December 2000 as of February 2011. How can you possibly say that it is too late to buy it???
Besides, don't forget that my plan is to FIRST cash out of ECUXF and GMO and THEN buy a house in Campbell. So what I actually care about is the ratio of ECUXF+GMO to the Case-Shiller index of prices in SF (as a proxy for the Bay Area), and there is NO WAY that this ratio has bottomed. It will be SEVERAL times higher by the end of 2012, and THAT will be time to cash out and buy a house.
How good are you at eating eggs?
ReplyDeleteYeah, I noticed Farrell went off the deep end. Reminds me of this social psychology professor at Michigan in the early eighties- a well-respected department head near retirement who one day inexplicably divorced his wife of 40 years and moved in with his 30-something secretary. Threw it all away.
ReplyDeleteI think David's waiting to buy RE is a sound one. The reason to buy now is the low interest rates, but David plans on buying with cash, so when rates inevitably rise it will further deflate home prices because there will be even less demand than now. Where is Campbell?
ReplyDelete"rb- I'm on my way down to City Hall right now with a crowbar, where I plan to rip the heads off parking meters for a 6-month stay in the county jail. A botched escape attempt should easily add another 5 years. I'll be released a rich man, ready to retire and write a novel about doing time.
ReplyDeleteThat's my 5-year plan."
That's a great plan, 2nd_ave! I am following you with my crowbar as well! How many meter heads do I need to rip off so as to serve right until the end of 2012, so as to cash out of ECUXF before long-term capital gains increase to 20%?
Campbell is in the South Bay, right next to Cupertino, and so it has very good public schools. A 3BR house in Campbell can be purchased now for as low as $500K.
ReplyDeleteSure, David. Either way, equities will outperform cash and bonds by a wide margin, and I will be able to afford a bottle of Nadurra at inflated 2012 prices.
ReplyDeleteTF and all.... There are big others in the pay by phone market. Do not know what that portends for tiny MITK:
ReplyDeletePay by Phone
In Europe and Asia, smart phones act like credit cards. How soon until that technology comes to America?
By Annie Lowrey
Posted Thursday, May 12, 2011, at 5:44 PM ET
www.slate.com/id/2293890?wpisrc=xs_wp_0001
"I think David's waiting to buy RE is a sound one. The reason to buy now is the low interest rates, but David plans on buying with cash, so when rates inevitably rise it will further deflate home prices because there will be even less demand than now."
ReplyDeleteYou got it, RB. I've been telling my friends to hold off from buy RE for years, but last month when the condo indices in SF broke down to 11 year lows and higher long-term interest rates became inevitable, I started telling those who need to borrow a lot to buy a house that now is an OK time to do it.
"Sure, David. Either way, equities will outperform cash and bonds by a wide margin, and I will be able to afford a bottle of Nadurra at inflated 2012 prices."
ReplyDeleteOK, it's a deal. You folks are all witnesses.
OK, so David and I will somehow manage to come up with 1001 ways to post 'buy-and-hold' for the next 5 years. No worries- I have at least 1825 stories of past exploits to draw on.
ReplyDeleteYou folks are all invited to share a bottle (or two) of Nadurra with us in December of 2012.
ReplyDeleteHere is what 500 K will get you in Tucson. Best older neighborhood in town. Great schools. Right next to Univ.
ReplyDeletehttp://www.zillow.com/homedetails/2202-E-9th-St-Tucson-AZ-85719/8502819_zpid/#{scid=hdp-site-map-list-address}
I will imbibe with all on that date, God willing and if the creek don't rise. Give me advance notice so that I have Nadurra on hand. May have to practice beforehand, otherwise I may fall asleep during the celebration.
ReplyDeleteRB - what can you get in Tuscon, 55+ community, for $100k?
ReplyDeleteYou will have plenty of time to build tolerance when CSCO/MSFT hit the thirties/forties earlier in the year.
ReplyDeleteDavid, T3d here, I noticed that Costco is selling nadurra here for $50.
ReplyDeleteSo, I'm interested in that bet, too.
Let me know if we have a deal.
I also think there is no rush to buy RE here also.
JB, http://delwebb.com/, to check out 55 plus offering's.
ReplyDeleteBTW David, if you accept the bet and I lose, it would be a pleasure to send you a bottle of Nadurra although the last time I had whiskey or scotch was J&B rare scotch when I was 17. Now that was a while ago.
I'm in agreement with 2nd that buy and hold will play well over the next decade.
ReplyDeleteI think the big calls you have to make are which industries will outperform and should be overweighted. The ones I am thinking hard about are commodities (ex energy which I am confident will do well) and banking.
Commodities have done so well over the last decade and their has been a lot of investment which should increase supply over the next few years. Banking has new regulations to deal with which could restrict their profitability going forward for a long time.
I have a distant relative that lives in Campbell. He is older than me and retired Lockheed. Very Christian conservative. I know him only from e-mail as we are both genealogists. Have not heard from him in a while.
ReplyDeleteJB WE HAVE A RETIREMENT community that is 30 miles south of Tucson.Called Green Valley. Its really a whole town of 30,000 and it is all age restricted. Beautiful view of Santa Rita's one side and mine tailings on the other. It is not as bad as it sounds.Cheap Prescription Drugs is 40 miles away in Nogales. There is shuttles for this purpose. Casino, GOlf and awesome cycling and mountain biking. Hell maybe I will move in with you.
ReplyDeletehttp://tinyurl.com/5vfkwhe.
There is also numerous foreclosures that don't have a price.
http://tinyurl.com/5vc7rf5
Articles like this point out weaknesses of CSCO. I recently bought one of those Linksys routers for $64. Too much per the article but who the hell cares.
ReplyDeletehttp://www.marketwatch.com/story/the-problem-with-cisco-is-marketing-2011-05-13?link=MW_story_investinginsightb
Illini- no doubt there will be a big movement toward payment thru cell phones in the future...but credit cards have been around for years yet checks haven't died off...mobile check deposit is just one of many applications for miteks optical capture technology. Its a tech company first and a mobile banking company second. Just listen to the most recent investor presentation they gave to get an idea of how it works...one example: get in a car accident, ask for other driver to show them their insurance card and registration card, take pics of both and submit to ur insurance company and a claim will be processed immediately. They also mentioned applications for transportation cmpanies (think digitizing paper documents like bill of ladings and purchase orders) and basically any paper intensive industry...their technology is tried and true and I think worth billions...
ReplyDeleteI've done the math on MITK just in relation to the mobile check deposit industry and I think conservatively its worth $1 billion...or at least $35 a share...and that assumes they make no traction on mobile bill pay (take pic of any invoice and pay thru phone...phone recognizes invoice details and pays them) or anything else they are working on...
ReplyDeleteBut enough about mitk...is the david/2nd bet over before or after the end of the world?
ReplyDeleteTOF- Just rolled in here to it seems. Nice to know the crew has been working all this stuff out for us.
ReplyDeleteMobile bill pay...Visa pretty much said it's dead. I agree. Who gives a shit.
Looks like you guys missed it, but SAP finally tracked down JB and hand delivered his pink slip.
WTF don't we all move to AZ and live in some sort of compound? No way David can worry about it's price drooping if it is unique to us, right? Otherwise it's useless.
Tough, tough, competion this weekend for Kendra, but she/they played well. 3-1.
Chase didn't make the Timberwolves U23 roster, but was invited to play this summer with the team. Not bad for a 19 year old.
Peace out...
Yikes JB, sorry to hear that! A couple of goats would take care of those weeds, I've seen those central valley roadside weeds, sunflowers, cotton, cantaloupe, corn....
ReplyDelete-Market-
Now that the media is proclaiming we're going into a double dip, I might anticipate stocks could correct even though the economy never really dips. The real reason for the correction would of course be a rising dollar, however brief, but I don't anticipate much more than 76 (We're there now).
Anyway - U$D - I see a higher high tonight but not a lower low yet, what's going on in the eurozone with the PIIGS??? That's what we need to know.
"Commodities have done so well over the last decade and their has been a lot of investment which should increase supply over the next few years."
ReplyDeleteBB, it is always dangerous to bet on a reversal of a long-term trend. For me, the trend of rising commodity prices since 2002 is a new long-term trend.
Jeremy Grantham has recently looked back a 100 years in his quarterly commentary. Its part 1 is titled "Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever." Here are some excerpts from it:
"Exhibit 4 shows how out of line with their previous declining trends most commodities are. We have stated this in terms of standard deviations, but for most of us, certainly including me, a probabilistic – 1-in-44-year event, etc. – is more comprehensible. Exhibit 4 is headed by iron ore. It has a 1 in 2.2 million chance that it is still on its original declining price trend. Now, with odds of over a million to one, I don’t believe the data. Except if it’s our own triple-checked data. Then I
don’t believe the trend! The list continues: coal, copper, corn, and silver … a real cross section and all in hyper bubble territory if the old trends were still in force. If you believe that commodities are indeed on their old 100-year downward trend, then their current pricing is collectively vastly improbable. It is far more likely that for most commodities the trend has changed, just as it did for oil back in 1974, as we’ll see later."
"Modesty should prevent me from quoting from my own July 2008 Quarterly Letter, which covered the first crash. "The prices of commodities are likely to crack short term (see first section of this letter) but this will be just a tease.
[Editor’s Note: the section referred to is titled “Meltdown! The Global Competence Crisis,” which discusses the aftermath of the global financial crisis.] In the next decade, the prices of all raw materials will be priced as just what they are, irreplaceable.” If the weather and China syndromes strike together, it will surely produce the second “once in a lifetime” event in three years. Institutional investors were too preoccupied staying afloat in early 2009 to have obsessed much about the first opportunity in commodities and, in any case, everything else was also down in price. A
second commodity collapse in the next few years may also be psychologically hard to invest in for it will surely bring out the usual bullish argument: “There you are, its business as usual. There are plenty of raw materials, so don’t listen to the doomsayers.” Because it will have broad backing, this argument will be hard to resist, but should be."
"BTW David, if you accept the bet and I lose, it would be a pleasure to send you a bottle of Nadurra."
ReplyDeleteJoe, I usually try to be nice to people, so I'll try to give you the pleasure of sending me a bottle of Nadurra. :) The bet is on!
RB, Joe - Thanks for the RE tips!
ReplyDeleteCP - thx, I got a long run out of Hi-tech, much longer than I thought was possible when I started years ago. Actually we were talking about a "organic, all natural" weed abatement biz just this weekend - goats and sheep.
Oh boy, today's my first day as a professional trader, sounds better than unemployed dope!
David,
ReplyDeleteSaw Grantham's article and the thought that popped into my head was "watch out - these stories are usually closer to the end of a bull than the start".
I'm still thinking about commodities and where we go from here. I think we will be in a trading range for the next several years with the physicals flat, so have sold the ones I owned that needed a rising price and kept the ones I think will do well in a flat environment.
But, I am definitely watching for signs they will move one way or another.
I'll throw my hat in the ring on commodities: I bet that oil continues higher just like grantham says (I don't know the best way to play it...uso doesn't work) until we all finally get on the brazil bandwagon and reduce our dependence on the stuff.
ReplyDeleteBy the way jb > assuming ur in a good spot with your forced retirement (and im praying u are) then congrats. Personally I would buy a business over becoming a full time trader
By the way I would keep an eye on nls...it reported its second consecutive profitable quarter...its clearly in turnaround mode. Placing a chip or two on it for a recovery to the double digits wouldn't be such a bad bet in my mind.
ReplyDeletetof - thx, only kidding about full time trading. may do it full time because I have nothing else to do but I have already reduced my trading acct balance to 3% of my port, just to avoid any temptation to plunge.
ReplyDeletebeen looking for a biz to buy, and will keep doing so.
of course if MITK rocks to the moon then all will be well!!!
2 ways to play oil I see now.
ReplyDelete1. Buy and E&P company With long life reserves (CNQ or SU for example). These will provide good leverage to the price of oil assuming it moves up and even if it doesn't, will grow production over time and increase share value.
2. Buy the oil services companies (eg. HAL). These are much cheaper than the E&P companies on a valuation basis and should do well over the next few years as drilling increase.
I'm not too keen on the big integrateds as the refining business margins move a lot and I don't know enough about the fundamentals to say this is a good time to buy. With the Mississippi flooding and some refiners having to shut down, they should do well shorter term, but longer term, it is harder to say.
Out TVIX +.75
ReplyDeleteoil plays - Will Congress eliminate their subsidy?
ReplyDeleteAnyway I'm long BEXP, IMO looks good too.
Refiners - Someone pointed out a few weeks back that US refiners benefit from the spread between WTIC and Brent, apparently they tend to receive more orders while Brent is higher.
Nibbling WFR. Stalking TZOO.
ReplyDeletepicked up some T @ 31.17 for the long port, not a trade.
ReplyDeleteis it too early for a cocktail?
Game Changer? - What's likely to happen when Congress raises the debt level?
ReplyDeleteHopefully they don't monkey around till the eleventh hour but I bet they do, like always.
JB- Never.
ReplyDeleteKinda happy with what I've got right now. I almost redeployed the 2k trading shares of BEXP on the ridiculous reaction to the news and E/P Co. actually bought land buy issuing notes.
Nibbled TZOO. Hit its 50 day.
ReplyDeleteMark - thank god!
ReplyDeleteBEXP - Looks like an obligatory retest of the 200SMA just like last September, doesn't it?
ReplyDeleteBEXP and TRE both doing well this a.m.
ReplyDeleteTRE- Yeah...I wonder if it will get out of that giant channel finally.
ReplyDeleteOK guys, good luck and all that crap... :)
BEXP - Obviously I should've trusted the chart and bought the morning dip...
ReplyDeleteWonder if it'll rally to over 60% higher than the 200SMA again this time???
CDE
ReplyDeleteMFN
ReplyDeleteMTL SVM CREE
ReplyDeletewow, did you guys see that 2M+ block trade in MITK?
ReplyDeleteMITK, yes at 5.75 for 2042856 shares.
ReplyDeleteFunny to is that they won best in show "Mobile Photo Bill Pay™ App Wins 'Best of Show' at Finovate.
David game on! Just for clarification is that a trade trough price of 2.25 or an EOD close print?
ReplyDeleteGoing to hedge my bet and pick up a bottle at Costco for $46, is that a good price?
I also have a bet here in town with Nylen on $50 silver close EOY 2011, fun.
I keep a bottle of Pernod in the trunk of my car as sometimes I like to nip it after tennis. HA HA
Wow 2M shs trade in mitk...wonder who did that. Maybe largest shareholder getting out?
ReplyDeleteU guys see TISA today? Announced mobile deposit and bill pay news. They're a competitor I think...we should keep an eye on them.
yeaf tof, Joe and I thought it was you buying more MITK
ReplyDeleteThe good news?
ReplyDeleteGas is down another 4%
Hmmmm....Hate to say it, but that 5.75 level will probably get tested.
ReplyDeleteMark > prob but I don't see any reason why this stays anywhere near this level for more than a short while...mitk is a beast in waiting
ReplyDeleteSome positives:
ReplyDeleteShanghai bounced off its 200 day, SPX holding solid above 1330 support, lots of materials stocks look like bounce plays (CP's BEXP looks good), 10 day put/call ratio not near crash levels.
Negatives:
The recent Sentimentrader updates,
Semis don't look too good, AAPL FINALLY rolling over.
I hope these are the pension plans Congress and the White house are vested in? Speaking of balance sheets, what are the odds treasury revenues can outpace government expenditures, or will the currency be devalued to make up the differential?
ReplyDelete"Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.
The latest estimate is that it borrows 40 cents for every dollar it spends."
"is the david/2nd bet over before or after the end of the world?"
ReplyDeleteHopefully after. :) If the end of the world arrives before the end of 2012, then gold/silver will surely spike, taking ECUXF with them. :)
I think pretty much all of the casinos can be shorted. Room rates falling off a cliff.
ReplyDeleteStopped out of TZOO - 2
ReplyDeleteTOF, just to sweeten your life, do you want me to forward to you one of the Nadurra bottles I receive from 2nd_ave and Joe if MITK triples by the end of 2012 (say makes a closing print above $20)?
ReplyDeleteJoe -- let's say that we want ECUXF to make a closing print above $2.25 before the end of 2012.
ReplyDeleteJB -- sorry to hear about your departure from SAP. Hopefully they gave you a good severance package. Are you going to be looking for a new job now?
ReplyDeleteMy buy stop limit order for 1000 shares of GMO got triggered this morning at $4.18. Now, I am trying to sell the worst-performing stock in my portfolio, NOSOF, and move that money into GMO.
ReplyDeleteHi David - thx, really weak package, guess it is the sign of the times. I may try to hook back on with a tech firm but I doubt it - a bit too long in the tooth. May look to buy a local biz, certainly not full time trading based on todays horrible results.
ReplyDeleteHow's life at the Big O?
Sold my WFR for a slight loss.
ReplyDeleteJB, not sure of your jurisdiction, but I'd be talking to a lawyer. Was laid off by Oracle a few years ago and new some guys laid of by Peoplesoft and SAP and they all paid fairly (at least in Canada).
ReplyDeleteThey tried to lowball a guy I worked with, and they had no documentation and their strategy seemed to be to just wait him out, but he had some cash behind them. Also, they are required to pay the minimum severance immediately even if you refuse to sign their package.
Pretty heavy selling in AMZN.
ReplyDeleteJB, Oracle is treating me well so far. Supposedly, this summer they will make some decent salary increases, since the company made some decent bucks over the past year. I am curious to see whether a "good" salary increase at Orcale will cover annual CPI inflation. :)
ReplyDeleteBB - yes, my buddies in Canada got great packages, not so here in the US, but given my age I will be speaking with a lawyer...btw - I used to work at Orcl, when where you there?
ReplyDeleteDavid - that's great, I would guess you'll get a nice bump...at least I hope so!
Mark - amzn is having some real issues with their public cloud strategy, there was some blip by a sap guy about it awhile back, plus the Sony hacker case has something to do w/amzn, at least that's what is being reported
ReplyDeleteThanks JB. For a second there I was hoping Patrica might have pulled back on the crap she buys there. Oh well.
ReplyDeleteWas there from 1996 - 2005 in the Mississauga office. Was an account manager.
ReplyDeleteWhere are you located?
BEXP - "Austin-based Brigham Exploration raising $250M through debt offering"
ReplyDeletehttp://us.rd.yahoo.com/finance/external/bizj/SIG=12r3msaai/*http%3A//www.bizjournals.com/austin/news/2011/05/16/brigham-exploration-raising-250m.html?ana=yfcpc
I put AMZN on death row with my gushing analysis of the company this weekend. It had to happen. I feel like a real stock analysis now.Maybe I should change careers. Goldman are you listening?
ReplyDeleteBB - I am in the central valley of california, was at orcl from 96-99, consulting.
ReplyDeleteOne half of my sell limit order for NOSOF (5000 shares) were executed at $0.8 at the close. Raised $4K. Placed a buy limit order for 1000 shares of GMO at $4.02.
ReplyDeleteREDF completing a nearly 100% round trip in a month. I was stopped out at 12.22 today. It is now trading at 9.95. Got to love stops.
ReplyDeleteBALT - Another -6.5% loss, Certainly not moving the way pumpers tried to claim it would a few weeks ago...
ReplyDeleteGNK - A higher low?
BAC - Am I actually going to see my $3 handle price target? I'll have the cash ready to roll if they can get it there before my itchy trigger finger starts twitching...
ReplyDeleteREDF - Looks like 50SMA is the target, at least in terms of the gaps up that seems to indicate the 50SMA may provide support and a logical place to stop selling?
ReplyDeleteHPQ rumor...
ReplyDeleteAtta boy...
ReplyDeleteBY BEN WORTHEN
Leo Apotheker, the chief executive of Hewlett-Packard Co., told his top deputies to brace for tough times.
In an email sent to 10 senior H-P executives, Mr. Apotheker asked his lieutenants to cut back expenses and slow their hiring plans.
The CEO cautioned the world's largest technology company by revenue is in for "another tough quarter," and its current work-force plans are unaffordable.
News of the email, days before the Palo Alto, Calif., company is set to report quarterly results, spooked investors, who sent H-P shares down 5% in after-hours trading.
Read more: http://online.wsj.com/article/SB10001424052748703421204576327712235186984.html#ixzz1MYgZDt5M
Thanks for the HP info Mark. As HP shareholder I feel thrilled by this rumors. Are you planning to pick up some shares on this dip?
ReplyDelete2nd What makes you feel bullish about this market? Seems like companies started showing some problems with earnings here and there. Debt ceiling and European problems are back in play. Commodities and energy is down. The only positive thing is negative consumer sentiment judged by inflows to bond funds. I might start playing defense if S&P500 breaks 1320. So far I have been bargain hunting, just the number of bargains is constantly increasing.
Yeah rumour had in when the layoffs started in earnest at Oracle in 2000ish, Ellison was shocked at how much he had to pay to get rid of Canadians due to our laws around layoffs.
ReplyDeleteFrom Raymond James this week:
ReplyDeletehttp://www.raymondjames.com/inv_strat.htm
The call for this week: Last Monday I wrote, “While the intermediate/long-term internal stock market energy remains fully charged for a move higher, the market’s short-term energy still needs some time to rebuild. This probably means another week, or two, of consolidation and/or attempts to sell stocks down before we begin another leg to the upside.” Well, this is week 2 since those words were scribed and I continue to feel the same way. Moreover, something is out of whack. Recently, forward earnings estimates rose for all 10 macro sectors, but valuations fell for seven of those ten sectors. And don’t look now, but the Technology sector is showing improving relative strength versus the S&P 500, as can be seen in the chart on the next page from the invaluable Bespoke Investment Group.
DSK - Quite the lady's man! Just another example of the entitled mindset I'm always ranting about. The guy isn't guilty b/c he knows he did nothing wrong...
ReplyDeleteLOW - Seems like a big hit that can't be swept under the rug. When Lowes disappoints, is it a real surprise or a setup by analysts? In CC they site soft consumer spending. Chart looks like some folks were anticipating a weak quarter...
ReplyDelete"Lowe's Profit Falls 5.7% Amid Surprise Sales Drop"
So why didn't the market close higher today???
S&P - RSI(7) still remains above 30, looks like downside isn't quite complete according to this indicator. Retest of 50SMA coming to a theater nearby?
ReplyDeleteLOW looks good to me on weakness, opened a 500 share position at 24.98. Probably a medium to long term hold.
ReplyDeleteMITK comment from Yahoo Message Boards:
ReplyDelete"3 lots at 100,000 shares each and one lot at around 1.9M shares, three at $5.75 and one at $5.60.
Not sure if this has anything to do with the imminent movement from the BB to NASDAQ OR if these were "short sales" by the new owners from the PP. If from the PP owners they cashed out already (even though the PP shares aren't registered yet)for a $.50 profit. The "new" new owner of those shares are in at $5.70ish. This could be good news in that the overhang is gone."
The assessment might make sense since there is no insider that owns anywhere close to 2M sh (as of March 15) and no institution either (as o Dec 31, per Yahoo). I do not see those sales as positive signs however but maybe they were just hedging until they can unload their new shares later.
Uh oh-
ReplyDeleteHPQ moves earnings to tomorrow morning:(
The thing that really scares me about catching a knife here is that after all of this selling, there's still no fear. The VIX is still near the lows @ $18.
Major head and shoulder pattern for HPQ over last 8 months. The right shoulder just started breaking 2 sessions ago. When the right shoulder breaks, it is usually a swift move down. H+S pattern would project to low 30's.
ReplyDeletenew post
ReplyDeleteMITK/TISA... Top Image Systems Ltd is an Israeli very small cap company who went up 42% today on news that they were entering the mobile phone, bank deposit business. They are already into this:
ReplyDelete"capture and classify data that enters your organization, process, validate and integrate it into your ERP, CRM and workflow systems."
Whatever all that means. They do have international biz and do make a profit, unlike Mitek.
http://www.topimagesystems.com/
http://www.finviz.com/quote.ashx?t=tisa